What Covid Treatment Will Cost You In 2023

(Bloomberg Opinion) -- Covid-19 funding in the US has nearly run out and unless Congress renews it, consumers could soon find themselves on the hook for vaccines and treatments that were previously free.

Last week, the Department of Health and Human Services said that commercial sales of coronavirus vaccines, previously distributed by the US government and offered at no cost to anyone who wanted them, could begin in early 2023. Some treatments, which also were largely free, are already transitioning to the commercial market; others will follow early next year.

What does a commercial market for Covid products mean for companies, consumers and the health of the country?

As Bloomberg Intelligence’s Sam Fazeli explains, already-low demand for vaccines could further falter. And medicines could be hardest to get for the people who need them most: those at highest risk of serious infections. That could put the US further behind other high-income countries in its Covid response.

Lisa Jarvis: Throughout the pandemic, Covid vaccines and treatments were free in the US. What could a commercial market mean for individual consumers?

Sam Fazeli: It will be tough for the booster campaign. If people were reticent to get a booster shot when vaccines were free, what happens when they have to pay?

The roughly 8% of the US population that has no health insurance will be worst hit. This group is at higher risk of infection because they tend to work in jobs where they are repeatedly exposed to the virus. And rates of obesity and other health issues, which predispose individuals to more severe Covid, are higher in this population.

Even those with health insurance will have to fund some of the cost out of pocket, which is a problem at a time when cost of living is rising fast. So it is very likely that the percentage of eligible people who roll up their sleeves for yet another booster shot will be even lower than the 34% of eligible people who got their fourth shot.

Even if there is a big new wave of infections, unless disease severity is proving to be worse, I don't think people will be more driven to take a booster.       

LJ: How does all of this factor into what Pfizer-BioNTech and Moderna might charge for their vaccines? Will consumers pay more per shot than the government, which depending on the type of vaccine has shelled out between $15 and $30 per dose, did?

SF: If we are right and demand will be lower than even the currently low level, companies might be tempted to raise prices in the private market to make up for the lower volume. But this could backfire, not only from a PR perspective, but also because it would likely drive a further fall in demand.

LJ: In discussing updated Covid boosters last week, both FDA and CDC officials drew comparisons to the way flu vaccines are updated each year. Will demand for Covid vaccines eventually look flu-like?

SF: A lot of people use the flu as a blueprint for their modelling of future demand for Covid vaccines. But there is a flaw here. The flu vaccine is updated because the strains of circulating virus actually change every year, meaning our immune system might not have encountered some strains recently. With SARS-CoV-2, the same virus is still evolving. The virus might become more contagious as it evades the front-line antibodies that prevent infection and levels of those antibodies fall over time. But so far it hasn’t become more lethal because older vaccines still hold up pretty well against serious infections. Right now, evidence is scant that updated boosters offer significant benefit over the original vaccine.

LJ: Given all of this, what do you anticipate the size of this market will be for Moderna and Pfizer?

SF: Clearly this will depend on several factors, including the number of boosters recommended during the year, the price of those shots and adherence by different age groups. If we assume a scenario in which around 50% of eligible age groups get their shots and they are priced at about $30 net of discounts, we could see a US market worth about $5 billion in 2023, and just over $20 billion globally. But these are very optimistic assumptions.

In a survey Bloomberg Intelligence conducted a few months ago, we found 50% of our respondents said that they were not willing to pay for a vaccine, while 30% said they were willing to pay more than $25 out of pocket.

Moderna also has a steep learning curve ahead of it in selling vaccines to the private market, whereas Pfizer has been in this game for decades and has long-established relationships and channels.

LJ: Does a commercial market make it any harder for newer, hopefully better Covid vaccines to be tested and approved?

SF: This is a really good question, and I think the answer has to be yes, it does make it harder. The issue for any new vaccine, especially one that uses a different platform or route of administration, is that the efficacy against infection and severe disease can’t be ascertained using cheaper immuno-bridging studies — ones that simply show a similar antibody response as an approved vaccine. Take new flu vaccines, for example. To get mRNA vaccine makers approved, regulators want full-blown clinical trials with control arms that use current vaccines. This is what I would expect to be required for new Covid vaccines. No small lab or biotech company would want to take that on. 

LJ: We’ve mainly focused on vaccines, but of course Covid treatments are also going commercial. Demand for monoclonal antibodies has been low even with the government providing them for free. Do you have a sense of how widely available these will be for those who need them going forward?

SF: This would be the biggest loss, as they cost a lot more than a vaccine shot. The list price for Eli Lilly’s bebtelovimab, which last month launched in the commercial market, is $2,100 per dose. People with Medicare might still be able to afford them because they are often given in a hospital or outpatient setting, but they could be out of reach for the uninsured and even those with private insurance might decide they are too expensive. Sadly, antibodies could be the best way to manage the effects of waves of infections, especially in the more vulnerable populations.

LJ: In the US, vaccinated people under the age of 65 have been able to get prescriptions for Pfizer’s antiviral Paxlovid despite little evidence that the drug helps them. Do you think doctors will weigh the costs versus benefits more carefully if patients are paying for it themselves?

SF: It’s hard to generate data proving the benefits of a drug that reduces your hospitalization risks in a group of people who already have a very low risk of hospitalization. So perhaps the drug should never be used in fully vaccinated people below the age of 65. Recent data from Israel shows an 85% reduction in risk of hospitalization for vaccinated people over 65 but no effect for those 40 to 64 years old.

LJ: All of this sounds like people in the US could have a much harder time accessing medicines and vaccines — for those motivated to seek them out. Where does that leave the country in terms of its ability to respond to this virus?

SF: If the vaccination campaign goes the way we think it will, i.e. fewer people get their shots than even the fourth dose last spring, there is a substantial risk that the US will fall further behind the rest of the world where the shots are free. That could mean far more infections in the US, if not hospitalizations and deaths. This of course assumes that attitudes to booster shots remains robust in other countries, which is a big if. Of course the irony, if this happened, is that all key Covid drugs and vaccines were developed in the US.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lisa Jarvis is a Bloomberg Opinion columnist covering biotech, health care and the pharmaceutical industry. Previously, she was executive editor of Chemical & Engineering News.

Sam Fazeli is senior pharmaceuticals analyst for Bloomberg Intelligence and director of research for EMEA.

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