Albert Bourla Pfizer CEO speaks to Yahoo Finance

In a wide-ranging interview with Yahoo Finance's Anjalee Khemlani, Pfizer CEO Albert Bourla discusses the company's efforts to

Video Transcript

ANJALEE KHEMLANI: Albert Bourla is the CEO of Pfizer. Under his leadership, the biotech giant has been at the forefront of battling the coronavirus pandemic. It delivered the first-ever COVID-19 vaccine shots in December, 2020, a landmark achievement in medicine Bourla called a great day for humanity. Today, Pfizer has delivered hundreds of millions of COVID vaccine shots globally.

So Albert, welcome to the event. Thank you again for joining us. I'm so excited to talk about, really, so many things today. But let's start off with, obviously, the thing that's on everyone's mind, which is the kids vaccine for five to 11. We're a day away from hearing from the FDA panel. And I want to just talk a little bit about what you're doing to prepare if you get that green light. Are you ready to go? And how quickly will we get to see these shots in arms?

ALBERT BOURLA: Yes, first of all, it's a great pleasure to be with you, Anjalee. And thank you for the invitation. We are working as before at risk. So in parallel, we've prepared the new formulations. And if we get a positive opinion and an approval from FDA and then later from CDC, we will be ready to circulate immediately the new formulation for these kids.

ANJALEE KHEMLANI: Is it different from what we saw happen with adult vaccines? Are there different sort of avenues or distribution channels that you need to focus on?

ALBERT BOURLA: We are working with the US government. They are the ones that they know how they want to decide--

[INTERPOSING VOICES]

--like us to send it. It is a different formulation than the previous one.

- Pfizer is asking that we pan out. He doesn't see himself.

- We're here.

ALBERT BOURLA: I'm sorry?

ANJALEE KHEMLANI: Oh, sorry. Keep going. That wasn't me.

ALBERT BOURLA: Can you hear me?

ANJALEE KHEMLANI: I can indeed. Please continue.

ALBERT BOURLA: Yeah, so what I was saying it is it's a different formulation. This is 1/2 of the mRNA. The injection contains the mRNA that they are giving to the adults. And so that's why we are required to make it in a very different way.

ANJALEE KHEMLANI: Got it, OK. Well, that's good to know. I'll definitely be keeping track of that.

When we talk about what else is going on, the vaccine is obviously front and center. And we're going to get to more later. But I just want to stay on the vaccine for a few minutes and talk about what's going on globally because that seems to be, really, something that you have to contend with these days.

Initially, this time last year, when we were talking about what the vaccine race looked like, no vaccines had been authorized. You expected a lot more competition, quite frankly, on the world stage. And now you find yourself in a very different position with a lot more pressure to develop as well as distribute vaccine doses. Tell me a little bit about what that has been like to see that and how it has changed your global strategy.

ALBERT BOURLA: Well, it was very, very true what you just said, that not only there were a lot of potential vaccines that would make it, but also we were, for a lot of countries, not the preferred one because we didn't promise local manufacturing. There were other companies that they signed contracts offering that we will do it in Brazil, we will do it in South Africa.

We didn't do that. We said, we are going to do it in our manufacturing sites, wherever they are ready to do it right now. And mRNA was not a proven technology. So as a result, we received not many orders from countries other than the highly developed income countries, Europe, the US, and Japan, Canada, they were the countries that they had raised the orders.

That I didn't like at all. And I actually sent letters to heads of states at the time of low and middle-income countries, telling them that everything that we have scheduled to produce would be allocated pretty soon. And I urged them to place an order so that we can, let's say, reserve quantities for them. They didn't, and for their reasons. But nobody knew at that time.

Of course, the situation changed when our vaccine became so effective and so safe. And then other vaccines either didn't make it or they were not able to produce at scale. So everybody wanted to get from us.

And we changed dramatically our strategy. We had invested to produce 1.3 billion doses for 2021. When we realized the situation, we put way more investments into the system. And we were able to raise the volumes to 3 billion doses this year and 4 billion next year. More than 40% actually, of these quantities will go to middle and lower-income countries by the end of the year, not in next year, in two months. That will be the total.

And so right now, it is very disproportionate. We are shipping way more to low and middle-income countries than to high-income countries, which is the opposite of what we did in the first six months.

ANJALEE KHEMLANI: I'm going to turn philosophical here. Would it have been different if you had, instead of pursuing-- I mean, of course, hindsight is 2020. But knowing what you know now, would it have been better to maybe work through COVAX more intently rather than these bilateral agreements, or have those worked out better in terms of keeping control over the manufacturing process?

ALBERT BOURLA: No, we did work with COVAX. And again with COVAX, it was the same situation. COVAX, they placed more of their bets in AstraZeneca. And placed very few orders in the beginning with our vaccine for many different reasons. And then eventually, things didn't work. And they came back to us, asking us for way more quantities.

What we did was even something better. We had a tiered price in our vaccine, which means that high-income countries were getting the vaccine at the cost of a takeaway meal. We all know. It's $20-25 bucks. This is the price for a vaccine. But for middle-income countries, we are charging half of this cost to the government because they give it free to the citizens. And for the low-income countries, we are charging at cost, not for profit.

What we did, we signed with the US government an agreement that we are providing them 1 billion doses-- I repeat, 1 billion doses at cost. With those, we are not making profit. Then the US government takes those doses, and they give it for free to the low-income countries. The only agreement that we made with them was that these doses, 1 billion, needs to go to the poorest countries.

The way that we administer, we administered through COVAX, the US government. And of course, we are working on the logistics. So eventually, COVAX is getting a lot of those shots.

ANJALEE KHEMLANI: Right. And that's what's happening now, of course. Through other countries though, is that possible? I know I've seen some reports where other countries might want to do the same, but they claim that their contract restricts them from doing that. Can you clarify what's going on there?

ALBERT BOURLA: No, no, no. All countries that they ask us to donate doses somewhere else, we collaborated with them. And within two or three days, we give them the approval to do it. There is no way that we will leave doses in the country that they are not utilized when they could go to a country that can be utilized.

ANJALEE KHEMLANI: Definitely. And what about the South Africa? I was really, really intrigued by the partnership you've created with Biovac Institute down in South Africa. I know that it was supposed to be operational by early next year. Can you give us an update on the timeline on when we might actually see doses manufactured there?

ALBERT BOURLA: I think the timeline that we announced is the timeline that we will stick to. The company that we are partnering with in South Africa is a company that we know very well. We are already producing over there other vaccines. That is what enabled us to have, let's say, the confidence that they can do the manufacturing with the high levels of quality because we are working with them for a long time. So we will stick to the schedule. And they will start manufacturing.

And also, the agreement is that all doses that will be manufactured in Africa will stay in Africa. Of course, Africa will receive way more doses from doses that are manufactured in other places, namely Europe and the US.

ANJALEE KHEMLANI: Well, that's good. Yeah, that's great to hear. And obviously, that confidence build plays a role in why you wouldn't be able to, say, just broadly speaking, create more of these partnerships or even going back to the IP argument-- I've heard your stance on that, that it's not feasible and that it would create sort of unnecessary competition as well for raw materials, per se.

But is there maybe a chance to have done what maybe Gilead did initially, where it was voluntary licenses? And if you have that much confidence that they really can't start from scratch, maybe just do it as a goodwill gesture even, to say, OK, here it is?

ALBERT BOURLA: I think that Moderna did it. They waived their rights to intellectual property so that anybody could do it for the local companies. Nobody did. That demonstrates that what we were saying is true, that they won't be able to do it just by outlicensing. These are technologies like the ones that, for example, Gilead are antibodies, where they have been produced massively in the world before.

The mRNA was never produced anywhere in the world. It was the first time that we produced. The machinery that we used to produce mRNA was designed by us. And then we asked manufacturers to manufacture the machines that we are using in our manufacturing plants. So it would be impossible, as it was, to do someone scale up within, let's say, a reasonable amount of time, less than two years, for example.

ANJALEE KHEMLANI: Right, OK. Moving onto the pill, that's obviously something that's really exciting coming down the line, something that's very needed, especially for considering this virus to be with us for quite some time and to help with treatments. How quickly do you think we can get that, really, to the world, because obviously, you don't want to be in a similar situation as the vaccine? So have you thought about the distribution process there?

ALBERT BOURLA: Yeah. So what is right now at stake is to make sure that we have one for antiviral. We are running the studies. And I hope we'll be positive. I have a lot of reasons to be optimistic. But in my career, I have seen signs disappointing us a lot as well. So I have seen projects that we thought will give us a medicine, but eventually they fail.

So I keep my fingers crossed that the studies will be positive. And I hope that we will be able to know if the studies are positive before the end of the year. So that's one.

I have authorized, just three months ago a bit over a billion dollars of at-risk investment in manufacturing, which means that we already started ordering raw materials, cleaning new lines, clearing new lines, manufacturing lines, building equipment that is needed to manufacture that, without knowing if it is going to be successful or not.

That we did because we know that time is of essence. And if it is successful, we should be able to produce as quickly as possible. And again, we are asking governments to place orders with us. And we will do the same.

So if someone comes from a low-income country to place an order, we will honor this order. And we will give an allocation.

ANJALEE KHEMLANI: Absolutely.

ALBERT BOURLA: But they need to come to place orders. If they don't, we can't do it.

ANJALEE KHEMLANI: Well, sure. I'm sure they're going to hear your message now loud and clear. I want to move away from--

ALBERT BOURLA: Well, I've told them multiple times. But I have told them multiple times, the vaccine. And I have told them multiple times with this one. And not everybody is thinking that track.

ANJALEE KHEMLANI: Is willing, yeah. Well, let's talk about just what this pandemic has really done for you. Right before it started, you were still relatively new in the role and had taken over and talked a lot about a shift in how Pfizer operates. You've shown your appetite for risk with pursuing mRNA for this vaccine. How has that shaped your thinking about how, really, to address the rest of the pipeline?

ALBERT BOURLA: I think it was transformational in our culture and in our thinking. Keep in mind that we have one of the six business units that did the COVID vaccine, the vaccines business unit. So in during that time, the other five business units at Pfizer were watching vaccines becoming the saviors of the world. And guess what, they want also to have their own COVID moment.

They want also to have their own project in oncology and develop very quickly something that has transformational capacity for human health. This is the same they do in internal medicine or in cardiovascular disease or in multiple other therapeutic areas.

So I think the biggest transformation for us, it is a cultural transformation of people that think that nothing is really impossible. But if you aim very, very high, you can always think out of the box and find solutions to things that you never thought that would be solvable. And this is the big heritage that the COVID vaccine leaves us to be able to repeat that in cancer, in rare diseases, in immune responses, in everything.

ANJALEE KHEMLANI: And one of those things, thinking outside the box, is the warranty program you created for one of your lung cancer treatments. Tell me a little bit about what you hope to achieve with this. And are we going to be able to see this applied to maybe some other products?

ALBERT BOURLA: Hopefully. This is a project that tries to guarantee the performance. It's based on the value. There is a price that the health care system needs to pay. And also, there is a participation of the patient that they need to pay for this drug. And there are some expectations about the performance of the drug based on the clinical trials.

So in a demonstration of partners, what we did with Bayer was that the patients pay for the medicine and the system. But if the medicine does not deliver the expected benefit in particular patients, we pay back both, the money that the system pays to us, insurance company, and the money that the patient paid us in terms of co-pays.

I hope that we will see that that project will be successful. And we would like very much to implement it into other areas as well.

ANJALEE KHEMLANI: OK. Well, one final question for you. Obviously, drug pricing is on everyone's minds. And they've heard some of your responses to, broadly speaking, the topic. But I wonder, on the specific point of price increases, annual or regular increases, do you think that there needs to be some sort of curbing or some sort of regulatory oversight into how quickly and how much prices increase?

ALBERT BOURLA: The issue of drug pricing is a real issue in the US. But it is not the issue that some people think and present. The total cost of medicines to the health care system represents 12%. This is how much the employer, this is how much Medicare pays to us in terms of how much it pays to hospitals, physicians, everybody else.

So by definition, this cannot be the big problem when we are 12%. And by the way, it's going down, not up. For example, in the first six months, Pfizer reported minus 5% in net pricing of US medicines in the US business. And it was minus also the year before. So that's not the problem.

But I'm sure that our patients, the patients that are taking our medicines didn't experience this minus 5%, experienced 2%, 3%, 5%, 10%, 20% sometimes increases in how much they have to pay, what is their participation for the cost of the medicine, because the two are not connected.

We have a problem here. The Americans are paying for their medicines like if they don't have insurance, although they do have insurance. And this needs to change. This needs to make sure that it will not be the case moving forward.

I'm sure that if they have to pay less, that will be a cost. And the system will have to absorb that cost. Who's paying for that cost? I'm willing, we are willing, the pharma industry, to participate and pay our fair share, pay even more than our fair share, as long as everything that we provide goes to release patients from their out-of-pocket.

Where we disagree, it is policies that will take all the money from the pharmaceutical industry and move them to the black hole of the federal budget to do other things. This is not the issue right now. The issue is the out-of-pocket of patients, which is very, very high. That's what we need to address.

If there are other projects that also are much needed, like the infrastructure project, I agree that everybody should contribute based on some rationale but not necessarily that we target the pharma industry to fix the infrastructure. We should target corporate America. We should target everyone who can contribute so that we can resolve the infrastructure. Everything that the pharma industry is giving extra on top of that needs to go to release the out-of-pocket of the patients, needs to make medicines affordable.

ANJALEE KHEMLANI: Definitely. Well, I wish that you and I could solve that problem together here. But unfortunately, we're out of time.

ALBERT BOURLA: I got it right.

[CHUCKLING]

ANJALEE KHEMLANI: We should next time. Albert Bourla, CEO of Pfizer, thank you again for joining us today. Pleasure, and hope to have you back soon.

ALBERT BOURLA: Thank you very much.