ALEX BRUMMER: Big pharma’s heroism deserves recognition

The Oxford AstraZeneca Covid-19 vaccine has finally reached the finish line. The cheers were more muted than they were for Pfizer and Moderna, which achieved a higher percentage result. 

Much of the share price reward has already been taken, with AZ’s market value close to the top of the FTSE100 and BA owner IAG, Rolls-Royce and Whitbread among the risers on its coat-tails. 

But it is worth recalling that AZ might have been first had it not been for a request for data from the US Food and Drug Administration surrounding an unrelated death which held things back. 

Shot in the arm: The Government's support for the Oxford research, and its order of up to 100m doses, was money well spent

Shot in the arm: The Government's support for the Oxford research, and its order of up to 100m doses, was money well spent

Shot in the arm: The Government’s support for the Oxford research, and its order of up to 100m doses, was money well spent

None of this should detract from the achievement for the UK. The Government’s support for the Oxford research, and its order of up to 100m doses, was money well spent. AZ’s vaccine will be easier to transport, store and administer than its American competitors and should protect against infection as well as disease. 

At a price of £2.30 to £3.00 a shot against £13.80 to £15 for the Pfizer vaccine, it should be more cost-efficient and accessible, not just in Britain but around the world. If the NHS can get the logistics right, it also offers hope of ending a fiscal and economic nightmare. Even though the UK spends below the OECD average on R&D, its world leading research universities and laboratories do come up with the goods. 

Immunisation against Covid-19 is plainly vital if millions of lives are to be saved and the world economy is to come back from its biggest shock since the period immediately after the First World War. 

The excellence of the science must be seen as part of a continuum. 

Britain’s vax champion GSK has just announced it has begun Phase 3 final clinical trials for the first vaccine against RSV, a respiratory illness which kills infants under six months old and results in 1.4m hospital isations each year. Needless to say GSK is working flat out on its own Covid vaccines using its proven adjuvant technology, which makes vaccines more effective. 

Big pharma has suffered a bad image over pricing and ethics, and doubtless will face abuse from anti-vaxxers. Its heroism in crisis deserves recognition.

Yellow peril 

There can be few greater examples of value and brand destruction than the AA. 

The long winding road to the motoring group’s parlous state began in 1999 when members sold the pass by voting for a £1.1bn bid by British Gas owner Centrica, each collecting a bung of £240. In today’s world that would just about buy a family subscription. Centrica’s curious idea that car engineers could also fix your gas boiler never really took off and in 2004 the AA fell into the hands of private equity vultures Permira and CVC for £1.75billion. 

The alchemy continued and, after a fraught period of ownership, when the owners were at war with the GMB union, the AA was sold to Charterhouse-owned travel and insurance concern Saga in a deal which placed an astonishing £3.4billion value on the motoring concern. It has been a steep ride down ever since as financial owners squeezed it dry before dumping it back on the stock market. The low point in terms of reputation was reached in 2017 when former chief executive Bob Mackenzie was involved in a brawl that cost him his job. As with so many companies put through the private equity wringer, the AA was loaded up with debt and had the anvil of £2.6bn hanging over it at the start of this year. 

AA is so worried about survival that it is offering itself up to private equity firms Warburg Pincus and Towerbrook Capital for a feeble £218m and the promise of a capital injection of £380m. 

It is a miserable last-ditch choice for a brand which once traded on the slogan that it was the nation’s 4th rescue service. Don’t count on instant responses on roadside this winter.

Cold comfort 

On the eve of tomorrow’s public spending review, a letter arrives from the Department of Work & Pensions letting me know I am among those qualifying for a £200 winter fuel payment. 

Doubtless, millions of other comfortable baby boomers will receive the same benefit alongside concessional travel benefits. My money will be recycled to a charity supporting social equality. But in this tech-savvy age there must be an algorithm which can means test and make sure that taxpayer resources are not wasted. 

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