WEBVTT - Is Pfizer's Vaccine Plan Fair? 0:00:00.880 --> 0:00:05.520 Welcome to Prognosis. I'm Laura Carlson. It's day three hundred 0:00:05.559 --> 0:00:09.760 and fifty six since coronavirus was declared a global pandemic. 0:00:10.880 --> 0:00:15.680 Today's main story. Demand for the Fiser vaccine from everywhere 0:00:15.720 --> 0:00:20.720 in the world far outstrips supply. That means the company 0:00:20.760 --> 0:00:23.840 has made tough decisions about how much to supply to 0:00:24.000 --> 0:00:29.040 different countries, and many world leaders aren't happy about the 0:00:29.080 --> 0:00:34.360 way they've done it. But first, here's what happened in 0:00:34.479 --> 0:00:43.040 virus news today. People in the US are warming to 0:00:43.080 --> 0:00:47.000 the idea of getting a vaccine. A Pew Research poll 0:00:47.200 --> 0:00:51.320 shows COVID nineteen vaccine hesitancy in the country is ebbing, 0:00:52.400 --> 0:00:56.160 But the same study shows that partisan differences in people's 0:00:56.240 --> 0:01:02.480 intention to get vaccinated is widening. In November, thirty nine 0:01:02.520 --> 0:01:06.520 percent of people said they probably or definitely wouldn't get 0:01:06.520 --> 0:01:12.080 a shot. That number declined to thirty percent in February. 0:01:12.640 --> 0:01:17.960 About three quarters agree that widespread vaccination would help the economy. 0:01:18.400 --> 0:01:22.240 The Republicans are less prone to that view than Democrats. 0:01:24.880 --> 0:01:28.720 The vaccine, being developed by Astra Zenica and Oxford University, 0:01:28.760 --> 0:01:32.560 appears to protect against the Brazilian variant of the disease. 0:01:33.520 --> 0:01:36.640 A person familiar with the matter told Reuters the shot 0:01:36.720 --> 0:01:39.640 will not need to be modified to protect against the 0:01:39.680 --> 0:01:44.120 Brazil P one variant. Results come from a study by 0:01:44.160 --> 0:01:49.280 Oxford University that has not yet been made public. Finally, 0:01:49.840 --> 0:01:55.280 Canada's Public Health Agency licensed Johnson and Johnson's coronavirus vaccine, 0:01:55.920 --> 0:02:00.400 making it the fourth shot available in the country. Anada 0:02:00.560 --> 0:02:03.000 is struggling to keep up with its group of seven 0:02:03.000 --> 0:02:08.600 peers on inoculations. Canada has an agreement to purchase thirty 0:02:08.639 --> 0:02:12.600 eight million shots from the New Jersey based company. The 0:02:12.639 --> 0:02:15.960 one dose J and J shot could help Prime Minister 0:02:16.160 --> 0:02:20.480 Justin Trudeau achieve his target of vaccinating every Canadian that 0:02:20.600 --> 0:02:30.560 wants one by September. And now, for today's main story, 0:02:32.360 --> 0:02:36.520 vaccine distribution still has the feel of a zero sum game. 0:02:37.600 --> 0:02:41.640 Five days after Israel received seven hundred thousand doses of 0:02:41.639 --> 0:02:45.920 the Fiser bio and Tech vaccine, Fiser told other non 0:02:46.080 --> 0:02:49.200 u as customers that it would cut supplies while it 0:02:49.320 --> 0:02:54.079 briefly closed a facility in Belgium. The disparity in vaccine 0:02:54.080 --> 0:02:57.840 allocation is the product of a company struggling to apportion 0:02:57.919 --> 0:03:04.280 doses while demand our exceeds supply. I spoke with Stephanie 0:03:04.320 --> 0:03:08.560 Baker and Cynthia Coons, who reported for Bloomberg Business Week 0:03:08.919 --> 0:03:12.080 that the company has determined how many doses a country 0:03:12.120 --> 0:03:16.400 gets through an opaque process that appears to involve a 0:03:16.440 --> 0:03:20.800 mix of border size, position in the queue, production forecasts, 0:03:21.120 --> 0:03:25.000 calls from world leaders, and of course, the desire to 0:03:25.040 --> 0:03:30.000 make a profit. Vaccine programs have begun to roll out 0:03:30.040 --> 0:03:33.320 in earnest throughout the US and across much of Europe. 0:03:33.639 --> 0:03:38.760 Many states are discussing opening eligibility to younger and younger demographics, 0:03:38.760 --> 0:03:42.720 but many still are awaiting their first shots. Now, this 0:03:42.800 --> 0:03:47.480 situation is a pretty stark contrast to what's happening in Israel, 0:03:47.520 --> 0:03:50.280 for example, which you know, currently holds the record of 0:03:50.320 --> 0:03:54.240 having administered the most COVID vaccine doses per capita than 0:03:54.480 --> 0:03:57.640 any other country in the world. And just to start 0:03:57.680 --> 0:04:01.400 off with, you know, what are some of the factors 0:04:01.440 --> 0:04:08.920 that have accounted for Israel's incredibly accelerated vaccine distribution. You know, Israel, 0:04:09.080 --> 0:04:11.560 of course has been a world leader in vaccination, and 0:04:11.600 --> 0:04:14.720 that is in part due to fiser Uh and the 0:04:14.800 --> 0:04:19.680 deal that Israeli's Prime Minister Benjamin Nettiyah, who struck with 0:04:20.400 --> 0:04:26.440 Visor's CEO Albert Borla. Israel was prioritized for two reasons. 0:04:26.480 --> 0:04:31.159 Really one um it paid more, paid almost thirty dollars 0:04:31.160 --> 0:04:34.720 a dose, which was about fifty more than the US paid. 0:04:34.880 --> 0:04:38.640 And to it, it offered to almost exclusively use the 0:04:38.640 --> 0:04:42.560 Fiser vaccine in order to generate a real world effectiveness 0:04:42.600 --> 0:04:45.279 study to show how the vaccine works in a much 0:04:45.360 --> 0:04:49.880 larger group of people than in the control controlled trials. 0:04:50.080 --> 0:04:53.640 And this has generated a stream of positive headlines about 0:04:53.640 --> 0:04:57.520 how effective the Visor vaccine is, which has only helped 0:04:57.640 --> 0:05:02.960 Fiser as its um marketed at the COVID vaccine worldwide UM. 0:05:03.040 --> 0:05:06.240 And it came at a time when europe um was 0:05:06.480 --> 0:05:11.240 being short changed with vaccines because Visor needed to shut 0:05:11.279 --> 0:05:16.200 down its Belgian production facility in order to boost production 0:05:16.279 --> 0:05:19.440 long term. But that that shutdown lasted for about two weeks, 0:05:19.480 --> 0:05:24.279 and you know, while Israel was being supplied with millions 0:05:24.279 --> 0:05:28.039 of doses of vaccines europe, European supplies were cut and 0:05:28.120 --> 0:05:33.600 you know that had a huge effect on Europe's vaccine rollout. Now, Stephanie, 0:05:33.720 --> 0:05:38.760 you mentioned Viser CEO Albert Borla, and I'm wondering what 0:05:39.400 --> 0:05:44.920 specifically his role was in this negotiation of vaccine supply 0:05:45.360 --> 0:05:49.520 and kind of an accelerated timeline with regard to israel I. Mean, 0:05:49.839 --> 0:05:54.520 what overall does he have control over when when kind 0:05:54.520 --> 0:05:59.599 of negotiating which countries will receive Visor's vaccine first and 0:05:59.600 --> 0:06:02.800 and the wanted to use will receive. You know, that's 0:06:02.839 --> 0:06:06.640 a good question. You know, he told us that UM, 0:06:06.720 --> 0:06:11.440 he was more focused on UM the scientific efforts to 0:06:11.839 --> 0:06:17.920 develop a new COVID vaccine against the new variants and 0:06:17.960 --> 0:06:21.240 some of the scientific developments on make it easier to 0:06:21.760 --> 0:06:24.760 store Visor's vaccine, which needs to be kept at sub 0:06:25.000 --> 0:06:28.839 arctic temperatures. But at the same time, during the past 0:06:28.880 --> 0:06:32.600 six months he turned into this kind of quasi statesman, 0:06:33.279 --> 0:06:38.479 holding talks with world leaders UM, including you know, he 0:06:38.560 --> 0:06:42.040 spoke to Israeli's Prime Minister Benjamin Natanya, who more than 0:06:42.080 --> 0:06:46.480 twenty times, and Natanya who bragged that he was able 0:06:46.680 --> 0:06:51.039 to get Borla to take his call even at two am. UM. 0:06:51.120 --> 0:06:53.800 He went on to have you know, talks with the 0:06:53.839 --> 0:06:59.080 European Commission President Ursula vonder lyand who called and complained 0:06:59.240 --> 0:07:04.479 when FISER announced its cut. In mid January, he had 0:07:04.680 --> 0:07:09.120 talks with UH, the Canadian leader Justin Trudeau, who was 0:07:09.160 --> 0:07:12.600 also upset that Canada had been cut um. You know, 0:07:12.640 --> 0:07:17.080 so he occupies this very uh strange position right now 0:07:17.120 --> 0:07:20.480 where he's the CEO of a pharma giant, but you know, 0:07:20.640 --> 0:07:24.800 he is involved in politics, um, whether he likes it 0:07:24.880 --> 0:07:29.040 or not. And of course this effort in Israel came 0:07:29.080 --> 0:07:32.440 out of crucial time for Netan Yahoo, who was facing 0:07:32.920 --> 0:07:36.720 re election in March um and it's very much positioned 0:07:36.840 --> 0:07:41.360 his COVID vaccination campaign as part of his political campaign, 0:07:42.080 --> 0:07:46.600 and you know, arguably has boosted his chances of re election. 0:07:47.360 --> 0:07:51.640 We're often talking about FISER because it very obviously it 0:07:51.720 --> 0:07:55.920 was first out of the gate, and understandably this allowed 0:07:56.080 --> 0:07:59.000 to make these kinds of deals with the governments of 0:07:59.040 --> 0:08:02.400 as we've been saying, Israel, obviously, the US and beyond. 0:08:03.120 --> 0:08:07.320 But I'm wondering about the logistics of how it was 0:08:07.360 --> 0:08:11.520 able to achieve this goal in terms of the amount 0:08:11.720 --> 0:08:15.280 of investment it did of its own money in research 0:08:15.320 --> 0:08:21.320 and development, how this has affected negotiating deals with governments 0:08:21.440 --> 0:08:26.760 and and in particular setting prices for doses. Yeah, Visor 0:08:26.880 --> 0:08:31.080 is unique in particular because they decided not to take 0:08:31.120 --> 0:08:34.080 money from Operation Warp Speed, which was the US government 0:08:34.480 --> 0:08:37.960 program that gave money to manufacturers in order to help 0:08:38.000 --> 0:08:43.160 spur vaccine development and invest in manufacturing, etcetera. Visor didn't 0:08:43.280 --> 0:08:47.080 didn't need that money, but arguably other large companies that 0:08:47.120 --> 0:08:49.520 didn't need that money participated and took some and so 0:08:49.600 --> 0:08:52.840 that was sort of a public private partnership, if you will, 0:08:52.880 --> 0:08:56.079 just to get vaccines going. And the US created essentially 0:08:56.120 --> 0:08:59.200 created a market for vaccines. And what they did, though, 0:08:59.520 --> 0:09:01.600 was there with the US, was that the US had 0:09:01.640 --> 0:09:04.319 an advanced purchase order, so the US was going to 0:09:04.360 --> 0:09:06.120 be able to buy something around the tune of two 0:09:06.160 --> 0:09:08.360 billion dollars worth of vaccine. So the US put money 0:09:08.400 --> 0:09:10.320 on the table and Fiser had a market. And that's 0:09:10.320 --> 0:09:13.640 really important too. It's not insignificant. It still means that 0:09:13.880 --> 0:09:16.560 they're incentivized to create a vaccine because there's someone who's 0:09:16.559 --> 0:09:17.760 on the other end who's going to buy it if 0:09:17.800 --> 0:09:19.760 it works. But it's not the same thing as the 0:09:19.760 --> 0:09:22.720 government being involved in their day to day getting reports 0:09:22.720 --> 0:09:25.400 and updates on their manufacturing. And I think this explains 0:09:25.400 --> 0:09:27.360 some of the snags they hit, at least in the US, 0:09:27.520 --> 0:09:30.559 because the government didn't have the insight into their manufacturing 0:09:30.559 --> 0:09:33.960 that they did with their competitors. So for for Fiser, 0:09:34.040 --> 0:09:36.800 they've said they spent about two billion dollars developing this 0:09:37.000 --> 0:09:40.880 drugs are vaccines very expensive to develop, especially the trials, 0:09:40.920 --> 0:09:43.440 the huge trials, which is why a lot of their 0:09:43.440 --> 0:09:47.120 competitors would have taken money from the government. So Fiser 0:09:47.200 --> 0:09:49.320 basically stood a bit apart from the pack and that 0:09:49.360 --> 0:09:52.680 did allow it to negotiate in a different way, perhaps 0:09:52.760 --> 0:09:54.720 even allowed it to go around the world and start 0:09:54.760 --> 0:09:58.559 striking contracts quite early, because say Maderna, for example, which 0:09:58.679 --> 0:10:01.560 was authorized by the d at the same time as Visor, 0:10:01.760 --> 0:10:05.120 just around the same time, they had taken substantially more 0:10:05.200 --> 0:10:08.160 government government money and they have not done the number 0:10:08.160 --> 0:10:10.000 of deals that Viser has done around the world. But 0:10:10.080 --> 0:10:13.720 they're also a smaller company. Advisor is already globally, already 0:10:13.720 --> 0:10:17.000 has a global footprint, so they had that advantage, and 0:10:17.040 --> 0:10:21.280 that brings up an interesting question about profit. What has 0:10:21.679 --> 0:10:25.480 Flier said regarding how much it is expecting to make 0:10:25.679 --> 0:10:29.240 from its vaccines and how does this contrast perhaps with 0:10:29.440 --> 0:10:32.600 some of the other drugmakers, say Maderna and whatnot. So 0:10:32.840 --> 0:10:37.640 Fiser has said it expects initial profit margins in the 0:10:37.720 --> 0:10:41.439 high twenty percent range, which is high for a vaccine 0:10:42.200 --> 0:10:44.680 during the pandemic. This is they're they're looking at it 0:10:44.720 --> 0:10:48.199 in terms of pandemic pricing, that they could look at 0:10:48.240 --> 0:10:53.160 increasing that price after the pandemic is over, when people 0:10:53.200 --> 0:10:55.480 have a choice of what vaccine they want and they 0:10:55.520 --> 0:11:00.079 believe they have, you know, high brand recognition, why be 0:11:00.160 --> 0:11:03.800 regarded as a very highly effective vaccine and that people 0:11:03.800 --> 0:11:07.880 will want it over some of the other vaccines. In contrast, 0:11:07.960 --> 0:11:12.600 you have manufacturers like Astra Zenica that has promised to 0:11:13.000 --> 0:11:15.920 sell the vaccine globally on a not for profit basis 0:11:16.080 --> 0:11:19.360 for just a couple of dollars of dose. UM Johnson 0:11:19.360 --> 0:11:23.600 and Johnson has also UH promised to do that sell 0:11:23.640 --> 0:11:26.240 it on a not for profit basis. And you know, 0:11:26.760 --> 0:11:30.439 the way this really comes to the four is looking 0:11:30.480 --> 0:11:33.679 at how all these drug manufacturers have interacted with Kovacs, 0:11:33.840 --> 0:11:38.120 the World Health Organization backed facility to distribute vaccines to 0:11:38.160 --> 0:11:41.840 low income countries uh Visor. At the end of January, 0:11:42.160 --> 0:11:46.400 UM did a deal with CoV X to sell forty 0:11:46.400 --> 0:11:50.239 million doses, which is about two percent of visors projected 0:11:50.240 --> 0:11:54.400 output this year. And to put that into context, Astra 0:11:54.679 --> 0:11:57.640 did a deal for a hundred and seventy million doses 0:11:57.720 --> 0:12:00.559 and Johnson and Johnson has a preliminary co vacs deal 0:12:01.400 --> 0:12:06.120 for five million doses um. And there's another deal that 0:12:06.200 --> 0:12:09.640 Covex did with the Serum Institute of India that is 0:12:09.679 --> 0:12:13.480 producing the Astrosonica vaccine again for just a few dollars 0:12:13.480 --> 0:12:16.400 of dose. So that sort of puts Fiser into a 0:12:16.520 --> 0:12:19.760 very different league in terms of COVID vaccines and how 0:12:19.840 --> 0:12:22.200 much they're likely to make from them. And just to 0:12:22.280 --> 0:12:24.680 add to that, the top line number here is that 0:12:24.760 --> 0:12:29.360 Fiser has said they expect revenue of fifteen billion dollars 0:12:29.400 --> 0:12:33.160 this year, and that doesn't that includes the contracts they've 0:12:33.200 --> 0:12:37.280 already struck or bakes in the contracts they anticipate. So 0:12:37.320 --> 0:12:39.680 there's an ability for them to now continue to make 0:12:40.120 --> 0:12:43.200 deals around the world and make more than fifteen billion. 0:12:43.200 --> 0:12:44.880 They're not going to take home fifteen billion. They have 0:12:44.880 --> 0:12:47.960 a partnership with bion Tech. Just to be clear, fifteen 0:12:47.960 --> 0:12:50.240 billion dollars makes it among one of the biggest selling 0:12:50.320 --> 0:12:52.800 drugs in the world, and that never happens right out 0:12:52.800 --> 0:12:55.040 of the gate. Drug companies never come out of the 0:12:55.080 --> 0:12:58.000 gate with a huge selling product. They usually come out 0:12:58.040 --> 0:13:00.800 and takes years to get to these levels. So first, viser, 0:13:00.840 --> 0:13:06.120 it's extraordinary revenue and income boost. Returning to the question 0:13:06.480 --> 0:13:10.920 of Viser CEO Borla, what are your reactions, let's say, 0:13:10.960 --> 0:13:14.400 to to an accusation that that someone like Borla, a 0:13:14.480 --> 0:13:18.920 CEO of a drugmaker, shouldn't be wielding this amount of 0:13:19.000 --> 0:13:23.400 power in terms of you know, supply and cost of vaccines. 0:13:23.440 --> 0:13:25.640 I mean, you know, he's not a public or an 0:13:25.640 --> 0:13:28.760 elected official, but you know he at the end of 0:13:28.760 --> 0:13:32.319 the day is making some of the most important decisions 0:13:32.400 --> 0:13:36.160 in a global health crisis. I think the real issue 0:13:36.400 --> 0:13:41.520 is that most people and global public health don't think 0:13:41.600 --> 0:13:45.640 that this is how we should be fighting the pandemic. 0:13:46.040 --> 0:13:49.640 This is not the best way to end the pandemic 0:13:49.760 --> 0:13:52.920 and to bring infection rates down around the world. But 0:13:53.400 --> 0:13:56.079 the fact of the matter is that Fiser, together with 0:13:56.120 --> 0:13:59.040 bion Tech and it's brilliant scientists, stepped up to the 0:13:59.080 --> 0:14:03.920 plate and developed an incredibly effective vaccine. The question I 0:14:04.000 --> 0:14:07.640 think is um whether or not it ought to have 0:14:07.720 --> 0:14:12.200 been following a more uh not for profit approach like 0:14:12.240 --> 0:14:15.520 some of the other vaccine developers during the pandemic. And 0:14:15.559 --> 0:14:18.559 I think that is that would have made it easier 0:14:19.000 --> 0:14:22.840 to get the vaccine out more widely, made it perhaps 0:14:22.880 --> 0:14:27.080 easier for um the likes of covacs to buy more 0:14:27.120 --> 0:14:31.640 doses or for other countries to do bilateral deals. But 0:14:31.800 --> 0:14:34.400 you know, when you think about how we might fight 0:14:34.440 --> 0:14:38.200 the next pandemic um and when governments are putting up 0:14:38.240 --> 0:14:41.800 money for research and development, whether or not there are 0:14:41.840 --> 0:14:44.720 more strings attached so that governments have a bit more 0:14:44.760 --> 0:14:48.160 control when some of these drugs get to the market. 0:14:48.560 --> 0:14:51.080 I think too, this is sort of a fundamental question 0:14:51.120 --> 0:14:54.920 about capitalism and healthcare, right, and it's come up in 0:14:55.080 --> 0:14:58.240 every iteration of analyzing the U S health care system 0:14:58.280 --> 0:15:01.240 when you overlay the need for a company to make 0:15:01.280 --> 0:15:05.600 profits because it's answering to shareholders and the reality that 0:15:05.680 --> 0:15:10.280 these drugs are vaccines, are life saving, and therefore should 0:15:10.280 --> 0:15:12.960 there be you know, someone else in charge. And so 0:15:13.520 --> 0:15:16.320 the Kovac's plan obviously didn't pan out. There have been 0:15:16.320 --> 0:15:18.520 other examples of this. The w h I wanted a 0:15:18.520 --> 0:15:22.400 patent pool that didn't exactly pan out, because pharma companies 0:15:22.440 --> 0:15:24.240 need to own that i P in order to make 0:15:24.240 --> 0:15:27.880 money off these products in future years. So I think 0:15:27.920 --> 0:15:31.200 what this story highlights is something that's really chronic in nature, 0:15:31.640 --> 0:15:35.120 in that we have this capitalist healthcare system and when 0:15:35.160 --> 0:15:38.520 it comes to the vaccine in public health, it just 0:15:38.560 --> 0:15:40.720 appears to be a mismatch. But how do we frain 0:15:40.800 --> 0:15:42.880 that in how do we change that? And that's really 0:15:42.920 --> 0:15:51.720 the question that was Stephanie Baker and Cynthia Coons. And 0:15:51.760 --> 0:15:54.120 that's it for our show today. For coverage of the 0:15:54.160 --> 0:15:58.080 outbreak from one bureaus around the world, visit Bloomberg dot 0:15:58.120 --> 0:16:02.360 com slash coronavirus and if you like the show, please 0:16:02.440 --> 0:16:05.280 leave us a review and a rating on Apple Podcasts 0:16:05.360 --> 0:16:08.600 or Spotify. It's the best way to help more listeners 0:16:08.800 --> 0:16:13.080 find our global reporting. The Prognosis Daily edition is produced 0:16:13.120 --> 0:16:17.440 by to for Foreheads, Magnus Henrickson and me Laura Carlson. 0:16:18.080 --> 0:16:22.320 Today's main story was reported by Stephanie Baker and Cynthia Coon's. 0:16:23.040 --> 0:16:26.920 Original music by Leo Cedrin. Our editors are Rick Shine 0:16:27.080 --> 0:16:31.720 and Francesca Levi. Francesco Levi is Bloomberg's head of podcasts. 0:16:32.240 --> 0:16:33.080 Thanks for listening.