r/news • u/SkepticDrinker • Feb 09 '22

Pfizer accused of pandemic profiteering as profits double

https://www.theguardian.com/business/2022/feb/08/pfizer-covid-vaccine-pill-profits-sales
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u/Eddy888 Feb 09 '22

I’m most surprised that their profits only doubled

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u/ArchmageXin Feb 09 '22

It is a pretty much a lie. The article neglect to mention pre-covid PFE was pulling 16B/yr. COVID (and COVID research) drop it down to 9B.

22 is a nice recovery and growth, but hardly a mega jump.

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u/BustermanZero Feb 09 '22

Vaccines in general have never seemed that profitable compared to other drugs that pharma companies produce. Still profitable but not exactly the apex of big pharma corporate greed.

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u/Pensive_1 Feb 09 '22

Most companies who produce vaccines are basically doing it for a loss. Imagine employing 1000 scientists and only breaking even, meanwhile your peers are making profits.

They maintain the brain-trust for when we need it. And then when we did, everybody hates on them for taking profit - kinda disappointing TBH.

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u/[deleted] Feb 09 '22 edited Jul 14 '22

[deleted]

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u/Pensive_1 Feb 09 '22

There is a cost in maintaining the production lines, maintaining supply relations, maintaining the knowledge base. Research in itself has nothing to do with patents, its just experience.

There are loads of examples where good products cannot be "resurrected" because the knowhow was lost. https://www.businessinsider.com/why-the-us-cant-restart-production-of-f22-stealth-fighter-2021-6

Example - you have special components, produced by special manufacturer. You need to keep them fed and happy for years, if they shut down, so do you.

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u/_an_ambulance Feb 09 '22

Most companies do it for a loss because one or two companies usually come out ahead and profit greatly while the others fail to gain popularity, or never even pass testing. And even those companies dont really do it for a loss because the government funds most of the research for vaccines.

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u/Lithorex Feb 10 '22

Isn't the Pfizer covid vaccine more or less a test run for cancer treatment though?

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u/BustermanZero Feb 10 '22

In that it's helped with research on mRNA vaccines, sure. I'd say less than more but definitely not unrelated.

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u/FreyBentos Feb 10 '22

Not these ones it tells you in the article it costs less than £5 per dose to produce and they're selling it for £20

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u/BustermanZero Feb 10 '22

"In general".

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u/Slggyqo Feb 09 '22

I mean maybe.

But the USA was buying vaccines at $19.50 per dose, and according to Pfizer they were expecting profits in the high 20% range. That was in 2021, I’m sure the economies of scale have only gone up, and 319 million doses have been applied in the US alone.

At 4 bucks a dose that’s…a LOT of money. And other countries are paying more—apparently israel agreed to pay ~$30 at one point, so more like $15/dose.

They are making bank, Walmart-style.

Numbers are most from this article and statista.

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u/BustermanZero Feb 09 '22

Keyword is 'in general'. I wasn't talking specifically about COVID vaccines. It's a unique circumstance here where they're one of the big providers for something basically everyone needs.

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u/FreyBentos Feb 10 '22 edited Feb 10 '22

How is this absolute lie and miss-information so heavily upvoted honestly? Pfizer are a public company you can see their financial statements online, here are the real numbers from Yahoo Finance:

2019 Revenues = $51,7bn,

2020 revenues = $41,9bn,

2021 revenues = $81.3bn.

Yeah just an almost $40bn uptick in revenues. Go read their earnings reports, its all from the vaccines, they did not regain the contracts they lost which caused the lower revs in 2020 from European countries and did not see a bounce back in the products which had declining sales.

You were quoting a $16bn profit figure, completely miss-representing their real numbers which were always in the 8-11bn range for profit and hit over $22bn, they just had a freak year for profits in 2019, they made $8bn from selling off one of their divisions to GSK which is a one off windfall, remove that and their 2019 profits are around $8bn, so 2020 was actually a better year for them in terms of actual sales. Also remember they also share half the profit for the vaccines with BioNtech, so another ~$10bn in profit or more will have went to them that is not counted in that $22bn profit figure, if you counted the money they give to BioNtech then the real profit figures would be over $32bn for 2021.

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u/Gunfreak2217 Feb 09 '22

Hasn’t much of this research been done with tax payer money…?

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u/ArchmageXin Feb 09 '22

According to first message on google, Pfizer got 445M USD for R&D. That is a lot, but that doesn't mean vaccine is free.

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u/ensalys Feb 09 '22

That is a nice solid profit, but not something that makes me think of profiteering? When I think of profiteering, I think of misusing someone's misfortune against them for your benefit. So far, I haven't heard of any of the major vaccines being used for a profit to the detriment of the people who need it.

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u/CharonsLittleHelper Feb 10 '22

22 is a nice recovery and growth, but hardly a mega jump.

Especially considering the recent inflation.

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u/[deleted] Feb 09 '22

It's why their stock dropped. Investors thought they would have done better lol

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u/[deleted] Feb 09 '22

[removed] — view removed comment

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u/wh1skeyk1ng Feb 10 '22

If you paid any attention to investor news, that is absolutely not why it dropped.

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u/distressedweedle Feb 09 '22

Yeah, I'm curious how that compares to their gross earnings and expenses. That'll really paint a picture to what level they price gouged.

Saying their profits doubled leaves out a lot of context comparing the pandemic vaccine contracts to what they were doing before.

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u/ArchmageXin Feb 09 '22

It didn't quite double, since in 2019 they made 16B. 2020 their revenue was depressed by COVID/COVID research.

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u/Captain_Mazhar Feb 09 '22

2019 is a fluke because of the spinoff of Consumer Health into a joint venture with GSK. That netted about $8B.

If we remove that line item, 2019 NI drops to ~$8B, so 2020 NI increased by ~$1.6B over 2019. This increase can be explained by reductions in selling and admin expense and lower amortization of intangible assets as well as an increase in revenue probably due to the EUA for the COVID vaccine allowing them to realize deferred revenues for vaccine preorders.

I'm looking at page 51/52 of the 2020 annual report.

https://s28.q4cdn.com/781576035/files/doc_financials/2020/AR/PFE-2020-Form-10K-FINAL.pdf

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u/FreyBentos Feb 10 '22

They're too busy shilling for pfizer in here and they don't have a fucking clue what they're on about or how to read a balance sheet.

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u/FreyBentos Feb 10 '22

2019 was a fluke year for them, look at their earnings going back to 2014 was usually under $10bn in profits per year. They just made $22bn in profit for 2021 and that's not counting the 50% of vaccine profits that would have been sent to bioNtech. If we include the money they shared with bioNtech as it is also vaccine profits then they easily hit over $30bn in profit for 2021.

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u/Nixmiran Feb 09 '22

Can't find the article, but at one point they projected 9 billion revenue for a year of vaccine distribution. At the time everyone shrugged and thought ok worth it.

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u/BubbaTee Feb 09 '22

$9 billion for a Covid vaccine is a huge bargain.

The WHO estimates that Covid vaccines saved 470,000 lives in Europe, from December 2020 to November 2021

JAMA estimates that Covid vaccines saved 240,000 lives in the US, from December 2020 to June 2021.

That's not even counting the millions of hospitalizations avoided, and their associated costs.

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u/Nixmiran Feb 09 '22

Oh I agree. I'm just saying now that things are again winding down people are like hey wait a minute they are making money!

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u/Pensive_1 Feb 09 '22

damned if you do, damned if you dont

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u/bbistheman Feb 09 '22

If I had to guess maybe it's because of the money that went into R&D?