Pfizer put its flag in the pricing landscape by announcing that it has come to an agreement with the federal government to provide by December 100 million doses of vaccine for $1.95 billion, or $19.50 a dose. Americans would then receive the vaccine for free.

In a remarkably candid interview with Time magazine, Pfizer CEO Dr. Albert Bourla shared the challenges his company is facing in trying to deliver a novel Covid-19 vaccine. Working with its biotech partner, BioNTech, Pfizer launched its ambitious program last March, committing more than $1 billion to meet its goal of having a vaccine available by the end of the year. But its program has risks. First, no vaccine has been successfully developed using the mRNA technology it is employing. While early data are promising, the durability of such a vaccine as well as the safety won’t be known until Pfizer completes a 30,000 patient trial later this year. Despite this, Pfizer has already begun large scale production of the vaccine anticipating success. Notably, Pfizer is doing all of this work without accepting any government funds. When asked by Time “What if the FDA rejects the vaccine?” Bourla simply responded: “We’ll just have to write it off and call it a day….. It’s only money we’re going to lose.” 

Of course, it’s of no value to have a vaccine that people can’t afford and so the issue of cost to patients has been continually raised. Today, Pfizer put its flag in the pricing landscape by announcing that it has come to an agreement with the federal government to provide by December 100 million doses of vaccine for $1.95 billion, or $19.50 a dose. Americans would then receive the vaccine for free. In addition, the government has rights to acquire 500 million more doses. Of course, this assumes that the FDA approves the vaccine. 

Pfizer is not the only company actively working on Covid-19 vaccines with large companies like AstraZeneca, J&J, Sanofi, and Merck, as well as smaller companies like Novavax and Moderna heavily involved. Moderna is an interesting case. Much like Pfizer, Moderna’s vaccine is also using mRNA technology and its program is progressing rapidly with help from a $483 million Covid-19 agreement with the U.S. government. Despite not yet having a product on the market, Moderna has an astounding market cap of more than $30 billion. Clearly, investors are anticipating Moderna’s vaccine to be a major success.