Pfizer (NYSE:PFE) signaled its intent to increase its COVID-19 vaccine price to roughly $110 to $130 per dose after the U.S. government’s purchase program for the vaccine expires, according to Angela Lukin, Pfizer’s global primary care and U.S. president.
The COVID-19 vaccine price hike would pertain to patients 12 and older.
The company could revise the pricing for the vaccine in the first quarter of 2023, assuming the U.S. government transitions COVID-19 vaccination to the private sector by then.
The U.S. government currently pays about $30 per dose for the COVID-19 vaccine from Pfizer and BioNTech (Nasdaq: BNTX).
Pfizer anticipates that private payers would cover the cost of the shots, making them free or nearly so for most individuals.
Demand for COVID-19 vaccines has fallen considerably in 2022, which could compel makers of COVID-19 vaccines to hike prices to meet revenue targets.
Pfizer ultimately anticipates the size of the COVID-19 vaccine market to be in line with the annual flu vaccine market.
Investors apparently liked the plan. PFE shares jumped almost 5% to $44.95.
The COVID-19 vaccine competitor Moderna saw its stock jump 8.40% to $128.32.
BioNTech stock was up even more — 11.15% to $131.64.
Moderna has previously signaled its intent to raise the prices for its vaccine to around $60 per dose, according to Barron’s.
Wells Fargo analyst Mohit Bansal estimated that Pfizer’s plan to increase its vaccine price could result in approximately $2.5 billion to $3 billion in additional annual sales for the vaccine. Bansal had assumed the company would charge $50 to $80 per shot. “We see a $2 per share upside to our estimates” from the price boost, Bansal wrote in a research note.
In the summer, Pfizer announced that it would boost the price for the COVID-19 vaccine by 27% in the U.S. in a $3.2 billion pact with the U.S. government.