As you would expect, developing vaccines costs a lot of money. Should You Prepare for a High Price for a COVID-19 Vaccine? Actually no. You might be surprised how much you’ll have to pay for a coronavirus vaccine.
A good kind of sticker shock
Flu shots typically cost around $ 40. A new shingles vaccine can cost almost $ 300 for two injections. Will the cost of a COVID-19 vaccine be somewhere in the middle? Nope. Guess lower. Much lower.
The US Department of Health and Human Services (HHS) intends to make COVID-19 vaccines available to Americans at free of charge. That’s right, the price for you will be $ 0.
We’re not just talking about Medicare members. The free offer isn’t just for low-income people. HHS has publicly stated that an approved COVID-19 vaccine will be free “to the American people.” This includes everyone, regardless of age, income, or type of health plan you have.
Of course, there could be money changing hands. Your healthcare professional will be authorized to bill insurers for the cost of administering the COVID-19 vaccine. This is normal with vaccines purchased by the government. And the insurance company will charge the money for you.
The price you won’t see but still pay
You’ve probably heard the expression that there is no free lunch. Well, there is also no free vaccine. There is a price for COVID-19 vaccines that you won’t see but likely pay.
Sometimes it’s easy to forget that when the US government buys something, the taxpayers ultimately pay the price. If you pay federal taxes, you will indirectly pay for COVID-19 vaccines.
The US government plans to purchase 100 million doses of the COVID-19 vaccine developed by Pfizer (NYSE: PFE) and BioNTech, assuming the lead applicant for both drugmakers obtains FDA approval or emergency use clearance. It pays $ 1.95 billion, which works out to a price of $ 19.50 per dose.
Spreading this cost of $ 1.95 billion over about 119.5 million taxpayers equates to just over $ 16 per taxpayer. However, you really pay more than that.
In March, HHS announced it would provide $ 456 million in funding for Johnson & Johnson’s (NYSE: JNJ) COVID-19 vaccine candidate. The ministry committed up to $ 483 million in April to Modernof (NASDAQ: ARNM) experimental vaccine against the coronavirus.
In May, HHS agreed to pay up to $ 1.2 billion to AstraZeneca (NYSE: AZN) to support the development and manufacture of its COVID-19 vaccine candidate AZD1222. And in July, the U.S. government signed an agreement with Novavax to obtain 100 million doses of its COVID-19 vaccine candidate in exchange for funding of $ 1.6 billion.
Just last week Sanofi and GlaxoSmithKline won an agreement with the US government to deliver 100 million doses of their vaccine candidate currently in preclinical testing. The deal was priced at $ 2.1 billion, including funding for the clinical development process.
In addition to these agreements, HHS pays Emerging BioSolutions $ 628 million under an existing contract with the Biomedical Advanced Research and Development Authority (BARDA). A portion of that amount is aimed at making a COVID-19 vaccine, but others will also go to Emergent BioSolutions helping to create therapies for the novel coronavirus disease.
Even though we rule out the HHS deal with Emergent, the U.S. government is paying more than $ 6.1 billion in total for COVID-19 vaccines. This means that each US taxpayer’s share of the bill is over $ 51. Obviously, the ‘free’ coronavirus vaccine that is hopefully on its way isn’t going to be really free.
The price of COVID-19 vaccines is also likely to rise. For example, AstraZeneca and J&J said they would not try to profit from their vaccines during the pandemic. But there could still be a high demand for COVID-19 vaccines even after the pandemic has officially ended. This could set the stage for the big pharmaceutical companies to raise their prices.
There will also almost certainly be a limit on the number of doses of the vaccine the US government will buy and make available for free. Once the current health crisis is over, you may have to pay for a COVID-19 vaccine out of pocket.
What could that amount be? Moderna could provide a clue. Biotechnology is reportedly considering pricing its COVID-19 vaccine between $ 50 and $ 60 per dose in the United States. Other drug manufacturers could possibly set their prices in this general stage.
Rising prices in the future in the health sector? It is not at all a surprise.