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Moderna's COVID Vaccine Progress Is Good News, but Israel's Not Out of the Woods Yet

In theory, the Moderna contract should have been much more balanced and reasonable than the Pfizer deal, but this isn’t quite the case

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A sign marks the headquarters of Moderna Therapeutics, which is developing a vaccine against the coronavirus disease (COVID-19), in Cambridge, Massachusetts, U.S., May 18, 2020 Credit: REUTERS/Brian Snyder
Meirav Arlosoroff
Meirav Arlosoroff

Moderna’s announcement on Monday that the coronavirus vaccine it’s developing is 94.5% effective wasn’t a surprise. Like Pfizer, Moderna is developing a vaccine using mRNA genetic technology, and as soon as it emerged that Pfizer’s vaccine was likely a success, the chances of Moderna succeeding as well increased.

Israel’s preemptive gamble on the Moderna vaccine has paid off. To date, Israel has signed three vaccine acquisition contracts, all for vaccines being developed with innovative technology that hasn’t been used in any inoculation currently approved for use. The coronavirus vaccine would be the first time an inoculation employing this technology would be approved, and fortunately it seems to be a success. The fear that these technological methods wouldn’t pan out – and Israel would be left without a vaccine – have fortunately vanished, but this is more due to luck than to foresight.

While Moderna’s breakthrough results do put Israel in better standing now, it’s not by much. The problems inherent in Israel’s agreement with Pfizer also exist in the contract with Moderna. As opposed to the Pfizer deal, which was signed Friday, after the company announced its partial stage 3 trial results, amid intense pressure from Prime Minister Benjamin Netanyahu and the Israeli public, the deal with Moderna was signed back in May. In theory, the Moderna contract should have been much more balanced and reasonable, but this isn’t actually the case.

As far as we know, Israel signed a contract with Moderna to buy 2 million vaccines – enough to vaccinate 1 million people – for a total of $238 million. The money was paid in advance, with no option for a refund, except in the case of the company refusing to sell vaccines to Israel. Ultimately, this means Israel helped pay for Moderna’s vaccine development in exchange for a commitment to vaccinate 1 million citizens should the vaccine be approved.

You’d presume that if we gambled with $238 million shekels we wouldn’t be getting back, at a time when the vaccine was still under development, we would at least secure a commitment to actually receive the vaccine. But apparently, the deal with Moderna, like the one with Pfizer, states that the manufacturers will try to provide Israel with vaccines, but don’t commit to it explicitly. The agreements don’t include the option of suing them or sanctioning them should they not supply the vaccines. In such a case, Israel would get its money back and that’s it.

Sector sources believe the manufacturers will indeed try to supply Israel with vaccines; for Pfizer, which intends to manufacture 1.3 billion vaccines in a year, 8 million doses isn’t a big deal. The companies primarily want to ensure that they maintain flexibility for themselves regarding when the vaccines are delivered, presuming that the United States and probably the European Union will take most of the initial doses for their own residents. Reports say that Pfizer has committed to supplying the EU with 300 million doses and the United States with 500 million doses, which means Israel will probably need to wait in line.

A technician inspects vials of coronavirus disease (COVID-19) vaccine candidate BNT162b2 at a Pfizer manufacturing site in manufacturing site in St. Louis, Missouri, U.S.Credit: Pfizer/Reuters

It’s expected that the first few doses – up to 200,000 – will arrive early as a goodwill message, but we’ll have to wait for the bulk of them. Moderna, an American company, apparently fears that it won’t be able to meet demand, and therefore insisted on a contract with opaque wording that would maintain its flexibility when it comes to when to fulfill Israel’s order. Given that Israel was only the second country to sign with Moderna, after the U.S., we can only wonder why Israel agreed to such a deal.

This isn’t the only problem in the Moderna contract. The company is a small one, with no approved vaccines to date, and it doesn’t have massive supply capacity. As far as we know, Moderna initially offered to supply Israel with the raw ingredients so that Israel could manufacture the vaccines locally, which wouldn’t really help since Israel doesn’t have such production capacity. Ultimately Moderna signed its own contracts with major producers. We can only hope that Moderna has solved its own production problems.

Another problem with Moderna’s vaccine is the logistics: This is a complicated, two-dose vaccine that needs to be kept in deep freeze. It must be stored at minus 20 degrees Celsius, which is much better than Pfizer’s minus 70 degrees Celsius, but the need for such conditions and the lack of clarity as to when the vaccine can be defrosted before use raises logistical challenges.

There are some experts around the world who say that the impossible logistical challenge is what will ultimately delay distribution of Pfizer’s vaccine. The vaccine looks excellent in laboratory conditions, but it’s not clear how to distribute hundreds of millions of doses in deep freeze, and the world just might choose to wait for vaccines that are more user-friendly.

In the meantime, Israel also has a vaccine acquisition contract with a third company, Arcturus, a very small company whose vaccine is still in early development, on stage 2 testing (out of 3). Arcturus will also need to sign contracts with manufacturers in order to actually make its vaccine.

The only advantage to Arcturus, should it actually manage to finish developing a vaccine, is that it is sold as a powder that doesn’t need to be frozen and works with only one dose. Given that Israel and Singapore funded Arcturus’ development, the company is committed to supply these two countries first – so it’s worth it to go on hoping that Arcturus will succeed, too.

Unfortunately, as the saying goes, Arcturus is the two birds in the bush. Israel already a bird in the hand in the form of contracts with Pfizer and Moderna, despite their logistical challenges, their unwillingness to commit to a supply-by date, and of course the very high price – 200-240 shekels per person.

Given that this is a new technology, there are also questions of safety surrounding the vaccines. The prevailing scientific assumption is that the technology is indeed very safe, even more so than existing vaccines based on a live attenuated or inactivated pathogen, and the evidence of this so far is that among the 100,000 test subjects who received mRNA-based vaccines in the studies being conducted by the various companies, none developed side effects. However, the risk is still there. All the companies that signed deals with Israel demanded – and apparently also received – an exemption from any responsibility for any problems that may emerge. That’s not encouraging.

A nurse gives a volunteer an injection as part of a vaccine development trial for Moderna and the National Institutes of Health, in Binghamton, N.Y., July 27, 2020.Credit: Hans Pennink / AP

Could Israel have reached better agreements? This has been the subject of a bitter debate between the Finance Ministry and the Health Ministry. As far as we know, the Finance Ministry’s outgoing budgets director, Rony Hizkiyahu, refused to approve the Moderna deal, which led to it being improved somewhat – including Moderna’s agreement to refund Israel should it refuse to supply the vaccines. And yet, the real issue is that Israel simply signed too few deals.

It was only within the past week that Israel signed its third contract, with Pfizer. Previously, Israel had only two agreements, both with small companies with unproven technology and no production capacity, and the deals were for vaccines for only 2 million people in total. The deal with Pfizer puts us in better standing with its commitment to provide vaccines for another 4 million people, but the problem is that it’s not clear when the vaccines will actually arrive.

Israel has ensured coverage for only a small percentage of the population, and it hasn’t sought to make use of a variety of technologies. There are four different methods for developing vaccines, but Israel has bet entirely on mRNA. This is the worst possible risk management. For sake of comparison, Canada, which has 37 million citizens, signed contracts for 150 million vaccine doses from six different companies in order to ensure that no matter what happens, it would have enough vaccines from a variety of sources.

Canada may have gone too far, but it’s clear that Israel showed negligent complacence in managing its vaccine strategy. The fact that the negotiations were left to the Health Ministry, which is indeed the ministry with expertise in this field but has never before handled a national emergency, without any institution with a strategic outlook overseeing the negotiations, proves the degree of the negligence.

Israel invests hundreds of billions of shekels in buying strategic weapons systems, with detailed discussions held at the highest level of government and the defense establishment, but there were no discussions about the vaccines that would protect us from the coronavirus, and no oversight of the acquisition process.

Our prime minister, Benjamin Netanyahu, was supposed to understand the importance of this strategic matter but fell asleep on the job. This is a shocking error and it again reveals Netanyahu as an amateurish manager lacking in strategic outlook.

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