Pfizer and BioNTech Profiteering Exposed – More than Enough is Enough

Buried in BioNTech’s annual report is information about their research and development (R&D) expenses, and by extension Pfizer’s R&D expenses, on their jointly held COVID-19 mRNA vaccine:

For the year ended December 31, 2020, research and development expenses were €645.0 million… . The increase was mainly due to an increase in research and development expenses for our BNT162 program. Research and development expenses include our share of expenses under the terms of the Pfizer collaboration agreement. Development costs are shared equally between Pfizer and us. … In addition, from May 6, 2020, the date of acquisition of our new U.S.-based subsidiary, BioNTech US Inc., contributed to our research and development expenses.

Since this statement reveals that development costs were shared equally by BioNTech and Pfizer and since we know that BioNTech’s number includes some non-Covid R&D and expenses related to its new subsidiary, we can realistically hazard a guesstimate that total R&D expenditures on the vaccine were $1 billion or less. And don’t forget, BioNTech got $445 million from Germany to speed up its vaccine development and for initial investments in expanded manufacturing capacity.

Compare these R&D expenditures with projected earnings. Pfizer is already on record predicting $15 billion in earnings from the vaccine this year. BioNTech’s estimate is $11.5 billion. But these projections are based on 1.4 billion doses only. The partnership is planning to increase production up to 2.5 billion doses by end of the year. Selling those additional .9 billion doses at $19.50, the U.S. price, would yield another $17.55 billion in revenue (note:  Pfizer had already predicted another possible $15 billion in sales).

Pfizer and BioNTech have an undisclosed no-markup price for their vaccine with COVAX for 40 million doses. That price has been estimated to be $6-7 per dose. Against this, we have estimates of costs of production at efficient economies of scale between $2-3 a dose.

We can see enormous profiteering taking place already, even before Pfizer institutes its projected “post-pandemic” price in the range of $150-175 a dose (post pandemic might very well be after first round of vaccinations in rich countries, e.g., 2022).

Arguments that the companies have not made enough money to justify their vaccine R&D investments are preposterous. Is a 60-80% profit rate over R&D and costs of production within one year an insufficient of a return? Is protecting their IP monopolies so companies can make many more multiples of profit so essential to shareholders’/managers’ expectations that Pfizer and BioNTech would fold up their tents and leave the mRNA vaccine space? 

What is particularly galling about this profiteering is that the companies acknowledge that they cannot meet demand from low- and middle-income countries (LMICs). And yet they still insist on protecting their intellectual property (patent and trade secret) empires and tying the hands of LMICs that are trying to waive those rights so that additional manufacturers can produce needed quantities. The companies are refusing to let other producers meet demand from LMICs – sales that Pfizer and BioNTech themselves cannot and will not make. They seem to be saying “Even if we can’t serve you, we won’t let anyone else do so because it would undermine our total control over our sacrosanct IP.” 

Will President Biden and other leaders in rich countries let Pharma greed and baseless threats lead to more mass graves?