Newswise – The Food and Drug Administration's Covid-19 vaccine approval issued on August 27th places a limit on those eligible to receive the vaccine. Meanwhile, the administration has approved seasonal flu vaccines, but only if it does not contain the mercury-based preservative thimeromonal.
These changes have caused confusion among consumers. Will the vaccine be available this fall? Are they effective? And will they be covered by insurance? Industry leaders will also wonder how these changes will affect reimbursement rates, profitability and overall revenue.
Below, we discuss the potential impact of these changes on the health sector, which accounts for nearly 20% of the US economy, Patrick Aguilar, managing director of the business initiative at the Orin School of Business at Washington University in St. Louis.
What are the current recommendations for annual vaccines such as Covid and the flu?
Respiratory viruses like influenza and Covid-19 tend to change significantly over time for a variety of interesting reasons. As a result of these changes, vaccines need to be updated regularly. The Centers for Disease Control and Prevention (CDC) still recommends that almost everyone receive the vaccine against the flu every year in September or October. Some people have medical reasons not to take the vaccine, but these exceptions are rare.
In the case of Covid-19, the Food and Drug Administration recently approved a new vaccine for this virus season, but has approved the inclusion of adults over the age of 65 and only adults/children over the age of 5 with at least one high-risk health condition. For children under the age of 5 who have at least one serious health problem, the Moderna vaccine is the only option available due to the new rules.
The impact would make getting the vaccine even more difficult for people under the age of 65 who do not have one of the designated high-risk criteria. Drugs may still administer the vaccine to people who meet the criteria. For those who do not meet the criteria, they will likely need a doctor's prescription.
Doctors can prescribe medicines to people for things other than FDA regulations and do so to provide vaccines to patients who do not meet the criteria, but pharmacists are unable to administer these vaccines. Depending on how pharmacies respond to these changes, it could result in other restrictions on access to the vaccine.
Finally, it is not yet clear whether insurance companies will pay for vaccines administered off-label. Due to uncertainty regarding the availability of “off-label” vaccines and insurance coverage, changing FDA approvals for COVID-19 vaccines poses a significant hurdle for patients under the age of 65 who are not in serious health, as physician prescriptions are required.
How could these changes affect pharmaceutical companies' revenues and future investments in vaccine development?
The exact number of people who received the Covid vaccine is difficult to track, but in recent years, it has been found that early revenues from Pfizer's Covid vaccine have declined. That said, the Covid vaccine remains a major contributor to the company's profitability. It is reasonable to expect new FDA regulations to reduce vaccinations and have a further negative impact on revenue. Pfizer's diversified portfolio will help with the weather of its changes, but Moderna is almost entirely focused on the Covid vaccine, with more significant overall impacts likely to be seen.
The pandemic has encouraged a large investment in vaccine development by various pharmaceutical companies. New actions by the government highlight some of the uncertainty that manufacturers may face, especially when creating vaccines that require approval of new repetitive approvals with regularity. Given the fact that businesses are most effective in a predictable environment, it is reasonable to suspect that this will allow businesses to pay more attention to their investment in vaccine production.
From a drug perspective, do you anticipate other challenges for the administration's actions?
There is no reason to believe these regulations will affect vaccine efficacy, but I think manufacturers will significantly reduce their ongoing vaccine production in anticipation of a decline in demand. This can present supply chain challenges, especially given the difficulty in predicting the willingness of a physician to prescribe a vaccine to individuals outside of approved standards.
How could these changes affect pharmacies?
While major pharmacy chains have not split enough details to understand the specific impact on the overall revenue of a vaccine, the challenges facing the retail pharmacy industry is so problematic that it has to do with loss of revenue. Vaccines tend to produce higher margins than other prescriptions, as they include different ways of negotiating prices and management fees not included in other products. The loss of higher margin activity is the cause of concern on the part of pharmacy leaders.
Under current guidance, are consumers the option to get the vaccine?
Consumers may need a prescription to get vaccinated under new regulations unless they meet FDA eligibility criteria. Even with these prescriptions, pharmacists may not be able to administer the vaccine due to individual regulations regarding the scope of their practice. This reduces the access needed by some patients to covid the vaccine. Additionally, insurance companies may or may not cover covid vaccines for patients who do not meet the criteria.
What impact will this have on hospitals and health care systems?
Although data on vaccine efficacy clearly suggests that recipients are less likely to have severe illness, the data is the strongest among patients who have approved the vaccine by the FDA.
For others, it's not very certain how lower vaccination rates will affect hospitals and healthcare systems. Although accurate effects are difficult to predict, if a significant portion of the population is not vaccinated, hospitals can see an increase in respiratory disease, exacerbate overcrowding and create challenges for access to patients who need care in hospitals for other reasons.
