Evidence of meeting #95 for Health in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was medicago.
A recording is available from Parliament.
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
I have confidentiality obligations, sir.
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Well, it's been reported as $173 million, but since you won't answer, I'll leave it at $200 million.
In addition to that, you had the purchase agreement for, I think, 76 million doses of the vaccine, which is estimated to be, if it had been delivered, about $1.5 million.
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
That is under the APA agreement with PSPC, which says that 20 million doses were ordered and that the government has an option to order an additional 56 million.
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
So it's for 76 million. Again, you'll probably say it's confidential, but the price that is commonly out there is $20 a dose, so that's $1.5 million.
The recent announcement by the government to pay Medicago $150 million for, I believe, no doses delivered is out of that contract, correct? The government got that obligation from that contract, correct?
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
For us, the $150 million was a non-refundable advance payment, which we actually used to manufacture vaccines at risk. This was the original concept.
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
But you didn't deliver a single vial of vaccines to the Government of Canada. Is that correct?
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
We didn't deliver any of the doses.
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
The first contract was signed—the first one, for the SIF contract—in October 2020. Five days later, the advance purchase sale was done for 76 million doses of a vaccine that you hadn't yet invented.
The government, which I know is not your area, had already signed, through about three months, other contracts for 190 million doses of other vaccines, of which they used only half. When you got approval—congratulations on getting this great scientific breakthrough of a non-mRNA vaccine with such efficacy—from Health Canada in February 2022, I believe, was the government not in an obligation to now start purchasing that production?
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
You understand correctly that we obtained approval of the COVID-19 vaccine in February 2022. The APA with PSPC initially said that our delivery of the 20 million doses was up to the end of 2021. Because of the delay in the approval, we negotiated in good faith with the PSPC. We agreed to amend the agreement so that delivery of the first 20 million doses could be made by the end of 2022, which was 10 months after the approval.
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Right. Then why didn't any of those doses flow to the Government of Canada after it was approved?
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
After the approval, we faced challenges in transitioning to a commercial scale-up of production. We started to work on it, and our experts believed we would be able to fix it, but we knew it would take time.
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
The health minister here at committee last week said that the reason was primarily because they had enough doses of other vaccines—
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
Yes, because I haven't finished—
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Let me finish.
He said that they had enough doses of other vaccines from other manufacturers, so they didn't need this vaccine anymore, and they actually had another non-mRNA vaccine that they had bought and acquired. Is that correct?
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
Yes. I will answer that one.
While we worked on our internal challenges, we started to observe the market evolving a lot. We started to see a lot of new variants arising that made our vaccine irrelevant. Market demands shifted to bivalent vaccines that included omicron, which is not the case for our vaccine.
At the time—
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
The delay by Health Canada made your vaccine no longer relevant to the subsequent strains of COVID.
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
Therefore, we understood that the Canadian government needed to—
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Just hang on. I'm speaking.
The result was that $150 million of taxpayer money had to flow to you and to Medicago for a vaccine that was now outdated, and that's why they didn't receive any products.
12:15 p.m.
President and Chief Executive Officer, Medicago Inc.
At that time, the Canadian government needed to readjust their vaccine inventory position in light of the government evolving that position, so they decided not to take our vaccine, given the market situation they faced then.
The $150 million advance payment was non-refundable because it was funded to our manufacturing of the vaccine at risk, sir. We purchased raw materials. We produced many batches. We hired additional workforce to support increased capacities before the approval was given—
12:15 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
I get that. You didn't deliver a single vial—
12:20 p.m.
President and Chief Executive Officer, Medicago Inc.
Again, I want to confirm that the $150-million advance payment was to finance our manufacturing at risk before the approval was given.
12:20 p.m.
Liberal
The Chair Liberal Sean Casey
Thank you, Mr. Tada.
Next we're going to Ms. Sidhu, please, for six minutes.