The COVID-19 vaccine has had a huge beneficial impact on patient health. A study found that the COVID-19 vaccine saved 240,000 lives between December 2020 and June 2021 (Verches et al. 2022).The graph below shows that the COVID-19 vaccine prevented a large number of deaths as the Delta and Omicron variants spread in the fall of 2021 According to Vox.
a study Ahuja et al. (2021) It was found that increasing the total supply of the COVID-19 vaccine from 200 million to 3 billion doses at the start of the COVID-19 pandemic would generate $1.75 trillion in social value.
Despite these positive effects, some political commentators blame drug companies profiteering. Some analysts predict Life sciences companies will get $100 billion in COVID-19 sales and $40 billion in after-tax profits. However, is making mRNA vaccines for emerging diseases a surefire route to big payoffs?
According to a recent NBER working paper Barberio et al. (2022) The answer is a resounding “no.” In fact, in most cases, developing mRNA vaccines for a range of emerging diseases will be money-losing. The author found:
We analyzed the financial performance of a hypothetical portfolio of 120 mRNA vaccine candidates targeting 11 emerging infectious diseases at the preclinical stage. We calibrate simulation parameters based on input from experts in the field of mRNA technology and an extensive literature review. We found that despite the scientific advantages and financial benefits of diversification from mRNA technology, the portfolio delivered an average annual ROI of –6.0% and a net present value of –$9.5 billion. Clinical trial costs accounted for 94% of the total investment, and manufacturing costs accounted for only 6%. Sensitivity analyses showed that the most important factor in determining financial performance was price per dose, and that increased probability of success due to mRNA technology, adjusting portfolio size, and the possibility of conducting human challenge trials did not significantly improve financial performance. These results highlight that continued collaboration between government agencies and the private sector may be necessary if the goal is to create a sustainable business model and a robust global vaccine ecosystem.
The return on investment for these vaccines is low due to the high cost of clinical trials and the highly uncertain incidence/prevalence of most emerging infectious diseases (i.e. most do not cause a pandemic). What looks like a windfall is actually not a very lucrative situation.
