VACCINE CAPITALISM
Bloomberg Businessweek|March 08, 2021
Pfizer deserves every bit of the credit it’s receiving. But should a drug company decide who gets a shot?
Stephanie Baker, Cynthia Koons, 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 Jan. 10, Israeli Prime Minister Benjamin Netanyahu motorcaded to Ben Gurion International Airport, southeast of Tel Aviv, to watch a shipment of 700,000 vaccine doses from Pfizer Inc. emerge from a blue-and-white El Al Boeing 787-9.

“This is a great day for the state of Israel, with a huge shipment that has arrived,” Netanyahu said, exuding a confidence few world leaders have mustered since the crisis began. “I agreed with my friend, Pfizer Chairman and CEO Albert Bourla, that we would bring shipment after shipment and complete the vaccination of the over-16 population in Israel during the month of March.”

Bourla had thrown Netanyahu a political lifeline. Faced with surging Covid-19 cases and an election in March, the prime minister latched on to Pfizer’s vaccine as his best hope to stay in office. Standing on the tarmac, he bragged that 72% of Israelis over the age of 60 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 Bourla to use his country as a test case for Pfizer’s vaccine.

Vaccine distribution still has the feel of a zero-sum game. Five days after Netanyahu’s victory lap, Pfizer told other nonU.S. 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 Pfizer announced the cuts. The country’s virus emergency czar at the time, Domenico Arcuri, lashed out, complaining that Pfizer had cut its shipments by almost 30% just as Italy was about to start vaccinating people older than 80 en masse. He warned that Italy could take unspecified action against the company.

Days after Arcuri aired his grievances, Pfizer began shipping millions of doses to Israel. Within a week, Israel expanded its rollout to include 16- to 18-year-olds.

“Look, we are very angry,” Luca Zaia, president of Italy’s Veneto region—one of the areas most affected by Covid, with more than 9,800 deaths—told reporters, sitting in front of EU and Italian flags. He’d recently learned that supplies to his region would be cut 53% 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 have involved 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,” Bourla 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.” Pfizer says the agreement with Israel didn’t affect doses going elsewhere.

Israel had two things going for it: Netanyahu had offered to pay roughly $30 a dose, about 50% more than the U.S. 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 mRNA. It’s being used almost exclusively in Israel, in what amounts to a large-scale effectiveness study. (Pfizer considered offering the same arrangement to Iceland, but the country didn’t have enough Covid cases to make a study meaningful.) By Feb. 22, Israel had given first doses to 47% of its 9 million people, making it the world leader. Italy, meanwhile, had administered first shots to 3.6% of its citizens.

Bourla 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 Feb. 24 was remarkable: The vaccine prevented 94% of Covid cases in almost 600,000 vaccinated people.

As the first company to develop an authorized Covid vaccine, which it did in partnership with Germany’s BioNTech SE, Pfizer wields enormous power. Bourla had been Pfizer’s chief executive officer only a year when the pandemic began and almost immediately faced choices no pharma 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’ve designed intricate vaccination programs with public-health officials, but those leaders are learning they’re at the mercy of what manufacturers such as Pfizer deliver.

In the past few months, Bourla has taken on an almost statesmanlike role, holding calls with heads of state, including former U.S. President Donald Trump, European Commission President Ursula von der Leyen, and Canadian Prime Minister Justin Trudeau. Netanyahu boasted in January that he’d spoken with Bourla 17 times, with the CEO even taking his calls at 2 a.m. Bourla says he’s talked to Netanyahu “even more” since then.

Pfizer’s first-out-of-the-gate status has also offered Bourla a sales opportunity like none other. He’s locked in orders from more than 60 countries on undisclosed commercial terms. Pfizer has supplied 95 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 2 billion doses in 2021—more than it has agreements to sell at this stage. It expects the vaccine to generate at least $15 billion in revenue in 2021, putting it—under the brand name Comirnaty, an ungainly blend of “Covid,” “mRNA,” and “immunity”—on track 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. Pfizer accomplished something extraordinary, exceeding nearly everyone’s hopes, and is now doing what pharma does: mass-marketing lifesaving 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 a central question might be how a single company came to hold such power over so many.

In May 2020 the Trump administration announced the launch of Operation Warp Speed. Moncef Slaoui, a former GlaxoSmithKline Plc executive, joined as chief adviser to OWS to figure out which vaccines to back. He had an uncommon familiarity with mRNA technology from serving on the board of Moderna Inc., which had spent years researching the platform. No drug-using mRNA technology had ever been approved.

Slaoui knew Pfizer might be a contender after it announced its decision to collaborate with BioNTech, another mRNA pioneer, but he didn’t know Bourla. When they first spoke, in June 2020, Bourla made it clear he wasn’t interested in taking money for research and development as the other companies OWS was evaluating were. Instead, he wanted an advance purchase order from OWS to guarantee a buyer if Pfizer succeeded. The company’s $50 billion in annual revenue meant it could afford to take a flier. Bourla 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,” Slaoui says.

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