Finita la corona: How much global pharma made during the pandemic and where it is going to seek profits next
What the industry will switch to and whether it will have to
On May 30, the annual session of the World Health Assembly, the highest governing body of the World Health Organization (WHO), concluded in Geneva. The event, which began on May 21, was the 76th such gathering. During the session, among other things, a project of the so-called pandemic treaty (establishing rules of conduct in case of global spread of dangerous infections) was considered, and it was decided to increase membership contributions for participants of the organization by 20%. The WHO programme budget for 2024-2025 was approved at $6.83 billion.
This happened almost a month after the world formally said goodbye to the COVID-19 pandemic. Recall: at the beginning of May, WHO Director-General Tedros Adhanom Ghebreyesus announced the end of the emergency situation in public health related to the COVID-19 pandemic, and the cessation of the relevant committee within the organisation. Despite vivid media headlines about the "end of the pandemic", the relevant decision of the WHO means only that the coronavirus infection has ceased to be an emergency situation and from now on the organizsation recommends reacting to it in the same way as to other viral diseases.
The infection itself, of course, has not gone anywhere. Despite the overall decline in its spread rates globally and the relaxation of quarantine measures by the governments of many countries, the situation remains ambiguous at the regional level. In particular, in China, after the abolition of the zero tolerance policy to COVID-19, a rapid increase in the incidence is recorded: by the end of January 2023, 80% of the country's population was infected.
Therefore, the WHO urges not to take its decision as a reason to weaken vigilance against the constantly mutating coronavirus or to "roll back" the built systems of medical response. "These news mean that it's time for countries to move from the emergency mode to fighting COVID-19 alongside other infectious diseases," Ghebreyesus explained.
Not only unprecedented quarantine measures from the governments of many countries but also the solidarity of doctors and the global scientific community, and as a result – the prompt development and release of COVID-19 vaccines and mass immunisation, helped to reduce the number of coronavirus infections. In addition to saving the world, COVID vaccines and drugs also brought super-profits to pharmaceutical companies that were able to quickly respond to new demand.
How much companies earned during the pandemic, what global pharma will need to adapt to after the reduction in the level of coronavirus disease and what the WHO meant by deciding to change the status of the COVID-19 pandemic, read in the analysis by Mind.
Why was the pandemic status changed just now? The WHO declared the spread of COVID-19 a global pandemic and declared a state of emergency in health care on January 30, 2020. As of May 24, 2023, the organisation reported almost 767 million confirmed cases of the disease and about 7 million deaths from coronavirus infection. According to Tedros Adhanom Ghebreyesus, the actual number of all infection-related deaths is over 20 million.
It should be noted that since the beginning of the pandemic, the Ukrainian Ministry of Health (MOH) has recorded over 5.5 million cases of coronavirus, of which over 112,000 have been fatal.
The end of the emergency in health care due to the COVID-19 pandemic is linked to the fact that the infection has been on a downward trend for over a year. Doctors link such a result to the increase in population immunity due to mass vaccination.
From April 24 to May 21, 2023, the WHO registered almost 2.3 million new cases of COVID-19 worldwide and about 15,000 deaths, which is 21% and 17% (respectively) less compared to the previous 28 days. It is worth recalling that at the peak of the pandemic, in January 2021, 100,000 people were dying from the infection every week. Today, however, the number of new COVID-19 cases is decreasing by an average of 15–20% week by week.
How did "anti-COVID" vaccines make a breakthrough? Undoubtedly, to reduce the spread of the coronavirus, many countries took serious quarantine measures: they closed borders, introduced lockdowns, mask regimes. At the same time, during the three years of the pandemic, an entire "industry" has emerged around COVID-19, as people, particularly scared by the not fully understood threat, bought everything that could protect them from the virus in some way: personal protective equipment, antiseptics, certain drugs that pharma presented as "antiviral".
The pivotal moment in the fight against the pandemic was the development of vaccines and mass immunisation of the population, and later the emergence of drugs that helped in the treatment of complications from the coronavirus. Vaccinations and well-updated protocols have reduced the number of hospitalisations due to infection and prevented the deaths of millions of people.
Interestingly, pharmaceutical companies managed to develop, clinically test, and approve vaccines against the coronavirus in less than a year. In particular, mRNA vaccines from Pfizer-BioNTech and Moderna with 95% efficacy went through the mentioned path in 11 months. Back in 2019, it was believed that this type of immunisation would only become available in 5–7 years.
By the way, on the eve of the russian federation's invasion, Ukraine was preparing to join the manufacture of vaccines against the coronavirus. The first production line for CoronaVac was planned to be launched in February 2022. Because of the full-scale war, this project was postponed. For the same reason, the Lekhim company’s initiative to develop inactivated vaccines was frozen, as it involved the inclusion of the Ukrainian Research Anti-Plague Institute in Odessa as one of the bases for laboratory research. In April 2022, the Darnitsa company reported that the WHO would provide Ukraine with mRNA vaccine production technology.
How much has global pharma made on coronavirus? As of May 23, 2023, over 13 billion doses of COVID-19 vaccines had been administered worldwide, and pharmaceutical companies' superprofits in the early years of the pandemic are measured in billions of dollars.
For instance, in Q1 2021, when coronavirus vaccinations had not yet reached the scale they did in the second half of the year, and less than 5% of the population had been fully immunised, pharmaceutical companies already reported increased profitability. For example, Moderna, thanks to its COVID-19 vaccine and US government investment in further development, earned $1.9 billion in the first three months of 2021 – 24 times more than in the same period in 2020 ($80 million).
Pfizer generated $14.6 billion in revenue (+45% against 2020) from January to March 2021, with $3.5 billion coming from the sale of the Comirnaty vaccine, which was produced in partnership with BioNTech. The latter's share price, thanks to the development and production of the coronavirus vaccine, increased by 3.5 times to reach $171 per share, and the total capitalisation reached $41 billion.
Johnson & Johnson earned $22.3 billion (+8%) in Q1 2021, although the sale of the COVID-19 vaccine only brought the company $100 million. AstraZeneca earned $7.3 billion (+15%) in Q1 2021, with $275 million coming from the vaccine sales. But most of the contracts for its sale were concluded in 2020, and then the vaccine sales brought the company $2.5 billion.
In 2022, the revenue figures from the sale of COVID-19 vaccines were no less impressive. During this period, companies also introduced coronavirus drugs, which they were able to make additional money on. For example, Pfizer's revenue for the past year was $100.33 billion (Comirnaty vaccine sales at $37.8 billion, Paxlovid tablet sales at $18.9 billion). And the company MSD (Merck & Co) earned $59.28 billion, of which $5.68 billion came from the oral antiviral drug Lagevrio.
Closer to the end of 2022, demand for anti-Covid products decreased due to reduced government orders – the number of infections fell, and healthcare facilities amassed stockpiles of vaccines and anti-coronavirus medications. The superprofits from the sale of coronavirus products for pharma companies came to an end. Specifically, Pfizer forecasts that its revenue for 2023 will decrease to $67-71 billion (compared to the mentioned $100.33 billion). The manufacturer expects vaccine sales to fall to $13.5 billion (compared to $37.8 billion in 2022), and Paxlovid drug sales to $8 billion (compared to $18.9 billion).
What will the industry shift to in the "post-pandemic" period? Drug and vaccine manufacturers believe that sales of "Covid" products will grow again in the next few years. Representatives of pharmaceutical companies and market experts assume that even after the end of the emergency situation related to COVID-19, people will still need to regularly get revaccinated to protect against new strains. In particular, Pfizer expects that the share of people receiving coronavirus vaccinations in the US will reach the level of annual flu immunisation, which stands at 50% in that country.
Such a scenario seems entirely plausible considering that, after its decision of May 5, the WHO published a Strategic Preparedness and Response Plan for COVID-19 for 2023-2025, which aims to guide countries in transitioning to long-term treatment of the coronavirus, and created a Review Committee to develop long-term standing recommendations for countries on how to permanently deal with COVID-19.
In essence, the WHO decision means that COVID-19 is to become a seasonal illness that we encounter during the autumn-winter period. It is likely to be "equated" to the flu (classified as an acute respiratory infection) and will be responded to accordingly – using seasonal vaccination. Vaccination will become routine, taking into account which strain is forecasted on the eve of each annual epidemic season. Currently, countries still have reserves of unused vaccines, but in the future, COVID-19 vaccinations will most likely be carried out on a commercial basis (of course, except for immunising critical infrastructure workers, which is usually free).
Moreover, the issue of pandemic prevention was given particular attention by the participants of the 76th World Health Assembly, which took place in Geneva from May 21 to 30. Representatives of the community discussed a new "pandemic treaty" project and amendments to the International Health Regulations, which envisage increased public health funding, vaccine distribution mechanisms, and other medical cooperation. One of the final decisions of the assembly was to increase member contributions by 20% and approve the WHO programme budget for 2024-2025 in the amount of $6.83 billion. Of these, $1.214 billion is allocated for "more effective protection in health emergencies" (such as pandemics).
In addition to the far-from-fruitless hopes of the pharma industry for increasing sales of COVID-19 products when humanitarian aid supplies are depleted in countries, another promising and profitable direction has "come to light" in the industry – the biotechnology market, particularly the development of mRNA vaccines. During the pandemic, these have shown high efficacy in immunising the population.
Moderna has actively begun to promote its capabilities in the mRNA field through a global advertising campaign. The thing is, scientists hope to apply this type of vaccine, among other things, for the treatment of HIV, cancer, and severe tropical diseases. Moderna has been studying the effectiveness of mRNA-based drugs in this direction for several years: the company has 24 developments, 13 of which are in the stage of clinical trials. The successful use of mRNA vaccines in the fight against COVID-19 has drawn heightened attention to the technology and provided the opportunity to attract more investment in further developments.
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