Instead of profit, Johnson & Johnson gets a "halo effect" from its vaccine
Shoot your shot... Johnson & Johnson was the tortoise in the race for an FDA-authorized Covid vaccine, coming in 3rd after Pfizer (#1) and Moderna (#2). So far, Pfizer's vax has been the most administered: 17.6M Americans have been fully vaxed with Pfizer, 15.6M have been fully vaxed with Moderna, and only 640K have been fully vaxed with J&J. Buuut...
- J&J could catch up quick: It's one shot, unlike Pfizer's and Moderna's (two doses weeks apart). It can be stored at fridge temp, vs. sub-zero temperatures for the mRNA ones.
- President Biden just announced plans to purchase 100M more J&J vaccine doses. The (less high-maintenance) vax could help speed up national vaccination.
But J&J won't be profiting... The 1B doses that it's on track to produce this year would generate up to $10B in sales. But unlike Moderna and Pfizer, J&J has pledged to sell "at cost" for emergency pandemic use (read: no profit). While J&J stock hasn't received a big vaccine boost, its reputation likely has.
- Big Pharma = not popular: Pre-pandemic, the pharmaceutical sector was ranked as the least-liked industry in a US Gallup poll (womp). Only 27% of Americans rated it positively — an all-time low.
- The profit-chasing bad rap comes from things like the opioid crisis and sky-high, rising drug prices (example: Mylan 6X'ing EpiPen prices by 2016).
- The US spends more per person on healthcare than any other developed country — partly thanks to higher drug prices. That, plus public anger, gets lawmakers' attention.
J&J could get a big "halo effect"... from Congressional and public heat — while doing a good thing. Lawmakers have been trying to reign in pharma prices. Pre-pandemic, the House passed the "Lower Drug Costs Now Act" (self-explanatory). But it didn't get through the Senate. The pharma industry has spent billions on lobbying and campaign contributions to avoid profit-crushing regulation. But since the pandemic, 40% of Americans have a more positive view of the pharma industry. J&J could get the biggest "halo effect," thanks to its no-profit approach.