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Feds commit $3.2B to lock in Covid-19 vax supply ahead of fall vaccination campaign

New Covid-19 vaccine booster shots are coming and they’ll include protection against the omicron variant. The U.S. government agreed to a purchasing contract covering 105 million doses of the Pfizer/BioNTech vaccine for a planned vaccination campaign in the fall.


The federal government has reached a deal to pay $3.2 billion to secure a new supply of the Pfizer/BioNTech Covid-19 vaccine that includes shots specifically adapted to the omicron variant.

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The agreement, announced late Wednesday, covers the purchase of 105 million doses. The government also has the option to buy up to 195 million more doses. The deal follows the meeting Tuesday of an FDA advisory committee, which voted 19-2 to recommend that an omicron component be included in Covid-19 booster shots. Most of the committee members supported a bivalent vaccine that protects against the original SARS-CoV-2 virus as well as the BA.1 omicron subvariant. The new versions of these vaccines would still need FDA authorization, followed by a recommendation by the Centers for Disease Control and Prevention.

The FDA on Thursday morning said that it is advising Covid-19 vaccine makers to modify their boosters to add a component addressing the omicron BA.4 and BA.5 subvariants. The resulting bivalent booster vaccine would protect against the original strain as well as the two latest highly transmissible omicron subvariants. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, said in a prepared statement that because this coming year will be a transitional period for these modified boosters, the agency is not advising manufacturers to change their vaccines for primary vaccination. Those shots still offer a base of protection against the circulating strains of the virus, Marks said.

Prior to the advisory committee meeting, Pfizer and BioNTech reported two omicron-adapted vaccine candidates, one monovalent and the other bivalent, now have clinical data demonstrating that they elicit a high immune response against BA.1, the original omicron subvariant. These vaccine candidates were compared to the companies’ approved Covid-19 vaccine. Pfizer and BioNTech said that they’ve shared the data with the FDA and plan to seek emergency use authorization.

Moderna has also reported clinical data supporting a bivalent booster adapted to omicron and its subvariants. The company said it is preparing to supply these new shots starting in August for vaccinations this fall. Moderna does not yet have a new supply agreement with the government.

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A Deep-dive Into Specialty Pharma

A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.

Clinical data for vaccines tested against BA.1 will be sufficient for seeking authorization of booster shots for BA.4 and BA.5, Marks said. But he added that the FDA will ask manufacturers to begin clinical trials of modified vaccines that include a component for BA.4 and BA.5. Data from these studies will be useful as the pandemic evolves, he said.

The Pfizer/BioNTech vaccines covered under the new contract are designated for a planned fall vaccination campaign, the U.S. Department of Health and Human Services said. The contract includes a combination of adult and pediatric doses. In a first, some of those doses will be supplied in single-dose vials. While multi-dose vials reduce packaging and storage costs, the advantages of single-dose vials include the lower risk of contamination and less wasted vaccine. Pfizer and BioNTech said that “at-risk” manufacturing of these vaccines has already begun to ensure that enough supply is ready for the vaccination campaign. They expect that vaccine deliveries could begin as soon as late summer.

The new vaccine contract comes amid funding uncertainty for pandemic response. Earlier this month, Congress failed to authorize additional Covid-19 funding. Some of the money for the new vaccine contract comes from the reallocation of $10 billion in previously authorized funding for Covid-19 response efforts.

Karen Andersen, a healthcare strategist for Morningstar, said in a note to investors that she expects the FDA will direct Moderna and Pfizer in early July to ramp up production of a bivalent vaccine with an omicron component. Availability by this fall would hopefully protect people before cooler weather brings another wave of the virus, she added. Regarding bivalent and omicron-adapted shots in development from Novavax and Sanofi, Andersen said that the mRNA vaccine makers still have an edge due to the manufacturing capacity they built up during the pandemic.

“We expect that competition will be more of a factor in future years, as the evolution of the virus could slow and make it easier for other technologies to ramp capacity,” Andersen said. “With several other firms developing mRNA-based vaccines as well, we still think that Moderna and BioNTech have yet to establish an economic moat.”

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