Ottawa is set to recoup $40 million from the former parent company of Medicago, the Quebec City-based biopharmaceutical firm that received over $300 million in federal funds to develop a domestic COVID-19 vaccine that never materialized.
The disclosure comes after a thorough examination by Members of Parliament from the Conservative, Bloc, and NDP parties in the House of Commons health committee. They questioned officials from Canada’s procurement department regarding the government’s interactions with Medicago during the pandemic.
Medicago was granted a significant infusion of $173 million from Innovation, Science, and Economic Development Canada (ISED) in 2020 to support vaccine technology development and the construction of its Quebec City manufacturing facility. Through negotiations with Mitsubishi, Medicago’s former parent company, Ottawa will now recover $40 million used in building the facility.
In addition to the initial investment, the government agreed to buy $150 million worth of COVID-19 vaccine doses from Medicago. Although Health Canada approved Medicago’s vaccine in February 2022, it couldn’t be sold internationally because the World Health Organization (WHO) linked it to the tobacco company Philip Morris International, a former partial owner of Medicago.
Medicago’s facility closed in February 2023 when Mitsubishi stopped promoting its COVID vaccine Covifenz, resulting in the shutdown. Minister François-Philippe Champagne committed to preserving intellectual property and jobs at the facility.
The WHO’s refusal to accept Medicago’s vaccine for emergency use was based on the company’s connection to Philip Morris, which holds a 21% stake in Medicago. While experts clarified the safety and efficacy of the vaccine were not at issue, the WHO’s concerns revolved around allowing a tobacco company to profit from it.
Medicago, acknowledging the WHO’s decision, emphasized the link to its minority shareholders and expressed confidence in the vaccine’s safety and efficacy. The WHO stated it is exploring policy options regarding health products linked to the tobacco industry, leaving room for Medicago’s reconsideration pending future decisions.
In an interview, Innovation Minister François-Philippe Champagne acknowledged the problem posed by the company’s association with the tobacco industry. Champagne affirmed ongoing efforts to collaborate with Medicago and hinted at discussions with Philip Morris about divestment, expressing optimism about finding a resolution.
Despite optimistic beginnings, the Medicago vaccine proved unsuccessful, prompting the government to reclaim $40 million. This highlights the complexities of developing new medicines, where unforeseen challenges can arise even in promising situations. The World Health Organization’s rigorous stance serves as a reminder to carefully consider ethical aspects in global health initiatives.
In the aftermath of the Medicago vaccine situation, there arises a question for the public: where should the retrieved $40 million be allocated by the government? Given ongoing health crises, directing the funds towards further research on vaccines within Canada could enhance our preparedness for future pandemics. Alternatively, investing in the improvement of our existing healthcare system or supporting urgently needed mental health programs are potential avenues for the funds.
As the government decides its course of action, clarity and accountability are important. The Medicago situation emphasizes the need for meticulous management of public funds, emphasizing the promotion of public health and overall well-being.
