Home » Business » Kate MacNamara: How New Zealand came to be woefully short of supply in the ‘year of the vaccine’
Kate MacNamara: How New Zealand came to be woefully short of supply in the ‘year of the vaccine’
September 10, 2021
Covid-19 Minister Chris Hipkins has insisted there was nothing he could have done to get more Pfizer vaccine doses to New Zealand sooner.
He couldn’t have paid more, to get supply sooner, he’s beenvery clear on that. He’s even told us that he’s been very clear.
“No and let me be very clear on that, the only way we could have increased the volume of vaccines that we’ve been administering earlier would have been to have used other vaccines in addition to Pfizer,” he told Jack Tame on TVNZ’s Q + A last month.
Again at a press conference on August 22, Hipkins was emphatic.
“Look, we have been in regular conversation with Pfizer since February or January  when we made the decision to go all in with that, to see whether there’s anything that we can do to get bigger deliveries, faster. So that’s been an ongoing conversation, ultimately, we’ve moved as quickly as possible, we’ve used every lever that we’ve had available to us,” he said.
Hipkins has been careful to reference only efforts his Government made to secure vaccine in 2021. But vaccine purchasing has been a lot like an iceberg; the part that you see is only the tip.
To properly understand New Zealand’s negotiating footing with Pfizer it’s necessary to turn the clock back to last year.
Starting in May, and picking up pace in June, July and August, dozens of countries inked advance purchase agreements with pharmaceutical companies with promising plans: Pfizer, AstraZenica, Johnson & Johnson, Moderna and others.
Pfizer signed such deals with countries large and small: the United States, Britain, Japan, South Korea, Singapore, Israel and Canada to name a few.
New Zealand, however, had no purchasing plan at the time. In late May, ministers announced a Covid-19 vaccine strategy, but it was little more than a $37 million pot of money to sprinkle around domestic vaccine research and manufacturing capability. There was no provision for the advance purchase of any international medicine at all.
In fact, it wasn’t until August 10 last year that the New Zealand Cabinet finally took the steps necessary to begin negotiating.
Hipkins himself, with ministers Megan Woods and Winston Peters, brought a paper to Cabinet outlining the need for the Government to think about what it was willing to pay for vaccine doses, and how it would weigh that against securing early delivery.
“Vaccines for early delivery will be more expensive (e.g. $75-150 per dose) compared to later delivery (perhaps less than $15 per dose)…” the paper reads.
“Officials have modelled a small set of simplified hypothetical portfolios to get some idea of how costs might add up. This modelling suggests the size of funding required is highly sensitive to the number of early access vaccines we choose to purchase.”
Cabinet was clearly asked to weigh up the value of paying for early doses of vaccine and it agreed funds of some $600m to start the process.
At the same meeting, a negotiation team of bureaucrats within the Ministry of Business, Innovation and Employment (MBIE) was agreed, as was funding of $500,000 to bring in outside help (a further $133,000 was ultimately larded in to buy an outside PR consultant to fashion ministers’ “procurement ‘messaging”). The half-million dollars bought a handful of Bell Gully lawyers, among them lead negotiator and Bell Gully partner Simon Watts.
If 2021, as Prime Minister Jacinda Ardern put it, is the year of the vaccine, then 2020 was the year of the vaccine purchase agreement. And it bears remembering that the former has been delivered in accordance with the terms of the latter.
On October 12, Hipkins and Woods jubilantly announced the country’s first vaccine advance purchase, with Pfizer. The deal secured 1.5 million doses, enough for 750,000 double jabs, subject to Medsafe’s approval. Which was terrific news. But why not more?
Could New Zealand, at that time, have secured more early doses? On Wednesday, when asked whether the Government could have contracted to buy more than 1.5 million Pfizer doses in October, Hipkins’ office directed the question to the Ministry of Health, which declined to answer the question, citing contract confidentiality.
To put the risk in perspective, government documents hint that a small deposit was at risk if Medsafe didn’t approve the medicine, but nothing close to its full cost.
Hipkins also refused to say whether the delivery schedule for October’s 1.5 million doses is more favourable than the delivery schedule of the subsequent contract the Government signed with Pfizer, in March, 2021, for 8.5 million doses. It almost undoubtedly is.
The October agreement secured New Zealand a place in the Pfizer delivery queue, albeit a late one. Those doses appear to have all arrived in the first half of 2021. The doses from the March agreement secured New Zealand a second, even later, place in the Pfizer queue. They appear to have arrived (and are arriving still) in the second half of 2021.
There was a small risk in 2020 that Medsafe approval would be withheld, though by December, the US, Britain and Canada had all okayed it. Medsafe granted provisional approval on February 3, 2021 and it wasn’t until after that date that the Government made its call to exclusively use Pfizer to vaccinate New Zealand.
But it’s important to note that Medsafe’s approval was later than other countries’ regulatory agencies in large measure because New Zealand’s original vaccine purchase was late. Initial data was submitted to Medsafe by Pfizer for the vaccine approval on October 21, only after the first purchase agreement was in place.
So the late timing of Pfizer doses was in train much earlier than the Government likes to imply. In addition, scope for reopening deals and paying more for early vaccine delivery certainly existed, though perhaps that window of opportunity was not open as late as February-March of this year. Documents released to the Canadian Parliament, for example, show that Canada amended its agreement with Pfizer on December 4, and paid a higher price than previously contracted in order to receive early doses.
The Canadian Broadcasting Corporation ran the story under the heading: “Canada paid a premium to get Covid-19 vaccine doses from Pfizer earlier than planned.”
New Zealand, at the time, was still securing a “vaccine portfolio” and was signing advance purchase agreements with other drug companies.
It wouldn’t matter much except vaccination, the Government promises, will restore some normalcy, save billions of dollars, and free us from the blight of lockdowns.