Pfizer and partner BioNTech agreed to supply an additional 100 million doses of their COVID-19 vaccine to the U.S., as the country seeks to widen its immunization program and revive its economy.
The agreement brings the total number of doses to be delivered to the U.S. to 200 million, the companies said Wednesday in a statement. The drugmaker expects to deliver all the doses to U.S. vaccine and drug accelerator Operation Warp Speed by July 31.
Countries around the world are seeking supplies of vaccine they hope will allow the reopening of schools and businesses and the resumption of travel. The U.K. has also begun administering doses of the Pfizer-BioNTech shot, and European drug authorities cleared it for use on Monday.
The U.S. has been working to expand supplies of the front-runner vaccine, in light of the drugmakers’ commitments to other countries. Earlier this month, the U.S. exercised an option to buy 100 million additional vaccine doses from Moderna, doubling the number it has on order from that company to 200 million.
Like Pfizer and BioNTech’s vaccine, Moderna’s is a two-shot regimen based on new technology known as messenger RNA, but it doesn’t have to be stored at the same ultracold temperatures as the Pfizer-BioNTech shot.
In July, the U.S. had agreed to pay $1.95 billion for an initial 100 million doses from Pfizer, with an option to buy 500 million more. The U.S. will also pay $1.95 billion for the new order, according to the statement, and will provide the vaccine to Americans for free. The cost of administering the vaccines is being paid for by private insurance, government health-care programs and a Department of Health and Human Services program for the uninsured.
Pfizer shares gained 1.5% to $37.29 at 10:09 a.m. in New York on Wednesday.
The U.S. and Pfizer had been in talks about delivery of another 100 million doses within the second quarter for weeks. Moncef Slaoui, the chief scientific adviser to Operation Warp Speed, said in an interview last week that Pfizer had asked the U.S. to use the Defense Production Act to help the drugmaker secure additional equipment and materials to meet that objective.
The deal follows reports that the government declined an offer to buy more doses earlier this year after Pfizer wouldn’t commit to a delivery date. Using the Defense Production Act could help get more doses to the American public faster, according to Slaoui.
The companies making vaccines for Operation Warp Speed use the same materials, Slaoui said, and the U.S. has been able to get priority access to supplies for drug companies that agreed to work with the government on research, development and manufacturing, he said.
The new deal could alter the dynamics between the U.S. government and Pfizer, which declined to take money from Operation Warp Speed to fund its vaccine research.
Pfizer “decided they didn’t want to take resources from the U.S. government,” Slaoui said. “If you ask the government to give you the Defense Production Act support, the government has, by definition under law, the ability to reach into whatever you’re manufacturing.”
Drug for deadliest cases
At the same time that the government is securing access to more vaccines, it is also looking to shore up the treatments it has available to people who fall ill with COVID-19.
The U.S. agreed to a deal Wednesday in which Merck will supply an experimental COVID drug that the company gained in its recent purchase of OncoImmune. The government will fund the development, production and distribution of the drug once it is cleared for use by the Food and Drug Administration, Merck said in a statement.
Merck will receive about $356 million for manufacturing and supply of 60,000 to 100,000 doses through the end of June, according to the statement. The therapy is designed to tamp down inflammation caused by virus-induced damage to human cells, an underlying cause of some complications, and is expected to be used for treatment of severely ill Covid patients.
Merck agreed in November to buy OncoImmune with an upfront payment of $425 million in cash.
More health care and Big Pharma coverage from Fortune:
- The COVID-19 vaccine rollout is dangerously flawed. Science and data could fix it
- Fueled by COVID-19, U.S. deaths will top 3 million in the deadliest year on record
- COVID vaccine recipients may still be infectious. When will we know for sure?
- COVID vaccine allergies are raising concerns. Most Americans should still get their shots
- Pfizer, Trump, and Biden: A twisted triangle that’s complicating COVID-19 relief