Big Pharma is facing a reckoning as they face a sales cliff with demand for the COVID vaccine projected to plummet by the end of the year.
The world’s largest pharmaceutical companies have raked in billions from the COVID-19 pandemic over the past two years, after governments around the world mandated vaccines for their populations.
Major drugmakers such as Pfizer, BioNTech, Moderna, Gilead Sciences, AstraZeneca, and Merck are estimated to have made about $100 billion in profits from COVID vaccines last year.
Most drug companies predict that vaccine sales could fall by nearly two-thirds at the end of 2023 due to massive existing stockpiles of the drugs, especially in the wealthier countries which acquired the bulk of the shots, according to Reuters.
Vaccine Demand Hits a Wall for Big Pharma
Demand has reportedly hit a peak, as the amount of people wishing to take the vaccine has dropped, while many are also gaining immunity from previous infections.Persistent and widespread skepticism over the vaccines and government mandates have also been a key factor in plunging sales.
The Republican-controlled House of Representatives voted to end the three-year federal public health emergency for the pandemic last week over opposition from the Biden administration and the Democrats.
Growing concern that the vaccines were causing serious injuries, combined with news that pharmaceutical executives allegedly had full knowledge of the potential serious reactions to their products, has caused a public backlash.
Pfizer, the biggest financial beneficiary of the vaccines, made more than $56 billion in revenue last year from the drug it co-developed with the German firm BioNTech and from its COVID antiviral treatment Paxlovid.
The pharmaceutical company is expecting revenue for 2023 to drop to around $21.5 billion, but some analysts believe that its forecasts are overly optimistic.
“We remain skeptical that COVID revenues will grow in 2024 and beyond,” JP Morgan analyst Chris Schott wrote in a research note.
He said that vaccination rates could fall even farther, exceeding the drop in demand for boosters in 2022.
Moderna, another major vaccine manufacturer, also expects its revenue for 2023 to fall sharply.
The company’s messenger RNA vaccine hauled in around $18.4 billion in 2022, but analysts expect earnings to drop to around $7 billion in 2023, reported Reuters.
Other Pharmaceutical Companies Face Dip in COVID Drug Sales
Other drugmakers have felt a milder impact from their pandemic-related drug sales.Merck, which reported sales of $5.7 billion from vaccine sales, with a total of more than $59 billion in sales last year, may see its earnings drop below $1 billion in 2023, say analysts.
“We are not counting on Lagevrio as a driver of growth for our business,” Merck CEO Rob Davis told Reuters last week, regarding his company’s antiviral pill.
“We very much saw Lagevrio as an opportunity to make a meaningful difference at a time of need.”
Eli Lilly and Co. gained $2 billion last year from its monoclonal antibody COVID treatments, but is not expecting any earnings from the drug for 2023.
The U.S. Food and Drug Administration revoked its authorization of Lilly’s latest antibody drug, Bebtelovimab, in November 2022, as it was found to be ineffective against Omicron variants.
“We did fine with COVID,” Eli Lilly CEO Dave Ricks told Reuters in an interview
“We made a little bit of money with it. What we did with that was we mostly reinvested it in R&D [research and development], and last year was a record R&D spending year for the company,” Ricks noted.
