Big Pharma vaccine profits – the real conspiracy

Updated 25 March 2015

One of the ongoing memes, tropes and fabrications of the vaccine deniers is somehow, somewhere, in some Big Pharma boardroom, a group of men and women in suits choose the next vaccine in some magical way, and foist it upon the world just to make billions of dollars. And while magically concocting the vaccine brew, these pharmaceutical execs ignore ethics and morals just to make a profit on hapless vaccine-injured victims worldwide.

The Big Pharma profits conspiracy trope ranges across the junk medicine world. Homeopathy, for example, claims that Big Pharma suppresses the data that shows water cures all diseases. Like Ebola.

But the Big Pharma vaccine profits conspiracy is still one of most amusing myths of the antivaccination world.

The vaccine denier myths

The vaccine deniers pollute the internet with their screeds about the Big Pharma vaccine profits. One of them said, “measles expert Offit has already made millions of dollars profit from his ties to vaccines and the measles MMR vaccine maker Merck.” Using a childish ad hominem, the article calls him, Dr. Paul “For Profit” Offit. Seriously, that’s how you’re going to “prove” that vaccines are a Big Pharma conspiracy? A 3rd grade playground tease? That’s the best you can do.

You can find whole threads of tedious commentary about Big Pharma vaccine profits on any typical anti-vaccine forum. One of the more illogical claims is that “maybe vax companies see vaccines as more of an investment? Break mostly even on what the vaxes cost to make and sell, but make a bank load of money on treating all the chronic problems they cause!” Of course, that would be a business strategy that would be laughed out of the secret Big Pharma boardroom, because they know that vaccines don’t cause chronic problems. The vaccines prevent it.

What is infuriating about these rants by the antivaccine cult is that not only that their scientific knowledge about vaccines is ridiculous, so is their business knowledge. Of course, I shouldn’t be surprised given that almost all vaccine deniers exhibit the same characteristic–a few hours googling is equivalent to a Ph.D., or, in this case, and an MBA.

A cheap psychological analysis of these claims


It’s a perfect example of the Dunning–Kruger effect‎, a cognitive bias in which unskilled, and uneducated, individuals suffer from an illusory superiority of their knowledge and skills, which causes them to overestimate their abilities in critical thinking abilities and knowledge of a field as much higher than average.

It continues to amaze me that these deniers (in whatever science, evolution, global warming and vaccines) think that reading a few pages on the internet is somehow equivalent to years of study. Attacking Paul Offit by calling him childish names must make the science deniers believe that brings Offit down to their level of knowledge, except that it doesn’t. Offit has been researching infectious diseases and vaccines for over 25 years, and probably laughs at these people.

I used to think that the Dunning-Kruger effect was only about the deniers science skills in vaccines. Apparently, it extends to their business knowledge of how a real corporation is managed. So I thought I’d look at the great Big Pharma vaccine profit conspiracy and deconstruct it as best as I can.

For once, I’m going to set aside the science side of this discussion and stick to the business side. I actually have 15 years of background in accounting and financial analysis of biomedical companies, which requires high level mathematical skills, while still understanding and critiquing the science of these companies. So, don’t be accusing me of the Dunning-Kruger effect. Reserve that accusation for my understanding of baseball.

Let’s take a look at these profits from two different perspectives. First, are vaccines as profitable as other Big Pharma endeavors? And second, if Big Pharma execs were truly immoral and corrupt, would selling vaccines actually be the best business strategy?

Are vaccines really profitable?

It would be insane for anyone to claim they are not highly profitable. But here are some facts that might temper your expectations that vaccines are that valuable:

But even though vaccine revenues are a tiny percentage of Big Pharma revenues, it is still a huge number. And new companies are entering the vaccine market, because as new vaccines are developed and as more adults get vaccinated, the market growth of vaccines is substantially higher than other pharmaceuticals.

The worldwide revenue growth rate for all pharmaceuticals is around 6-7% per year, but around 10-15% per year for vaccines. Now, this type of growth rate will not last forever, because eventually the market becomes saturated, and much of the growth will be in lesser developed countries, where the market value for vaccines is substantially less than in developed countries.

Let’s look at that US$24 billion in worldwide vaccine revenues more carefully. All of the numbers below are in billions of US dollars and were estimated based upon Vaccines: Expert Consult (page 41).

Revenues   24.0
Cost of goods sold (manufacturing, distribution, returns) 7.7
Gross margin (often called gross profit) 16.3
Administration (corporate overhead) 1.7
Sales and marketing 4.1
Net profit 10.5
Research &  Development 2.7
Taxes 4.2
Depreciation 1.1
True profits 2.5

So vaccines generate about US$10.5 billion in “net profits,” or about 43.8% of revenue. Most non-vaccine pharmaceuticals would generate about US$11.1 billion in net profit, or 46.3%,  from the same revenue–thus, vaccines produce around 5% less profits than do other pharmaceuticals.

This lower profit for vaccines is because non-vaccine pharmaceuticals have a lower cost of goods as a result of fewer returns due to spoilage and change in antigens (like from flu season to flu season). Regular pharmaceutical products rarely change from year to year, so something manufactured in 2013 can be sold in 2014 as long as it still has shelf life remaining. Moreover, distribution is a lot more expensive for vaccines, because they need to be shipped more carefully (which is much more expensive) to prevent spoilage.

Analysis of Big Pharma vaccine profits

Still, US$10.5 billion sounds like a boatload of cash, but let’s see what happens to that boatload.

  • Every drug, whether a new vaccine or new drug for erectile dysfunction, costs from US$3.8 to 11 billion dollars each to fully develop, depending on the drug and the market. But despite what some believe about Big Pharma, drug development is not a slam dunk. For example, in cancer drugs, less than 10% gain final approval from the FDA, so the vast majority are miserable failures. Since Big Pharma funds its own R&D, it has to pay for both its successes and its failures. A typical broad based pharmaceutical company like Johnson & Johnson spends about 11.4% of REVENUES (not profit) on R&D (pdf). So out of the US$24.0 billion in vaccine revenue, about US$2.7 billion is removed from the net profit, so we’re down to US$7.8 billion.
  • One of the mistakes made by individuals with no experience in business finance assume two things: risk capital, that is, the money to finance operations, including R&D, is free. And it is freely available. But it’s not. Big Pharma needs to finance its own R&D operations from its own cash (or borrow at high rates). And remember that’s all types of research from initial laboratory studies up through large clinical trials.
  • Big Pharma also has to pay taxes on the net profit. And because Big Pharma has manufacturing, R&D, and administration facilities in modern nations (need access to intelligent, well trained employees), they have a more difficult time in moving revenues outside of taxing authorities. They usually pay around 40% in taxes on the net profit. And they have to depreciate all of their capital, whether its buildings or equipment, because eventually they have to replace it
  • Companies need to acquire technology too, which costs money. Back to Johnson & Johnson (JNJ). They weren’t much of a player in vaccine manufacturing and sales until 2011, when they paid US$2.4 billion for Crucell, a manufacturer of vaccines. In other words, one year of profits for all vaccines was spent to purchase one vaccine manufacturer.

When all is said and done, that US$24 billion becomes around US$2.5 billion in earnings, which is usually paid to shareholders, who took the risk in investing in the company. It may actually be quite a bit less, because I’m ignoring things like cost of risk capital (even though Big Pharma is mostly self funded, it’s not always so, and if that capital could make more money invested in gold or something, it’s a lost opportunity). Given this level of profit, and spread over 50 or so vaccines, it’s hard to imagine that Big Pharma executives are sitting in that Boardroom laughing at how they’re taking over the world with vaccines.

Just some more perspective. Lipitor, probably the #1 drug in revenues ever, sold US$10 billion worldwide in 2011. That’s one drug, with one type of manufacturing facility. In just a few locations. Those Big Pharma execs would rather have Lipitor once or twice over than vaccines. By a long shot.

But are vaccines a good business strategy?

Going back to the laughing, unethical Big Pharma executives sitting in their boardroom, are they really conspiring to push vaccines on us, because it makes so much money? Or, as we saw above, would investing in another kind of medication make more money? Or would they make more money not even selling vaccines?

Let’s take an example of just one infectious disease, measles. According to the CDC, one hospitalization for a serious measles complication costs more than US$142 thousand. Typical cost breakdown of hospital billing indicates that pharmaceuticals and other consumables (syringes, IV’s, saline, etc.) are around 35-40% of the total cost to the patient. Now, a hospital marks up the costs to the patient, so let’s just go with 20% revenue from one measles case flows to Big Pharma, or around US$28,000.

Let’s assume that Big Pharma ended production of all vaccines today, because the evil Big Pharma execs wanted rapidly increase their profits. According to the CDC (pdf), there are about 4 million births in the USA every year. Starting today, those 4 million children annually will not be vaccinated, and the vaccine deniers will be dancing in the streets.

Staying with this imaginary scenario, in 2016, there’s an outbreak of measles that hits the 12 million US kids who are not vaccinated. Again, according to the CDC, about 30% end up being hospitalized, so of the 12 million or so kids who catch the measles (it’s very contagious, so I’m just going to assume that everyone catches it, which is not far from what would really happen), about 3,600,000 would end up being seriously hospitalized. That would mean one outbreak of one disease in one country would end up giving about 100 billion dollars to Big Pharma. Let’s say that only 10% need serious hospitalization. That’s still over 30 billion dollars.

Actually there are other issues that become problematic if we suddenly had this size of an epidemic. For example, the number of ICU beds per capita has dropped by 75% since the 1960’s partially as a result of the reduction in numbers of children with infectious diseases. If we suddenly stopped vaccinating because Big Pharma wanted to make billions more, our hospitals would be overwhelmed. And guess who’s making money then. Big Mortuary. Because children will die in much higher rates than in the 1950’s because we couldn’t handle it.

Again, one disease. In one country. Multiply these numbers out over all countries and all diseases, and those Big Pharma execs would be moving gold bars into their corporate headquarters. So, if Big Pharma were only interested in making money in the most unethical way possible, they’d be funding the anti-vaccine movement.

So, all of you people at Age of lying about Autism, how much money are YOU receiving from Big Pharma to create the illusion that vaccines are dangerous. Because, now I have uncovered the real goal of Big Pharma–get rid of vaccines. Best conspiracy theory ever.

But the truth is that pharmaceutical companies manufacture vaccines because they are able to make a decent profit, the goal of any corporation, and the goal of every human who needs to survive. They are not trying to harm humanity, because if they were truly ruthlessly profit motivated, they’d crush vaccines and wait for huge epidemics to strike the planet. Maybe they still have the specs to manufacture iron lungs for polio victims.

Is Big Pharma perfect? Hell no, and I’ve said it before.

But vaccines save lives. And Big Pharma makes sure that happens.


Use the Science-based Vaccine Search Engine.


Key citations:

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  • Bo Jangles

    I have a problem with the preservatives they are using. Thimerosal has a density of 2.5 times that of water. Its already been shown that doctors have a shockling low rate of hand washing..failure to shake up the vaccine prior to administration could result in a big fat dose of ethyl mercury in a baby who has limited ability to excrete heavy metals. Now aluminum a known neurotoxin is replacing mercury. The only reason these are used is because they dont want to make single dose containers anymore. Yeah everything for the safety of babies right?

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  • Ben William

    An even bigger ‘conspiracy’… pigs really DO fly and the pharma giant’s are paying the government to suppress this information.

    WOW! talk about grasping for straws on a topic. This one on anti-vacciners and big pharma really takes the cake.

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  • Kim Noreen

    Now in my sixties, I remember clearly agonizing over whether to get my children vaccinated ~ because I personally knew of people whose children had been brain damaged afterwards ~ and I had known their children before. Since then, I have met many people whose children have been adversely affected. This is not just one child. I imagine having been in the “medical industry” affects your opinion and I wonder if you have met any of the people that you out of hand dismiss. It might prove beneficial to you, and the people who read your blog, to actually do some serious research into BOTH sides of the issue, because it is not a black and white issue, even though the powers that be would have you believe so. It is curious, too, that we, the American people, have to protect this industry and what goes wrong and how much they control the conversation and our choices in all areas of medical care. It is clearly an industry that is motivated by profit and does great damage all in the name of “science” – there is clear and overwhelming evidence that this is NOT an industry to be trusted and we are right to be skeptical.

    • Tom Thomas

      Evidence? Any evidence that there is a link to vaccines damaging or causing brain damage? Show me some damage.

  • Agg

    I wish everyone would read this. There have been numerous people who came forward confessing to fueling the antivax movement by provoking debate and non-stop flooding social media with unproven theories of the damage vaccines cause. What is the real conspiracy? I wish I could find the xerox paperwork I have previously seen showing a well known celebrities bank account recieve a hefty 4 million dollars after publicly claiming their child “contracted” autism after having a vaccine. Maybe the hair dye, nail chemicals, and countless plastic surgeries have caused issues in your child. Not to mention smoking while pregnant. And people actually took that seriously. If you don’t want to vaccinate your kids then don’t but if diseases mutate and affect the children who are vaccinated you should be held responsible as you believe the pharma companies should.

  • Bella Dahna

    Vaccines are a guarenteed paycheck. Each year approx 4 million babies born in the US. The number of vaccines given before starting school adds up to a lot of money for Big Pharma.

    Now if your child is harmed by vaccines, you’ll be lucky if you can get compensation. The National Childhood Vaccine Injury Act of 1986 (Public Law 99-660) created the National Vaccine Injury Compensation Program (VICP). Vaccine manufacturers (and doctors!) get COMPLETE IMMUNITY from any legal liability if your child is harmed by their vaccine(s). No other industry enjoys this level of protection from a product that could injure a child!

    Through public law, these corporations have been made too big to fail, just like the banks. They make a hefty profit from government contracts. It’s a guaranteed paycheck for them – there is no incentive to change the process.

    Since 1989, pharmaceutical companies have paid only 2.3 billion dollars for vaccine injuries. Given the total lifetime care of a vaccine-injured child, many parents believe this figure should be substantially higher. Some pharmaceutical companies have even been charged with criminal acts by the Department of Justice.

    Remember pharmaceutical companies are in business to make profits and ensure shareholder value.

    In 2011, the US Federal government awarded 6 pharmaceutical corporations over 5.7 Billion to manufacture children’s vaccines alone.


    Sanofi Pasteur…………200-2011-38199……………..$1,142,400,000.00

    Glaxo Smith Kline……..200-2011-38201…………….$786,456,400.00




    Mass Biologic’s………. 200-2011-38202……………..$11,250,000.00


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  • rollog

    Why all the focus on the WORLDWIDE profit numbers? That is a very misleading number since not all pharmaceutical companies actually produce vaccinations. Yet you are adding those companies into the mix just to dilute the statistical goal. You need to look at some of the companies that actually do produce vaccinations. Merck for example. A GOOD portion of their global pharmaceutical profits come from vaccinations. Here is their profit chart on Pharmaceuticals. As you can see their number 2 best seller is one of the more controversial ones.

    Source, Merck:

    • Skeptical Raptor

      You seem to have either not read my article, or you just made my point. Whatever.

      • rollog

        No, I read it quite fine. Offered you proof of your bias through the citation and of course, it is ignored. My point, Pharmaceutical companies that produce vaccines rely on it’s profits to survive.

        Why are you adding corporations who make manufacture only Aspirin into the same category?

        Is that why you removed the article?

        Nice try.

        • Simon

          You’re not very bright are you? The point being made is that if vaccines re so freaking profitable then ALL the Big Pharma companies would be producing them. Basic profit motive economic theory will tell you that.

          • rollog

            Wow are you that clueless? There are PLENTY of pharmaceutical companies that do not work with vaccines, some do not work with opiates etc. The cost of infrastructure vs current marketplace competition comes into the decision as well. For Merck it makes up 20% of overall profit. The company would fail if it were not for the profit from vaccinations. Some pharm companies opt not to enter this arena. You are bordering on lying to the public. Is that why you deleted the article?

      • Laughingfan

        I read it and you have taken significant liberties with the numbers. Pharmaceutical companies pay an average of 2.2% on profits of all their drugs. Many of these companies park their headquarters and profits overseas to hide the billions made off American children. Also, there are numerous peer reviewed studies that prove a link between vaccines and leukemia, asthma, and neurological deficits. Of course they must do this research in other less corrupt countries such as Canada and Great Britain. I am curious how much Big Pharma pays you to keep this site going.

    • az

      I dont see where do you read what you claim to read in this link. What I see is that all the vaccines together provide about 10 % of Merck’s revenue. Out of this, the standard childhood vaccines like MMR acount for about 4%, or 400 million dollars. It is a large sum of money but definitely a very small share of their profits. But all you people are missing the main point. ALL drugs a profitable – thats why they produce them; this is how economy works. Would you refuse taking a cancer or stroke or pain medication just because a company that makes it benefits from it?? Would you refuse to go to surgery to remove the inflamed appendix or a malignant tumor because the company that produced the equipment made money on it?? These are absurd arguments and many childred are going to die because of people like you.

      • rollog

        If you know much about business, you will KNOW that 10% is enough to make a business or sink it. High stakes.

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  • Kir (Politicoid)

    “I actually have 15 years of background in accounting and financial
    analysis of biomedical companies, which requires high level mathematical

    There’s the Dunning-Kruger effect right there. High level math skills? No. It requires being good with numbers. But at least now I know what it is that you did in the medical field. You were in finances.

    • Skeptical Raptor

      NO dumbass. Apparently you know nothing of finance. But that’s all right. It’s hard to learn much graduating from the first grade and then going to live in your mom’s basement while getting fat eating Cheetos.

      See how this works?

      • Kir (Politicoid)

        Yeah. I have a degree in mathematics. You know, the author sets the time for comments. Try doing more than slinging childish insults.

      • Guest

        A very unprofessional comment that diminishes your credibility.

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  • Tardis1

    The anti-vaccers often site the lawsuit shield. What they don’t get and what is clear from the financial analysis is the pharma would stop making vaccines if they could be sued. One sick child out front of a sympathetic jury would lead to millions in damages. It wouldn’t take too many of these cases for vaccine manufacture to no longer be worth it.

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  • carpeveritas

    You’re title led me to believe I was going to find evidence that Big Pharma is backing the anti-vaccine movement, but everything you said seemed to suggest the opposite. I’m disappointed at the disservice of this blog post as a result of its deceptive title. A very poor attempt of a bait and switch, if that’s what you were trying to do. Perhaps what some might call the most successful global pro-vaccine organization, Task Force for Health, is financially backed by four major Big Pharma corporations in 2013 alone: Glaxo Smith Kline, Novartis, Pfizer, and Merck. (Reference: It seems like data such as this which most relevant to the answer of your title of your blog posting is a bit inconvenient for your talking points.

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  • dr tony cellini

    Correct, Taleen. This author has done no research – sounds like a high school junior journalism major. Break even? Guess he never saw the 2005 study from Harvard Medical School which showed that vaccine manufacturing on average ran 18% in the black. He’s actually trying to float the argument that vaccines are created and legistlated into use … why? For humanitarian, altruistic, benevolent reasons? Please. Here’s a collection of actual sources : Vaccination Is Not Immunization, 2013

    • Skeptical Raptor

      That’s the best you can do “dr”? Claiming I have no research. LMFAO.

      1. You don’t get parody. Dumbass.
      2. Immunization = vaccination. Unless you flunked immunology. Dumbass.
      3. No one claims that vaccines were legislated into use. Dumbass.

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  • Lowell Hubbs

    Virtually all licensed vaccines in the United States are produced by just a handful of pharmaceutical companies: GlaxoSmithKline, Merck, Novartis, Sanofi Pasteur, and Wyeth. These companies account for 80 percent of the worldwide vaccine market. With a limited number of manufacturers and many recommended vaccines produced by only a single company, vaccines are actually quite profitable. When you consider that a single FDA vaccine approval guarantees years and years of profits and with now no risk of any legal liability. Pharmaceutical drugs still carry some obvious risk of legal liability. Ask yourself what other product on the planet earth enjoys the benefit of having abslutely no rsik for anyone involved in its sales and so called professional usage? There are none.

    Vaccine Makers Profit from Government-Granted Immunity

    The Vaccine Industry – An Overview

    It’s Spreading: Manufacturing of vaccines is becoming big business, paying off for drugmakers

    Although prescription-drug sales are forecast to rise by a third in five years, vaccine sales should double, from $19 billion last year to $39 billion in 2013, according to market research firm Kalorama Information. That’s five times the $8 billion in vaccine sales in 2004.

    “What was essentially 25 years ago a rounding error now has become real money,” said Robin Robertson, the director of the U.S. Biomedical Advanced Research Development Authority.

    That jump is because of two new blockbuster vaccines and rising use of existing ones. The government’s list of recommended vaccines for children has more than doubled since 1985 to 17. It now also calls for a half-dozen vaccines for everyone over 18 and up to four more for some adults.

    Read more:

    How vaccines became big business

    Why vaccines spread disease and vaccine science is flawed

    The Current Failure of Pertussis and Measles Vaccine

    Failure Of The Continued Polio Vaccine Campaign

    Parents Who Do Not Vaccinate Are Not Ethically Negligent

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  • koala

    Never have I seen an antivac article that is “about the profits of vaccines”! ?

    • Skeptical Raptor

      Really? We see it all the time.

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    • kellymbray

      You sound like a paranoid chiropractor. Did you go to the Alex Jones School of Medicine?

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    • Dan Kegel

      I suspect very little of the medical marijuana sales at the several dispensaries in walking distance from my house are actually medical, and most are recreational. I’m tired of picking up empty (and sometimes not empty) vials of marijuana from the street. There are an awful lot of young, healthy looking people walking into that place.

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