Canada’s vaccine agreements: A strategy to cover all bases
Vaccines typically take years of research and testing before getting into people’s arms. The race for a safe and effective COVID-19 vaccine began within hours of researchers releasing the genetic sequence of the coronavirus in January 2020. The most optimistic scenario for the development of viable vaccines was thought to be late summer to fall 2021, but many warned that the world would need to wait much longer.
Based on the advice of experts, Canada adopted a sweeping vaccine strategy to supply everyone in Canada with the most promising COVID-19 vaccines. At the time, it was unknown which vaccines would be successful or when.
A summer of intense negotiations resulted in Canada signing advance purchase agreements (APAs) with 7 manufacturers of promising vaccine candidates. By the fall of 2020, Canada had bought more doses per capita than any other country, with enough orders to vaccinate every Canadian 5 times.
Vaccine Task Force scouted the world for vaccines to buy
Canada’s vaccine planning began in April 2020, when the government created the COVID-19 Vaccine Task Force. This team of experts was asked to develop medical and health advice based on a review of the emerging science and technology of the companies racing to develop vaccines to combat the coronavirus.
The task force tracked and sought out companies around the world working on vaccines and, in June, began identifying the most promising vaccines. It advised that the best approach for Canada was to diversify supply as much as possible with different types of vaccines, based on ones that looked most likely to work and be delivered the fastest.
Based on the task force’s recommendations, the Public Health Agency of Canada decided which vaccines to buy. A vaccine procurement team, led by Public Services and Procurement Canada (PSPC), was assembled in early July to initiate negotiations with vaccine suppliers.
Advance purchase agreements to secure vaccine supply and mitigate risks
Canada built its vaccine portfolio through APAs with 7 companies. The first 2 agreements, with Moderna and Pfizer, were announced in August, followed by similar agreements over the next 3 months with Johnson & Johnson, Novavax, Sanofi and GlaxoSmithKline, AstraZeneca and Medicago. None of the portfolio vaccines had a Canadian-based manufacturing capability at the time.
In most cases, initial agreements were signed through memorandums of understanding and term sheets with international sources to secure access to an early vaccine supply for Canada, while providing time for the regulatory process and to work through complex terms and conditions with the manufacturers.
The APAs have the obligations of a contract, while being structured to allow flexibility given uncertainties around the development of new vaccines. Essentially, they allow for the purchase of something that doesn’t yet exist.
When these agreements were signed, it was not known which vaccine candidates would go on to receive regulatory approvals, and if so, when that would be. As well, production capacity and supply chains were still being developed. All of these unknowns meant that it was impossible to establish detailed delivery schedules. Instead, the agreements include quarterly delivery targets.
Each company had its own negotiating strategy and different demands and pricing per dose depending on the investments made in research, manufacturing and supply logistics, which added to the complexity of landing agreements. As a common element, all agreements required initial investments with the vaccine manufacturers to support vaccine development, testing and at-risk manufacturing.
In February 2021, an additional contract with Verity Pharmaceuticals Canada Inc./Serum Institute of India was announced.
While waiting for vaccine approvals, Canada began to procure the additional material the companies needed to ensure the logistics for vaccines, storage and distribution were in place once the vaccines would be approved and ready for distribution.
Options to buy more
Under current agreements, the government could buy more than 400 million doses of COVID-19 vaccines if all vaccines are approved and all options in the agreements are exercised. So far, the Johnson & Johnson, AstraZeneca, Moderna and Pfizer-BioNTech vaccines have Health Canada regulatory approval.
Negotiating faster deliveries
Canada has consistently sought ways to secure quicker deliveries of approved vaccines. Once vaccines were authorized for use in Canada, the Government of Canada worked closely with suppliers to accelerate deliveries and to ensure that a steady stream of vaccines was arriving in the country as quickly as possible.
Since December 2020, doses of Pfizer-BioNTech, Moderna, and AstraZeneca, the first 3 vaccines authorized by Health Canada, have been arriving into the country, allowing provinces and territories to carry out their COVID-19 vaccination programs.
On July 27, 2021, the Government of Canada announced that Canada has reached a major milestone, receiving more than 66 million doses of COVID-19 vaccines. This means that Canada has received enough doses to fully vaccinate every eligible person in Canada.
As part of our commitment to transparency, PSPC has worked with its vaccine suppliers to secure their agreement on publicly releasable versions of Canada’s vaccine contracts.
These documents fully respect the Access to Information Act, so information that is commercially confidential or that could impact Canada’s ability to negotiate future contracts has been protected.
This approach allows us to release as much information as possible without compromising our existing agreements or our ability to keep Canadians safe.
As we have throughout the pandemic, PSPC will continue to openly communicate with Canadians about the work we are doing to support Canada’s pandemic response.
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