Beyond ordinary profits, Big Pharma rake in superprofits by setting prices way past their cost of production. This is particularly repugnant when companies engage in price-gouging in the case of life-saving medicines and vaccines.
Pfizer in March announced that it would price its 2-dose Covid-19 vaccine at no les than $40 in the US. Moderna will price its vaccine at $37 per dose. The company is set to earn up to $20 billion in US sales alone.
These companies earn high through lowering production costs, including using public funds for research. Capitalist profits therefore originate from the people’s money.
In March, the US government allocated $10 billion for pharmaceutical companies without setting conditions on how and speed of which vaccines should be manufactured, and how much should they cost. Among the recipients are Moderna, which received $483 million in April and Johnson & Johnson which gained half a billion dollars to develop Covid-19 medicines and vaccines.In June, the Trump regime gave Big Pharma more funds in the form of tax breaks, technical support and other incentives under the program Operation Warp Speed. A former official from GlaxoSmithKline and Moderna headed the program.
It was never an requisite for Big Pharma to set reasonable prices in exchange for American taxes. This is insurance for drug companies since these refuse to manufacture a drug that is not highly profitable. In US, AstraZeneca plans to sell its vaccine at $3-$4 only to The Netherlands, Germany, France and Italy. Oxford, its developer, also used public funds for research.
Even now, big companies are already taking advantage of the pandemic. In March, Doctors without Borders called on these companies to stop using the pandemic and sell their products at affordable prices.
The group castigated Gilead Sciences which attempted to monopolize the production and pricing of remdesivir, one of the drugs found effective in critical Covid-19 patients. The drug failed its purpose against hepatitis and colds, but was successfully developed by scientists from the University of Alabama against Covid-19. Public funds were used in the urgent research. Since Gilead Sciences held a patent, the drug could not be manufactured without paying the company for rights.
Gilead now sells the drug at $3,120 per regimen or $520 per dosage for critical Covid-19 patients. It allowed poorer countries to manufacture a generic version of the drug. Even so, prices still reach up to $600 per regimen or $100 per dose. Gilead’s profits is set to increase by 22% during the pandemic.
The doctor’s group also called out Cepeid, a company which manufactures testing kits, for overpricing its rapid test kit (Xpert Xpress SARS-CoV-2) at $19.80/test. Producing these kits actually costs only $3 each, including manufacturing costs. Like Gilead, the kits were developed using US public grant of $3.7 dollars.
The tests are used in GeneXpert machines which process nose and throat swabs. The result is typically produced in 45 minures. The Philippines is one of the 145 countries who have bought these kits. The country currently has 28 GeneXpert laboratories.
According to the doctors’ group, the kits were made by using the same technology in making tuberculosis test kits.