Pfizer is considering hiking the price of its COVID-19 vaccine by roughly four times what it currently charges as it prepares for sales in the U.S. to shift from government contracts to the private market.
The pharmaceutical company is targeting between $110 and $130 per adult vaccine dose after that transition, said Angela Lukin, Pfizer’s head of global primary care and U.S. president, on an analyst and investor call Thursday.
“We feel confident that this range will be seen as highly cost effective and definitely one that will help to enable and ensure appropriate access and reimbursement to the vaccine,” Lukin said on the call. Discussions with insurers are still in early stages, she added.
Lukin said that Pfizer expects people with government insurance like Medicare and Medicaid, or who are covered via commercial plans will not have to pay out of pocket to get vaccinated.
The pricing described by Lukin is higher than what investors have been expecting, according to analysts from SVB Securities and Cantor Fitzgerald, and above the $64 to $100 per dose range previously sketched out by competitor Moderna in September.
Shares in Pfizer climbed by more than 4% Friday morning, while Moderna stock jumped nearly 6%.
The price hike could open up Pfizer to new criticism of its vaccine pricing, which has remained an issue throughout the pandemic even at the prices it currently charges for government sales. Umer Raffat, an analyst at Evercore ISI, called Pfizer’s plans “a mistake,” noting that, while such a move makes it more likely the company meets Wall Street estimates, it is “clearly bad optics.”
On the call, Lukin defended Pfizer’s planned pricing as cost effective for the vaccine’s value. She also said the transition to private market sales would mean higher costs as the company switches to a single-dose vial and handles commercial distribution.
“While a commercial marketplace presents new complexities,” Lukin added, “we are confident we have the capabilities to make this transition successful.”
Pfizer earned more than $22 billion from sales of its COVID-19 vaccine, branded as Cominarty, over the first six months of the year. It has forecast annual sales reaching $32 billion this year.
But the company, as well as rival Moderna, face slowing demand for shots in the U.S. According to data from the Centers for Disease Control and Prevention, fewer than 20 million people have received either company’s updated booster shots, which are reformulated to better protect against the omicron variant. Less than one third of children between ages 5 and 11 have completed their initial two dose series, while only 3.5% of children aged 2 to 4 years old have.
Pfizer’s Lukin said the company is planning to support commercial marketing with communication through TV, radio, digital and social channels about booster dose eligibility and the importance of staying up to date on vaccination.