Vaccine developers say lack of federal funding hurt domestic capabilities

Alvena Poole, 83, receives her COVID-19 vaccine shot from Allison Miley, RN, at the IWK Health Centre in Halifax on Feb. 22, 2021.

Andrew Vaughan/The Canadian Press

Canada lags the developed world in COVID-19 vaccinations because it provided insufficient upfront funding to the smaller domestic companies that had potential inoculations in their pipeline, vaccine developers told a federal Parliamentary committee on Monday.

Had the federal government taken the approach of the United States and the United Kingdom, which provided hundreds of millions of dollars to companies with potential candidates early in the pandemic, the country would be on the cusp of making homegrown COVID-19 vaccines, John Lewis, an Edmonton-based biotechnology executive, told MPs.

Mr. Lewis, the chief executive officer of Entos Pharmaceuticals Inc., told the House of Commons health committee the “decisive and upfront funding” made available by those two countries was “key to both their success and their speed.”

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The National Research Council of Canada distributed a total of $23-million through its industrial research assistance program to domestic vaccine developers, up to a maximum of $5-million, Mr. Lewis said.

The federal government “took a careful, risk averse and committee-based decision approach that led to a relatively modest amount of scattered funding for companies in Canada to develop domestic vaccines,” he said. Mr. Lewis said this put all of the financial risk of vaccine development onto the small companies, which he said was a “mistake.”

Entos is developing a vaccine candidate and has received some of the federal money. While some of the smaller companies have production facilities, Canada currently has limited ability to mass-produce vaccines. This issue was not discussed at the committee meeting.

Gary Kobinger, a microbiologist who developed the vaccine for Ebola and briefly sat on the federal government’s vaccine task force, also testified that not enough funds were made available for domestic vaccine candidates. He compared Canada’s approach to the hundreds of millions of dollars the United Kingdom invested last spring in AstraZeneca’s proposed vaccine. “In our country, we’ve got a different approach. Money is sprinkled here and there, but there’s no follow-up,” he said.

As Canada trails many of its peer countries in rates of vaccination, lawmakers are focusing mainly on why it has not kept pace. Much of Monday’s parliamentary hearing focused on Canada’s vaccination efforts, and what the government might have done to position itself better.

The federal government has deals to buy vaccines from seven pharmaceutical companies, only one of which, Medicago Inc., is based in Canada. Health Canada has approved only two – from Pfizer-BioNTech and Moderna.

Mr. Lewis told MPs: “Expecting other countries to develop and manufacture vaccines and not prioritize their own population over other countries was, I think, a little misguided.”

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In a statement, a spokesperson for Industry Minister François-Philippe Champagne did not respond directly to Mr. Lewis’s criticisms, but said Entos had received funds through two federal programs: $5-million from the NRC and a $4.2-million grant. The money is being used for Entos’s Phase 1 clinical trial, but Mr. Lewis told lawmakers he believes his company’s vaccine candidate could have been in the final phase of trials had the government invested more and sooner.

Mr. Champagne’s spokesperson said in an e-mailed statement that the government’s decisions about what companies to fund have been driven by its volunteer vaccine and therapeutics task forces, and Ottawa has “pursued the most promising opportunities to build resilience in Canada’s future supply of vaccines and therapeutics.”

People involved with the U.S. vaccination program have said immediately available government money for producers was an important part of a historically quick development of vaccines.

Two officials involved with the U.S. vaccine program, Operation Warp Speed, wrote in the New England Journal of Medicine: “With heavy upfront investment, companies can conduct clinical operations and site preparation for … Phase 3 efficacy trials even as they file their [evidence] for their Phase 1 studies.”

The U.S. Department of Health and Human Services also provided about US$2-billion to vaccine manufacturers Johnson & Johnson, Moderna and AstraZeneca between March and May.

An investigation from the U.K. National Audit Office found that, through 2020, the U.K. government provided “upfront payments of £914 million” for five vaccine contracts and that “these payments have been used to start manufacturing and to support clinical trials.”

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In Canada, the federal government announced in March it was making $192-million available through its Strategic Innovation Fund (SIF). However, The Globe has learned that money is paid only for expenses incurred, and not provided in advance.

John Power, a spokesperson for Mr. Champagne, said: “The SIF is a claims-based program. The SIF provides the certainty needed for companies taking on major projects, including running clinical trials and building biomanufacturing capacity at scale. It also provides accountability for the spending of public funds, which Canadians expect.”

When the fund was unveiled in March, Prime Minister Justin Trudeau announced that one of its beneficiaries would be Medicago, which is based in Quebec City.

A news release said the “funding will allow Medicago to rapidly move forward on clinical trials and then quickly shift to scaling up production for pandemic response.”

Medicago said it didn’t receive the funds until October, when it signed its agreement with the federal government to supply 76 million doses of its vaccine candidate.

In a statement, Medicago spokesperson Alissa Von Bargen said the structure of the payment has not delayed its vaccine candidate. “Medicago greatly appreciates the federal government’s support,” she said.

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