Is $240 million upfront payment the real reason Australia ‘snubbed up to 50 million Pfizer shots’?

Pharmaceutical giant Pfizer demanded a huge upfront Covid vaccine payment from Australia that could have been as high as $240 million – but with no guarantee a single dose would ever be supplied. 

Prime Minister Scott Morrison’s government was criticised for waiting longer than the US and Europe to secure a deal with Pfizer, and sources involved in negotiations claimed Pfizer offered Australia up to 50 million doses in July 2020.

Pfizer was allegedly turned down in favour of AstraZeneca because it could be produced in Australia and only 10 million Pfizer shots were ordered. 

However, documents released under Freedom of Information have shed new light on why this might have been.

The documents the drug maker wanted an ‘upfront payment 50% refundable if reg (regulatory) approval not obtained or not manufactured and delivered’.

That means the New York-headquartered Pfizer wanted Australia to pay in advance for the doses it wanted, before the drug was approved as safe to use, effective against Covid, or even a single dose was made. 

And if Pfizer’s vaccine didn’t ever get approval or didn’t get made for any reason, only half of the upfront cost was refundable. 

Based on prices Pfizer was charging per vaccine dose to the US and the European Union – $26.64 and $23.95 per dose, respectively – Australia’s bill for the initial order of 10 million doses would have been about $240 million.

So if Pfizer’s Covid vaccine didn’t work, it would have cost Australia $120 million anyway – and $600 million if the 50 million doses were ordered.

The Health Department tried to keep the bombshell documents secret, but they were released after the Labor Party made a Freedom of Information request. 

Pfizer demanded an upfront Covid vaccine payment from Australia that could have been as high as $240 million – but with no guarantee a single dose would ever be supplied

The documents – parts of which are redacted – include emails, a letter to Health Minister Greg Hunt, and a ‘company liaison template’, which shows Pfizer contacted the Australian Government first in 2020. 

The amount of vaccines Pfizer forecast it could manufacture in 2020 was redacted.

In the email to Mr Hunt, Pfizer suggested a meeting between the minister or departmental leadership and senior company representatives including its global head of vaccines.

‘I would welcome an opportunity to discuss our candidate vaccine development in more detail,’ it said.

Staff from Mr Hunt’s office – but not the minister himself – first met Pfizer representatives on August 4, 2020. 

The health department has still not disclosed when Mr Hunt first met Pfizer representatives himself. 

Armed with the new information, many would compliment Mr Hunt and the government for being careful with taxpayers’ money, though others would say it was a mistake to be so cautious.

Ultimately, the Pfizer vaccine was approved and works very well, so being able to get more doses sooner may have saved more lives.

Labor health spokesman Mark Butler said Australia suffered because the government did not move quickly enough.

‘The vaccine rollout was always a race, but Australia started a lap behind because Scott Morrison’s government took a deliberate ‘wait and see’ approach to vaccine deals,’ he said.

‘While other countries were signing Pfizer deals, our government couldn’t even be bothered arranging a meeting.’

People are seen in the post vaccination observation area after receiving their Covid-19 vaccination at the Boondall mass vaccination hub in Brisbane on September 18, 2021

Health Department said details of the advance purchase agreement with Pfizer for its Covid-19 vaccine are commercial-in-confidence.

‘The relevant documents were published on the department’s disclosure log in accordance with the requirements of the FOI Act,’ it said.

‘The department subsequently identified that a small amount of exempt confidential commercial information had not been redacted from the documents prior to publication on the disclosure log. 

‘The exempt information has been deleted from the documents on the disclosure log in accordance with the FOI Act.’

Pfizer expects to earn close to $46 billion from its Covid vaccine this year. It profits will further increase as more countries sign up to buy extra doses to give people a booster shot. 

Throughout 2020, pharmaceutical companies demanded liability protection and patent ownership when negotiating deals with governments. 

There is now pressure to end patent protections so poorer countries can make far cheaper, generic versions of Covid vaccines.