It has not been a good few days for healthcare stock Pfizer (NYSE:PFE). We’ve already heard that it’s going to take a hit, considering the declining number of people interested in COVID-19 shots. Now, it’s announced a planned price hike on its COVID-19 therapy drug, Paxlovid. The news wasn’t welcome to investors, interestingly enough, and Pfizer shares fell over 2% in Tuesday afternoon’s trading session.
Basically, thanks to a plunge in government procurements and an increased reliance on private operations, Pfizer plans to hike its prices to make up for the loss in volume. That won’t take effect until 2024, however, so those who want Paxlovid can still continue to get it at no charge. Next year, however, those who want in will have to pay a co-pay—assuming they have private insurance—and Pfizer is already starting negotiations with insurance companies and other private payers. The “pandemic price,” Pfizer notes, of $530 per course is expected to be much less than the new price, which some estimate could be around five times that figure.
Perhaps already sensing that private payers will not exactly be thrilled about shelling out five times what the government did for the same medication, Pfizer has already started cost-cutting measures to insulate itself from the potential losses afoot. The plan will save around $3.5 billion, reports note, starting with $1 billion in savings this year. However, it’s going to cost about $3 billion to get there, thanks to a combination of execution costs and severance payouts.
What is the Pfizer Stock Price Forecast for 2023?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PFE stock based on five Buys and nine Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average PFE price target of $42.25 per share implies 29.68% upside potential.
