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Covid vaccines are costing Europe less than the United States

globalresearchsyndicate by globalresearchsyndicate
December 18, 2020
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Covid vaccines are costing Europe less than the United States
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Comparing that list to U.S. calculations by Bernstein Research, an analysis and investment firm, it appears the 27-nation union has a 24 percent discount on the Pfizer vaccine, paying $14.76 per dose relative to $19.50 in the United States. Some of the difference may reflect that the E.U. subsidized that vaccine’s development and the cost of shipping the European-made vaccine across the Atlantic.

The bloc will pay 45 percent less than the United States for the AstraZeneca-Oxford vaccine currently under development. But it will pay 20 percent more than the United States for the Moderna vaccine, which is expected to be approved for U.S. use on Friday. Both of those vaccines were funded partly by the U.S. government as part of Operation Warp Speed, an effort to expedite their development. The AstraZeneca-Oxford team received $1.2 billion, and Moderna got $4.1 billion.

As in the United States, European countries generally plan to make the vaccines free for their citizens.

The per-dose prices of the vaccines are lower than most brand-name drugs, but the hundreds of millions of doses required to vaccinate entire populations will drive up costs significantly for individual countries. Disparities between the higher prices in the United States and Europe in overall drug prices have long driven outrage in Congress.

Asked about the price differences between the United States and Europe, Pfizer noted that the E.U. coronavirus vaccine purchase, 200 million doses, was double that of the United States.

“Pfizer and BioNTech are using a tiered pricing formula based on volume and delivery dates,” Pfizer said in a statement. “The agreement with the European Commission for the supply of 200m doses, and an option to request an additional 100m, represents the largest initial order of our candidate vaccine to date.”

It said it would not disclose further details.

The U.S. Pfizer order has already been the subject of frustration, since Pfizer urged Operation Warp Speed over the summer to purchase double what the United States ultimately decided to order. By the time U.S. buyers asked for more doses earlier this month, the availability had been snapped up elsewhere — including by Europe.

Operation Warp Speed said that it had negotiated extensively with each drug manufacturer.

“Based on the significantly varying levels of developmental funding, distribution costs, and other contract terms, we are confident we negotiated the best possible price for the American taxpayer,” the initiative said in a statement. It noted that the price of Pfizer’s vaccine included distribution across the United States and territories, including charter flights from manufacturing flights in Europe.

The E.U. list underlines why policymakers are hoping AstraZeneca’s vaccine will be effective and will win approval — at $2.19 a dose, it is almost one-seventh the price of the Pfizer vaccine currently being administered in the United States and Britain. Most vaccines currently under development require two doses, although Johnson & Johnson’s — $10 in the United States and just a bit more in Europe — is a single shot.

European Union states will start administering coronavirus vaccines on Dec. 27 as they try to catch up with Britain and the United States. (Reuters)

The two vaccines that are first in line for approval — Pfizer-BioNTech and Moderna — are more expensive than others partly because they are more expensive to make, the result of a never-before-used approach that primes the immune system to defeat the coronavirus.

The E.U.’s finance arm offered a $122 million loan to BioNTech in June to help develop the vaccine, followed by an additional $458 million from the German government in September.

The other vaccine prices noted on the E.U. list were $9.30 for the one under development by Sanofi and GlaxoSmithKline, an 11 percent discount on the U.S. cost, and $12.30 for the one under development by CureVac, for which the United States has not signed contracts.

The E.U. has been secretive about the prices it negotiated for its 2 billion doses of various vaccines, drawing fire from transparency advocates who say the public and policymakers have a right to know how much their governments are paying for the inoculations.

The E.U. negotiated as a bloc, but most other countries, including the United States, are negotiating individual contracts with pharmaceutical companies. The confidentiality clauses presumably benefit the manufacturers, since they make it easier to vary the prices from country to country.

A spokesman for the European Commission, which negotiated the contracts for the vaccines on behalf of E.U. members, declined to comment about the pricing on Friday, other than to say disclosure was a breach of confidentiality clauses of the contracts.

The Belgian official, State Secretary for Budget Eva De Bleeker, posted the table of Belgium’s costs for vaccines on Twitter on Thursday, then deleted it shortly afterward. Because the E.U. has negotiated collectively for vaccines on behalf of its members, the same prices apply across all of its 27 nations.

A spokesman for De Bleeker confirmed the authenticity of the tweet, and said that it came after a Thursday evening discussion in the Belgian Parliament and opposition charges that there was no money to pay for the vaccines in the country’s 2021 budget.

“The communication team posted the tweet to close the discussion,” said Bavo De Mol, the spokesman. “We wanted to be as transparent as possible, but maybe we were a bit too transparent.”

Drug pricing is linked to a number of factors, including volume discounts and other specific promises made by governments when they sign the contracts. Some governments have agreed to limit the liability drug manufacturers will face if side effects arise from the vaccines, for instance. In February, the Trump administration offered vaccine manufacturers protection from lawsuits until 2024.

Europe has spread its bets relatively evenly among six different vaccines, reserving 200 million to 300 million doses of all of them except the one produced by Moderna, of which it purchased 80 million. A few countries, including Germany and Hungary, have purchased additional vaccines on the side.

The European Medicines Agency is likely to approve the Pfizer-BioNTech vaccine on Monday, with the vaccine expected to roll out across the E.U. the final week of December.

The E.U. vaccines will be shared equally across the European Union based on each country’s population size.

Birnbaum reported from Riga, Latvia, Rowland reported from Washington and Ariès reported from Brussels. Carolyn Y. Johnson in Boulder, Colo., also contributed to this report.

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