The following is an excerpt from Fortune.com.
For drugmaker Pfizer, a fortune amassed in the Covid pandemic is now paving the path to pharma nirvana: a weight loss pill worth billions.
The company has reaped nearly $100 billion from selling Covid-19 vaccines and treatments to U.S. taxpayers and foreign governments.
With that windfall, it plans to get richer, sinking the cash into developing and marketing potential blockbusters for conditions like migraines, ulcerative colitis, prostate cancer, sickle cell disease, and obesity.
It just announced it will triple or even quadruple the price of its Covid vaccine once it goes on the commercial market next year.
Meanwhile, the company is inundating doctors and pharmacists—and consumers—with advertising touting its Covid drug Paxlovid.
“Pfizer is a remarkable marketing machine. They have an incredible ability to make the most of molecules and get them adopted,” said Timothy Calkins, a professor of marketing at Northwestern University’s Kellogg School of Management.
The federal government is helping Pfizer with its marketing, urging people to get boosters targeting the omicron variants, although early data has been mixed on whether the shots work better than the earlier version.
But even with a 66% drop in Covid vaccine sales in the past quarter, the company made about $4.4 billion in those three months. Pfizer has a deep stream of cash to finance its future.
Covid has been very good for business.
Pfizer still sees Covid as a “multibillion-dollar franchise” long term, Chief Financial Officer David Denton told a Nov. 1 earnings call, since Covid “is going to be somewhat like a flu, sustained flu, but actually more deadly than the flu.”
The company announced Oct. 20 that it would charge $110 to $130 a shot once government contracts run out next year, more than double what investors were expecting.
The U.S. government paid $30.50 per shot in its latest contract with Pfizer, according to Zaid Rizvi, a researcher for the advocacy group Public Citizen.
Pfizer was a good citizen in keeping prices down during the worst of the pandemic, CEO Albert Bourla told investors.
Now payers will pick up the added cost, while consumers “wouldn’t see the difference” because there’s generally no copay for vaccines.
Still, unless new mutations are dangerous enough to scare enough people, Wall Street analysts expect sales to lag, as the public loses interest, Republican politicians discourage booster shots, and concerns continue about rare heart damage in young people getting the shots.
Pfizer said in July it had taken “a $450 million write-off of inventory related to Covid-19 products” that exceeded “approved shelf-lives.” And Moderna on Nov. 3 lowered sales predictions for its Covid vaccine.
“Not many people are going to go out and get their fourth, fifth, and sixth boosters if there’s no major new variant,” said Geoff Meacham, an analyst at Bank of America. “If you’ve had the two mRNAs and a booster, you are pretty well protected. Do you need it annually?”
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