How The Covid-19 Vaccine Injected Billions Into Big PharmaAnd Made Its Executives Very Rich – Forbes

Two Heads: Billionaire BioNTech cofounders Ozlem Tureci and Ugur Sahin.

Before the Covid-19 pandemic, Big Pharma had been easing out of the vaccine business for decades. By 2019, the major vaccine makers supplying America had dwindled to a handful of large companiesMerck, Sanofi, Pfizer, and Johnson & Johnson. Because vaccines are only used once or twiceas opposed to medicines that people take dailythey are not profitable. The scale of vaccination programs also invites class action litigation if something goes awry.

The White House needed a whopping amount of money to coax companies to research and test and then produce hundreds of millions of doses. They initially asked for and Congress rapidly appropriated $10 billion. Ultimately, Operation Warp Speed (OWS)the U.S. governments Covid-19 relief programwould dole out $22 billion to Big Pharma.

The amounts of money were the kinds of sums normally seen in the smaller defense budget line items, but were massive for a public health project$2.5 billion to Moderna, $1.2 billion to AstraZeneca, half a billion dollars to Johnson & Johnson, and $1.6 billion to a small company called Novavax. Only Pfizer opted out of ponying up to the trough at firstit didnt want to devote resources to coordinating with the US government on its work.

In July, Pfizer signed a $1.95 billion deal to sell one hundred million doses of its two-shot vaccine to the United States, enough for fifty million people. It would be the first to reach American arms. The price per double shotabout forty dollarsis comparable to the price per shot of the flu vaccine. By February, the government had ordered three hundred million doses from Moderna, with its first shipment of one hundred million priced at thirty dollars per double-shot dosecheaper than Pfizer partly because the United States had forked over nearly a billion dollars to Moderna research. Modernas CEO has said the price per dose will be higher for retail once the government contracts phase out.

Because the project worked, it may well elude financial investigation.

OWS was staffed at every level by pharmaceutical industry executives and their revolving door of allies in the government. They could, if they wished, keep their investments thanks to a special exemption. Brought on as contractors, they were not subject to federal conflict-of-interest regulations in place for employees. OWS advisers with connections and investments had to agree to assign some of their Covid vaccine earnings to the NIHbut they could wait to do so until after their deaths.

Executives at Moderna and Pfizer cashed in on the vaccine, selling shares timed precisely to clinical trial press releases.

OWS was staffed at every level by pharmaceutical industry executives and their revolving door of allies in the government. They could, if they wished, keep their investments thanks to a special exemption. Brought on as contractors, they were not subject to federal conflict-of-interest regulations in place for employees. OWS advisers with connections and investments had to agree to assign some of their Covid vaccine earnings to the NIHbut they could wait to do so until after their deaths.

Former Big Pharma executive Moncef Slaoui sat on the board of Moderna. Thirteen days after the first massive infusion of taxpayer money into its cofferswhich triggered a jump in the companys stock priceSlaoui was awarded options to buy 18,270 shares in the company, according to Securities and Exchange Commission filings first reviewed by Kaiser Health News. Those shares were added to 137,168 options hed accumulated since 2018. He reaped an estimated $8 million when he resigned from the Moderna board.

Among the other known connections between OWS and Big Pharma cash: OWS advisers and Pfizer employees William Erhardt and Rachel Harrigan maintained financial stakes of unknown value in Pfizer, the recipient of a nearly $2 billion HHS contract for one hundred million doses of its vaccine. Richard Whitley, an adviser on the vaccine safety panel, is associated with Gilead, maker of the Covid antiviral agent remdesivir. Adviser Carlo de Notaristefani is connected to Teva, maker of the Trump-approved hydroxychloroquine. Former FDA commissioners Dr. Scott Gottlieb and Dr. Mark McClellan, informally advising the federal response, both have seats on the boards of Covid vaccine developers.

Even more money was raining down on company insiders trading on good-news releases. Executives at Moderna and Pfizer cashed in on the vaccine, selling shares timed precisely to clinical trial press releases.

Timing stock sales like that is neither unusual nor illegal. Columbia Law School economist Joshua Mitts has found that execs in many sectors are up to three times more likely to sell o their company stock on days when their companies announce positive news than on days when negative, neutral, or no news is released.

The Big Shot: Albert Bourla, CEO of Pfizer

On November 9, the day Pfizer announced its more than 90 percent vaccine efficacy, Pfizer CEO Albert Bourla sold more than half of his holdings62 percent. It was a good day to sellthe positive news jacked stock prices 15 percent. Bourla was among seven Pfizer executives who collectively earned $14 million from stock sales in 2020, according to data provided to the Los Angeles Times by Equilar, an executive compensation and corporate governance data firm.

Not to be outdone, Moderna executives made $287 million from timed stock sales in 2020and kept going. In just a few days in late January and February 2021, Moderna CEO Stphane Bancel sold millions of dollars worth of his stock.

The Trump administrations best and brightest Covid solutionthrow public money at private industry with almost no oversight of the contracting procedurewill stand as one of the most audacious efforts in the administrations free market ideological playbook. The full roster of this pharmaceutical windfall club will probably never be revealed.

The pandemic crisis offered a challenge that government might have used to restructure the shareholder model of for-profit medicine, a model that dates to the 1980s and corporate Americas turn toward putting shareholders above the public good. Instead, taxpayer money flowed to a small group of capitalists with almost no strings attached and little transparency. The contracts are redacted, although Freedom of Information Act (FOIA) requests are pending.

As cities across the nation started vaccinating at the end of 2020, the media sought out and hailed some of the researchers as heroes. And they are heroes. But most researchers would not cash in. The NIHs Barney Graham, whose work on molecular protein manipulation is key to the Moderna vaccine, gets paid a government salary. Moderna execs, besides pocketing nearly a billion dollars, will still charge Americans for its vaccine.

Katalin Karik, a Hungarian biochemist whose research was crucial in developing the BioNTech-Pfizer vaccine, doesnt hold the patent for her discovery; the University of Pennsylvania does. BioNTech founders Ugur Sahin and zlem Treci, however, have profited significantly. Today the married doctors (top) are billionaires, among Germanys richest people. They sold their company Ganymed Pharmaceuticals in 2016 for $1.4 billion.

In 2020, the US government spent $18 billion on vaccine research, manufacturing, and logistics and approved two for use at the end of the year: the mRNA-platformed Pfizer and Moderna vaccines. The eleven-month concept-to-emergency-approval process set a record in American vaccine history. Nothing else even came close.

Besides the mRNA vaccines, US taxpayers had bet billions on Johnson & Johnson, Novavax, and AstraZeneca, the British company. Johnson & Johnson and AstraZeneca, like the Chinese and Russian vaccine efforts, were making vector vaccinesa newer vaccine model than the attenuated virus model in vogue since the days of the cowpoxusing virus modified so that it can enter cells, but cannot replicate itself. The vector vaccines use viruses that the body is familiar withusually an adenovirus that causes the common coldto deliver genetic information about specific disease into cells.

A year after Covid showed up in Wuhan, 200 vaccines were in trials or already in usea world record in vaccine history.

In February 2021, Johnson & Johnson reported that its single-shot vaccine, made from an adenovirus carrying Covid spike protein DNA, had a 72 percent efficacy rate. AstraZeneca produced a vaccine also based on a manipulated adenovirus that was already in use in the United Kingdom by February, despite a series of clinical trial mishaps. Novavax, the small Maryland-based company that took $1.6 billion from the US government to produce a protein-based vaccine using material from the soap bark tree as an adjuvant, was bringing up the rear, but promised to have one hundred million doses available in the United States by summer.

By late 2020, a year after Covid showed up in Wuhan, 200 vaccines were in trials or already in use, according to the WHOanother world record in vaccine history. Chinas Sinovac was first out of the gate with its inactivated Covid vaccine in June 2020. Another Chinese company, Sinopharm, started tests in the United Arab Emirates, Morocco, and Brazil during summer and made its first sale to the UAE, which began manufacturing it. By early 2021, the UAE was second in the world (behind Israel) in the percentage of its population that had received a vaccination.

The Chinese vaccine dominated the global market, stepping into a soft power vacuum left by US isolationism and pandemic mishaps. By early 2021, three Chinese vaccines were approved and in use, manufactured by Sinovac, Sinopharm, and CanSinoall either based on the adenovirus model or the attenuated Covid virus. In August, Sinovac announced an agreement to sell forty million doses to Indonesia. In February, Hungary became the first European Union country to approve the Sinopharm vaccine for useafter the European Union faced shortages due to the European Commissions inability to cut a deal quickly with vaccine makers in 2020.

In February 2021, the Russian Ministry of Health reported that a vaccine called Sputnik V, based on the vector platform, had a 91.6 percent efficacy rate. Mexico immediately authorized it for use. Canada, Turkey, and South Korea were all testing their own vaccines, and even Cuba had produced a viable vaccine and was reportedly offering it to tourists. Bharat Biotechs inactivated virus vaccine was approved for emergency use in India. Meanwhile, the Serum Institute of Indiathe worlds largest vaccine-producing factorywas scheduled to manufacture one billion doses of vaccine, mostly for poorer nations.

To be sure, these endeavors did not all meet the standards that Moderna and Pfizer had set. Few in the Western world fully trust official Russian and Chinese numbers about anything. In January 2021, Brazil announced Sinovacs efficacy at 78 percent. A week later, the country revised that to above 50 percentstill high enough to meet WHO goals, but the swing from high to merely adequate efficacy nonetheless gives us pause.

Seven Stories Press

Inevitably, the race to the vaccine took on a nationalistic flavor. In August, Russian president Vladimir Putin announced on national state television that Russias Sputnik V vaccine (named after the USSRs landmark launching of the worlds first artificial satelliteplus a V for vaccine) was quite effective, even though it hadnt made it to a phase three trial. The Brits took to calling the Oxford-developed AstraZeneca shot the English one, and in Germany,

Pfizerwhich received early German fundingwas called the German one with pride.

But the challenge also spawned some intriguing collaborations, suggesting that the virus could inspire the notion of a brotherhood of nations and corporations on the fractious planet. Russia and the United Kingdom, for example, announced they were going to pool their adenovirus vaccines into a single vac- cine, to see if the combination amplified efficacy. GSK, based in Britain, and the French company Sanofi, usually competitors, joined forces, putting their combined Big Pharma financial and manufacturing capacity behind a vaccine. And, in March 2021, the White House brokered a collaboration to manufacture vaccines between Merck and Johnson & Johnson.

The flurry of research and collaboration has even led to scientists not just talking about but being on the verge of testing a pan-coronavirus vaccine made of nanoparticles studded with corona proteins, which would be effective against all coronaviruseseven the one that causes the common cold. Imagine a world without the common cold. Can vanquishing death and taxes be far behind?

Adapted fromVirus by Nina Burleigh,published bySeven Stories Press. 2021by the author.

GetForbesdaily top headlines straight to your inboxfor news on the worlds most important entrepreneurs and superstars, expert career advice, and success secrets.

Read this article:

How The Covid-19 Vaccine Injected Billions Into Big PharmaAnd Made Its Executives Very Rich - Forbes