How Not to Make a Vaccine Deal

Reports are now trickling in that the Trump administration officials passed when Pfizer offered in late summer to sell the U.S. government additional doses of its Covid-19 vaccine, according to people familiar with the matter. Now Pfizer may not be able to provide more of its vaccine to the United States until next June because of its commitments to other countries.

Sources believe that the Trump administrative mistakenly believed that they could use an executive order to prevent Pfizer from making additional doses available to other countries should the U.S. need more of the vaccine.   The Trump administration is now scrambling to try to purchase more doses of the vaccine, along with plans to sign an executive order “to ensure that United States government prioritizes getting the vaccine to American citizens before sending it to other nations,” according to a White House official, though it is not known what force the president’s executive order would carry.  

 The Pfizer vaccine was developed in partnership with its German partner, BioNTech and was not part of the Trump administration's Operation Warp Speed.  Trump engaged in a months-long Twitter war with Pfizer, likely in the belief he had the upper hand after establishing relationships with other drug makers.  But by foregoing U.S. government funding in the R&D of its vaccine, Pfizer was able to move more quickly and get to the market first.  The Trump administration was eventually able to secure a contract for 100 million doses (enough for only 50 million) via federal contract.  But as a result of its antagonistic relationship with Pfizer, the Trump administration was not able to negotiate the usual government rights clauses in the contract-- and by that time, Pfizer had plenty of other customers for the vaccine.   In addition, Pfizer was able to negotiate its own handling of the vaccine delivery, which will allow the company to retain intellectual rights and data ownership of any discoveries and medical breakthroughs that arise during the vaccination process. 

The U.S. government has the option to buy up to 500 million more doses-- but they won't be available until next summer at the soonest.   In its desperation, the Trump administration surrendered on almost all of U.S government's intellectual property rights, as well as forgoing any leverage to use if the company ends up raising its price down the road.  According to Robin Feldman, professor at the University of California Hastings College of the Law, "The government is giving away the store — meeting critical short-term goals but ignoring long-term serious costs."