(CNN) The US Department of Health and Human Services and Department of Defense announced on Wednesday a $1.95 billion agreement with Pfizer to produce 100 million doses of a Covid-19 vaccine in the United States. The deal also allows the US government to acquire an additional 500 million doses.
The initial 100 million vaccines will belong to the federal government, although the vaccine will need emergency use authorization from the US Food and Drug Administration to be distributed. The vaccine developers, Pfizer and BioNTech, still need to complete a large Phase 3 clinical trial to show the vaccine effectively protects people from the coronavirus.
If the vaccine is successful and receives EUA or licensure, nationwide delivery would begin in the fourth quarter of 2020, according to HHS. The Pfizer doses would be delivered to locations at the US government's direction.
HHS Secretary Alex Azar said in a press release that the US government is collecting different vaccines through the Operation Warp Speed program in order to have at least one effective Covid-19 vaccine available to Americans. According to the World Health Organization, two dozen Covid-19 vaccines are in clinical trials around the world.
The Pfizer vaccine would be available to American people at no cost, the HHS press release says. Health care professionals could charge insurers for vaccine administration. Any Covid-19 vaccine that is sponsored by the government will be free or affordable for the Americans, Azar said on CNBC Wednesday.
"For any vaccine that we have bought -- so for instance, the Pfizer vaccine -- those hundred million doses would actually be acquired by the US government, then given for free to Americans," Azar said.
He said it was the same with the AstraZeneca and the Novovax vaccine, and they continue to be in discussion about the others.
"We will ensure that any vaccine that we're involved in sponsoring is either free to the American people or is affordable," Azar said.
For the Pfizer vaccine, the Biomedical Advanced Research and Development Authority collaborated with the DoD Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense and Army Contracting Command to provide $1.95 billion for the production and nationwide delivery of the first 100 million doses.
"We've been committed to making the impossible possible by working tirelessly to develop and produce in record time a safe and effective vaccine to help bring an end to this global health crisis," Dr. Albert Bourla, Pfizer chairman and CEO said in a separate release from the company. "We made the early decision to begin clinical work and large-scale manufacturing at our own risk to ensure that product would be available immediately if our clinical trials prove successful and an Emergency Use Authorization is granted."
Preliminary data released in a pre-print paper this week by Pfizer and BioNTech said its Covid-19 vaccine appeared safe and elicited antibody and T cell immune responses in a Phase 1/2 trial. However, more research is needed; Pfizer and BioNTech said they could start a Phase 3 trial of the vaccine in late July if they receive regulatory approval.