Vaccines contracts: Standing Committee on Health—June 14, 2021

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Letter to the chair of the Standing Committee on Health transmitting the vaccine contracts

Mr. Jean-François Pagé
Committee Clerk
Standing Committee on Health
131 Queen Street
House of Commons
Ottawa, ON K1A 0A6

Dear Mr. Pagé:

I am writing on behalf of Public Services and Procurement Canada regarding the request for contracts entered into between the Government of Canada and pharmaceutical companies for COVID-19 vaccines.

Public Services and Procurement Canada’s primary objective is to disclose as much information as possible to further the committee’s understanding of these matters, while balancing the government’s ability to respond to the ongoing public health emergency caused by the global COVID-19 pandemic. Officials have examined these contracts under the strict requirements of the Access to Information Act and consulted implicated companies as is required to ensure the appropriate safeguard of their information. Applicable exemptions have been applied to the documents to protect third-party or personal information, as well as to avoid jeopardizing orders or compromising Canada’s negotiating position given the volatility of the marketplace.

I hope that the committee finds the enclosed material useful for its work.

Sincerely,

James Stott
Assistant Deputy Minister
Policy, Planning and Communications Branch

Order paper question responses on contract negotiations and timing of agreements

Inquiry of ministry

Question 641

Question

With regard to signed or amended contracts for COVID-19 vaccines entered into by the government with Pfizer-BioNTech, AstraZeneca, Sanofi and GlaxoSmithKline, Covavax, Medicago, Verity Pharmaceuticals Inc. & Serum Institute of India, Moderna, and Johnson & Johnson:

Response by Public Services and Procurement Canada

Canada’s vaccine planning began in April 2020, when the government created the COVID-19 Task Force. These experts were asked to provide advice based on a review of the emerging science and technology from the companies developing vaccines to combat COVID-19.

The Task Force began identifying the most promising vaccine candidates in June 2020. It advised that the best approach was to diversify supply as much as possible with different types of vaccine platforms, based on the solutions that looked most likely to work and could be delivered the fastest.

Based on the Task Force’s recommendations, the Public Health Agency of Canada (PHAC) decided which vaccines to buy. A vaccine procurement team, led by Public Services and Procurement Canada (PSPC), was assembled to undertake the negotiations.

As with all government contracting processes, the work was carried out by government officials. The procurement team reported directly to the PSPC Deputy Minister, Bill Matthews. As with all major procurement projects, a multi-disciplinary approach was taken with different resources and expertise brought in as needed. The team included, among others, the contracting authority, subject matter experts (including scientists in this case), legal advisors and auditors as well as the client.

Canada built its vaccine portfolio through advance purchase agreements (APA). APAs have the obligations of a contract, while being structured to allow flexibility given uncertainties around the development of new vaccines. The first 2 agreements, with Moderna and Pfizer, were announced in August 2020, followed by agreements over the next 3 months with Johnson & Johnson, Novavax, Sanofi and GlaxoSmithKline, AstraZeneca and Medicago. In February 2021, a contract with Verity Pharmaceuticals Canada Inc./Serum Institute of India was announced.

In most cases, initial agreements were signed through memorandums of understanding and term sheets 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. Given the unknowns regarding regulatory approvals, production capacity and supply chains, it was impossible to establish detailed delivery schedules at the time agreements were negotiated. Instead, the agreements include quarterly delivery targets that were determined based on anticipated supply.

As each company has different negotiation strategies and corporate policies, securing every agreement required a unique and complex approach. As a common element, all agreements required initial investments with the vaccine manufacturers to support vaccine development, testing, and at-risk manufacturing.

Within the framework of the contracts, Canada has sought ways to secure quicker deliveries of vaccines. In December 2020, PSPC secured early doses from both Moderna and Pfizer-BioNTech, with vaccines arriving on Canadian weeks earlier than originally forecast. The government also negotiated an accelerated delivery schedule with Pfizer-BioNTech to deliver millions more doses than originally scheduled between April and September 2021.

Question 642

Question

With regard to the government’s response to order paper question Q-402, which stated that a negotiating team was assembled in June 2020 with regard to the procurement of COVID-19 vaccines:

Response by Public Services and Procurement Canada

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 provide advice based on a review of the emerging science and technology from the companies racing to develop vaccines to combat COVID-19.

Based on the task force’s recommendations, the Public Health Agency of Canada decided which vaccines to buy. A vaccine procurement team, led by PSPC, was assembled to negotiate with vaccine suppliers.

The team included, among others, the contracting authority, subject matter experts, legal advisors and the client. A multi-disciplinary approach was deployed, with different resources and expertise brought in as needed as the discussions evolved.

Vaccine contract information

Context

Will Canadians be able to see the entire contracts the government signed to procure vaccines for COVID-19?

Suggested response

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