Is the (vaccine) price 'right'? Better vaccine process valuation techniques lead to lower firm break-even prices and improved payer bargaining power

In recent years, a lot of discussion and criticism has emerged around pharmaceutical firms setting prices of their mpox, COVID-19 and other vaccines 'unfairly' high, leading to huge problems of equitable access. While the literature focuses on the unequal price set- ting bargaining power between these firms and the payers (donors/public health sector agencies) and the information asymmetry and lack of firm transparency on exact cost structures as major causes, hardly any attention has been paid to one particular dimension of vaccine pricing, which relates to the inappropriate- ness of the conventional Net Present Value (NPV) based valuation method used to determine an accurate firm break-even price. Building on our recent research (Engelen & Cassimon, 2025), this contribution presents compound real option analysis as a more accurate valu- ation technique, leading to a lower firm break-even price. It then applies this to a particular case and draws some policy conclusions for payer bargaining power in price setting negotiations.