- [Announcer] A Corona virus vaccine is seen
as a key weapon against the pandemic,
but how much will shots cost in the US?
Some companies have said that a dose could sell
for as little as a few bucks to as much as $25.
And that vaccines may actually be available fairly quickly
by industry standards, meaning less than two years,
as opposed to more than 10.
- It's called operation warp speed.
That means big. And it means fast.
- [Announcer] Of more than 160 groups racing
to put a vaccine on the market,
a handful entered the final testing stage
within the first six months.
That's much faster than the usual process,
which can take years.
And that's in part thanks to US government money.
The administration handed out more than $10 billion
between March and August.
- There's an expectation on the public's part that the drug,
because it's been funded partially by tax payer money,
that the price will be reasonable.
- [Announcer] But investors have also poured funds
into drug makers and stocks
at some pharma companies have sought.
That's putting pressure on big pharma
to make vaccines affordable
while also keeping investors happy.
We wanted to know what does that mean
for the final price tag?
Developing a vaccine is a huge gamble.
Getting it from the lab to clinic can cost billions
of dollars and not all of the companies that
are developing vaccines will end up with a viable product.
- Of all of the vaccines that start human testing,
about 66% of them will fail.
- Kenneth Kaitin studies drug pricing
at Tufts Center for the Study of Drug Development,
which receives grants from the pharmaceutical industry.
He says vaccine R&D is something few companies can afford.
- Not a lot of companies actually invest in this
for a variety of reasons.
One of them is the poor likelihood of success
and the difficulty of generating revenue
on whatever R&D activity they have.
- [Announcer] But in the case of the COVID-19 pandemic,
government money is taking away a lot of that risk
by funding, vaccine research and development
and signing contracts to buy the vaccines before
they're even approved.
Two government deals with Moderna and Pfizer would secure
as many as 200 million doses by January next year.
And that would mean both vaccines would be free of charge
to people in the US at least initially.
To speed things up, pharma companies
received additional funds for manufacturing
and are already mass producing vaccines
while still conducting clinical trials.
Michael Kinch is a biochemistry professor
and a vaccine historian.
He says producing and storing vaccines
can be very expensive.
- Under what conditions, what the temperatures and humidity
and a number of things that, again,
oftentimes can take years to develop.
It might be that we find out
that certain conditions ruin a batch of vaccine.
- There's also a parallel scramble to secure billions
of medical grade vials and syringes that are just
as important as clinical trials.
And the US isn't the only country trying
to secure doses for its citizens.
- Certainly there are just 7 billion people,
which is probably an underestimate,
and if each one perhaps needs two doses,
you're talking about a monumental logistics challenge
of being able to create double digit billions
of different vaccine doses.
- Manufacturers of glass vials have estimated
that worldwide demand because of the pandemic
will increase by 2 billion over the next two years.
Since most of the medical supplies are sourced overseas,
the US government is giving American glass-makers
and syringe suppliers, federal contracts
to ramp up production.
Some Americans are hesitant about taking a COVID-19 vaccine
because of concerns that development is being rushed.
To allay those concerns, several industry rivals
are planning a joint pledge to not seek regulatory approval
until the shots are proven to be safe and effective.
Despite the hurdles, some companies are joining
the crowded race because they already have
the technical capabilities to do so.
For instance, Novavax says it makes business sense
to repurpose the technology it uses for
a promising flu vaccine to develop one for COVID-19.
Plus financial backing from not just the US government,
but also various countries and nonprofits
have also given companies more of an incentive to chip
in than ever before.
In return, companies may get positive coverage worldwide
for stepping in during a pandemic
or being one of those to find an effective vaccine.
Lawmakers have said that drug makers
should be held accountable to taxpayer dollars.
Some companies have said their vaccines
will be priced at cost because of the current crisis.
- We will be providing a vaccine
at a not-for-profit price during the emergency pandemic.
- But Pfizer and Moderna has said they still intend
to make a profit.
- We will not sell it cost.
- Kenneth Kayton from Tufts points out
that some pharmaceutical companies with portfolios
of blockbuster drugs should be able to absorb
the cost of the vaccine.
Sales from these products can help take away some of
the pressure to profit from a single Corona virus vaccine.
Meanwhile, the government is working
with commercial insurers as well as Medicare and Medicaid
so people won't have to pay out of pocket.
There's also a government plan to help fund
the vaccines for the uninsured.
Black and Latino communities have less access
to health care than white people.
And they've been dying at disproportionately higher rates
during the pandemic while also making up a large part
of essential workers at greater risk for exposure
to the virus.
So a free or affordable vaccine would be one
of the best ways to protect the most vulnerable
and return to some level of normalcy.
(gentle music)