House Committee to Investigate $300M Payment to Defunct Vaccine Manufacturer

The Quebec-based pharmaceutical company Medicago developed a plant-based COVID-19 vaccine which was approved by Health Canada in 2022 but rejected by the World Health Organization. (CNW Group/Medicago)

The House of Commons health committee has decided to initiate a comprehensive study into the Liberal government’s expenditure of over $300 million on Medicago, a Quebec-based pharmaceutical company whose COVID-19 vaccine was never distributed.

After revelations by the National Post, Conservative MP Stephen Ellis presented a motion for the investigation. The report disclosed that the government had entered into a “non-refundable” advanced purchase agreement with Medicago, amounting to $150 million.

In October 2020, during the peak uncertainty of the COVID-19 pandemic, the Liberal government signed an agreement to procure up to 76 million doses of Medicago’s plant-derived vaccine. This was part of a broader initiative, securing multiple vaccine options for Canadians.

Quebec Economy Minister Pierre Fitzgibbon said Friday the province has had preliminary talks with potential buyers in the pharmaceutical sector to keep Medicago’s expertise and skilled workforce in Quebec. Friday, Feb. 3, 2022. Courtesy: Medicago

An additional $173 million was designated for the company’s research, development, and the construction of its manufacturing facility in Quebec City. Despite the substantial investment, the company’s closure was announced earlier this year, with its vaccine not reaching the public.

Ellis criticized the lack of transparency from the government, stating, “Three hundred million dollars of taxpayer money was wasted and… was hidden deep in a document. The sunny ways and transparency of this Liberal government have gone long and far and deep into some dark, dank cave.”

Health Canada had approved Medicago’s vaccine in 2022, but the World Health Organization’s refusal for emergency use – due to the company’s association with a major tobacco company – prevented its distribution. At the time, Philip Morris International held a minority stake, which it later divested.

Health Minister Mark Holland, seen here in November 2021, says the government ‘did the responsible thing’ by supporting the company’s vaccine development. (Adrian Wyld/The Canadian Press)

The market’s unpredictability led Mitsubishi Chemical Group, which owned Medicago entirely at that point, to cease the company’s operations, citing “significant changes” in the vaccine market.

Health Minister Mark Holland defended the government’s decision in the face of criticism, highlighting the urgency and uncertainty of the pandemic period. “Let’s remember back to the depths of the pandemic when we were all praying for a vaccine. The government did the responsible thing. We took a bet on all viable, scientifically probable options,” he said. Holland also criticized the expectation of predicting which vaccine would succeed, implying it was an unreasonable expectation.

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The intellectual property and patents developed by Medicago remain a concern, with Conservative MP Rick Perkins inquiring about the potential transfer to Mitsubishi Chemical Group. In response, Innovation Minister François-Philippe Champagne indicated that negotiations are underway to secure the intellectual property for Canada.

Champagne expressed optimism about the situation, “We’re very close… we found someone who is willing to take back the assets and some of the people to turn that around and that’s what we hope is going to happen.”

The health committee’s motion has summoned both Holland and Champagne to testify before the committee, alongside other officials and representatives from Medicago and Mitsubishi Chemical Group, to provide further clarification on the matter.