Exclusive: Pharma distributors in talks with U.S. for cut of COVID-19 vaccine shipping deal - sources

[January 28, 2021]  By Carl O'Donnell and Richa Naidu

(Reuters) - U.S. pharmaceutical distributors are talking to federal officials about increasing the number of companies shipping coronavirus vaccines as part of the Biden administration's push to speed up inoculations, according to an industry executive and three people familiar with the matter.

President Joe Biden has called the initial phase of the vaccination campaign a "dismal failure" and with vaccinations in the United States at around 1 million per day, the new administration wants to expand and improve the program.

The Trump administration signed an exclusive deal with healthcare distributor McKesson Corp to ship COVID-19 vaccines for the government. That distribution system has broadly worked, but it will face new demands as additional vaccines from Johnson & Johnson and others are added.

Cardinal Health Inc and AmerisourceBergen Corp, which together with McKesson are the biggest healthcare product shippers, have made proposals to take on some distribution. Biden's team is open to the idea, according to an executive at AmerisourceBergen and two people familiar with the talks. The Biden administration has not yet made a decision, they said.

"We stand ready to support the vaccine rollout and are advocating for the addition of other pharmaceutical distributors to join the effort," said Heather Zenk, a senior vice president at AmerisourceBergen in an interview with Reuters. Government officials were receptive and are considering the proposal, she said, adding that her company has not "received any formal outreach for contracting at this point."

The U.S. Department of Health and Human Services declined to comment, saying it is prohibited from sharing information about contract discussions. McKesson did not comment on talks between the U.S. and other companies but said it believes the current approach works best for ensuring safe and fast shipments.

Walgreens Pharmacists prepare Pfizer-BioNTech coronavirus disease (COVID-19) vaccines at Crown Heights Center for Nursing and Rehabilitation, a nursing home facility in Brooklyn, New York, U.S., December 22, 2020. REUTERS/Yuki Iwamura/File Photo

Two vaccines have been authorized for emergency use so far to inoculate adults in the 330 million population of the United States. McKesson has handled shipments from Moderna Inc under the government's Operation Warp Speed program. Pfizer Inc's vaccine is not part of the government's distribution program.

Johnson & Johnson, which is part of Operation Warp Speed, is releasing data on its vaccine candidate next week and it could be authorized in the United States as soon as February.

U.S. officials said in a press conference earlier this week that they will boost vaccine shipments from 8.6 million doses each week to at least 10 million in the coming weeks.

"The current system appears to be faltering at multiple levels so I do think having more distributors involved is prudent," said Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security.

"It will be important however to maintain central coordination," he added.

Even if the Biden administration does not sign a contract with the distributors in the near term, it may begin working with them to actively prepare for a contingency plan should the United States need additional shipping capacity in the coming weeks or months, one of the sources said.

(Reporting by Carl O'Donnell in New York and Richa Naidu in Chicago; additional reporting by Nandita Bose in Washington; editing by Peter Henderson and Grant McCool)

[© 2021 Thomson Reuters. All rights reserved.]

Copyright 2021 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.