US orders up to 600m doses of Pfizer, BioNTech Covid-19 vaccine

Washington

THE US agreed to pay US$1.95 billion for 100 million doses of a vaccine made by Pfizer Inc and BioNTech SE, the government's latest step to lock up supplies to fight the pandemic.

The US will pay the companies when it receives the doses, following regulatory authorisation or approval, according to a statement on Wednesday. The government also can acquire up to an additional 500 million doses.

Nations around the world have begun ordering vaccines that are still being tested as part of their efforts to try to blunt the impact of the pandemic that's roiled economies and killed more than 600,000 people since the beginning of the year. The US has already ordered experimental shots including one co-developed by the University of Oxford and AstraZeneca Plc.

Assuming the deal for the Pfizer-BioNTech vaccine is for the first 100 million doses, that suggests a price of US$20 per dose, according to Sam Fazeli, a Bloomberg Intelligence analyst.

"If this vaccine prevents disease after one use, we calculate a windfall of more than US$15 billion revenue for Pfizer," he said in a note. "We believe this sets the top price for a vaccine, with lower prices elsewhere. Need for repeated use would be the game changer."

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Earlier this week, Tazeen Ahmad, an analyst with BOA, estimated that BioNTech's vaccine programme is worth about US$11.7 billion. That's based on an estimated US$36 net price per dose in the US, US$30 per dose in the European Union and US$12 per dose in the rest of the world.

Pricing a Covid vaccine is far different than other products because of the potential demand and value, Pfizer chief executive officer Albert Bourla said in June at a conference.

"If we try to calculate the value of the vaccine for the pricing like any other vaccine", through common market principles, Mr Bourla said, "it would be unethical".

The US deals have stoked concerns that other countries, especially poorer regions of the world, will be left behind. Other rich countries, such as the UK and those in Europe, have also secured deals.

The US in May pledged as much as US$1.2 billion to AstraZeneca to help make Oxford's Covid vaccine, and the government has backed projects underway at Johnson & Johnson, Moderna Inc and other companies.

The Pfizer vaccine would be available to the American people for free, according to the government. The US moves are part of a larger initiative to secure Covid-19 vaccines for the US, officially dubbed Operation Warp Speed.

"Expanding Operation Warp Speed's diverse portfolio by adding a vaccine from Pfizer and BioNTech increases the odds that we will have a safe, effective vaccine as soon as the end of this year," Health and Human Services Secretary Alex Azar said in the statement. BLOOMBERG