By Michael Erman
(Reuters) -Pfizer’s plan to as much as quadruple current U.S. prices for its COVID-19 vaccines going forward could spur revenue for years, analysts said.
The drugmaker, which developed and sells the vaccine with Germany’s BioNTech said on Thursday evening that it is targeting a range of $110 to $130 a dose for the vaccine once the United States moves to a commercial market next year.
Outside the United States, Pfizer (NYSE:) said it already has contracts with governments in many developed markets that extend through 2023 with prices that have already been set.
Wells Fargo (NYSE:) analyst Mohit Bansal said the new pricing range could add around $2.5 billion to $3 billion in annual revenue for the shots.
“This is much higher than our assumption of $50 per shot and even assuming $80 per shot net price in high-income countries, we see $2 per share upside to our estimates” from the new prices, he wrote in a research note.
The public announcement of the new price range could also be a green light for competitors Moderna (NASDAQ:) Inc and Novavax (NASDAQ:) Inc to strive for prices in the same range.
“We expect Moderna to adapt to this signal,” SVB Securities analyst David Risinger said in a research note, adding that he sees Pfizer/BioNTech, Moderna and Novavax “pricing in a similar range for the foreseeable future.”
Moderna had previously suggested commercial price expectations in a range of $64 to $100 a shot.
Wall Street was expecting such price hikes due to weak demand for COVID vaccines, which meant manufacturers would need to hike prices to meet revenue forecasts for 2023 and beyond.
So far, the U.S. rollout of updated COVID-19 booster shots that target both the original version of the coronavirus and circulating Omicron subvariants has lagged last year’s rate despite more people being eligible for the shots.
Around 19.4 million people in the United States received the updated booster over the first seven weeks of its rollout. In the first seven weeks of the 2021 revaccination campaign, over 27 million people received their third shot even though only older and immunocompromised people were eligible at that point.