Officials from the Ministry of Health and the cross-agency vaccine team tried to stop New Zealand from going all-in on Pfizer, Marc Daalder reports in the second of a two-part series on the vaccine purchasing effort
Special report, part two: Officials advised against accepting an offer from Pfizer to supply enough vaccines to cover New Zealand’s entire population, in a briefing to ministers in February.
The previously unreleased documents show Pfizer asked if New Zealand would be interested in purchasing eight million more doses of vaccine, at a stage when we had secured just 1.5 million in a previous agreement. The Ministry of Business, Innovation and Employment (MBIE) said ministers should accept just five million doses and the Ministry of Health argued for just three million additional vaccines.
In the end, Cabinet overrode officials and negotiated a deal for 8.5 million additional jabs. Ministers also accepted an offer to purchase 100,000 additional doses through the COVAX facility, when officials had recommended against doing so.
READ PART ONE:
* Buying the vaccine: Was New Zealand too slow?
National Party spokesperson Chris Bishop said it was “staggering” that officials had advised against accepting the full offer.
“I just find it staggering that officials would actually tell the New Zealand Government, you know, ‘Pfizer wants to sell you vaccines, our recommendation is don’t buy it’.
“That I think is pretty surprising and it’s really for the officials to explain why that is the case.”
The February briefing is just one of dozens of government documents reviewed by Newsroom as part of a two-part investigation into the vaccine purchasing effort. The first part of the series, which examines whether New Zealand was slow to order vaccines, can be found here.
The second part canvasses the negotiations with pharmaceutical companies and how New Zealand moved from seeking to buy 20 different vaccines to going all-in on Pfizer.
One-in-five chance
The central tenet of the early vaccine strategy was diversifying the risks. That’s why officials explored whether vaccines could be made in New Zealand, looked into allying with Australia and Singapore to purchase vaccines multilaterally and put money into COVAX to secure the opportunity to vaccinate half of the population.
“The purchasing strategy developed by the Covid-19 vaccine task force takes a diversified approach – recognising the need to invest upfront in a range of candidates, without knowing which will ultimately succeed. This is the price to pay for early immunisation. We will need to pursue multiple pathways to deploy this hedged approach – through multilateral initiatives, a ‘bloc’ approach, or as a single purchaser,” officials wrote in July 2020.
Even with their preferred approach, officials said there was a one-in-five chance that we wouldn’t get access to a vaccine.
“Our estimate is that investing in 20 candidates will give us an 80 percent likelihood of securing a safe and effective vaccine. This figure is based on the fact that only one in six vaccine candidates that enter human trials succeeds, and that production capacity for any one candidate will be severely constrained.”
COVAX was to play a crucial role in securing access to 20 different candidates. The facility was planning to buy into at least 10 different vaccines but would only cover between 20 and 50 percent of New Zealand’s population.
“It is not guaranteed that COVAX will be able to provide the expected amount of doses . The COVAX facility requires additional members to become viable and there is the separate risk that COVAX will fail to back a successful candidate,” officials advised. “While we currently assess COVAX as the best avenue for New Zealand to access at least some quantities of a viable vaccine, relying on the doses promised by the facility carries a degree of risk.
“Therefore, outside of COVAX – either as part of a bloc/blocs or directly through engagement with pharmaceutical firms – we recommend trying to reach agreement with at least eight to 10 companies working on other vaccine candidates.”
In August, officials reported that vaccines might be able to be procured for early delivery, but they could be 10 times more expensive.
“Vaccines for early delivery will be more expensive (e.g. $75-$150 per dose) compared to later delivery (perhaps less than $15 per dose). It is also difficult to be definite about the number of advance purchase agreements required.”
This option may not have eventuated in the end – pharmaceutical companies are understood to have operated on pandemic pricing and production, earning relatively modest profit margins and distributing vaccines as soon as they were approved and manufactured.
The same August briefing authorised funding for a negotiations team to begin work – although Treasury pushed back on the notion that MBIE couldn’t support the team with its own baseline budget.
“The Treasury supports moving quickly on additional arrangements to progress vaccine purchasing options, but considers sufficient policy work has not yet occurred to enable funding to be drawn down and agreements to be entered into,” the briefing reported. The department did “not consider that a sufficient case has been made for additional departmental expenditure to support a cross-agency negotiating team, including why existing capability cannot be prioritised for this priority work”.
Negotiations begin
Just days after the funding was authorised, the nascent negotiations team met with staff from Pfizer to discuss their mRNA vaccine. Over the next few weeks, officials received a draft Heads of Agreement from Pfizer and had engaged with “several key candidates” as well.
In early September, however, officials were still seeking Cabinet approval of a framework for making vaccine purchasing decisions.
There was a “need to build a portfolio of vaccine investments through the urgent negotiation of a number of advance purchase arrangements” (APAs). COVAX was by this time downgraded to “a valuable ‘insurance’ mechanism” rather than a pathway through which we could expect to get most of our vaccines.
“Initial discussions with international counterparts and vaccine developers has indicated that we need to proceed urgently with negotiations to enter into APAs, as there is expected to be a global shortage of vaccines, and a number of large countries have already reserved significant quantities of vaccine doses in advance purchase arrangements.”
Officials had received price offers from some companies and viewed them as “reasonable” and “competitively priced”. But hanging over all of this was the uncertainty about whether vaccines would be effective enough.
“Waiting until there is clear data on safety and effectiveness and guaranteed availability will mean we would not be able to acquire any vaccines in the short- to medium-term because of constraints over global supply. The more certainty we seek then the more limited is our ability to move quickly.”
With advice from a new scientific review panel of experts on vaccines, officials had given eight candidates an ‘A’ rating and graded two more as ‘B’s.
The top tier included the now-household names of Pfizer, AstraZeneca, Moderna and Janssen. Novavax and Sanofi/GSK, which are both still working on their vaccines, were also considered A-grade candidates. The other two As, from Australian flu vaccine company Seqirus and from German pharmaceutical corporation Curevac, were ultimately scrapped.
Two Chinese-made vaccines, including the Sinovac jab, were the B-tier options.
Confidentiality clauses
One of the other hurdles was the need to sign a wide range of confidential disclosure agreements (CDAs). A separate September briefing said signing these contracts might be needed before negotiations could formally commence.
“CDAs cover all confidential and propriety information that is provided by the other party. This includes technical information and information related to the commercial terms. The fact of a CDA being signed and entering into negotiations may also be considered confidential – we will not be able to announce discussions with developers under CDA agreements until a final agreement is signed (unless the developer grants approval),” officials wrote.
“While the CDAs recognise that MBIE may be required to disclose information under law, including our role as a Crown agency (for example, requests for information made under the Official Information Act 1982), to ensure that negotiations continue effectively there will be a strong public interest in withholding the majority of information covered by CDA.”
Many of the documents released under the Official Information Act (OIA) to Newsroom contain redactions under sections of the legislation which protect trade secrets or information which “would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information”. None of the APAs that New Zealand has signed have been publicly released in any form and OIA requests seeking them have been refused.
Confidentiality concerns even drove the vaccine team to use codenames for the different candidates they were working on, with each vaccine named after a popular sweet. The AstraZeneca vaccine was called Starburst, Novavax was called Nutella and Janssen was Jaffa, for example.
By September 18, things were moving more quickly. The vaccine team had received four draft APAs or Heads of Agreements from suppliers and another was expected. Negotiations with Pfizer were “well advanced” and negotiations on the terms of the other three offers were set to begin in the next fortnight.
At the same time, an independent report commissioned by the task force found that there was “limited” potential for manufacturing vaccines in New Zealand in the next 12 months as developers were “focusing on proven production facilities with significant scale”. The medium-term future was more optimistic, with 2.5 million doses possible in 2022 and more than 10 million in 2023. These would have to be viral vector or protein subunit vaccines – mRNA jabs like Pfizer’s were still five years away due to “limitations in both human and other capabilities”.
A week later, the task force reported that it was in live discussions with seven suppliers.
The Pfizer deal
On October 2, the team took the first purchase agreement to Cabinet. This was technically a Heads of Agreement, meaning final details would still need to be hashed out at a later stage. Committing to it would bind New Zealand to purchasing 750,000 courses of Pfizer’s vaccine – or 1.5 million doses – with delivery as early as the first quarter of 2021.
The agreement also came with the possibility of expanding that by an additional 4.25 million courses, to cover the entire population of the country. That option would have to be triggered later – officials said it was “not possible at this stage to place more orders”. Newsroom understands that Pfizer first wanted to figure out how many doses it would need to allocate to COVAX before topping up orders for individual countries.
At that stage, almost no countries had ordered enough of the Pfizer vaccine to cover their entire populations and only a handful have since.
“New Zealand is one of only a few countries to have vaccinated a very high proportion of its population with one of the highly effective mRNA vaccines before the end of 2021,” an MBIE spokesperson said. Only Singapore, Israel and Australia are thought to have comparable mRNA coverage.
Specific details on delivery timelines in the Pfizer briefing were redacted, but were described as “the earliest we were able to procure”. Officials also reported that “in our negotiations, no other developer has offered delivery of vaccines as early as Pfizer have.
“At this stage it appears to be the only viable and globally available candidate with a prospect of delivery and potential to be approved for use in New Zealand in the first part of 2021. Early access to a safe, efficacious vaccine will be key in prioritising the protection of New Zealanders at highest risk of infection.”
Even the earliest vaccines from COVAX were also now expected only in late 2021, further raising the importance of this deal. Officials warned this was a limited opportunity.
“If New Zealand does not conclude an APA with Pfizer at this time, it is likely that we will lose the ability to purchase this vaccine for at least a further 18 months (with exception of what might become available through the COVAX facility if Pfizer participates in that arrangement). This is due to the high global demand for vaccines, particularly those expected to be delivered early.”
More Pfizer wanted
By October 23, New Zealand had received or was expecting seven draft purchase agreements from different suppliers, including the Pfizer one. Negotiations with different companies were broadly successful, having secured “more doses for New Zealand, earlier delivery time frames, better payment terms (eg reducing the amount paid upfront at risk) and narrower indemnities than originally offered”.
Janssen, for example, had only offered New Zealand four million doses in its initial approach. The vaccine team negotiated that up to five million – two million guaranteed and an option for three million more that New Zealand ultimately chose in March not to exercise. These were to be delivered much later than the Pfizer doses, however. The first tranche was due in the third quarter of 2021 and the second tranche across 2022.
In November, after interim trial results for the Pfizer and Moderna vaccines had been released, showing above 90 percent effectiveness at preventing Covid-19 infection, officials briefed ministers on the options for obtaining more mRNA vaccines.
“Under the heads of agreement, we can request up to 4.25 million more courses of [Pfizer’s] vaccine candidate,” they wrote.
“We are working to confirm the maximum number of doses we may want to purchase given logistical difficulties associated with this particular candidate (not just due to ultra-low temperature storage, but also because of the complexity of preparation required before it can be used).”
The vaccine team wasn’t in formal negotiations with Moderna for a range of reasons, including that they didn’t think the portfolio needed more than one mRNA vaccine, that they had “less confidence in their ability to manufacture at scale” and that it was more expensive. Newsroom also understands Moderna wasn’t open to overtures from New Zealand officials, citing limited manufacturing capacity.
The final shape of the portfolio was now coming into view. Only four different options with full population coverage – at least five million courses – were now needed.
“The ‘ideal’ vaccine is not yet available to buy. The vaccines that could offer wide coverage all have drawbacks that could prevent their widespread use, making it more difficult to achieve the widest possible uptake,” officials reported on November 20. “This is why we are building a portfolio of vaccines: to maximise options for the immunisation programme, and increase our chances of having safe and effective vaccines for population-wide deployment.
“We have benefited from being a fast follower. We have been able to see what other countries have bought, and had access to Phase I trial information for all purchases. We are also making decisions now with the benefit of recent news from Pfizer/BioNTech and Moderna.”
Portfolio completed
Two weeks later, the “core portfolio” was finished: Pfizer, Janssen, AstraZeneca and Novavax. Negotiations with three of these companies had concluded and Novavax would finish up in the next fortnight.
For AstraZeneca, as with Pfizer, officials made clear they wanted more doses. The 7.6 doses obtained under the APA was “the amount available to New Zealand at this time”, but officials had sought five million. These doses would also be delivered earlier than Janssen and more might be able to be secured through COVAX.
The scientific experts at the Technical Advisory Group also gave more details about possible timelines for receiving the doses: “Expected delivery dates to New Zealand are still being investigated, but developers suggest Q3 2021 (or possibly small amounts earlier) may be viable. New Zealand’s supply is currently planned to be produced in the USA rather than Australia which may present issues for supply.” A later briefing suggested some AstraZeneca doses could arrive in the second quarter of 2021.
On December 11, officials took the final APA – for Novavax – to Cabinet. This was “a very promising candidate” if it could be delivered. But the vaccine team was careful to caveat that Novavax came with “a higher delivery risk than other purchased candidates”. Nonetheless, “we are confident of the company’s ability to manufacture and deliver the vaccine in the agreed timeframes”. Doses were due to arrive between the middle of 2021 and the middle of 2022, with some coming as early as the second quarter of 2021.
However, Novavax has yet to deliver any doses – in fact, it only applied for regulatory approval in New Zealand in November.
The portfolio now had “sufficient diversity to manage risks with respect to technology platform, vaccine characteristics, global supply constraints and failure to achieve timely regulatory approval”. But officials still pledged to “investigate the purchase of another high-volume candidate and continue to consider smaller purchases, including through the COVAX facility”.
More Pfizer available
By the time January rolled around, the vaccine programme was about to start. The portfolio was effectively complete, but officials still seized on an opportunity to access more Pfizer doses. COVAX had reached out to say that 100,000 doses of the candidate were available and officials recommended accepting the option.
The offer was “our only immediate opportunity to secure additional volumes of the candidate” and the 750,000 courses in the APA were “the maximum available” at that stage. However, the offer threw up two hurdles. First, the European Union’s spat with vaccine manufacturers raised concerns that doses coming from Belgium might be stopped.
“There is a small but real possibility that these sites may be impacted by recent statements from the European Union about potentially restricting exports of COVID-19 vaccines,” officials warned.
Then there were the optics.
“We will also need to consider the international consequences of potential criticism relating to our purchase of additional volumes through COVAX when we have already secured sufficient vaccines for full population coverage,” officials wrote.
“We consider this risk to be manageable on the basis that we have not secured full population coverage of Pfizer’s vaccine, that a great deal of uncertainty remains over two of the main candidates in our portfolio, and other countries in our position are taking similar actions.”
At the same time, the vaccine team informed ministers they were “engaging with Pfizer on the possibility of securing additional doses of Pfizer’s vaccine bilaterally”, although there was no guarantee this would come through.
Officials opposed full offer
Two weeks later, on February 10, officials happily reported that a much larger Pfizer opportunity was in fact available. The company was offering New Zealand a full eight million doses of vaccine, which would give us almost enough to vaccinate the entire population (even though those under the age of 16 were not yet eligible for the jab).
Surprisingly, however, they recommended against accepting the full amount.
“We recommend purchasing fewer than the full eight million courses offered and have suggested two alternative purchase options in this briefing,” the vaccine team wrote. Those options were to purchase just three million additional doses to fully vaccine at-risk groups or buying five million extra doses “to provide greater certainty that we will have sufficient vaccines in 2021”.
Even that second option was opposed by the Ministry of Health, “as it does not consider there to be sufficient public health benefits from purchasing more than an additional 1.5 million courses.
“There is an opportunity cost in purchasing additional vaccines, including fiscal trade-offs and other health interventions.”
Newsroom understands that some Ministry of Health officials on the vaccine team had expressed the view that the money going towards advance purchase agreements would be better used on upgrading other parts of the health system that were unrelated to the pandemic.
In the February briefing, ministers were told they should decline the COVAX offer of 100,000 doses and just purchase extra doses through the bilateral offer instead.
“The value of additional Pfizer doses is dependent on the Immunisation Programme’s ability to administer the logistically complex vaccine. We do not recommend purchasing the full eight million doses offered as the vaccine’s difficult storage requirements are likely to make it unsuitable for delivery and administration outside major population centres,” officials warned. The cold storage freezers New Zealand had ordered could only hold 1.5 million doses at any one time.
Still, it was worth buying at least some extra doses, the vaccine team concluded.
“While we are reasonably confident we will have sufficient quantities of viable vaccines for use in the Immunisation Programme in 2022, we cannot yet guarantee that we will have sufficient quantities in 2021. We could seek to mitigate this risk through purchasing additional quantities of Pfizer’s vaccine,” they said.
“This approach also insures against delivery slippages. While it is possible that delivery schedules for all of our portfolio candidates may be delayed, we are more confident in Pfizer’s delivery schedules than those of Janssen and Novavax.”
In the end, Cabinet directed officials to go back and not only accept the full offer but seek to obtain enough doses to immunise the entire population. They also accepted the COVAX offer of 100,000 doses.
“Ministers decided on a stronger focus on Pfizer when its efficacy was becoming more apparent,” Research, Science and Innovation Minister Megan Woods told Newsroom.
“Ministers decided to ensure New Zealand had sufficient Pfizer vaccine to support population coverage. The vaccine from the COVAX facility enabled timely access to support the Covid-19 immunisation rollout, and ministers agreed to opt in to the purchase option for 50,000 courses,” a spokesperson from the Ministry of Health added.
Bishop said it was hard to understand why officials had recommended against accepting the entire Pfizer order.
“Why would New Zealand ever want to turn down a scarce, highly effective product like the Pfizer vaccine?” he asked.
“Putting yourself in the context of February, even if we decided not to use them and we had a mixed-dose regime of Pfizer and AstraZeneca and maybe Janssen, giving ourselves the option is really important. Particularly back in February, the Pfizer vaccine was a scarce product worldwide.
“Frankly, I find it staggering.”
