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These two companies have collectively received more than $1.5 billion from the US government [1]. As I understand it, Pfizer have not taken any federal funding. They do have government purchase agreements, but they are dependent on Pfizer delivering a viable vaccine. Their partner BioNTech received German government funding:
Berlin gave the German company $445 million in an agreement in September to help accelerate the vaccine by building out manufacturing and development capacity in its home market. [2]
[1] https://www.nytimes.com/2020/05/21/health/coronavirus-vaccin...
[2] https://www.bloomberg.com/news/articles/2020-11-09/pfizer-va...
So where did Pfizer's capital come from to shoulder these costs? It didn't come out of thin air, they've accumulated capital from somewhere. If not from taxpayers, someone is subsidizing Pfizer's expenses through Pfizer's revenue stream. Taxpayer subsidies really make sense here seeing how this issue effects everyone.
Companies taking a portion of what they earn from their existing products and investing this money to create new products is beneficial, and we should have more of it.
Additionally, while this is probably not the case for Pfizer, another possibility is that a company can take outside investment to fund development of a new product.
Without those trillions of dollars/euros most probably the capital markets would have been down by at least 50% (my guesstimate, or at least that's where we were headed mid-March), which means that the money available to companies like Pfizer would have been a lot less.
As such, Pfizer saying that they didn't receive federal money is technically correct, but without federal money most probably their market value would have been a lot less right now.
Pfizer's cash situation or ability to spend/pay a dividend has nothing to do with stock price. Pfizer does not have their cash balance invested in other stocks. Ability/willingness to pay a dividend has to do with excess cash.
To the extent there's any relation, it's a high stock price that discourages paying a dividend. If the dividend yield will be basically nothing, why bother spending down precious cash that could be reinvested (because obviously the market values future cash flows a lot more than current ones).
Deflation might encourage a little bit of holding of corporate cash rather than spending it on R&D, sure. But even then I think you're overstating the case.
I think the OP was reflecting on cash flow being used for R&D but your post seems to be more about market capitalization.
But let's look at this more holistically. Pfizer and pharma benefit a reasonable amount from public research. Pfizer has received their fair share of governmental funding in the form of products, services, and research: https://www.usaspending.gov/search/85a918fa6adf5152dbac723d2...
They've also been subsidized by people with illness over the years that isn't related to COVID (directly or through their insurance provider pools). It's in other cases the previously sick that have padded Pfizer's profit margins enough to enable them to accumulate enough capital they could take on this sort of risky R&D. Theres also the costs of enabling laws and defending their IP rights from external pressures the US pushes.
It may not be direct subsidy but there are plenty of indirect subsidies that enabled Pfizer to do this. Let's stop pretending these businesses pull themselves up by their bootstraps to success and take on all the risk: they don't. They very often take low risk returns and transfer to high risk and use subsidized activity (e.g. federally funded research) to their advantage. Anything high risk like pharma is prone to failure and needs assistance.
Should we continue assistance? Absolutely, I think so, it's good for everyone. As one parent mentioned, it is good to see these businesses reinvest in further R&D that lead to new discoveries in therapy and treatment as opposed to simply hoarding capital.
Apparently the thought of the narratives that Pfizer didn't pull themselves up by their bootstraps financially makes some people cranky. Everyone needs assistance (especially in high risk arenas), let's not pretend that assistance doesn't exist simply because its indirect, time delayed, and being shifted around.
A subsidy is, by definition, a governmental funding mechanism. "People with illness" who used Pfizer products in the past aren't subsidizing the COVID vaccine anymore than I subsidize an automobile manufacturer making pickups when I buy my tiny hatchback. It's built into the business model and not really a "subsidy".
I agree with you in terms that we shouldn't view these companies as operating in a vacuum, I just don't think the idea of the markets being propped up is the most congruent way of framing the discussion. Pfizer benefited along with most other publicly traded companies, irrespective of their COVID vaccine.
https://lifescivc.com/2019/12/venturing-a-perspective-on-the...