Israel significantly improved its ability to vaccinate its population against the coronavirus on Friday, after signing a deal with Pfizer for the supply of eight million doses of the vaccine, enough for four million people.
Prime Minister Benjamin Netanyahu announced Friday that according to the agreement, Pfizer will supply its coronavirus vaccine as early as January 2021.
Albert Bourla, Pfizer’s CEO and chairman, was quoted as saying that his company had reached an agreement with Israel which will allow its citizens to be vaccinated against COVID-19 as soon as the vaccine is approved by regulatory agencies.
However, reality is more complicated. The company holds immense power vis-à-vis countries wishing to purchase its vaccine. The deal with Israel states dates and quantities, but includes no sanctions in case Pfizer does not deliver the goods. The agreement is more of a statement of intent than a legally binding document. Non-delivery could happen in case of an unexpected force majeure, or if Pfizer sells vaccines to a higher bidder. This is unlikely with a reputable company, but Pfizer does have an option of reneging on the deal for any reason.
"The company keeps itself the right to do anything it wants," said a senior member of the cabinet, who is closely familiar with deal.
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Last week Pfizer said initial data from its late-stage trials showed the vaccine to be more than 90 percent effective, putting it in the lead among major pharmaceutical companies racing to develop a COVID-19 vaccine.
Israel has a similar agreement with Moderna, which is expected to announce success of Stage 3 trials of its vaccine in the near future. This agreement also allows the drug company to withhold supplies, even though Israel has paid it 240 million shekels ($71.25 million) as a non-refundable deposit. Moderna will supply vaccines for two million Israelis, although one version says it’s two million doses for one million people. (The vaccine requires two doses per person.) If both deals pan out, six million Israelis, out of a total population of nine million, will be vaccinated. “The aim is to allow all Israelis to get vaccinated,” said Netanyahu on Friday.
Despite the lack of clarity regarding Pfizer’s obligations, it looks like the company will be sending a first batch of 200,000 doses as a token of goodwill within 30-45 days of the vaccine being approved, possibly by February. The subsequent rate of supply is less clear. Pfizer has committed to supplying 8 million doses out of the 1.3 billion it intends to produce in 2021. However, at least one half of the doses it produces are intended for citizens of the United States and Germany, the two countries in which the vaccine is being developed. Israel needs to vaccinate two million people in the first phase of vaccination, including medical personnel and vulnerable populations.
As far as is known, Israel will pay 100 shekels ($29.7) per dose, or $59 per person. The U.S. government will pay less than $40 dollar per person, but this has some justification, since the United States helped finance the research. It is believed that Israel is paying the same amount as other countries, other than Germany and the U.S.
Israel has paid Pfizer a first installment of $120 million, but this is refundable if there are any problems with providing the vaccine. Israel has also signed a deal with Arcturus, which will enable the vaccination of one million people. However, this company is still in an earlier phase of trials, so supplies will be later in being delivered.
The government has allocated a billion shekels ($298 million) towards acquiring vaccine doses, and already paid Moderna and Arcturus nearly half that sum.TheMarker has learned that the delay in signing the deal with Pfizer related to issues of responsibility for possible harm caused to people receiving its vaccine. The first draft included a clause freeing Pfizer from any responsibility, putting all of it at Israel’s doorstep. In recent days, following intense efforts led by the Ministry of Justice, this clause was apparently softened.
In any case, the road to vaccination is still long and arduous. It includes many obstacles and logistic difficulties, mainly in transporting the vaccine, which needs to be stored at minus 70 degrees Celsius The operation will have to be very precise and rapid. Another challenge will be obtaining public trust in the vaccine and its safety.
Reuters contributed to this report.