The coronavirus pandemic has changed the way many people around the world live, with entire cities on lockdown and social distancing still in place in many areas that aren’t. As the death toll nears 300,000 worldwide, many are wondering how the world will ever get back to “normal,” with some experts saying that it will take the development of a vaccine to get us there.
But once a vaccine is developed, how much will it cost? Unfortunately, there’s no simple answer, as a number of factors are at play, but the goal remains recovery from the coronavirus.
Last updated: May 14, 2020
The US Allows Drugmakers To Set Their Own Prices
Unlike many other developed countries, the United States allows pharmaceutical companies to set their own prices for prescription drugs, the Los Angeles Times reported.
The US Charges More for Certain Drugs Than Other Countries
Because pharmaceutical companies call the shots in terms of pricing in the U.S., it often has higher drug prices than other countries. A 2017 study that compared the cost of cancer drugs in Australia, China, India, Israel, South Africa, the United Kingdom and the United States found that the U.S. had the highest drug prices.
Many Other Countries Provide Vaccines for Free or Set Limits on Prices
Australia, Canada and the United Kingdom — which all have universal healthcare — provide routine vaccinations at no cost. In Germany, insurance companies cover the cost of vaccinations recommended by the Vaccination Commission, Business Insider reported. And Singapore strictly regulates vaccine prices.
The Cost of a Coronavirus Vaccine Could Be High Because of Its Level of Benefit to Society
The pharmaceutical company Celgene defended its recent price hike of two of its key cancer drugs by stating that “pricing decisions reflect the benefits that our innovative therapies provide to patients, the healthcare system and society,” in a statement given to FiercePharma.
Los Angeles Times business columnist David Lazarus explains why this type of pricing model is so dangerous: “When you’re pricing a drug relative to its ‘benefits’ rather than its actual production cost, you can charge as much as you like. This is why a vial of insulin that sold for $20 a quarter-century ago now sells for about $300.”
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Many Factors Go Into Determining the Cost of a Drug
It’s not just the relative benefit that determines how much a vaccine will cost. Other factors that are taken into consideration include the manufacturing process, the availability of ingredients, the number of doses needed and how it needs to be stored and transported, Business Insider reported.
Boosters Can Add To a Vaccine's Cost
If the coronavirus vaccine uses an adjuvant, or booster, that can make the initial price higher. An adjuvant enhances immune response, however, so it would lower the number of doses required.
Vaccines Cost More When They Are New
The vaccine will likely cost more right when it comes out than it will in a few years. For example, tetanus shots — which were developed in the 1920s — cost less than $35, while the newer HPV vaccine Gardasil costs around $230 per dose, Business Insider reported.
The Cost Will Also Depend On the Supply
When there is a limited supply or a limited number of suppliers, price gouging can occur. In 2004, 100 million doses of flu shots that were manufactured at a factory in England were deemed unsafe by the U.S. Food and Drug Administration. This left only one supplier for the U.S.’s flu shots for the year, which allowed the company to inflate prices. Some hospitals reported being charged $100 for a dose that would normally cost $12 to $20, Business Insider reported.
Congressional Democrats Have Asked President Trump To Step In To Prevent Price Gouging
In a February 2020 letter to President Donald Trump, 46 Congressional Democrats asked for the government to actively prevent potential price gouging for a coronavirus vaccine.
“We write to ask you to ensure that any vaccine or treatment developed with U.S. taxpayer dollars be accessible, available and affordable,” the letter stated. “That goal cannot be met if pharmaceutical corporations are given authority to set prices and determine distribution, putting profit-making interests ahead of public health priorities.”
But This Assumes the Drug Will Be Developed With Public Funding
If a drug is developed entirely in the private sector, the government might not be able to have a say in its pricing, MarketWatch reported.
The Coronavirus Vaccine Could Cost Over $300 Million
EpiVax, a company that makes vaccines for smallpox, tuberculosis and influenza, told Business Insider in early May that it is three months away from clinical trials of its coronavirus vaccine candidate, EPV-CoV19. EpiVax CEO Annie De Groot told that site that it could cost at least $300 million to get EPV-CoV19 to the finish line.
Other Estimates Say the Total Cost of Development Could Be $1 Billion
A 2018 study published in The Lancet found that it can cost $1 billion to fund the research and development of a new vaccine. Because of the high cost, many vaccine manufacturers accept funding from the government, which means the government could have a say in the pricing, MarketWatch reported. The U.S. government has already pledged $1 billion for research into a coronavirus vaccine.
Pharmaceutical Companies Have Said That They Are Not Looking To Make a Profit Off the Vaccine
Despite the high cost of developing a coronavirus vaccine, EpiVax and other pharmaceutical companies have said that they are not seeking profits.
“We are not looking to make a profit on this pandemic, but to simply cover costs,” De Groot told Business Insider.
Similarly, Moderna and Johnson & Johnson told the site that they would be offering fair pricing for a potential vaccine: Moderna CEO Stephane Bancel told Business Insider that “there is no world, I think, where we would contemplate to price this higher than other respiratory-virus vaccines,” and a representative for Johnson & Johnson stated, “we are on the record as saying it will be on a not-for-profit basis … essentially at cost.”
Currently, Most Adult Vaccines Cost Less Than $200 per Dose
In general, vaccines are not exorbitantly expensive. According to figures from the Centers for Disease Control and Prevention, the private sector cost for common adult vaccines ranges from $26 per dose on the low end to $228 per dose on the high end, though most vaccines cost less than $200 per dose.
However, Respiratory-Virus Vaccines Can Cost Over $800 per Patient
The leading pneumonia vaccine, Prevnar 13, costs $202 per dose, and the typical pediatric patient gets four doses, bringing the cost per patient to $808. If the coronavirus vaccine is priced similarly to other respiratory-virus vaccines — as the Moderna CEO said it would be — and it requires the same number of doses, that could mean the coronavirus vaccine would cost around $800 per patient.
Medicare Recipients Will Be Able To Receive the Vaccine for Free
Although it’s unknown what the out-of-pocket costs will be for Americans who pay for the vaccine with no insurance or with a co-pay, Medicare recipients will be able to receive the vaccine at no cost. The Coronavirus Aid, Relief and Economic Security act pledges to cover the full cost of the shot for these individuals.
Health Insurance Companies Will Likely Cover the Cost of the Coronavirus Vaccine for Americans
Healthcare industry attorney Maria D. Garcia told Business Insider that insurers will likely cover the costs of the coronavirus vaccine.
“[U.S. health insurance providers] will feel the pressure from public opinion and the government to make the vaccine widely available and affordable,” she told the site. “It would be a PR nightmare to not cover the vaccine.”
If It Is Covered By Insurance, Premiums Will Likely Go Up
Even if you don’t have to pay anything out of pocket for a coronavirus vaccine, it’s likely you’ll pay for it in the end as premiums are likely to rise if the vaccine is fully covered by insurance, Business Insider reported.
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