In the past, the COVID-19 pandemic has reshaped the healthcare industry, but now, the recession of the pandemic has once again changed the industry.

The Zhitong Finance App learned that vaccine manufacturers and pharmacy chains have found that the number of people vaccinated against COVID-19 has declined sharply. Manufacturers of rapid testing equipment for home use are also going bankrupt one after another. Companies that manufacture personal protective equipment have gone out of business one after another.

When the coronavirus first appeared, companies across the healthcare industry raced to restructure their businesses. Pharmaceutical companies that focus mainly on cancer and rare diseases are involved in the development of vaccines and antiviral drugs. Medical device manufacturers have developed household test reagent products and rapidly increased production.

But that transformation is now falling apart. Pfizer (PFE.US), once one of the biggest winners in the pandemic boom, provided one of the most notable signs of transformation on Monday: the company cut its annual sales forecast by $9 billion due to falling demand for COVID-19 vaccines and Paxlovid treatments.

Bloomberg Intelligence analyst Max Nisen said, “The declining demand for vaccines and Paxlovid shows that this is indeed a post-pandemic transition. People will have to figure out what's going on with the exception of Pfizer (other companies).”

Currently, many Americans have left the outbreak behind. The US public health emergency ended in May, but the virus has not completely disappeared, and the new strain continues to spread. Also, although the number of people hospitalized due to COVID-19 is still far below the peak level, the hospitalization rate in September was the highest since March. However, fewer and fewer people are working from home, and restaurants and airports are gradually becoming overcrowded.

Not all healthcare companies facing sudden changes due to the COVID-19 pandemic have been affected. For example, when clinics are full of people with the virus, more and more people are returning to private doctors for routine tests and surgeries. This is great news for doctors and hospitals.

Despite this, Pfizer's decision to adjust its financial guidelines shows that the situation has changed to a certain extent, which will put pressure on other businesses that benefit from providing services to COVID-19 patients and require them to re-examine their expectations and make adjustments. By Monday's close, Pfizer had closed up 3.61%.

Also on Monday, Pfizer's competitor Moderna (MRNA.US) reaffirmed its 2023 COVID-19 vaccine sales guidelines, but said it is still too early to accurately predict at what level vaccination rates will stabilize. On Monday, the stock closed down 6.47%, the lowest level since November 2020.

Moderna said vaccine sales are expected to reach $6 billion to $8 billion this year. William Blair analyst Myles Minter said in a report to investors on Monday that he believes the company's vaccine sales this year will hit the low end of this range. Moderna also predicts that the US market will need at least 50 million doses of the vaccine this quarter, but Jefferies analyst Michael Yee expects it to be even lower, between 35 million and 40 million doses.

Shifting focus

Not long ago, Wall Street was excited about the potential of mRNA, the technology behind Moderna and Pfizer's COVID-19 vaccines. Both companies believe this breakthrough will have a range of applications, while competitors are also under pressure to develop mRNA independently. However, this view has changed as investors invest money into the diet medicine sector, and some analysts have predicted that diet pills will have a broad economic impact.

So far this year, Pfizer's stock price has fallen 35% cumulatively, and Moderna has fallen 49% cumulatively. In contrast, the stock price of Novo Nordisk (NVO.US), a leader in the diet medicine sector, has risen 49% this year.

This quarter, the unstable supply of vaccines has made it more difficult for people to figure out exactly how much demand there is in the market. Drugstores discovered that Moderna and Pfizer's new vaccine was in short supply, forcing them to turn away customers who bought the vaccine this fall.

It's also hurting pharmacies. Walgreen-United (WBA.US) pharmacy and retail businesses have been impacted by declining pandemic-related contributions. Executives said in a conference call with investors that in the fourth quarter, Walgreens received about 400,000 doses of the COVID-19 vaccine, compared to 2.9 million doses last year. Demand for COVID-19 testing has also declined sharply.

Sivis Health (CVS.US) is also facing resistance. In the second quarter, the adjusted operating profit of its pharmaceuticals and consumer health business was $1.4 billion, down 17% year over year, mainly due to falling demand for COVID-related products and services.

COVID-19 testing manufacturers are facing challenges

Vaccine manufacturers aren't the only type of company that is in a slump due to pandemic-related business. In February of this year, Lucira Health (LHDX.US), a manufacturer of household COVID-19 test reagents that hasn't been listed in the US for long, filed for bankruptcy protection. Test reagent manufacturer Ellume Ltd., has obtained approval for the first domestic COVID-19 test kit in the US, but went bankrupt and liquidated in June.

ABT.US (ABT.US) sales of COVID-19 testing products declined rapidly in 2022, and this slump forced the company to cut temporary workers this year. According to analysts, sales of Abbott's COVID-19 testing products in 2023 will be only 1.3 billion US dollars, far lower than the 7.7 billion US dollars in 2021.

However, unlike smaller competitors, Abbott has other businesses that can offset this decline: demand for medical devices such as diabetes monitors has mitigated the impact of pandemic-related revenue declines.

For health insurers, the receding impact of the pandemic means more and more people are seeking health insurance. Patients have postponed surgeries and other care during the pandemic, but insurers have seen a rebound in the number of joint replacements and heart surgeries this year.

In June of this year, a United Health (UNH.US) executive said that medical costs would be higher than expected, leading to a sharp drop in health insurance companies' stocks. Managed healthcare companies are also facing declining Medicaid membership, as millions of people who joined safety net health plans during the pandemic must now prove they are still eligible for the program. However, the actual performance of insurance companies is still better than what investors are worried about.

For hospitals, surgery centers, and medical device manufacturers, returning patients for more treatments will benefit their business. Labor costs soared during the pandemic as hospitals relied on traveling nurses and temporary medical staff, but these pressures have abated somewhat. Meanwhile, investors' enthusiasm for online healthcare has waned.