BIO: What's the ROI on a COVID-19 vaccine? We have no idea, says Pfizer

John Young, Pfizer’s chief business officer, was only about four minutes into a one-hour fireside chat at this year’s virtual BIO conference when he addressed a question that’s been weighing on investors for several weeks now: If the company successfully develops a vaccine against COVID-19, what will the return on investment be?

When Pfizer began strategizing methods for addressing the pandemic back in January, “we realized this is not a time to think about … a typical ROI,” Young said. “Frankly, the world needs a safe and effective vaccine,” and the company’s priority is to “play our part in bringing forward vaccines and treatments that the world needs right now.”

"At Pfizer, there is no thought being given to 'ROI' in our COVID-19 work. Instead our decisions are being driven by three priorities: the health and safety of our colleagues, the continued supply of our medicines and vaccines, and finding medical solutions to this crisis," a Pfizer spokesperson added in an emailed statement.

Pfizer has been working with Germany-based mRNA specialist BioNTech to develop a COVID-19 vaccine. The partners are now in clinical trials, assessing four variants of the vaccine. After testing the variants at different schedules and dose levels, they will select a vaccine candidate to move into larger trials.

Pifzer is one of five finalists in Operation Warp Speed, the U.S. government’s attempt to speed up the development of a COVID-19 vaccine. But unlike other contenders, it is not looking for federal funding to accelerate clinical development. There’s a reason for that, Young said at BIO.

“We made an active decision not to seek government funding because we didn't want this to slow down our partnership with BioNTech and to slow the progress moving a vaccine construct into the clinic,” Young said. “Our focus was to move as quickly as possible and we really didn't want to … spend a month negotiating with the U.S. government.”

So how long will Pfizer’s development process take? Young was reluctant to make any hard predictions. Too few patients have been dosed in the clinical trials thus far, he said, and “ultimately data should really drive the decisions that we make, along with regulators, as to which [candidate] has the potential to be the safest and most effective vaccine construct.”

But Pfizer is thinking about how to tackle the challenge of manufacturing enough doses of a COVID-19 vaccine to meet the demand—and investing plenty in that effort. The company said in May it would lean on its manufacturing sites in Michigan, Massachusetts and Missouri, as well as a fourth site in Belgium, to ramp up production of the vaccine.

During the BIO chat, Young said Pfizer will handle the U.S. supply chain and BioNTech “will develop a parallel supply chain for Europe and rest the world.” Meanwhile, Pfizer will outsource production of some its other drugs to contractors to clear manufacturing space.

Despite its strong partner network, the manufacturing of a COVID-19 mRNA vaccine will be far from simple, Young said. Typically, Pfizer makes about 500 million vaccine doses per year, but this time around, the company has committed to make “tens of millions of doses this year and hundreds of millions in 2021” if one of its vaccine candidates succeeds, he said. “So we need to more than double down on our investments in our supply chain, and to make significant investments of capital, as well as investments in … some very specialized raw materials.”

Young emphasized that making an mRNA vaccine is a brand-new endeavor for the company. It involves combining nanoparticles with mRNA and using plasmids to produce the mRNA. “We have not made one of those products before, so we really had to from scratch work with raw material suppliers … and companies that make these very specialized products.”

It all brought to mind that one pressing question: What will the ROI be for Pfizer? To answer that, the company would need to estimate its own costs, not to mention the price of the vaccine—neither of which it’s ready to do, Young said.

Pfizer has done “no modeling work to this point around … the pricing,” Young said, because “we’re still in the process of figuring out where our supply chain is to know even what our cost of manufacturing is. So it’s really premature in our vaccine program to reach a point of view on pricing.”

The controversy over drug pricing continues to be a thorn in the side of the pharma industry, even amid the pandemic. Pfizer is well aware of the need to balance the need for an affordable COVID-19 vaccine with the demand from investors for ROI—and the potential for its actions to help repair the industry’s image, Young said.

“We really need effective vaccines … to get back to normal economic activity,” Young said. “So I hope, if we're successful in that mission … the perception of our industry will reflect the efforts that we've made.”