The Ultimate Supply Chain Challenge, Part Two: Pfizer’s Factories, Freezer Farms & Frigid Flights
In Part One of this report, we examined how a lack of timely competition helped Pfizer overcome unprecedented logistics obstacles and narrowly win the Covid vaccine first-to-market race.
Then, we answered the one question on everyone’s minds: why the vaccine’s two pioneering technologies—messenger RNA encoding and lipid encapsulation—require Pfizer to store and ship its vaccine at the never-before-attempted arctic temperature of minus 94 degrees Fahrenheit.
To accomplish this logistics feat, the drugmaker developed 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.
Pfizer’s Drive for Supply Chain Control
An expert on supply chain planning models, the Columbia Business School’s Dr. Awi Federgruen explained to the Chicago Tribune that Pfizer’s preference to control so much of the vaccine’s storage and shipping stands out:
Normally speaking, it would be much more efficient to work with large distributors. . .but the understanding that lead times have to be reduced, and the number of handoffs have to be reduced to an absolute, bare minimum, has led to this very novel and ambitious distribution plan.
He also said it remains to be seen how rapidly Pfizer can scale up distribution and whether the drugmaker will run into problems.
Apparently this drive for supply chain control also played a part in Pfizer’s opting out of Operation Warp Speed. Had the firm taken research and development funding from OWS, in exchange, the federal government would have insisted that Pfizer cede control over more of its logistics to the Department of Defense and more of its packaging and distribution to McKesson Corporation, the White House’s selection for a distribution subcontractor.
Instead, Pfizer only negotiated a purchase price and sales delivery contract with OWS, but not a research and development sponsorship like Moderna and the other Warp Speed participants.
Given that Pfizer wanted to retain as much control as possible—including control over information shared with the public—here’s a summary of the few specifics that are known about the vaccine’s manufacturing, packaging, and logistics.
Where is the Pfizer Vaccine Manufactured & Assembled?
For the United States market, the ingredients crisscross the nation. The supply chain kicks off with raw material production in St. Louis. Next, the critical messenger RNA components are manufactured in Andover, Massachusetts.
To construct the lipid nanoparticles, the factories will blend the mRNA substance with other materials in a process known as impingement jet mixing. Sterile filtration then creates the bulk vaccine.
Standard glass shatters at ultracold temperatures. Instead, Pfizer will dispense the injections into five-dose vials made by Corning from a chemically strengthened glass compound introduced in 2017 known as Valor Glass. It’s similar to Gorilla Glass, the rugged formulation originally developed by the glassmaker for Apple’s iPhone and iPad screens. After sterilizing, filling and capping the vials, Pfizer will then inspect them before transferring the containers to labeling and packing lines.
The packaging line will load 195 vials in a tray that resembles a pizza box. Each tray drops into a “shipper,” a reusable insulated carton with a dry ice layer which will contain a single tray (975 doses) or five trays (4,875 doses). Each smart cooler also comes with temperature sensors wired to a GPS-enabled transponder, enabling Pfizer and OWS to continuously monitor the locations and temperatures of each shipment. As long as the smart cooler remains sealed, the dry ice should keep the contents at about minus 94 degrees Fahrenheit for 10 days.
The drug company’s distribution plan includes ultracold storage facilities at its factories in Kalamazoo and Puurs. Pfizer also plans to store the product inside more freezer farms at its distribution centers in Karlsruhe, Germany and Pleasant Prairie, Wisconsin, next to Kenosha.
How Will the Vaccine Be Transported?
The Wall Street Journal reported that on November 27 United Airlines began operating flights to pre-position shipments of the Pfizer vaccine for rapid distribution once regulators approve the injections. United expects to fly Pfizer’s smart coolers aboard chartered cargo flights between Brussels International Airport and Chicago O’Hare International Airport. O’Hare is less than 35 minutes away from the Pleasant Prairie distribution center.
However, dry ice is considered a “dangerous good” by the Federal Aviation Administration. Dry ice is solid carbon dioxide; as it thaws, the gas poses an asphyxiation hazard on aircraft. The gas also constitutes an explosion risk inside sealed containers. And passenger jetliners usually don’t have equipment that monitors carbon dioxide and mitigates hazards. For these reasons, FAA regulations usually prevent airlines from shipping large quantities of dry ice aboard passenger aircraft.
United had requested and received a waiver of the 3,000 pound dry ice limit from the FAA. The agency will instead permit United to transport five times as much, or 15,000 pounds on each flight.
United isn’t the only airline flying Pfizer’s vaccines. A White House briefing with Operation Warp Speed’s Chief Operating Officer General Gustave Perna had also identified United Parcel Service and Federal Express as Pfizer’s logistics subcontractors. Plans call for dozens of daily cargo flights and truck trips. UPS has recently installed an extensive freezer farm, housing rows of ultracold freezers near their primary hub’s terminal at the Muhammad Ali International Airport in Louisville. Pfizer’s Wisconsin distribution facility is also near the Chicago Rockford International Airport, a huge secondary UPS hub with 40 gates at the carrier’s cargo terminal.
According to OWS, McKesson and the Defense Department will also ship injection supply kits via UPS and FedEx so that they meet Pfizer’s vaccines at the destinations. These kits include supplies like needles, syringes, and alcohol pads. For the other vaccines like Moderna’s, McKesson will assemble and ship many of these supplies in the same packaging as the vaccines.
In collaboration with the CDC’s Advisory Committee on Immunization Practices (ACIP) and state health officials, the Defense Department will also coordinate shipping quantities and shortest routes among Pfizer, UPS and FedEx. Former GlaxoSmithKline Vaccines CEO Dr. Moncef Slaoui, Operation Warp Speed’s chief adviser and an IMD Business School MBA, told NBC News’ Meet the Press that the vaccine quantities will be proportionally allocated to the states based on population. For example, California expects to receive an initial allocation of 327,000 Pfizer doses, but Maine will receive only 12,500.
The Clinician’s Explosive Dilemma
Shipping from the U.S. freezer farms to final destinations should take less than 72 hours. Once the smart coolers arrive, most clinicians who don’t have ultracold storage will need to observe a difficult set of constraints.
If restocked with dry ice upon arrival and at least every five days afterward, Pfizer’s smart cooler can temporarily serve as a storage container for another 15 days. But here’s the challenge: Clinicians can open the smart cooler for only 60 seconds at a time, and can open it no more than twice a day.
Clinicians can store the thawed vaccine in refrigerators, but only for five days, after which time they need to discard any unused vials. At room temperature, the vaccine will spoil after only six hours, and once clinicians puncture the vial caps, the remaining vaccine spoils even faster.
Supply chain expert Dr. Anna Nagurney, a professor in the Department of Operations and Information Management in the Isenberg School of Management at the University of Massachusetts, told the Associated Press, “It’s really upsetting to have wastage like that. It’ll result in loss of lives and pain and suffering. It’s a waste of resources.”
Hannan told Reuters that, in other words, clinicians without ultracold freezers will face a difficult dilemma: they can either refrigerate the vaccines and administer all 975 doses from the smallest cooler within five days. Or, to lengthen the vaccines’ lifespan, they can restock the cooler with dry ice and only open it twice a day for 60 seconds each time.
This is the frustrating, no-win dilemma that blew up Hannan’s head.
In Rochester, Minnesota, the largest employer in the state is the Mayo Clinic. Since the 1960s, the Mayo Clinic has continually earned its reputation as the finest medical center in the world. Nevertheless, even the largest and most prestigious teaching hospital on the planet says that it doesn’t currently have ultracold storage capabilities.
Here’s what Dr. Gregory Poland—an award-winning vaccine researcher and virologist at Mayo’s Alix School of Medicine—told Reuters:
We’re a major medical center and we don’t have storage capacity like this. That will be true for everybody. This is a logistical obstacle. We’re talking about a vaccine that needs storage at minus 70 or 80. That’s a tremendous logistical issue not only in the U.S. but outside the Western world.
What Could Go Wrong?
A widely-quoted professor of operations management and business analytics at Johns Hopkins University’s Carey Business School, Dr. Tinglong Dai, suggested to the Chicago Tribune that using the smart coolers as storage devices will be fraught with obstacles. Doing so will require clinicians to tightly coordinate supply with demand so that they don’t end up with extra vaccines that spoil, he said. And each time clinicians restock the dry ice creates opportunities for errors.
Dr. Dai points out that because ultracold freezers can cost as much as $20,000, it might make sense for large urban medical centers to make that investment, but not small rural hospitals. He also suggested an option that might work well in urban areas. This approach might entail setting up large centralized freezer farm warehouses with hundreds of freezers that could store the vaccines for points of care, like hospitals, pharmacies, and doctors’ offices.
According to this grand rounds presentation for the University of California at San Francisco by Dr. Paul Offit of the University of Pennsylvania’s Perelman Medical School, this appears to be the approach implemented by Pennsylvania. Other states like North Dakota and California are scrambling to obtain and deploy their own ultracold freezer systems, equipment suddenly sold out in many areas of the country.
In the ultracold freezer industry, business is booming. Stirling Ultracold, a startup launched with Ohio University serving as the lead investor in the firm’s seed funding round, has already installed at least 70 of their energy-efficient ultra-low temperature (ULT) freezers at Louisville International’s UPS freezer farm. UPS is also building a similar facility in the Netherlands at Venlo, not far from the Eindhoven Airport. The airline has invested in 600 ultracold freezers for deployment at the two facilities, with an estimated minimum equipment cost of $6 million.
But many cash-strapped states, like Illinois, still aren’t convinced they want to invest in ultracold equipment. One account reported that the aggregate funding states say they need from the federal government to promote and distribute Covid vaccines tops more than $8 billion. None of these costs is shouldered by Operation Warp Speed, and so far, neither Congress nor the lame duck administration in Washington has mandated reimbursements for these costs.
Illinois officials might wish to reconsider their plans, because Pfizer’s vaccine probably won’t be the last SARS-CoV-2 vaccine that requires ultracold storage. For example, another mRNA vaccine candidate developed by Boston-based Translate Bio in collaboration with Sanofi requires storage at a temperature even colder than Pfizer’s: minus 112 degrees Fahrenheit.
In fact, many points of care are even scrambling merely to find enough dry ice. Carbon dioxide is manufactured as a byproduct of petroleum refining. Since Americans who are staying home because of the pandemic haven’t been driving during most of 2020, weak demand existed for gasoline. Consequently, there’s not much of a carbon dioxide inventory available for manufacturing dry ice—a critical supply shortage suddenly colliding with explosive demand.
Writing for Bloomberg, Dr. Scott Duke Kominers of the Harvard Business School and Dr. Alex Tabarrok of George Mason University argue for immediate investments in supply chains that will support vaccines like Pfizer’s:
We’ve already seen the costs of supply-chain failures during the Covid-19 pandemic: Delays in the production of simple nasal swabs slowed testing by months even as the pandemic exploded in the U.S. The world is now eagerly awaiting a vaccine, and will need billions of doses as quickly as possible. If the vaccine supply chain fails, the economic and human cost of Covid-19 will be prolonged. . .
Supply chains failed as the pandemic began, and we can’t let that happen again with vaccines. Nobody should die because poor preparation keeps us from being able to deploy lifesaving technology quickly. We have to be ready to produce billions of doses as soon as a vaccine is approved—and that means we need to invest now.
As the Pfizer vaccine was recently approved for emergency use, many of these logistical challenges will begin to play out in the coming months. Whatever the future holds, this international supply chain challenge will be studied for generations to come.