Belgian official's tweet reveals US paying more for Covid-19 vaccines than EU

The higher US price may reflect the eagerness of US officials to encourage several pharmaceutical companies to invest in vaccine development. PHOTO: AFP

NEW YORK (NYTIMES) - The European Union appears to have paid less than the United States for some of the coronavirus vaccines it secured, according to confidential pricing data that was released in a seeming blunder.

A Belgian government minister released, then quickly deleted, a Twitter post late on Thursday (Dec 17) containing prices that the EU has negotiated to pay pharmaceutical companies for coronavirus vaccines.

The prices had been kept secret by the European Commission, the bloc's executive, which is negotiating on behalf of its 27 member states and ordering doses for the 410 million people living in the vast region, where cases have been surging.

For most drugs, European nations tend to pay substantially lower prices than patients in the US. But the coronavirus vaccines are unusual because the US government negotiated prices and has arranged to buy doses for every American directly. For most medications, the US government has a limited role, and individual insurance companies bargain with drugmakers.

The higher US price may reflect the eagerness of US officials to encourage several pharmaceutical companies to invest in vaccine development - and to move with haste. Those financial incentives appear to have worked: No vaccine has ever before been developed so quickly.

It may also reflect the differing relationships between Pfizer and the governments in question. In the Trump administration's contract with the company, it agreed to buy doses of the vaccine if it was authorised by the Food and Drug Administration, but the US did not fund any part of the vaccine's development.

In a statement, a spokesman for the Department of Health and Human Services (HHS) noted that the EU's early financial investment in Pfizer's vaccine may have factored into its price. It also noted that the US price partly reflected the cost of shipping doses from Europe, and to more remote locations such as Guam, Alaska and Hawaii.

The new information emerged days before the EU is expected to approve its first vaccine for use across the region, which will set off an ambitious and logistically challenging inoculation campaign.

The price list, briefly released by Belgium's budget state secretary, Ms Eva De Bleeker, showed that the Pfizer-BioNTech vaccine, which is set for approval on Monday in the bloc and is being administered in the US and Britain, will cost €12 (S$20) per dose, bringing the cost per person to €24, as each person is supposed to receive two doses.

That is markedly lower than the company's official price, which has been announced at US$19.50 (S$26) per dose, the price the US government paid. Rollout of the Pfizer vaccine began in the US this week.

The Moderna vaccine, which is the next in line for EU approval, on Jan 6, and received authorisation from the US Food and Drug Administration for emergency use on Friday, is costing the EU US$18 per dose, the table showed. The company had said it was looking to charge US$25 to US$37 per dose. The US government has been directly involved in funding the development of the Moderna vaccine, and has signed a contract to pay around US$15 per dose.

Mr Eric Mamer, a European Commission spokesman, declined to comment on the price list, saying that the negotiated agreements were "covered by confidentiality," but did not dispute the pricing.

A spokesman for Ms De Bleeker said that she had tweeted the details to settle a political debate in Belgium, where opposition politicians are accusing the government of not setting aside enough money to buy the vaccines.

"We were trying to be transparent, but it seems we were a bit too transparent," Mr Bavo De Mol, the spokesman, said.

Several health economists have noted that the price of the vaccine itself - even if the US is paying more than Europe - is trivial compared with the economic cost of a continuing pandemic. Just this week, Congress is preparing to authorise payments of US$600 to every US adult to cushion the blow of the pandemic-driven recession, far more than the US$39 per person it will take to vaccinate adults at the higher Pfizer price.

"The cost of overpaying is so small relative to the potential counterfactual," said Dr Benedic Ippolito, a resident scholar at the American Enterprise Institute, who studies drug prices. "It's like a shrug-your-shoulder situation where, OK, our price is a little higher. This is a one-time pandemic, and we'll deal with the drug pricing situation later."

The American price for Pfizer's vaccine was the result of complicated and occasionally tense negotiations over the summer between the company and the federal government, according to federal health officials familiar with the talks.

"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 HHS spokeman said on Friday.

But now that it is public, the price discrepancy may influence negotiations over future batches of vaccines.

The secrecy around the European prices was part of the negotiation, EU officials said, although they acknowledged that the demands for transparency around the vaccine deals were legitimate.

"We would not have had those contracts if we did not have the confidentiality clause inserted," Mr Mamer said.

"It is a relevant debate; we are not questioning this. This was a part of the process to conclude those contracts, and we are not in a position to change it now," he added.

The EU ordered more vaccines from most providers than the USS, partly because the bloc's total population is bigger. In the case of the Pfizer-BioNTech vaccine, for example, the EU secured 200 million vaccines with an option to tap the same deal for more down the line.

Other prices on the list released by the Belgian minister included €1.78 per dose for the AstraZeneca-Oxford University vaccine; US$8.50 per dose for the Johnson & Johnson vaccine; €7.56 for the Sanofi/GlaxoSmithKline vaccine; and €10 for the CureVac vaccine.

Some of these vaccines are far behind in development, and their advance purchasing agreements may never be activated or may take much longer; the contract the EU signed with them will become active only if their vaccines work.

In authorising the EU to strike one comprehensive deal on behalf of its 27 member nations, the governments pooled negotiating capital and clout as a bloc, the bloc's leadership says.

Provided the Pfizer-BioNTech vaccine is approved Monday, the EU plans to deliver the first batch of vaccines to each of its members' capitals on Dec 26, and to start rolling out inoculation across the bloc immediately thereafter.

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