Vaccine cost: Minister ready to brief PAC

PUTRAJAYA – Science, Technology and Innovation Minister Khairy Jamaluddin is prepared to give a briefing to the Public Accounts Committee (PAC) on the procurement of COVID-19 vaccine including the cost details but the committee members must comply with the condition of secrecy as stipulated by the vaccine manufacturers.

He said the briefing was in reply to a statement by DAP leader Lim Kit Siang who alleged the price of COVID-19 vaccine paid by Malaysia was about 20 times the price obtained by the Belgian government.

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“For the time being, all governments including Malaysia are subject to the condition of secrecy and as such we cannot give the price details based on each vaccine producer.

“If we breach the condition, it will affect our agreement with the vaccine manufacturing company. It is their condition, not ours,” he told a media conference on the development to procure COVID-19 vaccine here today.

Asked whether he was worried if PAC members would disseminate the information given in the briefing, Khairy said he wanted to be transparent on the vaccine procurement and there was no choice except to meet PAC as the representative of the people.

“I want to be as transparent as possible, I want to tell Malaysians that I am very happy with the price we got from Pfizer, if I could I would like to say it now but I can’t. Even based on the so-called leaked European Union (EU) price, I’m even happier about the price we got,” he said.

Khairy stressed that the procurement of COVID-19 vaccine from pharmaceutical companies, Pfizer (United States) and AstraZeneca (United Kingdom) was made through direct negotiation and not through middlemen or distributors.

According to him, AstraZeneca also issued a press statement today which confirmed that Malaysia was buying the vaccine at cost which was the price given by AstraZeneca.

Many factors influencing pricing

Vaccines come with a price tag. With high expectations of first doses being made ready in the coming months, and more being pushed into use in the future, there are three main factors which could decide the pricing of a vaccine for the masses:

1. The technology behind it

A lot of vaccines being worked on right now make use of different technologies-mRNA, DNA vector technologies, which not just require a bit of scientific precision but are costly to procure. The cost will also be reflected in the final mark-up of the vaccine being sold. Hence, different companies are subject to selling the vaccine at different prices.

In the future, when we have more than one (or two) vaccines ready, the pricing could also differ on the basis of efficacy. Higher the response and efficacy rate, higher could the price go.

2. Storage and transportation

mRNA vaccines make use of special enzymes (vaccinia capping enzyme) which not only degrade faster, but are also considered to be one of the costliest ingredients in the world, and also difficult to procure. Cold storage, in places where it isn’t possible, would also require the use of additional resources and shoot up the cost as well.

Far-off areas may also have to pay a higher upfront cost, to facilitate vaccine delivery, which, again, could add up the costs.

3. Vaccines would be free of cost for the public, the government would pay the price

While price capping is being considered, there is also a possible option that the governments of respective countries could be paying upfront costs to the companies, and then distribute the vaccines ‘free of cost’ to the public, or offer them at a discounted rate and provide subsidies in the long run.

However, there’s also a strong possibility that prices could also differentiate, depending on the country it is primarily designed to use for, the population group it is targeted at. Wealthier nations may also have to pay more, depending on the situation at hand.