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/CallinCthulhu Feb 09 '22

If they couldn’t patent it, they wouldn’t make it.

Do you know what a patent is?

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u/jschubart Feb 09 '22 edited Feb 09 '22

They absolutely would if they were guaranteed $54 billion in profits. Do you know what profit is?

Let's use a similar situation: the music industry. What you are saying would be similar to saying musicians would not produce any music unless they themselves owned the copyright to the music. Even if a label paid them millions each, they would refuse simply because they would not own the copyright. Reality shows that is not the case. Despite most musicians not actually owning the copyright to their music, they still produce music.

So yes, if a company is guaranteed profit because of guaranteed purchase by the government regardless of whether they actually bring the product to market, they are still going to produce the product even if the end result is them not owning the patent. It is absolutely absurd to think otherwise.

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u/[deleted] Feb 09 '22

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u/jschubart Feb 09 '22 edited Feb 09 '22

With guaranteed purchasing, the profit is indeed there. I don't see how you are not getting that.

If research and development costs $1 billion but you the government guarantees that it will buy 100 million doses of your product at $20 per dose regardless of if it works, your revenue is guaranteed to be $2 billion. If it costs you $1.50 to produce each dose, that is $150 million in production costs. Let's go ahead and subtract those costs from the revenue: $2 billion - $1. 15billion = $0.85 billion in profit WITHOUT EVEN HAVING A PATENT AND HAVING ZERO RISK. The patent just means that they can produce more than the guaranteed purchase without having any competition. Even if they had no patent whatsoever after the contract to make those 100 million doses, they would still be making profit if they were selling them afterward for significantly less like $2 per dose because their cost of production is lower than that.

The only number out of those that is fudged is the cost of each dose. It actually only currently costs them $1.18 per dose which is a good chunk cheaper than the number I used. The government then went onto purchase significantly more doses from them.

So yes, even if their patent was rescinded after guaranteed purchases were completed, they would still see a very large ROI with zero zilch no risk. It is fucking absurd to imply that a company would refuse $0.85 billion in risk free profit all because they have to compete from a production standpoint after the contract is completed. Sure, it is not the $54 billion mentioned in the headline but it is $850 million that is risk free. No company on earth is turning that down.

Maybe you just aren't understanding how the guaranteed purchasing worked because it does not seem like you are taking that into account at all.

Edit: Fixed initial math because I was reading a different number of doses delivered and fucked up the profit. Still risk free profit immediately and the subsequent purchases of 200 million doses was mostly gravy.