OBJECTIVES: In May 2022, Pfizer announced it will make its 23 patent protected medicines and vaccines available on a not-for-profit basis to 45 low- and lower-middle-income countries. The initiative will benefit around 1.2 billion people, but tiered pricing, especially if the at-cost price is publicly disclosed, carries risks. If other countries use any of the 45 countries as part of their reference basket for International Reference Pricing (IRP) purposes, price cuts could be imposed on Pfizer products elsewhere. We assess the risk to Pfizer, given its current selection of 45 countries, and explore how much greater the risk would have been if it had extended not-for-profit price levels to all low- and middle-income countries (LMICs).

METHODS: All first-degree referencing relationships were considered based on the GlobalData IRP Matrix.

RESULTS: By selecting all low-income countries and a small number of middle-income countries for inclusion in the program, Pfizer is limiting the impact on drug prices to 45 countries directly and seven additional countries indirectly via IRP. If Pfizer, or other pharmaceutical companies considering similar pricing strategies, were to extend the low, publicly-known price to all lower-middle-income countries, the low price will have a direct effect in 84 countries and will indirectly impact prices in nine additional countries due to IRP. If the not-for-profit, publicly known price were to be extended to all higher-middle-income countries, the low price will directly affect 139 countries and price levels in eight additional countries will be at risk of reduction due to IRP. While we only considered first-degree IRP effects here, the price pressure would multiply if second-degree IRP and internal price linkage are taken into account.

CONCLUSIONS: Reducing prices in selected countries and making the reduced price publicly known is a risky endeavor for the pharmaceutical industry as a result of price leakage under IRP.