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Investing.com -- Shares of vaccine manufacturers Moderna Inc (BMV:MRNA) (NASDAQ:MRNA), Novavax Inc (NASDAQ:NVAX), and Pfizer Inc (NYSE:PFE) fell in today’s trading session, down 5%, 3%, and 0.5% respectively. The declines came following a New York Times (NYSE:NYT) report that the U.S. plans to end its financial support for Gavi, the Vaccine Alliance. Gavi has been instrumental in procuring vaccines for children in developing countries.
The Trump administration’s decision to cut funding for Gavi, as part of a broader reduction in foreign aid, may have significant implications for vaccine makers. The move is expected to scale back efforts to combat global health threats such as malaria, while maintaining some grants for H.I.V. and tuberculosis medications and food aid in regions affected by civil wars and natural disasters.
According to the NYT article, the U.S. Agency for International Development (USAID) sent Congress a 281-page spreadsheet detailing the foreign aid projects that will be continued or terminated. The State Department, which now oversees what remains of USAID, confirmed the accuracy of the terminations. The spokesperson stated that each award was reviewed for alignment with agency and administration priorities, and terminations were executed where deemed inconsistent with national interest or policy priorities.
This development signals a potential decrease in the future demand for vaccines produced by companies like Moderna, Novavax, and Pfizer, particularly in developing countries that have relied on U.S. financial support through Gavi. The reductions in funding come as a stark contrast to the previous annual budget of $40 billion for USAID, with only $8.3 billion in unobligated funds remaining to cover awards that extend over several years.
The cut in vaccine funds is seen as a driver behind today’s stock movement, reflecting investor concerns over the impact of reduced U.S. support on the global vaccine market. While the long-term effects are yet to be fully understood, the immediate market response suggests a cautious outlook for these pharmaceutical companies.
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