With almost daily announcements about Covid vaccines and therapies, it's easy to assume that pharmaceutical companies have had an extraordinarily good 2020.
But pharma has not been shielded from the realities of economic shutdowns around the world. And while some, though not all, of the vaccines and treatments for Covid may deliver handsome returns in years ahead, for now they are simply an exceptional drain on drug companies’ R&D budgets.
Results from pharma giants Pfizer, Eli Lilly and Merck among others this week show the industry is still grappling with a slow recovery from the early days of the coronavirus pandemic.
Many people continue to avoid doctors’ offices amid a new surge in infections. For drugmakers, that means a continued squeeze on demand for everything from childhood vaccines to smoking-cessation drugs and diabetes treatments.
Pfizer said on Tuesday that its third-quarter sales were reduced by $500 million, or 4 per cent, due to the effects of the virus.
At Eli Lilly, key diabetic therapies saw revenues decline as job losses pushed people towards public care and cheaper drugs.
For its part, Merck, which did beat expectations, has been hurt by lower sales of vaccines, including Gardasil for HPV, during the back-to-school season. It reckons the pandemic has cost it about $475 million.
Drugmakers are confident that business will recover. When, is the question. The second surge of coronavirus infections just makes the future harder to predict, especially if it puts pressure on hospitals and other healthcare centres, forcing them to defer other, more routine or non-essential care.
And that brings headaches for pharma executives and investors.
