McDonnell Boehnen Hulbert & Berghoff LLP

On Friday, Dr. Albert Bourla, the Chairman and Chief Executive Officer of Pfizer, sent an open letter to Pfizer employees regarding the U.S. Trade Representative's announcement last week that the Biden-Harris Administration would support waiving intellectual property protections for COVID-19 vaccines.  Dr. Bourla (at right) begins the letter by noting that the U.S. Trade Representative's announcement had "created some confusion" about whether Pfizer had "done enough to ensure fair and equitable distribution of our COVID-19 vaccine" and whether the proposed waiver was "going to bring solutions or create more problems."  The Pfizer CEO's letter sought to address these questions.

With respect to the global distribution of Pfizer's COVID-19 vaccine, Dr. Bourla declared that the "[f]air and equitable distribution [of its vaccine] was our North Star from day one," noting that there were two conditions that had to be met in order to ensure that every country would have access to its vaccine: (1) a price that anyone can afford, and (2) reliable manufacturing of enough vaccine for all.

With regard to pricing, Dr. Bourla explained that Pfizer had decided in June 2020 to offer its vaccine through tiered pricing, where "wealthier nations would have to pay in the range of about the cost of a takeaway meal and would offer [the vaccine] to their citizens for free . . . middle-income countries were offered doses at roughly half that price and . . . low-income countries were offered doses at cost."  He also noted that "[m]any of the poorest communities will receive their doses through donation," stating that "[e]quity doesn't mean we give everyone the same.  Equity means we give more to those that need more."

As for being able to manufacture "enough vaccine for all," Dr. Bourla acknowledged that while this second condition had been "much more challenging," the company was "getting there with remarkable speed."  Commending "the ingenuity and hard work of [Pfizer's] scientists, engineers and skilled workers," and pointing to "multibillion dollars of Pfizer investment," he noted that the company will provide more than 2.5 billion doses globally in 2021, and expected to provide 4 billion doses in 2022.  Dr. Bourla states that:

These doses are not for the rich or poor, not for the north or south.  These are doses for ALL.  We have concluded agreements to supply 116 countries and we are currently in advanced negotiations with many more for a total of approximately 2.7 billion doses in 2021.  Upon finalization of all agreements, we expect that 40% of them, or more than 1 billion doses, will go to middle- and low-income countries in 2021.

The Pfizer CEO acknowledges, however, that of the approximately 450 million doses that have been shipped to date, "the balance is more favorable to high income countries."  He explains that when Pfizer asked countries to place orders so the company could allocate doses, "the high-income countries reserved most of the doses."  He also explains that he "became personally concerned" with dose allocation and had "reached out to many heads of middle/low-income countries by letter, phone and even text to urge them to reserve doses because the supply was limited."  Unfortunately, most of these countries "decided to place orders with other vaccine makers either because mRNA technology was untested at that time or because they were offered local production options," and "other vaccine producers were not able to meet their supply commitments for varying technical reasons."  According to Dr. Bourla, Pfizer expects to be able to better supply its vaccine to middle- and low-income countries in the second half of 2021 and "to have virtually enough supply for all in 2022."

Turning to the U.S. Trade Representative's announcement, Dr. Bourla writes that he recently had an opportunity to discuss distribution of the Pfizer vaccine with Ambassador Tai, and "explain why the suggested waiver of IP rights could only derail this progress."  His discussion with Ambassador Tai leads to the second question he raised at the start of his open letter -- whether the proposed IP waiver was "going to bring solutions or create more problems."  And to this question, his answer is "categorically the latter."  Dr. Bourla explains that:

When we created our vaccine there was no manufacturing production of any mRNA vaccine or medicine anywhere in the world.  We had to create manufacturing infrastructure from scratch.  With 172 years of quality manufacturing tradition, substantial deployment of capital, and more importantly, an army of highly skilled scientists, engineers and manufacturing workers, we developed in record time the most efficient manufacturing machine of a life-saving vaccine that the world has ever seen.  Currently, infrastructure is not the bottleneck for us manufacturing faster.  The restriction is the scarcity of highly specialized raw materials needed to produce our vaccine.  These 280 different materials or components are produced by many suppliers in 19 different countries.  Many of them needed our substantial support (technical and financial) to ramp up their production.  Right now, virtually every single gram of raw material produced is shipped immediately into our manufacturing facilities and is converted immediately and reliably to vaccines that are shipped immediately around the world (91 countries to date.)  The proposed waiver for COVID-19 vaccines, threatens to disrupt the flow of raw materials.  It will unleash a scramble for the critical inputs we require in order to make a safe and effective vaccine.  Entities with little or no experience in manufacturing vaccines are likely to chase the very raw materials we require to scale our production, putting the safety and security of all at risk.

Aside from the manufacturing challenges, Dr. Bourla also suggests that "waiving of patent protection will disincentivize anyone else from taking a big risk."  He explains that Pfizer spent $2 billion before the company knew that it could successfully develop a vaccine because the company "understood what was at stake."  While acknowledging that "[t]he recent rhetoric will not discourage us from continuing investing in science," he is "not sure if the same is true for the thousands of small biotech innovators that are totally dependent on accessing capital from investors who invest only on the premise that their intellectual property will be protected."

Dr. Bourla concludes his letter by stating that "[e]nding the pandemic and vaccinating the world is a massive, but achievable undertaking," and that Pfizer remains "fully focused on getting high-quality, safe and effective vaccines to patients all over the world as quickly as possible and to putting an end to this deadly pandemic."

For additional information regarding this topic, please see:

• "If the Devil of the WTO IP Waiver Is in the Details, What Are the Details?" May 9, 2021
• "The Road to Hell Is Paved with What Everybody Knows," May 6, 2021
• "BIO & IPO Issue Statements on Biden Administration's Support for Proposed WTO Waiver," May 6, 2021
• "Biden Administration Supports Waiver of IP Protection for COVID-19 Vaccines," May 5, 2021
• "Suspending IP Protection: A Bad Idea (That Won't Achieve Its Desired Goals)," April 26, 2021
• "Sen. Tillis Asks Biden Administration to Oppose WTO Waiver Proposal," April 21, 2021
• "IP Organizations Support Continued Opposition to Waiver Proposal," April 5, 2021
• "Industry Coalition Supports Continued Efforts to Oppose Waiver Proposal," March 29, 2021
• "BIO and PhRMA Urge Biden Administration to Oppose Proposed WTO TRIPS Waiver," March 11, 2021
• "IPO Sends Letter on IP Law and Policy to President-Elect and Vice President-Elect," January 4, 2021