The price and availability of COVID-19 vaccines

Now that the COVID-19 vaccines are rolling out for use in some countries, most of them wealthy, the main question for us now is how soon will the vaccine be available for Filipinos.

When will Filipinos get the vaccines? The country was offered a supply contract for the Pfizer vaccine, but our government failed to act quickly and lost it.

Even if we can reestablish early supply arrangements, much depends on quick action and diplomatic finesse. There will be a rollout of other vaccines. The Moderna vaccine was approved in the US last week.

Our officials might be more alert now!

The next question is at what price the vaccine will be bought.

The government has to finance the acquisition from its revenues and future borrowings. The government could finance part of the purchase through borrowings, but this begs the question of fiscal sustainability.

For the moment, there is a budget for vaccines. Vaccine acquisition is also part of the government’s recovery program.

Tight supply, initially. In the previous column, I said that the vaccines produced by the drug companies from the US and Europe are expected to be costlier than those developed in China and Russia.

It is likely, however, that the price of vaccines going to developing countries and middle income countries will vary and will be cheaper than those paid by those countries where the vaccines are produced originally.

As more vaccines get accepted for adoption and use, the supply of vaccines will also increase and their price will become less burdensome.

Bilateral contracts between governments and the companies that manufacture the vaccines is the name of the distribution game. Some rich governments hedged under uncertainty of success and over-bought contracts. These contracts involved non-refundable initial commitments of cash.

Should vaccines, however, enter the retail market, the price of those will be astronomical and their efficacy or genuineness will be in question as they are likely to be leakages in the supply chain sold to governments. All country public health systems are undertaking vaccinations as a government-initiated program and initiative.

Misbehavior, which has very high rewards in times of emergencies, can be expected in drug distribution. When it happens, the following could be the culprits: countries with over-bought supplies; recipient institutions of early supplies; drug companies that might direct supplies to private buyers; and criminal elements.

Price of vaccines. The European Union contracted its vaccine needs as a bloc, representing all 27 member countries and, as a result, secured good prices for each country.

This was partly accidentally revealed by the release of prices that the government of Belgium is paying for its vaccine purchases. Since this is the same price secured for all EU countries, their secret is out of the bag.

The Washington Post seized the moment and compared the prices that the US government is paying for the same vaccines. Here is what the comparison revealed. Per dosage of vaccine, the Pfizer vaccine cost $19.50 in the US, but $18 in EU (or 24 percent less); for Sanofi/GSK, the cost is $10.50, but $9.30 (or 11 percent less) in EU. For Johnson and Johnson, the $10 per dose is $8.50 or (15 percent less); for AstraZeneca/Oxford $4.00 for the US and $2.19 (or 43 percent less) in the EU.

In the case of the Moderna vaccine, however, the US price is $15 per dose, but the EU price is higher, $18 (or 20 percent more). However, the US had advanced federal funding of support for development, along with advanced purchases in the case of both Moderna and AstraZeneca/Oxford vaccines worth $4.1 billion and $1.2 billion, respectively.

In the US, Pfizer was given an advance purchase contract to deliver 100 million doses of the vaccine for $1.95 billion, unlike the assistance to Moderna and AstraZeneca which received federal funding during the development of their vaccines. Pfizer explained that the EU committed to buy 200 million doses, but the US only bought 100 million doses. When the US did not affirm the second 100 million which the company had offered initially, it sold this volume to other countries.

Vaccine diplomacy and competition. Rivalry in influence, as well as competition among the different vaccines, will likely bring down the price to poor and middle income developing countries.

This is only true as supplies broaden with more vaccines coming into the picture.

In fact, China and Russia have been in some kind of diplomatic offensive to promote their vaccines. They will supply these to countries depending on goodwill, commerce, and other motives.

China has at least three major companies (CanSino, Sinovac, Sinopharm) developing four types of vaccines. CanSino has active phase 3 trials in Pakistan, Saudi Arabia, and Russia. Sinovac has trials in Brazil, Indonesia, and Turkey. Sinopharm has two vaccines, one being tried in UAE and Argentina, and the other vaccine in the UAE, Peru, and Morocco. Russia’s vaccine is being produced by state-owned Gamaleya Research Institute. It has advanced trials conducted in Russia, Belarus, UAE, and India.

All these vaccines are in advanced stages of development.

Low cost competition from India. And then, there is India. For several decades India has developed its own pharmacy industry in defiance of the major international drug firms.

In fact, it has gained a good reputation in this industry internationally. AstraZeneca/Oxford, the US-based Novovax, and Russia’s Gamaleya vaccines are not only being licensed to be manufactured in India for use in that country, but also for possible distribution of the vaccines to other countries.

In addition to these brands of vaccines, India has also its own vaccine in the process of development. COVAX, the vaccine coalition mentioned in my column last week, hopes to manufacture its allocation of vaccines through India to assure low cost and efficacy.

In fact, India is negotiating bilateral contracts for the supply of Philippine vaccine needs.

There is another feature to be expected of these other mainline vaccines. These vaccines can be stored under less demanding circumstances, unlike the Pfizer and Moderna vaccines.

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