InThinking IB Business Management

Unit 4.1 The Role of Marketing

How innovation, ethics & culture influence marketing (AO3)
https://www.thinkib.net/businessmanagement/

Pfizer and the coronavirus vaccine

In early November 2020, more than a year after the first case of
the coronavirus was reported, news media announced a
vaccine that potentially offers 90% protection against Covid-19
by American pharmaceutical company Pfizer.

The race to a successful vaccine to liberate everyone from the

world's most severe economic recession in living memory would
enhance the reputation and profitability of any pharmaceutical
company able to gain a first-mover advantage and brand
advantages. However, there are also important questions to ask
about any private sector for-profit businesses engaged in
research and innovation in return for colossal profits, especially
when it comes to matters of public healthcare and safety.
Source: https://unsplash.com/photos/mAGZNECMcUg

Pfizer and BioNTech, its German biotech partner, are expected to earn around $13 billion in
2021 from an approved coronavirus vaccine. Some analysts suggested that large
pharmaceutical companies like Pfizer and BioNTech should not be allowed to profit from the
world’s most severe crisis since the Second World War, although such views were
dismissed by Pfizer’s CEO, Albert Bourla. Afterall, Bourla said that being private company,
Pfizer “have never taken any money from the US government, or from anyone” so should
be allowed to reap the benefits of its innovation and the financial risk taken.

Whilst Bourla argues that pharmaceutical companies should be allowed to patent Pfizer's
vaccine in the same way that other drugs are, there are concerns that this would give the
company the exclusive right to charge whatever the market is willing to tolerate for the new
vaccines. Global Justice Now, a British campaign group, is calling for patents on the Pfizer
vaccine to be suspended to prevent Pfizer from having the sole rights to make and sell their
drugs for the next 20 years, preventing the supply of cheaper, generic versions and thereby
stifling competition from rival brands.

Although the announcement was a public relations triumph for Pfizer, critics suggest that
coronavirus should serve as a reminder of the disastrous consequences of allowing the
industry to be in the hands of a large profiteering monopoly. In the USA, it has been reported
that people pay on average nearly four times more for medicines than other countries, with
large pharmaceutical companies being accused of ripping off patients.

In its most recent financial year, multinational Pfizer made a net profit of $17.9bn, which was
34.2% of its revenues. So, whilst the world celebrates the news of a potential vaccine, it
does not mean that large profit-making pharmaceutical companies are necessarily placing
people before profits.
Source: Adapted from https://www.theguardian.com/commentisfree/2020/nov/12/covid-vaccine-patent-pharmaceutical-
industry-profits-public-sector, The Guardian 12th November 2020

www.thinkib.net/businessmanagement
Questions

(a) Define the term first mover advantage. [2 marks]

(b) Define the term patent. [2 marks]

(c) Explain the importance of branding for Pfizer. [6 marks]

(d) Discuss whether it is ethical for a business such as Pfizer to gain financially from a
public health crisis. [10 marks]

Total: 20 marks

www.thinkib.net/businessmanagement