Pfizer, U.S. Wrangle Over Vaccine Pace While Working Toward Pact

(Bloomberg) -- Pfizer Inc. pushed back on claims it is experiencing problems producing its Covid-19 vaccine, as the company and the federal government continued to try to reach a deal that would eventually double the number of doses available for the U.S.’s vast immunization effort.

Moncef Slaoui, the chief scientific adviser to Operation Warp Speed, said in an interview on Thursday that the U.S. is close to a deal for another 100 million doses of the vaccine Pfizer developed in partnership with BioNTech SE. Through the agreement, Pfizer would deliver the additional supply in the second quarter of 2021, Slaoui said.

In July, Operation Warp Speed, the U.S. vaccine-development program, agreed to buy 100 million doses of the two-dose regimen; the $1.95 billion contract came with an option to buy 500 million more doses. However, Pfizer and federal officials have been at odds after reports that the government declined a subsequent offer to buy more doses, and that Pfizer would need to fulfill commitments to other countries before it could get more stock to the U.S.

The wrangling during the first week of the vaccine’s rollout came as other supply questions emerged. Some governors complained this week that their allocations of the vaccine are less than what they expected. Florida Governor Ron DeSantis said his state had a shortfall he blamed on what he said were production issues at Pfizer. Health and Human Services Secretary Alex Azar made similar claims in a briefing Wednesday.

Pfizer, however, said that it has not experienced production issues. In a statement Thursday, the company said it shipped all 2.9 million doses of the vaccine the U.S. had allotted so far, and has millions more doses in warehouses ready to send. Those include doses being held for a required second shot, as well as a new batch set for delivery over the coming week.

“Pfizer is not having any production issues with our Covid-19 vaccine, and no shipments containing the vaccine are on hold or delayed,” the company said, adding that government officials had visited its facilities and been updated on its production planning.

In recent days, there has been growing frustration in the Trump administration with the company. A senior administration official who spoke on condition of anonymity to discuss details of the vaccine program said Pfizer is negotiating in public despite having delivery problems and not meeting the initial volumes that the U.S. had expected.

More Support

Pfizer didn’t take money from Operation Warp Speed for the research and development of its Covid-19 vaccine or to build out manufacturing capacity, but Slaoui said in the latest round of discussions the company was asking for the government’s help. He said Pfizer has asked the U.S. to exercise the Defense Production Act in order to get additional equipment and materials, such as tube filters and chemicals, so it can scale up quickly and deliver the additional doses in the second quarter of 2021.

Pfizer’s chief executive officer said during a CNBC interview this week that they were asking for the Defense Production Act to be used to address “critical supply limitations.”

“What’s happening now is Pfizer is realizing they need more support,” Slaoui said. “The DPA always comes with conditions, and that’s really the whole conversation that’s happening.”

Slaoui described the talks as constructive and nearing an end. The U.S. will help Pfizer get priority access to additional materials, he said. Additional supply for the two-dose regimen would cost the U.S. the same amount as the initial agreement, according to Slaoui, at $19.50 per dose.

Representatives for Pfizer didn’t immediately respond to requests for comment.

Persistent Confusion

Though Pfizer said it is having no issues producing or delivering its vaccine, confusion over how many doses will be available has built up in recent days.

The U.S.’s original order for 100 million doses initially called for 20 million a month beginning in November. But shipments only began arriving in December, and Pfizer isn’t giving the U.S. its November allotment right away, according to the senior administration official. Instead of doubling December’s shipment to catch up, Pfizer is spreading the 20 million that was due in November over the first four months of 2021, the official said.

Pfizer has so far allocated about 10.4 million doses to the U.S., the official said. From the first tranche of 6.4 million, 500,000 doses were set aside as a reserve and 2.9 million were shipped out this week. The remaining 2.9 million will be sent in three weeks as the second dose of the vaccine’s two-shot regimen. The U.S. will begin delivering a second allocation of 4 million doses next week, again sending out half while holding back half for second doses.

The rapid-fire distribution of millions of doses has challenged planners in the states, who have asked for more time between rounds to determine where to send them. Additionally, the U.S. won’t promise states shipments until the supply has been confirmed by Pfizer. That stretches the timeline, with the allocation process spanning Tuesday to Friday, distribution grinding forward over the weekend and deliveries beginning the following Monday, the official said.

Public Scrutiny

The U.S. expects at least 7.4 million doses are being held on its behalf by Pfizer. That stockpile will build as second doses accumulate, until those start being shipped in January, 21 days after the initial dose was given.

The U.S. does not have full visibility into Pfizer’s process, according to the official. The U.S. expects another allotment from Pfizer on Tuesday, which it will ship to states the following week, once states determine where to send it.

Slaoui said Covid-19 vaccine makers are currently under the microscope, with unusual public scrutiny on the daily output of a very complex manufacturing process.

The Warp Speed official said he is confident that the U.S. will be able to distribute 40 million vaccine doses between the Pfizer-BioNTech shot and one from Moderna Inc. before the end of the year. If daily distribution “ebbs and flows,” that’s a normal part of the process, he said.

Azar is likely to be vaccinated next week, a person familiar with the matter said. He and other top HHS officials would prefer to get the Moderna vaccine rather than the Pfizer one partly because of the dispute between Pfizer and the administration, one official said. They also want to highlight Moderna in part because it, unlike Pfizer, was also a full participant in Operation Warp Speed.

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