The U.S. government has amended its supply agreement with Pfizer for Paxlovid and the company has updated its Full-Year 2023 Guidance. A cost-cutting initiative aims to save $3.5 billion through 2024 due to a drop in the sales of its COVID-19 products.
 
Under the terms of the revised supply agreement with the U.S. government for COVID-19 drug Paxlovid (nirmatrelvir/ritonavir), the government will return to Pfizer approximately 7.9 million doses of Paxlovid.
 
Paxlovid was initially given an Emergency Use Authorization (EUA) in December 2021, and later converted to full approval in May 2023. Pfizer will make the NDA-labelled Paxlovid commercially available by the end of the year.
 
As a result, Pfizer is cutting $7 billion from its full-year 2023 revenue expectations for Paxlovid. The company is also lowering its 2023 revenue outlook for its COVID-19 shot Comirnaty by approximately $2 billion driven by a drop in vaccination rates.
 
The multi-year cost realignment program will involve undisclosed layoffs, and the company expects an upfront cost of $3 billion, largely due to severance payments and to fund the implementation of the cost-cutting program.
 
Pfizer aims to achieve $1 billion in savings in 2023 and the remaining $2.5 billion in 2024.