Is a $240 million upfront payment the real reason Australia ‘turned down up to 50 million Pfizer shots’?
Pharmaceutical giant Pfizer demanded a huge upfront payment for Australia’s Covid vaccine that could have been as much as $240 million, but with no guarantee that a single dose would ever be delivered.
Prime Minister Scott Morrison’s government has been criticized for waiting longer than the US and Europe to close a deal with Pfizer, with sources involved in the negotiations claiming that Pfizer had offered Australia up to 50 million doses by July 2020.
Pfizer would have been rejected in favor of AstraZeneca because it could be produced in Australia and only 10 million Pfizer shots were ordered.
However, documents released under Freedom of Information have shed new light on why this might be.
dr. Jamal Rifi administers the Pfizer vaccine to a customer at the Belmore Sports Ground vaccination center on October 3, 2021 in Sydney
The documents in which the drug maker wanted a “50% upfront refundable if the reg (regulatory) approval was not obtained or not manufactured and delivered.”
That means New York-based Pfizer wanted Australia to prepay for the desired doses, before the drug was approved as safe to use, effective against Covid, or even made a single dose.
And if Pfizer’s vaccine never received approval or was not made for whatever reason, only half of the initial cost could be reimbursed.
Based on the prices Pfizer charged per vaccine dose to the US and the European Union – $26.64 and $23.95 per dose, respectively – Australia’s bill for the initial order of 10 million doses would be approximately $240 million been.
So if Pfizer’s Covid vaccine didn’t work, it would have cost Australia $120 million anyway — and $600 million if the 50 million doses had been ordered.
The health ministry tried to keep the bomb documents secret, but they were released after the Labor Party filed a freedom of information request.
Pfizer demanded a prepayment for Australia’s Covid vaccine that could have been as much as $240 million – but with no guarantee a single dose would ever be delivered
The documents – parts of which have been redacted – include emails, a letter to Health Minister Greg Hunt and a ‘company contact template’ showing that Pfizer was the first to contact the Australian government in 2020.
The number of vaccines Pfizer predicted it could produce in 2020 was redacted.
In the email to Mr Hunt, Pfizer suggested a meeting between the minister or departmental leadership and senior company representatives, including the global head of vaccines.
“I would like to have the opportunity to discuss the development of our vaccine candidates in more detail,” it said.
Staff from Mr Hunt’s office — but not the minister himself — first met with Pfizer representatives on August 4, 2020.
The health department has still not disclosed when Mr Hunt first met Pfizer representatives himself.
Armed with the new information, many would compliment Mr Hunt and the government for being careful with taxpayers’ money, though others would say it was a mistake to be so careful.
In the end, the Pfizer vaccine was approved and it works very well, so if you can get more doses sooner, more lives may have been saved.
Occupational health spokesman Mark Butler said Australia was suffering because the government did not act quickly enough.
“The vaccine rollout has always been a race, but Australia started a lap behind because the Scott Morrison government deliberately took a wait-and-see attitude on vaccine deals,” he said.
“While other countries made Pfizer deals, our government couldn’t even bother to arrange a meeting.”
People are seen in the post-vaccination observation area after receiving their Covid-19 vaccination at the Boondall Mass Vaccination Center in Brisbane on September 18, 2021
The Department of Health said the details of the pre-sale agreement with Pfizer for its Covid-19 vaccine are commercially confidential.
“The relevant documents have been published in the department’s disclosure log in accordance with the requirements of the FOI Act,” it said.
“The department subsequently determined that a small amount of exempt commercial confidential information had not been removed from the documents prior to publication in the disclosure log.
“The exempted information has been deleted from the disclosure log documents in accordance with the FOI Act.”
Pfizer expects to make nearly $46 billion this year from its Covid vaccine. Profits will increase further as more countries sign up to buy additional doses to give people a booster shot.
Throughout 2020, pharmaceutical companies demanded liability protection and patent ownership when negotiating deals with governments.
There is now pressure to end patent protection so poorer countries can make much cheaper, generic versions of Covid vaccines.