The Ultimate Supply Chain Challenge, Part One: Ultracold Storage & Shipping for Pfizer’s Covid Vaccine
So daunting are the first Covid vaccine’s distribution requirements that they’ve already claimed at least one exploding head.
As Molly Howell, a state health official in North Dakota, watched a webinar on how to distribute what’s expected to be the first Covid-19 vaccine, her head began to spin.
“How are we going to do this?” she texted a colleague who was also on the webinar.
Her colleague responded with an exploding head emoji.
Whose head blew up? It belonged to Clare Hannan, the executive director of a group that supports state vaccine initiatives, the Association of Immunization Managers. Hannan told CNN, “These challenges are so unprecedented. I don’t have anything to compare [them] to.”
Howell, the manager supervising North Dakota’s immunization program, terms the prospect of administering this new vaccine manufactured by Pfizer as “daunting” and “overwhelming.” And she isn’t alone. Across the nation, state public health officers charged with distributing Covid vaccines fret that this process won’t go smoothly.
Although Pfizer had announced in a press release that final results from the Phase 3 clinical trial for its new Covid vaccine demonstrated stunning 95 percent efficacy without significant safety issues, it will also be the most perishable pharmaceutical product in history. This vaccine must be continuously stored at about minus 94 degrees Fahrenheit, roughly 75 degrees colder than any vaccine ever distributed in the United States.
Some of America’s academic medical centers have freezers that cold in which they store research specimens, but few have extra space for thousands of vaccine vials. And state laboratories, doctors’ offices, and pharmacies generally don’t have freezers this cold.
Pfizer’s solution was to create a complex and controversial logistics specification that transformed the supply chain’s transportation, handling, and storage into a series of herculean tasks. “It’s a very complicated supply chain, and you need a lot of things to work together for this to happen at a large scale,” says operations research expert Dr. Tarek Abdallah, a professor in the Managerial Economics, Decision Science, and Operations Department at Northwestern University’s Kellogg School of Management.
Dr. Kelly Moore, a physician and health policy professor at the Vanderbilt University Medical Center, said that state health officers were “shocked” when they learned about Pfizer’s storage requirements, adding, “We all are going into this expecting that there are going to be major glitches.”
In this CNBC video, she also warns that this will be “the most complex vaccination program ever attempted in human history.”
Why Not Turn to a Competitor Like Moderna?
So if Pfizer’s vaccine is such a challenge to store and transport, why wouldn’t governments instead distribute a competing product? After all, Boston-based biotechnology firm Moderna also claimed in a news release that the company’s Covid vaccine candidate returned a similarly remarkable 94.1 percent final efficacy result from its Phase 3 clinical trial of 30,000 volunteers.
What’s more, Moderna’s vaccine may have demonstrated 100 percent efficacy against severe forms of Covid. In Moderna’s results, 30 of the 185 volunteers who contracted Covid in the trial’s placebo cohort experienced severe disease, and one died. But only 11 of the volunteers who received the vaccine contracted Covid—none of those cases involved severe illness or fatalities.
Moreover, the Moderna vaccine only requires freezer storage and transport at minus 4 degrees Fahrenheit, which is not much colder than the freezer temperature inside many kitchen refrigerators. At that temperature, Moderna’s vaccine will keep for six months.
The reason governments can’t give all their business to Moderna relates to the firm’s inability to manufacture enough of the vaccine rapidly. Moderna had scaled its production forecasts way back, from an originally optimistic 100 million doses to only 20 million by the end of 2020. And like most Covid vaccines, Moderna’s is a two-dose formulation. That means this startup—one that’s never brought a vaccine to market—will only have enough capacity to produce injections for 10 million Americans by January.
By contrast, Pfizer—which like Moderna has applied for (and was granted) an Emergency Use Authorization from the U.S. Food and Drug Administration—can produce five times as many vaccine doses by then.
But because Pfizer accepted no funding from the federal government’s Operation Warp Speed rapid development initiative, the drug company isn’t obligated under an exclusive distribution agreement with the federal government. Because half of Pfizer’s 50 million doses had been purchased by seven foreign government customers, that only leaves enough of Pfizer’s product to vaccinate 12.5 million Americans by the end of the year.
What About Other Vaccine Manufacturers?
Furthermore, delays have saddled three other leading Covid vaccine manufacturers. Novavax, which we first covered here on BSchools in September 2020, experienced delays because of direct material shortages and production issues. Two others—Johnson & Johnson and Britain’s AstraZeneca—halted their Phase 3 clinical trials for several weeks because of safety concerns.
Johnson & Johnson still hasn’t released details on its safety issue. By contrast, AstraZeneca was more forthcoming. But the nature of the issue and the way that the drugmaker chose to disclose it have placed AstraZeneca under fire.
The New York Times reported that following her first vaccine dose, an AstraZeneca volunteer developed a dangerous spinal cord disease known as transverse myelitis that required a hospital stay. Often caused by infections, this rare affliction can cause paralysis along with bladder and bowel malfunctions. Incredibly, AstraZenica’s CEO Pascal Soriot reportedly first disclosed news of the woman’s adverse event not to the public, but to a private audience of JP Morgan’s investor clients.
After the trial concluded, AstraZeneca claimed efficacy results ranging from about 62 to 90 percent depending on the dose level. However, analysts criticized a range of anomalies that damaged confidence in AstraZeneca’s vaccine. The abnormalities included injecting by mistake 2,800 volunteers with only half the planned dose, and failing to include a high-risk demographic—adults over age 55—in the sample that returned the best efficacy.
Besides all the safety concerns, a Wall Street analyst’s dismal assessment combined with damaging coverage in the New York Times and Wired have probably scuttled chances for the vaccine’s expedited regulatory approval in the United States.
America’s citizens are extraordinarily concerned about the Covid vaccines’ safety. Less than a third of respondents in a Consumer Reports survey said they were very likely to take the injections. What’s more, that hesitation even extends to knowledgable healthcare professionals. For example, an October 2020 survey that polled members of the American Nurses Association disclosed that only 34 percent of members would vaccinate themselves. Thirty-six percent said that they would refuse, with about a third unsure.
In part, that caution arose because the White House influenced the work of the Food and Drug Administration and the Centers for Disease Control. The Covid vaccines’ severely expedited development schedule, with its potential for “cut corners” that compromised safety, also didn’t help.
In any event, the two most likely first-to-market contenders in the United States—Pfizer and Moderna—estimate they can only manufacture enough doses to vaccinate 22.5 million Americans before January.
And policymakers are going to face some tough choices before then if they want to defend against the Covid threat to our nation’s healthcare system. That’s because those 22.5 million immunizations are barely enough to protect more than 18 million high-risk American healthcare workers, of whom Covid has already infected 115,000 and killed 1,400. Dr. William Haseltine, a former department chair and professor at the Harvard Medical School and the Harvard School of Public Health, emphasizes that the United States leads the world in Covid-19 infections among healthcare workers by a wide margin.
Why So Cold? The Role of Messenger RNA in Pfizer’s Vaccine
Pfizer’s extreme cold requirement stems from the firm’s need to preserve a novel ingredient never before used in a vaccine. And the rapid development technology that enabled Pfizer and Moderna to bring their vaccines to market before other competitors also relies on this ingredient—a naturally-occurring component of cell biology known as “messenger RNA,” or mRNA.
A long molecule made up of many hundreds of building blocks called nucleotides, messenger RNA might be thought of as a physical set of instructions. When introduced into a cell, this instruction molecule directs a cell to perform a particular function. Generally, this function will involve manufacturing a vital protein.
Many BSchools readers have heard of a key protein on the surface of the SARS-CoV-2 Coronavirus, known as the spike protein. In January 2020, both Moderna and BioNTech—the German startup that developed Pfizer’s vaccine—had independently identified this key protein as a good vaccine target. One reason it’s useful is that so far, this protein has rarely mutated. The SARS-CoV-2 virus has mutated hundreds of times since January 2020, but the amino acid sequence of the spike protein component has remained relatively stable.
Each of the two competing firms then encoded directions for making this spike protein into one of these synthetic messenger RNA instruction molecules. That molecule could then be duplicated repeatedly and administered directly to patients as an injection.
After the injection, each synthetic mRNA molecule travels to immune cells where it instructs them to manufacture copies of the spike protein—just as if SARS-CoV-2 had infected those cells. Other immune cells can then learn about the spike protein in advance, and develop ways to protect that patient in case they’re ever exposed to the actual Coronavirus.
What differentiates this novel approach from traditional vaccines like AstraZeneca’s is that Moderna and BioNTech never needed to make the virus itself to make the injection, which is a time-consuming and resource-intensive process.
Instead, all that the mRNA developers needed was to use information from the virus, and administer that information to the patient in the form of an injection. With that information, the patient makes their own vaccine.
mRNA’s Preservatives: Lipid Encapsulation and Low Temperatures
The messenger RNA platform is truly the future of vaccine development, in part because it’s incredibly fast. Working with the National Institutes of Health, Moderna only needed two days to develop the messenger RNA molecule for the spike protein from the date they first received the genetic sequence for the virus from China.
However, mRNA molecules pose daunting challenges, some of which have delayed their applications as vaccines and therapeutics for 15 years. For example, mRNA molecules cannot by themselves penetrate cell walls, which is necessary for delivering their instructions into the patient’s cells. Moreover, mRNA is inherently unstable, since it degrades rapidly—in some cases falling apart in as little as a few minutes. These two characteristics led to the development of an ingenious preservative and delivery system: complex lipid encapsulation.
Lipid encapsulation wraps an mRNA molecule inside a tiny protective capsule of fat that extends the molecule’s lifespan. Fortunately, cell walls are made of lipids, too. When the mRNA-containing nanoparticle capsule bumps up against a cell wall, the two membranes fuse, like two soap bubbles that collide and meld together. When they merge, the capsule releases its messenger RNA molecule into the cell, which instructs the cell to make the spike proteins that trigger the patient’s immune response.
Nevertheless, although they don’t break down nearly as rapidly as unencapsulated mRNA molecules, these lipid capsules also degrade. The reason why the Moderna vaccine doesn’t need ultracold freezing is that its lipid capsules appear to be more robust at higher temperatures than the lipid formulation developed by BioNTech for the Pfizer vaccine.
As a result, BioNTech’s more fragile lipid nanoparticle compound prompted Pfizer to develop a workaround. It took the form of an ultracold distribution and packaging system that preserves the company’s control over as much of the supply chain as possible.
Coming Up in Part Two…
Guided by insights from business school supply chain experts, in this report’s second half we examine the ways Pfizer wields control. We trace the vaccine’s supply chain through manufacturing and packaging, followed by ultracold warehousing, cargo flights, and distribution.
We also look at how Pfizer is driving the booming business in ultracold refrigeration equipment and supplies, and the consequences when ultracold equipment isn’t available. And we suggest that the supply chain’s ultimate success may require a federally-funded investment in state vaccine promotion and point-of-care initiatives as a last-minute rescue.