The Side Effects of Biden’s Vaccine Production Plans

On January 21st, 2021, President Joseph Biden signed into action “Executive Order on a Sustainable Public Health Supply Chain.” As a large portion of his campaign was devoted to promising COVID-19 relief, it came as no surprise that President Biden enacted such an order during his second day in office. However, the ways in which he sought to address the current deficiencies in the domestic vaccine supply chain are not without serious repercussions on the international vaccine supply chain. By enacting the Defense Production Act (DPA) of 1950 (amended 2009), the federal government will be given contract primacy with American-based vaccine companies. Although this will certainly increase the amount of vaccines states are able to administer, the usage of the DPA will have international fallout on vaccine availability,  

How does the Biden Administration plan on using this archaic wartime law to get more shots administered? The main clause of the DPA that will encourage the production of more vaccines, aside from the use of funding to encourage production, is §4511 (a), Priority in contracts and Orders, Allocation of materials, services, and facilities: 

“The President is hereby authorized (1) to require that performance under contracts or orders (other than contracts of employment) which he deems necessary or appropriate to promote the national defense shall take priority over performance under any other contract or order, and, for the purpose of assuring such priority, to require acceptance and performance of such contracts or orders in preference to other contracts or orders by any person he finds to be capable of their performance… 

Essentially, this clause allows the federal government to push a contract through the long queue of international orders, and for the recipient American company to accept it.

The monopolization of American-based vaccine production would not typically be a bad thing, except for the fact that Pfizer and Moderna are global companies. Since they are headquartered in the United States, their largest production sites are located in the United States as well; both companies have smaller production centers located abroad that they use to supplement European orders. Pfizer’s main production locations are Andover, MA., Kalamazoo, MI, St. Louis, MO, and Puurs, Belgium; Moderna, similarly, has contracted with the production company Lonza for production in Portsmouth, NH and Visp, Switzerland. Through the DPA, ⅔ of the production sites owned by these companies would be exclusively used to produce vaccines for Americans.

Why would Biden even consider using the DPA? Due to ordering “short sight” of the Trump administration, the US Government does not have enough vaccines, possessing only 50% of the total necessary shots. The US Government currently has arrangements for 200 million vaccines with both Pfizer and Moderna, which were finalized in December 2020. The original Pfizer deal in July 2020 allowed up to 500 million extra doses to be acquired. However, the Trump administration only secured an extra 100 million, creating a supreme deficiency in doses. If the United States is solely dependent on Pfizer and Moderna for national production, which are currently the only two companies with FDA approval, then the United States sits at the end of a very long waiting list to purchase vaccines. Thus enters the Biden administration, and their plans to use the DPA. 

Additionally, to secure enough vaccines, the Biden administration must first sign a new order with Pfizer or Moderna and then direct the company to prioritize the new order. Although this requires the companies to agree to a new deal, it may not be as difficult as it seems. The Trump administration had used Article III of the DPA, which allows for the allocation of funding to companies to increase their production capabilities, to help develop Pfizer’s manufacturing sites in the United States. But despite previous funding from the US Government and proper applications of this law, pressuring these companies to prioritize US orders will have rippling effects on other states. 

It is unlikely that Pfizer and Moderna’s manufacturing capabilities can handle a massive order from the United States and meet orders from other countries simultaneously. Thus, these companies will be required to devote all of their US-located production lines to domestic production and cut back on orders from countries like Germany and the United Kingdom.  In fact, Pfizer has done so already: On January 21st, the Health Ministers from Romania, Poland, Czech Republic, Denmark, Italy, and Canada have all reported declining numbers of vaccine deliveries by Pfizer: as much as 50% in some cases. Although Pfizer has a production center in Europe, it was conducting renovations to increase the amount of vaccine that could be produced there and thus had to stop the production. The alternative — using Pfizer’s US-based locations — would have been difficult, as they are currently filling the US orders there.  If Biden enacts the DPA on new contracts, it is then likely that there would be many future instances where our partner nations are left stranded because of the monopolization of US-based production by the US government.  

Although most of the anger from these EU states is directed at Pfizer, it is interesting to consider how much longer other nations would be willing to put up with these shortages until they begin to direct their anger at President Biden. If the DPA is used, then this would certainly be sooner rather than later. Like the previous administration, Biden must reconcile the United States’ position and responsibilities as a world leader with the urgent need to cure the US population of a disease that has killed nearly 430,000 people.

Olwyn Kells is a sophomore concentrating in International and Public Affairs and Slavic Studies. She currently serves as a staff writer for the BULR Blog, and can be reached at olwyn_kells@brown.edu.