Analysis-Falling demand for COVID boosters puts price hikes on the table
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[October 20, 2022]
By Michael Erman
NEW YORK (Reuters) - With most Americans
delaying or skipping new COVID-19 booster shots, analysts and investors
are now predicting far fewer will be given each year, pushing the number
of shots well below annual flu vaccinations.
With fewer shots needed, vaccine makers including Pfizer Inc, partner
BioNTech SE, rival Moderna Inc and Novavax Inc could have to hike prices
as much as three times current levels if they hope to meet Wall Street
revenue forecasts for the shots for 2023 and beyond, several analysts
said. Last year, many on Wall Street were estimating the number of
COVID-19 shots would be in line with the annual flu vaccine, which is
the vaccine market leader with more than 160 million shots per year in
the United States and 600 million shots globally.
Now the slowing pace of the early COVID revaccination campaigns -
particularly in the key U.S. market - is changing that view. A recent
poll by Kaiser Family Foundation found that two-thirds of American
adults do not plan on getting a COVID vaccine soon. Analysts are
expecting the U.S. market to be as low as one-third the size of the flu.
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"The fact that you have people saying the pandemic is over doesn't
motivate people to get vaccinated," said Dr. Bruce Farber, chief of
public health and epidemiology for New York hospital system Northwell
Health.
He added that instances of COVID infections in those who have been
vaccinated has left many to question the effectiveness of the vaccine.
Healthcare investor Bijan Salehizadeh with Navimed Capital, previously
thought demand would likely mirror that of the flu, but now believes it
will be much smaller without significant evidence that updated shots are
better.
"The average person is not going to jump to get it" without signs of
improved efficacy, he said.
FALLING NUMBERS
Over the first six weeks of the roll out, around 14.8 million people
have received the updated COVID-19 booster shots which target the
original coronavirus strain and the Omicron strain. In the first six
weeks of the 2021 vaccination campaign, over 22 million people received
their third shot even though only older and immunocompromised people
were eligible at that point. Uptake of the boosters this year in the
European Union did not spike as hoped after new, updated shots that
target Omicron were released, staying in a range of 1 million to 1.4
million doses a week.
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A vial labelled "VACCINE Coronavirus
COVID-19" is seen in front of a stock graph in this illustration
taken on January 17, 2022. REUTERS/Dado Ruvic/Illustration
![](http://archives.lincolndailynews.com/2022/Oct/20/images/ads/current/chicagost_sda_FHG_2022.png) Wall Street analysts and investors
agreed vaccine sales could improve if the companies provide proof
new boosters protect people from mild illness; if they develop
pan-coronavirus vaccines; or if the shots are combined as a single
shot with the flu vaccine. A new wave of infections could also spur
demand.
For 2023, analysts on average estimate Pfizer, Moderna and Novavax
could generate sales of $16.3 billion, $7.9 billion and $2.8 billion
from their COVID-19 vaccines, respectively, according to Refinitiv
data.
Pfizer, BioNTech and Moderna declined to discuss their outlook for
COVID related sales.
Novavax Chief Commercial Officer John Trizzino said that although
vaccine fatigue and the belief the pandemic is over are currently
tamping down demand, the drugmaker expects the COVID market will
eventually be at least as big as flu. He said increased infection
rates, hospitalizations and deaths will drive people to get
boosters.
"Unfortunately, the virus does that work for us," Trizzino said.
Moderna has also suggested several times that it believes flu is a
good comparison both in the United States and globally. The
companies could make up for some of the weaker demand with price
increases. Moderna has said that it could aim to charge as much as
$100 a dose for shots that it originally priced at around $16.50.
SVB Leerink analyst Daina Graybosch is skeptical the companies will
be able to raise prices that high.
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But Jefferies' Michael Yee said it is plausible private health
insurers and U.S. government health plans would spend up to three
times more than the current price of around $30 to prevent the
significant costs of hospitalizations or long COVID. That would mean
annual revenue of $3 billion to $5 billion over the long-term for a
company like Moderna, he added. Investors have already started to
sour on the promise of the COVID vaccine market, particularly for
Moderna, BioNTech and Novavax, three young companies that rely on
the shots to generate virtually all of their profits. Shares in all
three companies have fallen by at least two-thirds over the last
year. Pfizer, one of the biggest pharmaceutical companies in the
world, has dropped around a third.
(Reporting by Michael Erman; Editing by Caroline Humer and Chris
Sanders)
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