June 16, 2024

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Pfizer generated $58 billion in total sales in 2023.
Image: Johanna Geron (Reuters)

Pharma giant Pfizer announced Wednesday another cost-cutting initiative as the company struggles with diminishing demand for its COVID-19 vaccine.

The vaccine maker said in a U.S. Securities and Exchange filing that it is launching a multi-year program to cut its costs on goods sold. The cost-saving program is expected to include “operational efficiencies, network structure changes, and product portfolio enhancements.”

The first phase of the new program will focus on operational efficiencies and could generate about $1.5 billion in saving by 2027. The company expects to incur one-time costs amounting to $1.7 billion for this first-phase, primarily in 2024, due severance and implementation costs.

This new initiative is on top of another plan from the company to save $4 billion by the end of this year.

The cost-saving initiatives come as Pfizer and other drug makers struggle with falling demand for COVID-19 vaccines.

In 2023, sales of Pfizer’s COVID vaccine fell 70% in 2023 to $11.2 billion, down from $37.8 billion in 2022. The vaccine accounted for about 20% of Pfizer’s total revenues of $58 billion that year.

Pfizer is not alone in facing diminishing sales.

Moderna, whose only product on the market is a COVID vaccine, saw its sales for the first three months of 2024 fall 91% to $167 million, down from $1.9 billion in the same quarter the prior year.

And earlier this month AstraZeneca said it is no longer producing or supplying its COVID-19 vaccine, known as Vaxzeveria, due to shrinking demand. Revenue for the vaccine fell 99% in 2023 to $12 million, from about $1.8 billion in 2022. This week, the drugmaker announced a plan to launch 20 new drugs this decade to generate $80 billion in annual revenue by 2030.

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