Speaker 1: Welcome to Prognosis. I'm Laura Carlson. It's day three hundred
Speaker 1: and fifty six since coronavirus was declared a global pandemic.
Speaker 1: Today's main story. Demand for the Fiser vaccine from everywhere
Speaker 1: in the world far outstrips supply. That means the company
Speaker 1: has made tough decisions about how much to supply to
Speaker 1: different countries, and many world leaders aren't happy about the
Speaker 1: way they've done it. But first, here's what happened in
Speaker 1: virus news today. People in the US are warming to
Speaker 1: the idea of getting a vaccine. A Pew Research poll
Speaker 1: shows COVID nineteen vaccine hesitancy in the country is ebbing,
Speaker 1: But the same study shows that partisan differences in people's
Speaker 1: intention to get vaccinated is widening. In November, thirty nine
Speaker 1: percent of people said they probably or definitely wouldn't get
Speaker 1: a shot. That number declined to thirty percent in February.
Speaker 1: About three quarters agree that widespread vaccination would help the economy.
Speaker 1: The Republicans are less prone to that view than Democrats.
Speaker 1: The vaccine, being developed by Astra Zenica and Oxford University,
Speaker 1: appears to protect against the Brazilian variant of the disease.
Speaker 1: A person familiar with the matter told Reuters the shot
Speaker 1: will not need to be modified to protect against the
Speaker 1: Brazil P one variant. Results come from a study by
Speaker 1: Oxford University that has not yet been made public. Finally,
Speaker 1: Canada's Public Health Agency licensed Johnson and Johnson's coronavirus vaccine,
Speaker 1: making it the fourth shot available in the country. Anada
Speaker 1: is struggling to keep up with its group of seven
Speaker 1: peers on inoculations. Canada has an agreement to purchase thirty
Speaker 1: eight million shots from the New Jersey based company. The
Speaker 1: one dose J and J shot could help Prime Minister
Speaker 1: Justin Trudeau achieve his target of vaccinating every Canadian that
Speaker 1: wants one by September. And now, for today's main story,
Speaker 1: vaccine distribution still has the feel of a zero sum game.
Speaker 1: Five days after Israel received seven hundred thousand doses of
Speaker 1: the Fiser bio and Tech vaccine, Fiser told other non
Speaker 1: u as customers that it would cut supplies while it
Speaker 1: briefly closed a facility in Belgium. The disparity in vaccine
Speaker 1: allocation is the product of a company struggling to apportion
Speaker 1: doses while demand our exceeds supply. I spoke with Stephanie
Speaker 1: Baker and Cynthia Coons, who reported for Bloomberg Business Week
Speaker 1: that the company has determined how many doses a country
Speaker 1: gets through an opaque process that appears to involve a
Speaker 1: mix of border size, position in the queue, production forecasts,
Speaker 1: calls from world leaders, and of course, the desire to
Speaker 1: make a profit. Vaccine programs have begun to roll out
Speaker 1: in earnest throughout the US and across much of Europe.
Speaker 1: Many states are discussing opening eligibility to younger and younger demographics,
Speaker 1: but many still are awaiting their first shots. Now, this
Speaker 1: situation is a pretty stark contrast to what's happening in Israel,
Speaker 1: for example, which you know, currently holds the record of
Speaker 1: having administered the most COVID vaccine doses per capita than
Speaker 1: any other country in the world. And just to start
Speaker 1: off with, you know, what are some of the factors
Speaker 1: that have accounted for Israel's incredibly accelerated vaccine distribution. You know, Israel,
Speaker 1: of course has been a world leader in vaccination, and
Speaker 1: that is in part due to fiser Uh and the
Speaker 1: deal that Israeli's Prime Minister Benjamin Nettiyah, who struck with
Speaker 1: Visor's CEO Albert Borla. Israel was prioritized for two reasons.
Speaker 1: Really one um it paid more, paid almost thirty dollars
Speaker 1: a dose, which was about fifty more than the US paid.
Speaker 1: And to it, it offered to almost exclusively use the
Speaker 1: Fiser vaccine in order to generate a real world effectiveness
Speaker 1: study to show how the vaccine works in a much
Speaker 1: larger group of people than in the control controlled trials.
Speaker 1: And this has generated a stream of positive headlines about
Speaker 1: how effective the Visor vaccine is, which has only helped
Speaker 1: Fiser as its um marketed at the COVID vaccine worldwide UM.
Speaker 1: And it came at a time when europe um was
Speaker 1: being short changed with vaccines because Visor needed to shut
Speaker 1: down its Belgian production facility in order to boost production
Speaker 1: long term. But that that shutdown lasted for about two weeks,
Speaker 1: and you know, while Israel was being supplied with millions
Speaker 1: of doses of vaccines europe, European supplies were cut and
Speaker 1: you know that had a huge effect on Europe's vaccine rollout. Now, Stephanie,
Speaker 1: you mentioned Viser CEO Albert Borla, and I'm wondering what
Speaker 1: specifically his role was in this negotiation of vaccine supply
Speaker 1: and kind of an accelerated timeline with regard to israel I. Mean,
Speaker 1: what overall does he have control over when when kind
Speaker 1: of negotiating which countries will receive Visor's vaccine first and
Speaker 1: and the wanted to use will receive. You know, that's
Speaker 1: a good question. You know, he told us that UM,
Speaker 1: he was more focused on UM the scientific efforts to
Speaker 1: develop a new COVID vaccine against the new variants and
Speaker 1: some of the scientific developments on make it easier to
Speaker 1: store Visor's vaccine, which needs to be kept at sub
Speaker 1: arctic temperatures. But at the same time, during the past
Speaker 1: six months he turned into this kind of quasi statesman,
Speaker 1: holding talks with world leaders UM, including you know, he
Speaker 1: spoke to Israeli's Prime Minister Benjamin Natanya, who more than
Speaker 1: twenty times, and Natanya who bragged that he was able
Speaker 1: to get Borla to take his call even at two am. UM.
Speaker 1: He went on to have you know, talks with the
Speaker 1: European Commission President Ursula vonder lyand who called and complained
Speaker 1: when FISER announced its cut. In mid January, he had
Speaker 1: talks with UH, the Canadian leader Justin Trudeau, who was
Speaker 1: also upset that Canada had been cut um. You know,
Speaker 1: so he occupies this very uh strange position right now
Speaker 1: where he's the CEO of a pharma giant, but you know,
Speaker 1: he is involved in politics, um, whether he likes it
Speaker 1: or not. And of course this effort in Israel came
Speaker 1: out of crucial time for Netan Yahoo, who was facing
Speaker 1: re election in March um and it's very much positioned
Speaker 1: his COVID vaccination campaign as part of his political campaign,
Speaker 1: and you know, arguably has boosted his chances of re election.
Speaker 1: We're often talking about FISER because it very obviously it
Speaker 1: was first out of the gate, and understandably this allowed
Speaker 1: to make these kinds of deals with the governments of
Speaker 1: as we've been saying, Israel, obviously, the US and beyond.
Speaker 1: But I'm wondering about the logistics of how it was
Speaker 1: able to achieve this goal in terms of the amount
Speaker 1: of investment it did of its own money in research
Speaker 1: and development, how this has affected negotiating deals with governments
Speaker 1: and and in particular setting prices for doses. Yeah, Visor
Speaker 1: is unique in particular because they decided not to take
Speaker 1: money from Operation Warp Speed, which was the US government
Speaker 1: program that gave money to manufacturers in order to help
Speaker 1: spur vaccine development and invest in manufacturing, etcetera. Visor didn't
Speaker 1: didn't need that money, but arguably other large companies that
Speaker 1: didn't need that money participated and took some and so
Speaker 1: that was sort of a public private partnership, if you will,
Speaker 1: just to get vaccines going. And the US created essentially
Speaker 1: created a market for vaccines. And what they did, though,
Speaker 1: was there with the US, was that the US had
Speaker 1: an advanced purchase order, so the US was going to
Speaker 1: be able to buy something around the tune of two
Speaker 1: billion dollars worth of vaccine. So the US put money
Speaker 1: on the table and Fiser had a market. And that's
Speaker 1: really important too. It's not insignificant. It still means that
Speaker 1: they're incentivized to create a vaccine because there's someone who's
Speaker 1: on the other end who's going to buy it if
Speaker 1: it works. But it's not the same thing as the
Speaker 1: government being involved in their day to day getting reports
Speaker 1: and updates on their manufacturing. And I think this explains
Speaker 1: some of the snags they hit, at least in the US,
Speaker 1: because the government didn't have the insight into their manufacturing
Speaker 1: that they did with their competitors. So for for Fiser,
Speaker 1: they've said they spent about two billion dollars developing this
Speaker 1: drugs are vaccines very expensive to develop, especially the trials,
Speaker 1: the huge trials, which is why a lot of their
Speaker 1: competitors would have taken money from the government. So Fiser
Speaker 1: basically stood a bit apart from the pack and that
Speaker 1: did allow it to negotiate in a different way, perhaps
Speaker 1: even allowed it to go around the world and start
Speaker 1: striking contracts quite early, because say Maderna, for example, which
Speaker 1: was authorized by the d at the same time as Visor,
Speaker 1: just around the same time, they had taken substantially more
Speaker 1: government government money and they have not done the number
Speaker 1: of deals that Viser has done around the world. But
Speaker 1: they're also a smaller company. Advisor is already globally, already
Speaker 1: has a global footprint, so they had that advantage, and
Speaker 1: that brings up an interesting question about profit. What has
Speaker 1: Flier said regarding how much it is expecting to make
Speaker 1: from its vaccines and how does this contrast perhaps with
Speaker 1: some of the other drugmakers, say Maderna and whatnot. So
Speaker 1: Fiser has said it expects initial profit margins in the
Speaker 1: high twenty percent range, which is high for a vaccine
Speaker 1: during the pandemic. This is they're they're looking at it
Speaker 1: in terms of pandemic pricing, that they could look at
Speaker 1: increasing that price after the pandemic is over, when people
Speaker 1: have a choice of what vaccine they want and they
Speaker 1: believe they have, you know, high brand recognition, why be
Speaker 1: regarded as a very highly effective vaccine and that people
Speaker 1: will want it over some of the other vaccines. In contrast,
Speaker 1: you have manufacturers like Astra Zenica that has promised to
Speaker 1: sell the vaccine globally on a not for profit basis
Speaker 1: for just a couple of dollars of dose. UM Johnson
Speaker 1: and Johnson has also UH promised to do that sell
Speaker 1: it on a not for profit basis. And you know,
Speaker 1: the way this really comes to the four is looking
Speaker 1: at how all these drug manufacturers have interacted with Kovacs,
Speaker 1: the World Health Organization backed facility to distribute vaccines to
Speaker 1: low income countries uh Visor. At the end of January,
Speaker 1: UM did a deal with CoV X to sell forty
Speaker 1: million doses, which is about two percent of visors projected
Speaker 1: output this year. And to put that into context, Astra
Speaker 1: did a deal for a hundred and seventy million doses
Speaker 1: and Johnson and Johnson has a preliminary co vacs deal
Speaker 1: for five million doses um. And there's another deal that
Speaker 1: Covex did with the Serum Institute of India that is
Speaker 1: producing the Astrosonica vaccine again for just a few dollars
Speaker 1: of dose. So that sort of puts Fiser into a
Speaker 1: very different league in terms of COVID vaccines and how
Speaker 1: much they're likely to make from them. And just to
Speaker 1: add to that, the top line number here is that
Speaker 1: Fiser has said they expect revenue of fifteen billion dollars
Speaker 1: this year, and that doesn't that includes the contracts they've
Speaker 1: already struck or bakes in the contracts they anticipate. So
Speaker 1: there's an ability for them to now continue to make
Speaker 1: deals around the world and make more than fifteen billion.
Speaker 1: They're not going to take home fifteen billion. They have
Speaker 1: a partnership with bion Tech. Just to be clear, fifteen
Speaker 1: billion dollars makes it among one of the biggest selling
Speaker 1: drugs in the world, and that never happens right out
Speaker 1: of the gate. Drug companies never come out of the
Speaker 1: gate with a huge selling product. They usually come out
Speaker 1: and takes years to get to these levels. So first, viser,
Speaker 1: it's extraordinary revenue and income boost. Returning to the question
Speaker 1: of Viser CEO Borla, what are your reactions, let's say,
Speaker 1: to to an accusation that that someone like Borla, a
Speaker 1: CEO of a drugmaker, shouldn't be wielding this amount of
Speaker 1: power in terms of you know, supply and cost of vaccines.
Speaker 1: I mean, you know, he's not a public or an
Speaker 1: elected official, but you know he at the end of
Speaker 1: the day is making some of the most important decisions
Speaker 1: in a global health crisis. I think the real issue
Speaker 1: is that most people and global public health don't think
Speaker 1: that this is how we should be fighting the pandemic.
Speaker 1: This is not the best way to end the pandemic
Speaker 1: and to bring infection rates down around the world. But
Speaker 1: the fact of the matter is that Fiser, together with
Speaker 1: bion Tech and it's brilliant scientists, stepped up to the
Speaker 1: plate and developed an incredibly effective vaccine. The question I
Speaker 1: think is um whether or not it ought to have
Speaker 1: been following a more uh not for profit approach like
Speaker 1: some of the other vaccine developers during the pandemic. And
Speaker 1: I think that is that would have made it easier
Speaker 1: to get the vaccine out more widely, made it perhaps
Speaker 1: easier for um the likes of covacs to buy more
Speaker 1: doses or for other countries to do bilateral deals. But
Speaker 1: you know, when you think about how we might fight
Speaker 1: the next pandemic um and when governments are putting up
Speaker 1: money for research and development, whether or not there are
Speaker 1: more strings attached so that governments have a bit more
Speaker 1: control when some of these drugs get to the market.
Speaker 1: I think too, this is sort of a fundamental question
Speaker 1: about capitalism and healthcare, right, and it's come up in
Speaker 1: every iteration of analyzing the U S health care system
Speaker 1: when you overlay the need for a company to make
Speaker 1: profits because it's answering to shareholders and the reality that
Speaker 1: these drugs are vaccines, are life saving, and therefore should
Speaker 1: there be you know, someone else in charge. And so
Speaker 1: the Kovac's plan obviously didn't pan out. There have been
Speaker 1: other examples of this. The w h I wanted a
Speaker 1: patent pool that didn't exactly pan out, because pharma companies
Speaker 1: need to own that i P in order to make
Speaker 1: money off these products in future years. So I think
Speaker 1: what this story highlights is something that's really chronic in nature,
Speaker 1: in that we have this capitalist healthcare system and when
Speaker 1: it comes to the vaccine in public health, it just
Speaker 1: appears to be a mismatch. But how do we frain
Speaker 1: that in how do we change that? And that's really
Speaker 1: the question that was Stephanie Baker and Cynthia Coons. And
Speaker 1: that's it for our show today. For coverage of the
Speaker 1: outbreak from one bureaus around the world, visit Bloomberg dot
Speaker 1: com slash coronavirus and if you like the show, please
Speaker 1: leave us a review and a rating on Apple Podcasts
Speaker 1: or Spotify. It's the best way to help more listeners
Speaker 1: find our global reporting. The Prognosis Daily edition is produced
Speaker 1: by to for Foreheads, Magnus Henrickson and me Laura Carlson.
Speaker 1: Today's main story was reported by Stephanie Baker and Cynthia Coon's.
Speaker 1: Original music by Leo Cedrin. Our editors are Rick Shine
Speaker 1: and Francesca Levi. Francesco Levi is Bloomberg's head of podcasts.
Speaker 1: Thanks for listening.