NEW DELHI: Research and development programmes for vaccines against covid-19 are unlikely to aid financials of pharmaceutical firms but the successful introduction of a vaccine to combat one of the world’s biggest pandemics would significantly improve the pharmaceutical industry’s reputation globally, Moody’s Investor Service said in a report.
“Coronavirus vaccine development has the potential to boost the industry's reputation. In various public opinion polls, the pharmaceutical industry has tended to receive low rankings," the ratings agency said.
“The successful introduction of coronavirus vaccines could help better align public perception with the industry's operational mission of using science and innovation to develop products that improve human health."
The ratings agency does not anticipate the vaccine to significantly boost companies’ credit metrics as many of them, like AstraZeneca plc and Zydus Cadila Ltd, have substantial businesses outside of vaccines and as many of them have promised to not profit from the vaccines they develop during the pandemic.
However, Moody’s said pricing and equitable distribution of the vaccine would be the biggest factors determining the companies’ reputation, especially as there is unprecedented scrutiny and government involvement in the R&D.
“As vaccines get closer to reaching the market, developers will face difficult decisions related to pricing and distribution. Given the significant public health implications, reputational harm could ensue if prices are perceived to be too high. With global demand likely to far outstrip initial supplies, the equitable distribution of vaccines also poses social risks," Moody’s said.
With governments and various multilateral bodies partially funding development of vaccines, companies will be under considerably greater regulatory risk, it said.
“The governmental role in COVID-19 vaccine development appears unprecedented and brings a new level of government oversight to the entire process. In addition, government funding of many of the programs is likely to limit the profit opportunities that companies realize," the rating agency said.
India’s own frontrunner among vaccines, ‘Covaxin’, is being co-developed by the government’s apex bioresearch body Indian Council of Medical Research along with Krishna Ella-led Bharat Biotech International Ltd.
The government's involvement in the indigenous vaccine has been to such an extent that ICMR director general Balram Bhargava last week wrote a controversial letter to the company and the principal investigators of the 12 sites, directing them to expedite the trials and even set a potential target date of 15 August for the launch.
Later, the government said the letter was only meant to expedite the trial during a health emergency but refused to comment on whether they had retracted the deadline.
Currently, there are more than 150 vaccine candidates in various stages of pre-clinical and clinical trials. Of these, 21 candidates have reached the stage of human trials, including two in India--Bharat Biotech and ICMR’s ‘Covaxin’ and Zydus Cadila’s vaccine candidate.
The vaccine candidate being developed by University of Oxford in UK and Astrazeneca is widely considered to be the front runner, expected to be launched by the end of the calendar year. Serum Institute of India has signed a pact with Astrazeneca for mass production of the vaccine for sale in low and middle-income countries, including India.