The European Commission (EC) has signed a third contract with pharmaceutical companies Pfizer and BioNTech for 1.8bn doses of COVID-19 vaccine, to be delivered between end 2021 and 2023.
The order is the biggest vaccine contract signed by the EU since the start of the pandemic and comes as it tries to make up lost ground after a slow start in ordering vaccines.
Pfizer shares were up 0.5% on the Nasdaq on Thursday while BioNTech’s American Depositary Shares (ADS) were up 2.5%.
The deal covers the purchase of 900 million doses of both the current vaccine and a vaccine adapted to COVID-19 variants, with the option to buy an additional 900m doses, the EC said.
“The new contract is now in force, which is good news for our long-term fight to protect European citizens against the virus and its variants," said EC president Ursula von der Leyen.
"Production and delivery in the EU of up to 1.8 billion doses are guaranteed. Potential contracts with other manufacturers will follow the same model.”
EU to pay higher price for new vaccines
To date, the European Union has signed two contracts with Pfizer and BioNTech for a total of 600 million doses, without disclosing the prices.
However, Reuters reported that the EC paid an average price of €15.5 (£13.36, $18.93) per dose for the first 300 million doses and €17.5 ($21.3) for the subsequent 300 million doses.
The price in the new contract is estimated at around €19.5, Bulgarian prime minister Boiko Borisov said earlier this month, making the contract’s total value an estimated €35bn, according to DW.com.
The new contract also comes with stricter delivery conditions. “The contract requires that the vaccine production is based in the EU and that essential components are sourced from the EU. It also stipulates that, from the start of the supply in 2022, the delivery to the EU is guaranteed,” the EC said in a press release.
The conditions follow a row over the supply of the AstraZenica vaccine, which the UK ordered in bulk last spring, several months before an EU order was placed. The EU then threatened legal action because its order was not being fulfilled.
A clear confidence vote for mRNA vaccines
The EC’s latest deal is a clear sign of its preference for the new messenger RNA (mRNA) vaccine technology supplied by Pfizer and BioNTech, which comes with higher costs and greater logistical requirements than the traditional vaccines offered by AstraZeneca and Johnson & Johnson. The mRNA vaccines instruct human cells to produce harmless fragments of the virus, which the body uses to build an immune response to prevent or fight disease.
“The Commission decided to continue supporting this vaccine based on a sound scientific assessment, the technology used, the companies' experience in vaccine development, and their production capacity to supply the whole of the EU,” the EC said.