Week 48: The ice cold story of the vaccine rollout
In this issue: ▸ Meet Albert Bourla, the Vaccine King ▸ Blackouts, NDAs and a gun to our head ▸ The failure of COVAX ▸ Where did compassion go? ▸ And much more...
A cold shower or an ice bath? There’s a difference. Most people who have tried it know what I’m talking about. A cold shower is like the younger sibling, usually far more gentle (although also very feisty).
An ice bath, on the other hand, envelops organs, skin, muscles, your soul.
If you go for ice bathing with head dip (not really recommended), your brain cells sort of stop for a moment. They don’t freeze, they just stop for a second, hanging there in awe and horror.
An ice bath will make your spirit stronger, many will say. It will make your body more resistant, they claim. Resistant to what I really don’t know. But then again, people say so many things.
The menu this week is freezing cold 🥶
This week we serve an ice bath with the story on vaccines, failures, tragedies and profits. It’s a deep ice bath into something that is going right on in front of all of us, but which happens under the radar. Brain cells freeze in awe and horror.
What you are about to read is freezing, I would say. Mutations, variations of viruses, discussions, protection measures, lockdowns, breached basic human rights, enforcements. All of it in the Western hemisphere, to protect us.
A 66 percent of people living in the G7 countries have had two vaccine doses. In Africa, only 6 percent.
How will ESG investors change this? What is their view on the topic? Most of the ESG funds hold stocks and bonds in pharmaceutical companies, and most of these companies are top ESG rated.
Let’s take a look behind one the world’s most historic events then.
(NB: This time I’ve placed all the read more links/sources at the end.)
Meet Albert Bourla, the Vaccine King
Pfizer’s Albert Bourla has become the world’s most in-demand chief executive.
As vaccines permitted some countries to reopen their economies over the summer, the Pfizer boss flew into Cornwall for the G7 summit in June, parking his private jet next to Prime Minister Boris Johnson’s plane.
Weeks later, he was welcomed to the Olympics by then Japanese prime minister Yoshihide Suga, the first time officials could recall the Akasaka Palace state guesthouse hosting a corporate leader.
In September, US president Joe Biden was describing the 59-year-old Greek-born “Albert” as his “good friend”.
By email, text or phone, global leaders have pleaded with Bourla for orders, in some cases hoping that it might rescue political careers. Facing an election battle he eventually lost, former Israeli prime minister Benjamin Netanyahu topped the list, calling Bourla 30 times.
Vaccine dominance and political power
The vaccine has transformed Pfizer’s political influence. Now, the US drug maker is behind the pharmaceutical product with the record for sales in a single year. Pfizer forecasts sales of the vaccine will hit $36bn in 2021, at least double those of its closest rival Moderna.
Pfizer’s ability to dramatically expand production has made it by far the most dominant vaccine maker. In October, Pfizer had 80 percent market share for Covid vaccines in the EU and 74 percent in the US. Since the vaccine’s approval at the end of last year, Pfizer’s decisions have helped shape the course of the pandemic. It has the power to set prices and to choose which country comes first in an opaque queueing system, including for the booster programmes that rich countries are now scrambling to accelerate.
So far, 66 percent of people living in G7 countries have had two vaccine doses; in Africa, only 6 per cent. The number of people in high income countries who have had booster shots is almost double the number in low income countries who have received first and second doses.
Blackouts, NDAs and a gun to our head
How Pfizer wields this newfound power, and what it plans to do next, is treated as top secret, as the vaccine maker blacks out large chunks of contracts no and binds even independent scientists with non-disclosure agreements.
The EU now expects five times more doses from Pfizer than its next biggest supplier, Moderna. Such a huge commitment would usually result in a price cut. But Pfizer raised the price by more than a quarter from the initial agreed level of €15.50 to €19.50. Pfizer also raised the price by a similar amount in its 2021 contracts with the US and the UK. Pfizer has told investors it will be able to raise the price after Covid-19 enters an endemic phase, when its spread is slower and more controlled.
Next year, Pfizer forecasts it will generate $29bn from the vaccine, based on contracts it had already signed in mid-October. In an earnings call in February 2021, Pfizer predicted that after the pandemic ends, its current margins — in the high 20 percentage points — will increase, as costs are likely to fall.
Pfizer has slashed prices for low-income countries, to as low as $6.75 per dose for the poorest, and about $10 to $11 for middle income nations, less than Moderna is charging but still higher than AstraZeneca. But before deals could be agreed, Pfizer demanded countries change national laws to protect vaccine makers from lawsuits, which many western jurisdictions already had. From Lebanon to the Philippines, national governments changed laws to guarantee their supply of vaccines.
The negotiations with South Africa were particularly tense. The government complained that Pfizer made what its former health minister Zweli Mkhize called “unreasonable demands”, which it said delayed the delivery of vaccines.
At one stage, Pfizer had asked the government of South Africa to put up sovereign assets to cover the costs of any potential compensation, something government of this country refused to do. The Treasury rejected the health department’s request to sign the deal with Pfizer, according to people familiar with the matter, arguing it was equivalent to “surrendering national sovereignty”. But Pfizer did insist on indemnity against civil claims and required the government to provide finance for an indemnity fund.
“Many South African felt like this: ‘These guys are putting a gun to our head,’” said a senior official familiar with African vaccine procurement efforts. “People were screaming for a vaccine and they signed whatever was put in front of them.”
The failure of COVAX
How could it go so wrong? Through the course of 2020, western politicians failed to fund COVAX – the global initiative aimed at equitable access to COVID-19 vaccines – quickly enough for it to move fast when vaccines became available, or to put clauses in their contracts that companies must help poorer countries.
COVAX was meant to supply COVID-19 vaccines for all based on solidarity and equity. Instead, it relies on rich countries’ willingness to share their doses. It was hailed as a “global, heroic effort” that would “transcend the limits of human ingenuity” to ensure that vaccine development progressed as fast as possible, at “a speed, scale, and access never before seen in human history.”
COVAX’s funding model is complex, but the basic plan went like this: Wealthy countries would purchase at least some of their vaccines through the COVAX facility, even if they also signed their own deals on the side. With that group purchasing power, COVAX would negotiate cost-effective deals with various vaccine makers, and participating countries would have an insurance policy in case their own vaccine procurement plans failed.
Meanwhile, another arm of COVAX would collect donations from non-profits, businesses and countries to support the donation of billions of doses to low- and middle-income nations.
A lifeline that was never given
The grand idea of COVAX was that the combination of these two funding streams – the self-financed part and the aid-financed AMC – would give the facility the means to invest in research and development of several promising vaccine candidates.
Additionally, as a pooled procurement mechanism, COVAX would have the financial muscle as a buyer to drive down prices for all participants. Once any of the COVAX portfolio vaccines had successfully undergone clinical trials and proved themselves to be both safe and effective, both self-financing and AMC countries would be allocated vaccines at the same rate, proportional to their total population size.
This model enabled COVAX to spread its bets by backing numerous vaccine makers; that way, plans would be in place with whichever companies ultimately succeeded in developing an effective vaccine, and it wouldn’t matter as much if some failed.
The group’s donation arm was meant to guarantee that poorer countries would get access to vaccines at the same time as richer ones. COVAX’s initial goal was to provide enough vaccines to protect some 20% of each country’s population, before any participating country got more than that.
COVAX would be “quite literally a lifeline” for self-financing countries that had not made any bilateral deals with vaccine manufacturers.
As of September 8, COVAX had distributed more than 240 million vaccine doses in 139 countries. That sounds like a lot, and but it is not 2 billion doses by the end of 2021 as it should have been.
COVAX is largely placing the blame on the shoulders of the world’s richest countries, some of which have purchased more than enough vaccines for their populations. While many wealthy countries have begun to donate unneeded doses to COVAX, “The global picture of access to COVID-19 vaccines,” COVAX representatives said in the statement, “is unacceptable.” COVAX was struggling to sign major deals. As a brand-new organization, it didn’t have any funding in the bank. And many countries, even those that pledged to be part of the initiative, were slow to turn promises into actual financial contributions.
It didn’t help that wealthy countries weren’t only depriving COVAX of much-needed funding by relying on their own side deals, but also buying up large chunks of the vaccine supply before the shots were even available.
High-income nations’ behavior
In the summer of 2020, members of the WHO’s ethics committee met with leaders from COVAX to discuss its population-based allocation plan. Immediately, says someone who attended the meeting (and who asked to remain anonymous so they could openly discuss it without fear of reprisal), members of the WHO’s ethics committee expressed concerns. Why were all countries set to receive the same proportional number of vaccines, when need varied drastically? (A WHO spokesperson said the discussions were confidential and did not confirm or deny that account.)
Things might have turned out differently if global economic leaders, i.e. rich countries in the West put up money from the beginning, potentially inspiring other wealthy nations to do the same. In that alternate reality, perhaps COVAX would have had enough cash on hand to sign bigger deals with vaccine makers and to secure a more diverse array of manufacturers, boosting supply and safeguarding itself against unexpected delays.
COVAX couldn’t single-handedly change the way high-income nations carry out their foreign relations and political manoeuvres, which were always going to include some amount of nationalism. Some rich countries that bought enough vaccines for themselves haven’t been shy about requesting even more from COVAX. The U.K., as the Associated Press reported, asked for nearly half a million doses in June.
What can we learn from this?
The primary function of a sovereign state is to serve the interests of its own population. Full Stop. And we hope that the global climate emergency will be dealt with in another way?
If the COVAX horror has shown anything, it is that the world can’t afford to wait for a solution to be built once a problem has already arrived. There must be a tool standing ready, funded and organized and able to spring into action, the moment a new health crisis emerges.
So how do we create global CLIMATE SWAT that will serve that purpose?
Where did compassion go?
This leaves us with a couple of questions – and some very uncomfortable answers:
COVID 19 is a global pandemic. Does it make sense that only 6% of the population in the poorest countries in the world have been vaccinated? I guess answer to that question is No.
What are we doing about it? We give ourselves a 3rd vaccine and we’ve vaccinated our children and soon our pets too. Does it make sense? No.
Yet we don’t see people in the West protest and refuse the 3rd dose for the benefit of a family in Uganda (0.5 % vaccinated), or push from ESG/Impact/Sustainable investors on pharmaceutical companies to stop blackmailing poor countries with changes of regulations and national laws so they can not be accountable for potential misfiring of vaccines.
And when mutations get a foothold in some of these countries, we simply just close our borders. Showing some kind of genuine human empathy seems to be on the shit list in the Western hemisphere. It’s neither popular nor trendy.
Instead we build monuments of our own egos, professionally packaged in our social media circus with “this is what I eat, this is who I hang out with, this is my pet, this is my latest trip.” We end up playing the lead role in our own insignificant and cringy Hollywood productions. Embarrassing to watch.
We can do better, so much better. And the next time you go get a “boost”, do me a favor and think about the billions around the world who never got the chance.
Sources and read more for this week’s ‘ESG on a Sunday’: