Pfizer has unveiled its pricing plan for the commercial market launch of Paxlovid, its oral antiviral drug for COVID-19, expected later this year. The pharmaceutical giant has set a list price of $1,390 for a five-day course of the medication. This price point marks a significant increase from the approximately $529 per course charged to the US government during the pandemic when Paxlovid was provided at no cost to US citizens.
Pfizer is now navigating a transformed landscape as the market shifts away from pandemic-driven supply agreements to a post-pandemic commercial model led by health insurers. The actual cost to insurers is anticipated to be lower than the list price due to the US healthcare system’s discounts and rebates. Pfizer has also committed to ensuring that patients have minimal or no out-of-pocket expenses by subsidizing co-pays, a commitment that extends at least until 2028.
Importantly, Paxlovid will remain free of charge for patients enrolled in the federal Medicare and Medicaid insurance programs until the end of the next year, providing continued access to those in need.
In a noteworthy assessment from last year, the Institute for Clinical and Economic Review (ICER) in the US determined that a fair price for Paxlovid for commercial insurer payments should fall within the range of $563 to $906 per course.
Pfizer’s pricing announcement comes in conjunction with the company’s cost-reduction initiatives, which aim to reduce operating expenses by approximately $3.5 billion over the next two years. This move reflects Pfizer’s strategic adaptation to a changing market dynamic.
Pfizer anticipates a decline in sales of COVID-19 treatments, estimating a decrease from over $100 billion in 2023 to a range of $58 billion to $61 billion in 2024. The $9 billion reduction from earlier forecasts, with $7 billion attributed to Paxlovid, underscores the evolving landscape of COVID-19 management.
This contraction in sales is expected to persist in 2024 unless the emergence of a new COVID-19 variant triggers a surge in cases, hospitalizations, and deaths.
Paxlovid received emergency use authorization (EUA) from the FDA in December 2021, marking the first antiviral treatment for mild-to-moderate COVID-19 in adults at high risk for severe progression. It was designed to be administered at home, providing a valuable tool in the fight against the virus.
While the US government had procured approximately 24 million courses of Paxlovid during the pandemic, a recent agreement led to the return of 7.9 million courses, equivalent to around $4.2 billion in anticipated 2023 savings, albeit in the form of a credit note for future purchases. The US government will maintain an ongoing stockpile of 1 million Paxlovid courses, refreshing it as it expires in 2028, ensuring continued preparedness for potential future challenges related to COVID-19.
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