” Auf Wiedersehen to COVID-19 – Pfizer’s First Move to Begin Competitive Marketing ” – November 11, 2020.

If Corona’s stellar role steered the public conversation away from the accomplishments of President Donald Trump during his Election campaign and even earlier denying a second term for him, the Vaccine developed by Pfizer/BioNTech announced just 6 days after the Election Day can help steer Joe Biden’s team to victory in controlling the pandemic while reviving the Economy and International travel.

President, Donald Trump, in fact, handed this to the Democrats on a silver platter even if they did not expect it.

Dr Anthony Fauci, Infectious Disease Expert and Leader of the Coronavirus Task Force under Mike Pence/Donald Trump, calls the Pfizer breakthrough as “extraordinary”, “help is on the way”, ” it will be good even if it is 50% effective”, and ” the vaccine will be in use by the end of the year “, while he was pitching into those who promised a cure for COVID-19 by late November or early December citing efficacy and safety as not achievable within weeks. Encouraging words now, nevertheless, for those holding faith and belief in Science, Data, Experiments, and Trials .

Pfizer promises 50 million doses by the end of this year, and about 1.3 billion doses by 2021. There will, however, be a huge sense of relief for people all over the world now.

Pfizer says : ” Submission for Emergency Use Authorization (EUA) to the Food and Drug Administration (FDA) planned for soon after the required safety milestone is achieved which is currently expected to occur in the third week of November “. Pfizer has spent nearly $ 2 billion of its own for research and development without any Government funding or under the Operation Warp Speed Program.

Pfizer vaccine is a two shot one ; there has been no papers in Journals or reviews by peer researchers ; there is however a safety monitoring authority checking their progress and events. The vaccine is based on ‘mRNA’ technology by injecting a catalyst that can form spike proteins on human cells with ability to detect the virus and destroy it. The only other company following this route of attack is “Moderna” which has received $ 1 billion in funding from the US Government. Other prominent players in the race include Johnson and Johnson ; Astra Zeneca/Oxford Institute ; Nova-Vax ; Sanofi ; GlaxoSmithKline and other small players numbering about 40 candidates in all.

There are billions of individuals in the world requiring vaccination, US alone has 300 million and more.

Two factors need consideration from the management/marketing perspective : (1) Competition ; and (2) Pricing.

1. Competition : Vaccine production and use has reached a stage of marketing warfare now. Emergency Use Authorization to Pfizer will immediately spur others in the race to make claims for their share, fame, and name. FDA will be highly vigilant and stringent in verifying the claims ; supporting evidences ; trial successes ; and absence of side effects. I may be wrong, ‘ that there has not been a success more than 60% (and it is for flu shot) in any vaccine case earlier in history’. This fact may have prompted Dr Anthony Fauci to expect at least 50% success/efficacy for use. Also, the world needs billions of doses that cannot be satisfactorily produced, stored, and delivered by a single Company. Hence, the ventures of 40 or more candidates make the effort justifiable.

Pfizer/BioNTech vaccine is ‘mRNA’ based ; two shot vaccine ; the second shot administered 3 weeks after the first ; vaccine needs to be stored at -75°C for which freezers are not ready yet ; Pfizer itself is testing storage with dry ice for the benefit of people ; has an excellent record of global supply chain and logistics for delivery. Its deal is valued at $ 39 for a two shot course. Moderna is in the same category. Its deal is valued at $37 per dose. J and J’s deal indicates a price of $10 per dose. It is a one shot vaccine. It has to be administered intravenously. It doesn’t require storage at such freezing levels.

Eli Lilly had already obtained Emergency Use Authorization for its monoclonal antibody treatment from FDA (just yesterday). It is a therapeutic and not a vaccine. There are many in the pipeline from different companies in different places.

Hence, the factor of Competition playing a role in the ‘ marketing opportunity’ of all the vaccines and companies is real. Safety and Efficacy are the set parameters determining the ‘Competitive Value or Strength’ of the vaccine.

Pfizer’s statement that it is 90% effective is a reassurance that one cannot ignore even if it remains to be fully validated yet. Pfizer’s financial strength, staff and scientists strength, and know-how relating a to vaccines and other drugs makes it a big game player. BioNTech of Germany being a partner adds to the clout it can reap in Europe. Other companies mentioned above also have similar strengths and competitiveness.

If a 50% efficacy is set as the main requirement (as Dr Anthony Fauci has referenced in his Observations), then the number of companies achieving the target is expected to be in good numbers. To be in the race for a preferred vaccine manufacturer, distributor, and courier (delivery agent), the companies may resort to ‘Competitive Reactions’ in terms of price adjustments. More the competition, more will be the price cuts or discounts whether during the pandemic period or later. It will be important for the companies to note the fact that the demand for vaccine may be steady initially (as it is a public health issue requiring everyone to be vaccinated) but likely to become volatile later when it will become a choice.

The companies may also offer different prices for different regions depending on their perceptions of values in terms of fame, reputation, and service. There could be some innovations here.

2. Pricing : Pricing is critical in a Global Health Issue like this involving people of different nations ( developed, less developed, marginally efficient, poor ) with people of different financial abilities. Pfizer’s $ 39 for two doses ; Moderna’s $ 37 for two doses when compared with Astra Zeneca’s $ 3 per dose or Johnson and Johnson’s $ 10 for the only shot required are too high for any ordinary individual without a subsidy from the Government.

Companies engage in ‘pricing’ with the following considerations : Raw materials/basic ingredients for vaccine production ; research scientists’ term pay ; clinical trials ; and labour costs in production constitute the variable costs. Cost of equipment/tools ; laboratory infrastructure ; and other administrative costs constitute the fixed costs of vaccine production. Margin to meet the profit objective will be added to arrive at the selling price of the vaccine per unit.

Astra Zeneca/Oxford University has pledged not to profit off the COVID-19 shot during the pandemic. Its pricing indicates cost of manufacturing plus $ 1 billion for clinical trials ( or a 20 % of the cost of manufacturing to the vaccine’s price ). It has established Quality Assurance already. Deals for 100 million doses to UK ; 300 million doses to U.S.A., 400 million doses to EU ; 120 million doses to Japan ; and 100 million doses to China are promised already. It has also built a Global Supply Chain with ability to turn out 3 billion doses of vaccine. Astra Zeneca’s price per dose is just $ 3 to $ 5. It has also promised that low income countries will receive its vaccine on a cost basis ” in perpetuity “. It has a headstart in the marketing warfare already.

Administration of a vaccine is a Public Health Measure in which every individual – male/female ; young/old ; symptomatic/asymptomatic ; whites/blacks – participates. It is also the duty of any Government to contain the pandemic as a welfare measure. Individuals, every human being in the world, may not be willing to pay the same price for vaccination. These aspects make price setting a challenge while prompting companies to think in future in terms of alternate price levels. Moderna has declared that in the pandemic period, pricing considerations will follow traditional dynamics and market forces including vaccine efficacy and Competitive landscape.

It appears that the very emergency nature of the Disease may help the companies make hay as the sun shines ; and the pricing war will likely begin only after the emergency measures are relaxed. This is also quite in tune with what any Product Life Cycle teaches us during the period of growth when prices remain high and affordable for the top and special categories of people. Pfizer and Moderna may rule the roost initially (catering to the prioritised groups supported by concerned institutions and the Government in specially the well developed nations) while the likes of Johnson and Johnson, Astra Zeneca and others in the same pack will eke out their share in a different way in different countries with different population groups.

A clear picture will emerge only after the companies report their safety and efficacy data in public.

“Dieu avec nous “

Wednesday, November 11, 2020 – 2.19 p.m. (IST)

Tidbit : ” It is a great day for science and humanity “.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: