By Denise Roland, Noemie Bisserbe and Nick Kostov 

PARIS -- As pharmaceutical giants edge closer to a potential vaccine for the new coronavirus, governments demanding access to any supplies are running up against a hard reality: the bill.

The tension was cast into relief last Thursday when Sanofi SA chairman Serge Weinberg took a call from French Prime Minister Édouard Philippe, according to a person familiar with the matter. Mr. Philippe wanted to know why the chief executive of the company -- one of France's corporate crown jewels -- had told an interviewer the U.S. would be first in line for its potential coronavirus vaccine.

Mr. Weinberg said Sanofi hadn't promised to prioritize the U.S., but that the executive was simply stating the obvious: the company will start manufacturing the vaccine in countries that help it shoulder the financial risk of ramping up production before its vaccine is proven to work.

Europe is lagging behind the U.S. in funding its share of the billions it will cost to manufacture vaccine doses on an unprecedented scale. Still, European governments expect their citizens to be among the earliest recipients of any vaccine against Covid-19, because the continent is home to pharmaceutical giants like Sanofi and AstraZeneca PLC that are developing some of the world's most promising candidates.

On Tuesday, Mr. Macron summoned Mr. Weinberg and other Sanofi officials to the Élysée Palace, where the company pledged that any vaccine it developed would be treated as a public good available to all, according to a presidential aide. Sanofi declined to comment on the meeting.

In normal vaccine development, companies wait until they have solid proof that the product works before they increase production, and even then they roll out supplies only gradually.

To defeat a virus that has killed hundreds of thousands of people and devastated economies world-wide, however, governments are expecting drug companies to have hundreds of millions of doses ready to go as soon as clinical trials show that a vaccine is effective. But companies say they can't assume the risk of manufacturing vaccine doses that may turn out to be ineffective without financial support from governments and other funders.

The U.S. has pivoted quickly to commit funds to certain vaccines, thanks to a government organization called the Biomedical Advanced Research and Development Authority, which was set up in 2006 to prepare for biological threats like pandemics and bioterrorism. Barda has a long history of providing funds for the development and manufacture of new vaccines to prepare the U.S. for a flu pandemic. The $2 trillion coronavirus stimulus package included $3.5 billion for Barda to support manufacturing, production and purchase of vaccines, drugs and diagnostics for Covid-19.

Barda has already handed Sanofi $30 million to support early research into a vaccine. If that candidate goes on to show promise, the company anticipates that Barda will provide hundreds of millions of dollars in further support to start manufacturing doses on a large scale while it is still in testing, according to a company spokeswoman. Barda has also pledged up to $483 million for a vaccine developed by U.S. biotech Moderna Inc., another front-runner that has already shown early promise in human studies.

The U.K., which left the EU in January, has also moved to secure access to a vaccine for its citizens. On Sunday, the British government announced a deal to secure 100 million doses of a vaccine under development by the University of Oxford and AstraZeneca. The deal is the first of several agreements the partners expect to sign to deliver the vaccine across the globe, according to a company spokesman.

The EU has contributed EUR1.4 billion ($1.53 billion) to the Coronavirus Global Response, a fund aimed at supporting the development and global distribution of diagnostics, treatments and vaccines for coronavirus. It isn't yet clear how the EU-led fund, which has so far raised EUR7.4 billion in total, will distribute money between projects and how it will ensure fair access around the world.

What the EU truly lacks is a body that can coordinate its spending on vaccines. Officials are rushing to create a European equivalent to Barda from a standing start. They intend to evaluate various vaccine candidates over the coming weeks and provide more clarity on funding plans in the summer, according to the person familiar with the talks.

"In Europe they woke up very late to this," said someone familiar with the talks between vaccine makers and the European Commission, saying that officials at the commission and in member states didn't appreciate the role of governments in supporting emergency vaccine development. "There was not a sense of urgency."

Sanofi has held talks with the Commission as well as a number of member states about how to finance manufacturing for a vaccine in Europe, according to people familiar with those talks. One option is for countries to promise to buy a certain number of doses in advance, according to people familiar with the talks. European countries already use these advance purchase agreements to buy supplies of the seasonal flu vaccine.

European officials are trying to avoid a repeat of the fight for resources that erupted across the continent early in the crisis. Shortages of protective gear and ventilators ended up pitting countries against each other and exacerbating the North-South divide as Germany kept a lid on mortality while Italy saw its hospitals overwhelmed.

Since then the Commission has tapped emergency funds to jointly procure protective equipment like gloves and masks, as well as ventilators, for distribution across the bloc. It has also provided an EUR80 million loan to German vaccine maker CureVac AG to speed up the construction of a plant that could potentially churn out billions of doses of its candidate vaccine. Still, the company will need further support to start manufacturing the doses at a large scale, according to a company spokesman.

For multinational companies like Sanofi -- accustomed to easily supplying drugs and vaccines across national borders -- the international tug of war is jarring. A person familiar with the talks between Sanofi and the French government said discussions were "trapped by this nationalistic view, which is contradictory with the science and the medical necessities."

--Valentina Pop in Brussels contributed to this article.

Write to Denise Roland at Denise.Roland@wsj.com, Noemie Bisserbe at noemie.bisserbe@wsj.com and Nick Kostov at Nick.Kostov@wsj.com

 

(END) Dow Jones Newswires

May 19, 2020 17:41 ET (21:41 GMT)

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