Pfizer’s Fast and Lucrative Vaccine Distribution

and how much to charge. Well. Fiser's drug is an extraordinary accomplishment, exceeding nearly everyone's hopes. The company is now doing what pharma does, mass marketing life saving products at prices that the market is willing to pay. The company expects the vaccine to generate at least fifteen billion dollars in revenue. And there's no rule book for how a

global corporation should behave during a pandemic. Of course, we know that, but if there's ever an autopsy of the pandemic, essential question might be how a single company came to hold such power over so many. Vaccine capitalism Fyser deserves every bit of the credit its receiving, but should a

drug company decide who gets a shot? By Stephanie Baker, Cynthia Coons and Vernon Silver, It's not every day that a head of government goes to the airport to greet a cargo shipment, but the pandemic has changed many things. On January tenth, Israeli Prime Minister Benjamin netann Yahoo motorcated to Ben Gurion International Airport, southeast of Tel Aviv to watch a shipment of seven hundred thousand vaccine doses from Fyser emerge from a blue and white allal bowing seven

eighty seven nine. This is a great day for the State of Israel, with a huge shipment that has arrived, Netanyahoo said, exuding a confidence few world leaders have mustered since the crisis began. I agreed with my friend, Viser chairman and ce O, Albert Borla that we would bring shipment after shipment and complete the vaccination of the over

sixteen population in Israel. During the month of March. Borla had thrown net Yahoo a political lifeline, faced with surging COVID nineteen cases and an election in March the Prime Minister latched onto Viser's vaccine as his best hope to stay in office. Standing on the tarmac, he bragged that Israelis over the age of sixty had already been vaccinated thanks to shipments that began in early December, and that

more doses would come soon. That was because he'd struck a deal with Borla to use his country as a test case for Fiser's vaccine. Vaccine distribution still has the feel of a zero sum game. Five days after nettnya Who's victory lap, Fiser told other non US customers that it would cut near term supplies while it briefly closed its vaccine manufacturing facility in Belgium for an upgrade. Panic and anger rippled through world capitals, nowhere more so than

in Rome. Italy, which has suffered one of the highest COVID death rates and which had successfully set up a mass vaccination program and inoculated more people than any other European Union country, was waiting for new doses when Fiser announced the cuts. The country's virus emergencies are at the time.

Domenico our Coury lashed out, complaining that Fiser had cut its shipments by almost thirty percent, just as Italy was about to start vaccinating people older than eight on mass he warned that Italy could take unspecified action against the company. Days after our Cury aired his grievances, Fiser began shipping millions of doses to Israel. Within a week, Israel expanded

its rollout to include sixteen to eighteen year olds. Look, we are very angry, Lucas Aiah, president of Italy's Veneto region, one of the areas most affected by COVID with more than dred deaths, told reporters sitting in front of EU and Italian flags, he'd recently learned that supplies to his region would be cut fifty for that week. I want to understand what Nobel Prize winner they paid to organize the distribution, or which principle or algorithm they used. It

didn't come from some algorithm. The vaccine allocation was the product of a company struggling to apportion doses while demand far exceeded supply, using an opaque process that appears to involve a mix of order size, position in the queue. Production forecasts, calls from world leaders, the potential to advance the science, and of course, the desire to make a profit.

Everybody wanted deliveries in the first quarter, and we tried to allow discussions and negotiations to spread things so everybody would get in an equitable base. Borla says the countries that hadn't placed orders wanted a place in line, and those that had placed early orders wanted to buy more. It was a constant negotiation, he says. Everybody wanted it, of course earlier. Feiser says the agreement with Israel didn't affect doses going elsewhere. Israel had two things going for it.

Net and Yahoo had offered to pay roughly thirty dollars a dose about it, more than the US government, according to people familiar with the deal. He also agreed to share countrywide data on the vaccine, a two dose product based on an experimental platform called Messenger RNA or mr NA. It's being used almost exclusively in Israel in what amounts to a large scale effectiveness study. Fiser considered offering the same arrangement to Iceland, but the country didn't have enough

COVID cases to make a study meaningful. By February, Israel had given first doses to of its nine million people, making it the world leader Italy meanwhile, had administered first shots to three point six percent of its citizens. Bore Less says the agreement with Israel will provide data that will transform the world's understanding of how to end the pandemic. They are trying to extract the scientific information that the whole world is waiting on right now, he says. We'll

get data on symptomatic and asymptomatic transmission very quickly. Indeed, the news out of Israel on February twenty four was remarkable. The vaccine prevented of COVID cases in almost six hundred thousand vaccinated people. As the first company to develop an authorized COVID vaccine, which it did in partnership with Germany's bio intech Fiser, wields enormous power. Borla had been Fiser's chief executive officer only a year when the pandemic began,

and almost immediately faced choices. No farma executive would normally be making government policy matters, as does the behavior of individuals, but to some degree, vaccine makers determine where infections will decrease and which economies will reopen first. Their customers are elected national leaders who have designed intricate vaccination programs with public health officials, but those leaders are learning that they're at the mercy of what manufacturers such as Fiser deliver.

In the past few months, Borla has taken on an almost statesmanlike role, holding calls with heads of state, including former US President Donald Trump, European Commissioner President Ursula vonder Lyon, and Canadian Prime Minister Justin Trudeau. Net and Yah, who boasted in January that he'd spoken with Borla seventeen times, with the CEO even taking his calls at two am. Borla says he's taught to Netanyah who even more since then. Fiser's first out of the gate status has also offered

Borla a sales opportunity like none other. He's locked in orders from more than sixty countries on undisclosed commercial terms. Fiser has supplied nine million doses globally. It's executing on one of the most ambitious scale ups in pharmaceutical history to meet the relentless demand, boosting production to two billion doses in one more than it has agreements to sell.

At this stage, it expects the vaccine to generate at least fifteen billion dollars in revenue in putting it under the brand name Commernity, an ungainly blend of covid, m r n A and immunity on act to be one of the biggest selling drugs in the world. There's no rulebook for how a global corporation should behave during a pandemic. Feiser accomplished something extraordinary, exceeding nearly everyone's hopes, and is now doing what pharma does, mass marketing life saving products

at prices the market is willing to pay. It's not bound to serve a global public health agenda. All that said, there will one day be an autopsy of the pandemic, and the central question might be how a single company came to hold such power over so many. In May, the Trump administration announced the launch of Operation Warp Speed. Monsef Slowie, a former Glaxo Smith client executive, joined as chief advisor to OWS to figure out which vaccines to back.

He had an uncommon familiarity with mr and A technology from serving on the board of Maderna, which had spent years researching the platform. No drug using m RNA technology had ever been approved. Sloughy knew Fiser might be a contender after it announced its decision to collaborate with bio in Tech, another m RNA pioneer, but he didn't know Borla. When they first spoke in June. Borla made it clear he wasn't interested in taking money for research and development

as the other companies of WS was evaluating were. Instead, he wanted an advanced purchase order from OWS to guarantee a buyer. If Fiser succeeded. The company's fifty billion dollars in annual revenue meant it could afford to take a flyer. Borla has said it wasn't an easy decision, but he felt it liberated scientists from bureaucracy to get faster results. Albert was very clear that they had what it takes

to deliver. Sloughy says Fiser's confidence showed early on. It began marketing the vaccine globally in May, soon after it started safety testing. The process started in the very early days when we reached out to every single country. Borla says. We started discussions in all continents of the world. The UK was the first country to do a deal, agreeing on July twenty to buy thirty million doses, later up to forty million to be delivered in twenty twenty one.

As with most of Viser's deals with individual countries, the terms were not disclosed. Two days later, Fiser announced a one point nine billion dollar order from Operation Warp Speed for one hundred million doses, pending authorization of its vaccine from the Food and Drug Administration. The straight advanced purchase

order set Fiser apart from all the other OWS candidates. Maderna, for example, got two point forty eight billion dollars from the US government, including nine and fifty five million dollars for clinical development and manufacturing, and payment for one hundred million doses. By contrast, Fiser has spent two billion dollars

of its own money on development. Company executives came out of the gate asking for a higher price per dose than the nineteen dollars and fifty cents they eventually agreed on, According to former senior Administration officials who declined to be named because the discussions were confidential, higher prices were floated in Europe to last summer. Fiser and Biointech started off asking for fifty four euros about sixty five dollars a dose.

In negotiations with the EU, A person familiar with the talks, says, Confirming German media reports, Biointech co founder Uger Shaheen told Build that initial ballpark figures were based on rough calculations of production costs before they figured out how the manufacturing would work. They later settled on a range of fifteen to thirty euros a dose for industrialized countries, depending on order size. Free from the strings attached by a government grant,

Fiser could move faster. We made the early decision to begin clinical work and large scale manufacturing at our own risk to ensure that product would be available immediately if our clinical trials proved successful, Borla said, would anne the US deal. Less than a week after securing the US contract, Fiser started its final stage trial, saying it aimed to seek regulatory review by the FDA as early as October.

Maderna started its final trial the same day, but a longer interval between doses twenty eight days to Fiser's twenty one, meant that all other things being equal, Fiser was positioned to report results first. The orders kept rolling in a few days after the trial started. Japan ordered one and twenty million doses to be delivered in the first half

of one in early August, Canada made a deal. In late August, Fiser shared early data showing that participants generated a strong immune response to the vaccine, and even more countries got in line. In early September, the company agreed to potentially supply the EU with as many as three hundred million doses, but the block dragged its feet on finalizing the deal. The Gulf state of cutter placed in

order a few weeks later. Borla had been assistently saying the company expected to report results from the final stage trial by the end of October, which Trump seized on as he sagged in the polls in the home stretch of his reelection campaign. We're going to have a vaccine very soon, maybe even before a very special date, Trump said in early September, concerned that Fiser was rushing the

trial at the expensive safety checks mounted. Pushing back at the perception that the Trump administration was pressuring the company, Borla promised to make safety paramount. I wanted to speak directly to the billions of people, millions of businesses, and hundreds of governments around the world that are investing their hopes in a safe and effective COVID nineteen vaccine. He said in an open letter, the vaccine must be proven safe.

Fiser ruffled feathers with some inside operation warp speed. The company had been pushing for the US government to place an additional order of one million doses, but OWS officials were wary. The company was already failing to meet its production targets for November for re since that were unclear, according to the former senior administration officials. Fiser says it

kept the government informed about production. When Fiser announced the results of its final stage trial six days after the election, the news was huge. The vaccine was more than effective at preventing COVID symptoms. Sloughy says, Borla called him right before Viser issued a news release at six am on November nine, and he was so excited that he had to refrain from shouting for fear of waking up other

guests in his hotel in Washington. Nevertheless, amid the euphoria was some bad news, Viser warned that it would be able to produce only fifty million doses worldwide by the end of the year, instead of the one million it had projected. Fiser was running into major production problems at its Acre campus in Kalamazoo, Michigan, where the company set up a freezer farm the size of a football field to store doses at the required negative seventy five degrees celsius.

Scaling up manufacture ring of a new product with a new technology required a steady flow of raw materials. It turned out Fiser needed the government's help after all. To clear supply chain hold ups. Company executives were pressing warp Speed for an order under the Defense Production Act, which would give it priority access to suppliers. Other OWS candidates had been taking advantage of the d PA for months.

OWS hesitated the administration. Officials say they were worried that Fiser would use its size and market cloud to muscle out Maderna in the supply chain if it got equivalent status under the d p A. Fiser's production hold ups had a huge impact on the US vaccine rollout. Before the trial results were announced, OWS had been expecting twenty

million doses in November and twenty million in December. Instead, it got nothing in December and twenty million doses in December, some of them flown in from Fiser's production site in Belgium to make up for the gaps. From Kalamazoo. The UK, which was the first country to authorize the vaccine on December two, had been expecting ten million doses by the

end of the year, but got about half that. Despite the supply challenges, Fiser announced right before Christmas that it had agreed to supply the US with another one hundred million doses. At the same time, government officials finally agreed to provide the company with priority under the d p A. In late December, a flurry of news stories from the Middle East revealed that Fiser had contracted to sell millions

of doses to countries in previously unreported deals. Dubai got its first doses blown in from Belgium and announced it would aim to inoculate seventy of its three point three million people with the Fiser vaccine. Officials in Saudi Arabia told TV broadcaster Al Arabia they were expecting three million Fiser doses, with a third of those to be delivered

by the end of February. Oman ordered three hundred and seventy thousand, paying thirty dollars a shot for early supplies arriving in December and twenty four dollars a shot for later shipments. The Health Minister told a government news outlet this appeared to be one of the highest prices outside Israel, though lack of disclosure makes it impossible to say for sure. Fiser executives found a partial fix to their supply problem

in the vaccine vials themselves. They just needed authorization to change the labels to say the vials contained six doses instead of five. Its standard practice in the pharmaceutical industry to overfill vials slightly to avoid running the risk of undershooting and violating FDA labeling laws. Fiser was overfilling each vial by just enough for an extra dose if vaccinators used what are called low dead volume syringes, but not

all vaccination sites had the syringes. Moreover, the company's application to the f d A and other regulators specified five dose vials viser needed to generate data showing the extra shot could be reliably extracted. The company did that and then began pressing FDA officials to change the authorization to recognize the sixth dose. O w S officials were against the change, anticipate nightmare logistical implications, right when they were

starting the biggest mass vaccination campaign in US history. The former senior administration officials say Viser's vaccine needed to be kept at subarctic temperatures. It was already difficult enough to distribute without last minute rejiggering. Recently, the FDA announced that it can be kept at normal freezer temperatures for up to two weeks. The company's lobbying efforts succeeded. On January six, the FDA revised its fact sheet, allowing the sixth dose

and effectively boosting Viser's production. By regulators in Europe, the UK and elsewhere followed suit. The US and the UK had managed to source the syringes, but other countries were left scrambling. Sweden and Japan complained they didn't have enough special syringes to extract the sixth dose, and warned it would likely mean millions of doses would be thrown away.

Austria was also short of supplies. Borla defended the policy change by saying the company had validated thirty six syringe needle comb nations that could get the extra dose out. It would be criminal if we can use six doses and we are throwing away one vaccine that can save lives right now, he told Bloomberg in late January. The

modification was a huge win for Fiser. The company had promised to supply the US with one dred million doses by the end of the first quarter, and it now says it can provide one twenty million because nations paid by the dose. The move also delivered an instant price hike per Vile. When Borla took the helm at Viser in January nine, his mission was to get the company to focus on blockbuster drugs and to fend off a potential battle with the Trump administration over drug pricing. The

coronavirus immediately gave him a new focus. Viser's little known partnership with a German biotech turned it into a hero of the pandemic. There was considerable doubt that Mr and A vaccines would work, but Borla's willingness to gamble on the new technology you paid off. While Israel was swimming in Visor vaccines in late January, other countries were struggling to find out when their deliveries would resume. On January eight, the EU said it had doubled its order by securing

the purchase of another three hundred million doses. A week later, Fiser announced the supply cut and the Belgian shutdown within days. It informed officials in Canada, which had recently doubled its order to forty million shots, that the country would receive no doses the following week. Prime Minister Trudeau spoke with boor Law on January one, but the call didn't unlock

additional supplies. Desperate for doses, he agreed to take vaccines from KOVACS, the facility backed by the World Health Organization to provide two billion doses to low income countries. Canada was the only group of seven country to do so. Opposition politicians accused him of grabbing doses meant for countries that couldn't afford to do bilateral deals. Bahrain, Dubai, and Saudi Arabia also reported delays and shipments. Viser supply has

been a global challenge. Amyor Sharif, head of Dubai's COVID nineteen Command and Control Center, told Bloomberg TV there have been a lot of discussions with visor representatives in the region. Oman was cut too, Do not panic, Ahmed bin Muhammad Al saidi Oman's health minister urged at a press conference on February one. We were assured that the next consignment will be here before the middle of this month. The Gulf States have weathered the delays without major consequences because

their rates of infection are relatively low. Mexico, with surging cases in the world's third highest number of deaths, has felt Viser's supply cut more profoundly, having agreed in early December to buy thirty four million Visor doses. The nation started vaccinating in late December, the first country to do so in Latin America. Then Viser's shipments stopped for three weeks until roughly five thousand doses for healthcare workers arrived in mid February. It hadn't d and started vaccinating the

elderly on February second. Mexican Foreign Minister Marcelo Ebrard criticized Fiser for holding back doses that are already signed and paid for. The world was waiting for Viser to retool its sprawling facility, the size of several sports stadiums on the outskirts of the tiny Belgian town of Purrs. Last year, Fiser hired several hundred more staff, bringing the total to more than three thousand, as it geared up for production. That wasn't enough to keep up with the crush of orders.

The partial closure of the plant lasted almost two weeks. When there is a question of life and death, when there is a question of the global economy, the demand will always be bigger, Borla says, you will get complaints. Fiser wasn't alone in cutting supplies to Europe. Astra Zenica later also fell well short on its promised deliveries to the EU, but Europe was relying on the American company

to start its rollout. There's no doubt in my mind that there is anxiety, there is stress, there is usher, Borla says. The voices are becoming louder and people will try to find the scapegoats. In the Rome region, the viser cuts delayed the vaccine campaign for people older than eighty by a week, with first shots administered on February eight. The knock on effect means some of the most vulnerable

are waiting until spring to get their first doses. Salvatore Parisi, four, a retired Rome courthouse clerk, is sheltering at home until his April third appointment at a hospital for his first viser shot, with a second dose scheduled for April twenty four. He's holding out hope that doses might become available sooner at his family doctor's office. Every week we call. Is there something new? No, no, he says via telephone to questions relayed by his seventy nine year old wife, Maria Sinibaldi,

because his hearing isn't what it once was. I'm a little scared, but not too angry. I'm just waiting for a call from my doctor. The EU had developed a strategy of pooling vaccine procurement across the twenty seven member states. It signed supply deals with six vaccine developers. With Fiser, the European Commission agreed to a framework for supplying countries quarterly, leaving week to week decisions to the company and each nation,

says Stephen de Kersmacher, a commissioned spokesman. When Fiser made its cuts in January, that arrangement led to a patchwork of supply gaps across the continent, which caused anchor to mount against the drugmaker. A Fiser spokeswoman said the cuts were made with the understanding that the Belgian factory revamp would lead to significantly increased volumes before the end of March. EU member states also agreed not to negotiate bilateral agreements

with drug companies. That didn't stop Germany from striking a separate preliminary agreement with Biointech for thirty million doses after it gave the company a three hundred and seventy five million euro grant in September. Fiser is not party to that agreement. The e C says it hasn't seen Germany's deal, which hasn't been finalized. Parallel negotiations aren't allowed in our vaccine strategy. De ker Schmacher says legally, it's not allowed.

German Chancellor Angela Merkel tried to diffuse Europe's vaccine crisis by holding a video conference with Commission officials and drugmakers, including Fiser executives, on February first. Fiser says it got back on schedule with the EU at the end of January. Borla says countries started getting more doses by late February. Striking deals and mass producing a new vaccine in the middle of a pandemic was never going to be straightforward.

This is the fastest any vaccine has been approved and ruled out, the fastest any vaccine has been mass administered to people, the fastest response to a pandemic and probably the fastest manufacturing ramp up ever, says Jonathan Miller, an analyst at ever Corps, I s I I don't think

this could have gone much faster than it did. Public health officials have warned that rich countries making arrange mints with companies such as Fiser will restrict access to the vaccine for those who can't afford prices no object deals. In January, w h O Director General tedros Gabrie Sus criticized bilateral deals and implored high income countries to share doses, warning that the world is on the brink of a catastrophic moral failure. It wasn't until the end of that

month that Borla announced an agreement with Kovacs. The deal for forty million doses represented less than two percent of Viser's projected one production. Other vaccine developers have come in bigger. Astra Zeneca has committed one hundred and seventy million doses of its vaccine, while the Serum Institute of India has agreed to supply at one point one billion doses of its versions of the astra Zenica shot and another vaccine

developed by the American company Novavax pending authorization. Kovacs is also finalizing commitments for hundreds of millions of additional doses from Johnson and Johnson and Novovas. No one in public health says the current global rollout of COVID vaccines is

the best way to beat the pandemic. In an ideal world, what we would have had is one global mechanism where manufacturers would have said we're all going to supply one entity, and government said we're all going to procure through one entity, says Katin O'Brien, the w h OSE technical lead on Kovacs. It makes much more sense more. La of course, doesn't run a public health agency. He answers to his shareholders.

Locking in orders early, sometimes at a higher price for those that can afford to pay more, is what a CEO does. Fiser has said it expects initial profit margins in the upper twenty percent range, which is high for a vaccine. Moderna has charged more for its shot outside the US, but it's limited manufacturing capacity means it's done a fraction of the deal's Fiser has, with most deliveries

expected only in the spring. Astra Zeneca has struck dozens of bilateral agreements, but it's promised not to make a profit during the pandemic. It's selling its shot for a few dollars a dose. If there's a challenger to Viser's primacy, it might be the recently authorized vaccine from Johnson and Johnson, which is highly effective, requires simple refrigeration, and is administered

in a single shot. For now, though Fiser has unparalleled brand awareness, even if commernity doesn't quite roll off the tongue, the name might not even be used in the u S. Brand names are established only after full FDA approval. In late February, President Joe Biden toured Visor's Michigan plant and reassured the public that the government is working overtime to get everyone vaccinated. To meet the challenge, Fiser is continuing

to increase production. The company now expects to be able to ship thirteen million doses a week by mid March, up from four to five million a week in early February. Speaking with investors and analysts after releasing earnings results in January, Borla and other Viser executives talked expensively about a post pandemic world in which the company would be able to charge more for the vaccine. Vaccine prices are normally about one fifty two hundred and seventy five dollars, said chief

financial officer Frank Damelio. We're in a pandemic pricing environment, he said. Obviously we're going to get more on price. With new variants of the coronavirus spreading, the need for regular booster shots is highly likely. Fiser is working on a new vaccine that can target the South African mutation of the virus, which may infect some people who have been vaccinated. The prospect of the world's population of almost eight billion needing boosters puts COVID vaccines into an entirely

new league. Fiser expects to be able to make its vaccine easier to store and ship. It's working on a freeze dried version. The company is preparing for what Borla calls an open market, in which supplies are plentiful and people can choose which vaccine they want. I would feel very comfortable that we will have the and share of the market because we are first and we are best, Borla said on his earnings call. In scenarios that COVID will move from a pandemic into more of a normal

type of vaccination business. It is very clear that Fiser will have a key advantage, not only because of the strength of data, but also because we have developed significant brand equity and trust with the people. The shortage will eventually subside. Until then, Borla occupies a strange position. He's a savior, the bold leader of a company that's stepped up. But he promised desperate governments doses he couldn't deliver on time.

As supplies increase, hard feelings may fade, but Borla's decisions during the height of the pandemic will be the subject of study. There was a vacuum in global leadership. He and his company filled it. The world needs better solutions before the next public health crisis comes around. With Ivan Levingstone, Sylvia Westall, and Naomi Kreski, and that's this week's cover.

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