Vaccine heroes? COVID-19 pitfalls, pricing put pharma on the spot

Test tubes
Pharmas rushing to develop COVID-19 vaccines and treatments face issues outside the lab in keeping the indutry's image up. (University of Michigan School of Medicine)

Pharma is looking to reset its image with COVID-19 vaccines and treatments, but landmines loom—with pricing likely the biggest.

The halo from pharma’s rapid response in research and discovery—and the hope that a vaccine or effective treatments will allow the world to return to some sort of normal—has propelled the industry’s reputation at an all-time high. Forty percent of Americans say their opinion of the pharma industry has turned positive during the COVID-19 pandemic, according to The Harris Poll.

However, pricing lurks just beyond the lab. Just this week in media, one well-known pundit posited in a Forbes column that the industry’s reputation hinges on the pricing of Gilead Sciences' treatment remdesivir, while another touted Pfizer CEO Albert Bourla’s promise to not price its vaccine too high in part because “people will not forget if you do that.”

Yet in the same Axios article, Bourla is quoted as saying the vaccine represents a “huge commercial opportunity” for Pfizer. Industry experts say it’s a safe bet that other pharma companies are wrangling with the same contradictory issues.

RELATED: Can the price be right? With the world watching, Gilead faces a no-win decision on remdesivir

Stewart Lyman, a biotech and pharma consultant, said while scientists and researchers will be satisfied with just the discovery of a vaccine, executives at the top of pharma companies will likely want more.

“I suspect they will be very sensitive to not gouging because there will be both political pressure and pressure from the other companies to not do that this one time,” said Lyman, who is also a former scientist at Immunex, now owned by Amgen.

“(But) they’re going to be looking for something in return," he added. "Exactly how that gets sorted out, I don’t know, but one can easily imagine a quid pro quo of some type where they say ‘yes, we’re giving this to you for cheap but let’s not have any price controls’” on other drugs in the future.

The Harris Poll Managing Director Rob Jekielek said pricing alone, whether Gilead's remdesivir or vaccines, hasn't been the key to pharma's improved reputation during the pandemic. Pricing has been a top three issue in Harris Poll surveys since March, but vaccines and treatments—especially vaccines—are what's driving the hockey-stick spike in the industry's reputation. 

The bigger pricing issue will be affordability once vaccines and treatments are released, he said, although as he pointed out, that will be a more integrated issue across industries including pharma, insurance, pharmacy benefit managers and others.

"If a vaccine or treatment exists, but Americans can’t afford to get it, especially the most vulnerable or at risk populations—for example, lower income, minority, or living in more densely populated areas—it will likely be a major issue," Jekielek said.

Of course, pricing isn’t the only hurdle pharma companies face in navigating their reputations through developing and delivering COVID-19 vaccines and treatments.

Managing expectations—for instance, avoiding overpromising and underdelivering on a vaccine's timeline—is another important consideration, said N. Craig Smith, the chaired professor of ethics and social responsibility at INSEAD graduate business school in France.

Smith pointed to global access to vaccines and treatments, along with manufacturing and distribution issues, as other challenges. He co-authored an MIT Sloan Management Review article about the liability of the pharma industry's competition-based model in COVID-19 drug development.

“There are still questions around how drugs and vaccine get made available, who gets them first and what prices are charged, but I do think there’s a great opportunity here for the industry to come out looking a whole lot better than it has in recent years,” Smith said.

Safety and efficacy of the medicines is yet another consideration. While Operation Warp Speed in both name and effort seems to be focused on speed, Lyman said, safety and efficacy are both more important.

“Coming up with and launching a vaccine fast—but one that is neither safe or efficacious or is just one of those—would be an unmitigated disaster,” he said. “Not just for the COVID-19 programs, but for every other vaccine made these days. Because then you’re going to get people afraid, pushed by these anti-vaccine groups, and starting to question the safety and efficacy of other vaccines.”

RELATED: One COVID-19 opportunity for pharma? A chance to bolster its reputation, Lilly CEO says

Jane Sarasohn-Kahn, a health economist with THINK-Health and blogger at Health Populi, agreed about the vaccine concerns. She has already begun to see shifts in opinions in the past few weeks as the pandemic wears on.

“There’s been an erosion in public support in the U.S. for vaccines—we’ve seen challenges in getting people signed up into trials, and a growing chasm between folks who would plan to take advantage of a COVID-19 vaccine versus those who would not,” she said in an email.

Still, pricing is top of mind not just for pharma companies but for government officials. Consumer pricing bills in both the U.S. House and Senate seek to limit companies from profiting during national emergencies. That includes drug companies and would impose a 10% profit margin for treatments or vaccines.

However, Anthony Fauci, M.D., head of the National Institute of Allergy and Infectious Diseases, cautioned at BIO this week that “the federal government shouldn’t force drug companies to lower the costs of COVID-19 vaccines and treatments but should encourage fair pricing,” according to a Bloomberg report.

Where does that leave the industry? In a delicate spot. As Forbes contributor John LaMattina summed up in his column about the importance of Gilead's pricing decision, saying that it “will set the tone for the Covid-19 vaccines and drugs that will follow. It will also impact the reputation of the whole industry. It’s not an easy decision. Let’s hope they get it right.”

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