Ottawa invested $323 Million in Medicago, Then Told Company its Vaccine Doses Weren’t Needed

Federal Health Minister Mark Holland rises during Question Period in the House of Commons on Parliament Hill in Ottawa on Sept. 25, 2023. The Canadian Press/Justin Tang

The federal government could have maintained its deal with Medicago for the delivery of COVID-19 vaccines, but instead told the manufacturer the doses weren’t needed, Health Minister Mark Holland told MPs.

After Medicago’s Covifenz vaccine was authorized in Canada, “it became clear that we had the doses that we needed,” Mr. Holland told the House of Commons health committee on Dec. 6. “The other vaccines that were available meant that the Medicago ... doses were not required.”

The minister said bets had to be placed on which manufacturer would deliver early in the pandemic, and while Medicago was eventually successful, it “panned out in a timeframe where it was rendered not necessary because of the success of the other options.”

The government gave $150 million to Medicago, a division of Japanese powerhouse Mitsubishi, for an advanced purchase agreement to deliver 76 million vaccine doses before a product had been developed. Similar deals with six other manufacturers were also made.

Ottawa also gave $173 million to the company for building a plant in Quebec and for research and development. The intellectual property remains with Mitsubishi.

“Did Canada tell them we don’t need the vaccine doses because we already have enough?” asked NDP MP Don Davies.

Dr. Donald Sheppard, vice-president of the Infectious Diseases and Vaccination Programs Branch at the Public Health Agency of Canada, responded that Medicago had initial challenges to scale production.

“When they were in a position to provide a commercial scale, they were informed that at that point in time, which is when we refer to as having all the other vaccines, we were not in need of production,” added Dr. Sheppard.

Covifenz, a vaccine using a distinct plant-based technology, received approval from Health Canada on Feb. 24, 2022.

At that time, COVID-19 injections were still targeting the original Wuhan strain, despite the virus having mutated several times. The Omicron variant was ripping through Canada and did not discriminate between vaccinated and unvaccinated.

A few weeks later, the World Health Organization (WHO) said Medicago’s vaccine would not receive emergency use approval due to tobacco giant Philip Morris International having a stake in the company.

The WHO’s Framework Convention on Tobacco Control, to which Canada is a signatory, recommends against such ties.

Government procurement officials told the committee on Dec. 4 they knew about the risk the vaccine would not be recognized by the WHO, but it had to be taken given the circumstances of the pandemic.

Mr. Holland struck a similar tone, saying that no one would have protested about ties to big tobacco if Covifenz had been the only vaccine getting approved.

“I think that we were in a circumstance where we needed to look at what options were technically viable and the minority position that was held in Medicago did not advance the interests of either nicotine or tobacco,” he said.

Medicago announced in February this year it was shutting down its operations in Quebec City, citing  “significant changes to the COVID-19 vaccine landscape” and a review of global demand.

‘Insurance Policy’

Mr. Holland also defended the government losing hundreds of millions of dollars on the deal, comparing it to an insurance policy. If you didn’t need the policy, “you don’t go back to the insurance company and ask for your premiums back,” he said.

“The reality is that you make a bet, because you’re trying to protect yourself, and that’s what Canada did, we bet on seven different options.”

Conservative MP Rick Perkins contested the portrayal the minister made of the loss of millions.

“The 150 penalty payment you’ve paid is not a down payment, it’s not insurance, it’s not a mortgage, it’s none of those things,” he said. “There is no clause in that contract that required any money upfront. It’s a penalty payment for not meeting your commitments under the contract, isn’t that true?”

Mr. Holland responded “no,” but he also said he had not read the full contract. Mr. Perkins insisted there’s no advance payment clause in the contract and asked the minister to release it publicly.

Non-mRNA

Conservative MP Pierre Paul-Hus remarked that some Canadians had been waiting for Covifenz before getting vaccinated against SARS-CoV-2, the virus that causes COVID-19, since they didn’t want to get injected with the more widely available mRNA-based products from Pfizer-BioNTech and Moderna.

“You’re right there was mRNA hesitancy but we had non-mRNA options that were already on the table,” said the minister.

The early non-mRNA products, viral vector vaccines from AstraZeneca and Johnson & Johnson (J&J), were not as widely available. A total of 23,814 doses of J&J were administered in Canada out of nearly 100 million total COVID-19 doses.

AstraZeneca’s product was injected around 2.8 million times but was later suspended due to its links to blood clots.

The other non-mRNA vaccine was made by Novavax and received Health Canada’s approval in February 2022. Only 35,210 doses have been administered so far, with a near total domination of the market by Pfizer-BioNTech and Moderna.

‘Absolute Miracle’

“It is an absolute miracle of science that vaccine solutions were found,” Mr. Holland told the committee.

Some companies actually had products almost ready to go. Moderna Canada executive Patricia Gauthier wrote to Deputy Minister of Health Stephen Lucas in March 2022 to say as much.

“One of the reasons that Moderna was able to roll out a COVID vaccine so quickly was because we had already done research into the MERS virus, which belongs to the same ‘family of virus,’” she said in an email obtained via access to information and posted online.

Health Canada also changed its approval process for COVID-19 vaccines, allowing manufacturers to provide rolling submissions and put products to market that had not completed all phases of clinical trials.

Health Canada also confirmed that the product initially widely distributed by Pfizer-BioNTech is not the one that underwent clinical trials, with different manufacturing processes having being used.