Is Pfizer's Vaccine Plan Fair?

the idea of getting a vaccine. A Pew Research poll shows COVID nineteen vaccine hesitancy in the country is ebbing, But the same study shows that partisan differences in people's intention to get vaccinated is widening. In November, thirty nine percent of people said they probably or definitely wouldn't get a shot. That number declined to thirty percent in February. About three quarters agree that widespread vaccination would help the economy.

The Republicans are less prone to that view than Democrats. The vaccine, being developed by Astra Zenica and Oxford University, appears to protect against the Brazilian variant of the disease. A person familiar with the matter told Reuters the shot will not need to be modified to protect against the Brazil P one variant. Results come from a study by Oxford University that has not yet been made public. Finally, Canada's Public Health Agency licensed Johnson and Johnson's coronavirus vaccine,

making it the fourth shot available in the country. Anada is struggling to keep up with its group of seven peers on inoculations. Canada has an agreement to purchase thirty eight million shots from the New Jersey based company. The one dose J and J shot could help Prime Minister Justin Trudeau achieve his target of vaccinating every Canadian that wants one by September. And now, for today's main story, vaccine distribution still has the feel of a zero sum game.

Five days after Israel received seven hundred thousand doses of the Fiser bio and Tech vaccine, Fiser told other non u as customers that it would cut supplies while it briefly closed a facility in Belgium. The disparity in vaccine allocation is the product of a company struggling to apportion

doses while demand our exceeds supply. I spoke with Stephanie Baker and Cynthia Coons, who reported for Bloomberg Business Week that the company has determined how many doses a country gets through an opaque process that appears to involve a mix of border size, position in the queue, production forecasts, calls from world leaders, and of course, the desire to make a profit. Vaccine programs have begun to roll out in earnest throughout the US and across much of Europe.

Many states are discussing opening eligibility to younger and younger demographics, but many still are awaiting their first shots. Now, this situation is a pretty stark contrast to what's happening in Israel, for example, which you know, currently holds the record of having administered the most COVID vaccine doses per capita than any other country in the world. And just to start off with, you know, what are some of the factors

that have accounted for Israel's incredibly accelerated vaccine distribution. You know, Israel, of course has been a world leader in vaccination, and that is in part due to fiser Uh and the deal that Israeli's Prime Minister Benjamin Nettiyah, who struck with Visor's CEO Albert Borla. Israel was prioritized for two reasons. Really one um it paid more, paid almost thirty dollars a dose, which was about fifty more than the US paid.

And to it, it offered to almost exclusively use the Fiser vaccine in order to generate a real world effectiveness study to show how the vaccine works in a much larger group of people than in the control controlled trials. And this has generated a stream of positive headlines about how effective the Visor vaccine is, which has only helped Fiser as its um marketed at the COVID vaccine worldwide UM.

And it came at a time when europe um was being short changed with vaccines because Visor needed to shut down its Belgian production facility in order to boost production long term. But that that shutdown lasted for about two weeks, and you know, while Israel was being supplied with millions of doses of vaccines europe, European supplies were cut and

you know that had a huge effect on Europe's vaccine rollout. Now, Stephanie, you mentioned Viser CEO Albert Borla, and I'm wondering what specifically his role was in this negotiation of vaccine supply and kind of an accelerated timeline with regard to israel I. Mean, what overall does he have control over when when kind of negotiating which countries will receive Visor's vaccine first and and the wanted to use will receive. You know, that's

a good question. You know, he told us that UM, he was more focused on UM the scientific efforts to develop a new COVID vaccine against the new variants and some of the scientific developments on make it easier to store Visor's vaccine, which needs to be kept at sub

arctic temperatures. But at the same time, during the past six months he turned into this kind of quasi statesman, holding talks with world leaders UM, including you know, he spoke to Israeli's Prime Minister Benjamin Natanya, who more than twenty times, and Natanya who bragged that he was able to get Borla to take his call even at two am. UM. He went on to have you know, talks with the European Commission President Ursula vonder lyand who called and complained

when FISER announced its cut. In mid January, he had talks with UH, the Canadian leader Justin Trudeau, who was also upset that Canada had been cut um. You know, so he occupies this very uh strange position right now where he's the CEO of a pharma giant, but you know, he is involved in politics, um, whether he likes it

or not. And of course this effort in Israel came out of crucial time for Netan Yahoo, who was facing re election in March um and it's very much positioned his COVID vaccination campaign as part of his political campaign, and you know, arguably has boosted his chances of re election.

We're often talking about FISER because it very obviously it was first out of the gate, and understandably this allowed to make these kinds of deals with the governments of as we've been saying, Israel, obviously, the US and beyond. But I'm wondering about the logistics of how it was able to achieve this goal in terms of the amount of investment it did of its own money in research and development, how this has affected negotiating deals with governments

and and in particular setting prices for doses. Yeah, Visor is unique in particular because they decided not to take money from Operation Warp Speed, which was the US government program that gave money to manufacturers in order to help spur vaccine development and invest in manufacturing, etcetera. Visor didn't didn't need that money, but arguably other large companies that didn't need that money participated and took some and so that was sort of a public private partnership, if you will,

just to get vaccines going. And the US created essentially created a market for vaccines. And what they did, though, was there with the US, was that the US had an advanced purchase order, so the US was going to be able to buy something around the tune of two billion dollars worth of vaccine. So the US put money on the table and Fiser had a market. And that's

really important too. It's not insignificant. It still means that they're incentivized to create a vaccine because there's someone who's on the other end who's going to buy it if it works. But it's not the same thing as the government being involved in their day to day getting reports and updates on their manufacturing. And I think this explains some of the snags they hit, at least in the US, because the government didn't have the insight into their manufacturing

that they did with their competitors. So for for Fiser, they've said they spent about two billion dollars developing this drugs are vaccines very expensive to develop, especially the trials, the huge trials, which is why a lot of their

competitors would have taken money from the government. So Fiser basically stood a bit apart from the pack and that did allow it to negotiate in a different way, perhaps even allowed it to go around the world and start striking contracts quite early, because say Maderna, for example, which was authorized by the d at the same time as Visor, just around the same time, they had taken substantially more government government money and they have not done the number

of deals that Viser has done around the world. But they're also a smaller company. Advisor is already globally, already has a global footprint, so they had that advantage, and that brings up an interesting question about profit. What has Flier said regarding how much it is expecting to make from its vaccines and how does this contrast perhaps with

some of the other drugmakers, say Maderna and whatnot. So Fiser has said it expects initial profit margins in the high twenty percent range, which is high for a vaccine

during the pandemic. This is they're they're looking at it in terms of pandemic pricing, that they could look at increasing that price after the pandemic is over, when people have a choice of what vaccine they want and they believe they have, you know, high brand recognition, why be regarded as a very highly effective vaccine and that people

will want it over some of the other vaccines. In contrast, you have manufacturers like Astra Zenica that has promised to sell the vaccine globally on a not for profit basis for just a couple of dollars of dose. UM Johnson and Johnson has also UH promised to do that sell it on a not for profit basis. And you know, the way this really comes to the four is looking at how all these drug manufacturers have interacted with Kovacs, the World Health Organization backed facility to distribute vaccines to

low income countries uh Visor. At the end of January, UM did a deal with CoV X to sell forty million doses, which is about two percent of visors projected output this year. And to put that into context, Astra did a deal for a hundred and seventy million doses and Johnson and Johnson has a preliminary co vacs deal for five million doses um. And there's another deal that Covex did with the Serum Institute of India that is producing the Astrosonica vaccine again for just a few dollars

of dose. So that sort of puts Fiser into a very different league in terms of COVID vaccines and how much they're likely to make from them. And just to add to that, the top line number here is that Fiser has said they expect revenue of fifteen billion dollars this year, and that doesn't that includes the contracts they've already struck or bakes in the contracts they anticipate. So there's an ability for them to now continue to make deals around the world and make more than fifteen billion.

They're not going to take home fifteen billion. They have a partnership with bion Tech. Just to be clear, fifteen billion dollars makes it among one of the biggest selling drugs in the world, and that never happens right out of the gate. Drug companies never come out of the gate with a huge selling product. They usually come out and takes years to get to these levels. So first, viser,

it's extraordinary revenue and income boost. Returning to the question of Viser CEO Borla, what are your reactions, let's say, to to an accusation that that someone like Borla, a CEO of a drugmaker, shouldn't be wielding this amount of power in terms of you know, supply and cost of vaccines. I mean, you know, he's not a public or an elected official, but you know he at the end of the day is making some of the most important decisions

in a global health crisis. I think the real issue is that most people and global public health don't think that this is how we should be fighting the pandemic. This is not the best way to end the pandemic and to bring infection rates down around the world. But the fact of the matter is that Fiser, together with bion Tech and it's brilliant scientists, stepped up to the

plate and developed an incredibly effective vaccine. The question I think is um whether or not it ought to have been following a more uh not for profit approach like some of the other vaccine developers during the pandemic. And I think that is that would have made it easier to get the vaccine out more widely, made it perhaps easier for um the likes of covacs to buy more

doses or for other countries to do bilateral deals. But you know, when you think about how we might fight the next pandemic um and when governments are putting up money for research and development, whether or not there are more strings attached so that governments have a bit more control when some of these drugs get to the market.

I think too, this is sort of a fundamental question about capitalism and healthcare, right, and it's come up in every iteration of analyzing the U S health care system when you overlay the need for a company to make profits because it's answering to shareholders and the reality that these drugs are vaccines, are life saving, and therefore should there be you know, someone else in charge. And so the Kovac's plan obviously didn't pan out. There have been

other examples of this. The w h I wanted a patent pool that didn't exactly pan out, because pharma companies need to own that i P in order to make money off these products in future years. So I think what this story highlights is something that's really chronic in nature, in that we have this capitalist healthcare system and when it comes to the vaccine in public health, it just appears to be a mismatch. But how do we frain that in how do we change that? And that's really

the question that was Stephanie Baker and Cynthia Coons. And that's it for our show today. For coverage of the outbreak from one bureaus around the world, visit Bloomberg dot com slash coronavirus and if you like the show, please leave us a review and a rating on Apple Podcasts or Spotify. It's the best way to help more listeners find our global reporting. The Prognosis Daily edition is produced by to for Foreheads, Magnus Henrickson and me Laura Carlson.

Today's main story was reported by Stephanie Baker and Cynthia Coon's. Original music by Leo Cedrin. Our editors are Rick Shine and Francesca Levi. Francesco Levi is Bloomberg's head of podcasts. Thanks for listening.