The pandemic’s business

September 12, 2021

Big pharma is making big money from the pandemic

The pandemic’s business

Coronavirus, the most deadly in living memory, is an opportunity for some; suffering and death for others; economic breakdown for most; and psychological scarring for almost all survivors.

The virus has given birth to a new global drug economy of roughly $500 billion. This represents a nearly 50 per cent boost to the market over pre-pandemic times. The market is still controlled mainly by brands like Pfizer, Glaxo, Meyers, Sanofi and Roche etc.

There are four major cash costs attached to this pandemic so far. Covid testing (involving diagnostic kits and hospital charges) has already been done for around 4 billion people, with an average cost of $30 per person, amounting to $120 billion globally. The second cost is universal vaccination at an average of $30-32 per person for two shots, i.e. $210 billion for a universal global immunisation programme. The coronavirus vaccine costs vary from $6 to $60 per person as per published data on Covid vaccine brands amidst serious supply disruptions. Pfizer, the leading producer of coronavirus vaccines, is set to produce $2.1 billion doses in 2021 at an average price of $32 (for two doses) to the US and European governments, according to Pfizer’s own reported financials. The company profit is projected to reach $7.8 billion this year, 86 per cent higher than last year. It is pertinent to note that the share of Pfizer’s Covid vaccine sales this year alone will be larger than the combined revenues of its seven top-selling non-Covid drugs. Pfizer, owned dominantly by private institutional investors, has been distributing dividends/ profits to its shareholders for 83 years now. Still, a profit distribution of $2.2 billion in the last three months is unprecedented. Pfizer’s German partners BioNTech and Moderna (USA), which hardly had a cash drug in their pipeline earlier, have shot to the world’s top 20 pharmas overnight with an average projected profit of around $5 billion each in 2021, primarily with one cash drug, i.e. Covid-19 vaccine.

Both Pfizer/ BioNTech and Moderna have launched genome-controlled laboratory-prepared mRNA vaccines for the first time in human history. Russia’s Sputnik, Astra Zeneca and Johnson & Johnson vaccines are based on the viral vector technique previously tried for Ebola virus. In contrast, the Chinese vaccines are based on inactivated viruses like the previous polio vaccine.

Thirdly, Covid patients paid an average cost of $92,000 each in the United States for an average of nine days of hospital stay. Roughly half of the global causalities of 4 million-plus have borne these hospitalisation costs at varying levels across the globe. $18 billion has already been spent on 196,000 Covid patients treated in hospitals in the US alone. That’s a whopping 400 per cent on top of hospitals’ actual out-of-pocket costs in the US while people sell family silver in poorer countries to save their loved ones. Globally, patients spent an estimated $60 billion-plus on hospitalisations alone.

Finally, the breakthrough cases (infected post-vaccination) due to which booster doses are reportedly required at periodic intervals for the next few years till a stable and permanent vaccine is developed.

Most coronavirus vaccines have been tested to have efficacy levels between 60 and 93 per cent for the first six months after vaccination. Most of them deplete their effect at a rate of one per cent per month. So Covid vaccines will continue to be administered for a few years. Pfizer has already started promoting a third booster dose against the Indian delta variant of Covid-19 on its website.

The pandemic’s business

Overall, global drug prices have already registered a 16 per cent raise over the last seven months.

It is naïve to assume that governments and not individuals are funding the Covid fight. It is the taxes paid by the people that the governments use. And, now there is a new opportunity cost, Covid-19. Interestingly, five major American/ European Pharmas currently in production of Covid-19 vaccines were given grants amounting to over $10 billion to fund and support the mass production and clinical trials of potential vaccines on emergency grounds through Biomedical Advanced Research and Development Authority (BARDA), which is a US Department of Health and Human Services (HHS) office responsible for the procurement and development of medical countermeasures in consultation with Department of Defence. The emergency funding was made from the taxpayers’ money.

The Covid-related deaths in the developed world were six times more than the least developed countries according to a Brookings Institute. One needs to ponder why this virus/ pandemic has a higher cumulative infection rate in the developed world. So far 47 per cent of the deaths have been in the Americas, 29 per cent in Europe and 14 per cent in southeast Asia, according to World Health Organisation (WHO) stats published on August 10.

Now may be the time to reflect on why the so-called human growth and excellence centres have been struck so harshly and been unable to ward off this calamity? The virus has been especially deadly for older people with pre-existing comorbidities. Two-thirds (67 percent) of deaths in the US have been of 65-years-plus patients and only 3.5 per cent below the age of 30. Interestingly, the American homeless persons have reported only 462 Covid-related deaths. Their death ratio has been less than half that of America, as per in the USA.

Big Pharma are reaping huge financial dividends as their revenues bulge and share prices surge. President Biden’s exhortations to Big Pharma to be flexible on drug patents to adopt a more humane and inclusive approach have been squashed by hundreds of Big Pharma lobbyists in the European Parliament so far. The lobbying cost per annum to Big Pharma’s is a meagre $38 million (or 0.002 percent of Big Pharma’s revenues) as per advocacy group in Brussels.

In short, the developed world has not changed an iota in its attitudes in the face of the Corona pandemic. Politics, drug diplomacy and profiteering are rampant and hardly any lessons have been learnt from the catastrophe.

Covid-19 has proved devastating for humanity and an unprecedented boon for Big Pharma. A pandemic that has killed more than four million people has been unable to jolt the capitalist world out of its ways. It is business as usual. For the first time in human history every living human is a potential customer/ patient because Covid-19 is unsparing in its proliferation.

Conspiracy? A forensic audit of shareholding patterns in Pfizer, Moderna, Johnson & Johnson and BioNTech over the last five years might provide some clues.

The author is an   award-winning   Investigative Journalist

The pandemic’s business