AstraZeneca Is Caught Up in Delicate Vaccine Politics
(Bloomberg Opinion) -- The Americans have joined the British effort to find a vaccine against the coronavirus, and suddenly the numbers are getting very big. AstraZeneca Plc, the U.K.-based pharmaceuticals giant that would mass produce the vaccine being developed at Oxford University, faces a challenge. It must avoid being seen to profit from the crisis, avoid losing money on a risky project and, above all, avoid getting sucked into so-called “vaccine nationalism” given the overwhelming U.S. financial commitments now being made.
Many drugmakers are racing to find a vaccine, often funded by U.S. cash. AstraZeneca will be mindful of the controversy caused by Sanofi, its French peer, whose chief executive officer said recently that the U.S. would get priority for its vaccine because of the country’s financial support for risky research and development.
The Oxford project has so far been a mainly British affair, with funding in the tens of millions of pounds from the U.K. government. Its ambitions have always been global, but Britain has been implicitly first among equals in its target population. Where will the U.S. now rank?
AstraZeneca got involved last month. That provided a global manufacturing and distribution partner. Vaccines aren’t its core business. As a big pharma group, it’s adept in running the large, late-stage drug trials required here. But AstraZeneca’s involvement is not about financial resources; the money is coming from state actors.
Now the U.S. Biomedical Advanced Research and Development Authority is providing $1 billion to the program. American involvement suddenly ramps up the scale of the project. The cash will partly fund a phase-three trial involving 30,000 patients. The U.S. Department of Health and Human Services says it’s working with the company to secure 300 million doses. Previously, the expectation was for 100 million doses across Britain.
Small wonder AstraZeneca set out to reassure investors on Thursday, saying that “expenses to progress the vaccine are anticipated to be offset by funding by governments.” With the costs getting so big — AstraZeneca is talking about possibly 1 billion doses — that was a necessary clarification.
Even if the Oxford vaccine is a clinical success — and there is no guarantee that it will be — AstraZeneca says it won’t make a profit from it during the pandemic. That allows for the making of money from annual vaccine programs once the crisis has eased — just like the drugmakers who produce regular flu vaccines. This won’t displace AstraZeneca’s core work of fighting cancer.
But the company is now involved in a delicate political situation. AstraZeneca is talking about parallel agreements with the U.K. and U.S., as well as a broad and equitable supply of any working vaccine to the world. The Oxford tie-up is also about making a drug accessible for low- and medium-income countries. Altogether, it implies various national governments’ orders for this vaccine can be met simultaneously. That’s a laudable aspiration. Whether it can be achieved remains to be seen.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.
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