A $2 Billion Bet on Pfizer’s Covid Vaccine Is Worth It
A preset U.S. government contract carries risks but guarantees supply. It is also a rounding error set against the huge losses caused by the pandemic.
Setting terms in advance on a Pfizer-BioNTech Covid vaccine has multiple advantages to balance the risks.
Photographer: Jeenah Moon/BloombergThe U.S. just took a step beyond funding Covid-vaccine research toward actively securing shots. On Wednesday, the government signed an agreement with Pfizer Inc. and BioNTech securing 100 million doses of their vaccine candidate for $1.95 billion, payable if the inoculation succeeds in clinical trials and gets approved by the Food and Drug Administration.
Vaccine pricing is always contentious, and even more so now in the midst of a global pandemic. Setting terms in advance is the right idea even though the government doesn't know and won't know for some time if the shot works. The alternative — waiting until a candidate proves effective and relying on weak U.S. pricing mechanisms to keep it affordable — isn’t appealing.