- Pfizer and its German partner BioNTech reached a $1.95 billion deal with the U.S. government.
- The two companies will supply at least 100 million COVID-19 vaccines to the U.S. government
- The vaccine will be made available to the American public at no cost.
Pharmaceutical giant Pfizer Inc. (NYSE: PFE) and its German partner BioNTech struck a $1.95 billion deal with the U.S. government to provide the American public with 100 million doses of their COVID-19 vaccine candidate.
As part of the Wednesday morning announcement, Pfizer and BioNTech will initially distribute 100 million doses and up to an additional 500 million doses. The deal is contingent on the vaccine receiving regulatory approval. So far, it has shown encouraging preliminary results in a small group of patients and will enter the late-stage testing phase before August.
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The government won’t fund any part of Pfizer and BioNTech’s research and development, although this is not the case with other companies. For example, the government reached an agreement with rival vaccine maker Novavax to fund clinical studies and help finance large-scale manufacturing.
Pfizer and BioNTech’s vaccine will be made available to the American public at no cost. Pfizer previously said it will not make a profit from its vaccine that is estimated to cost $19.50 a dose, according to The Wall Street Journal. This is consistent with a standard flu vaccine.
HHS Secretary offers inside look
The U.S. government now has five major investments in companies working towards a vaccine, Health and Human Services Secretary Alex Azar said on CNBC’s “Squawk Box.” If needed, the government will extend its financial coffers further to new companies as well.
The deal with Pfizer is in part based on data from the Phase 1 clinical trial which showed exactly “what we look for” in a vaccine, he said. Specifically, the vaccine produced neutralizing antibodies at levels equal to or better than in recovered patients.
Neither Pfizer nor the government is waiting for confirmation of effectiveness in future trials before mass-producing the vaccine. In fact, production of the vaccine is underway “now” and so far there are no supply chain-related concerns.
The vaccine is fully manufactured in the U.S. and is counting on the Defense Department for support to ensure the process remains smooth. The Defense Department is contributing “incredible logistics and procurement” support and capabilities for the historic effort.
Finally, Azar said that similar agreements with rival vaccine makers include similar terms that it will be procured by the government directly and then distributed to the public, he said.
“We will ensure that any vaccine that we are involved in sponsoring is either free to the American people or is affordable,” the Secretary concluded.