Funding for COVID-19 Vaccines: An Overview




INSIGHTi

Funding for COVID-19 Vaccines:
An Overview

Updated January 11, 2021
The U.S. Food and Drug Administration (FDA) has authorized for emergency use Coronavirus Disease
2019 (COVID-19) vaccines sponsored by Pfizer/BioNTech and Moderna. Several other COVID-19
vaccines are currently in clinical trials; additional vaccines may become available within months.
Operation Warp Speed (OWS)—the COVID-19 medical countermeasure initiative led by the Department
of Health and Human Services (HHS) and the Department of Defense (DOD)—has contracted with
manufacturers to purchase hundreds of millions of doses (including Pfizer/BioNTech and Moderna’s
vaccines) and related supplies. OWS is also planning and implementing a nationwide vaccine program.
OWS has thus far been financed largely by emergency funding provided in the coronavirus supplemental
appropriations acts.
In the FY2020 laws, not much was appropriated specifically for COVID-19 vaccine-
related efforts; instead, several accounts have funding available for relevant activities. In FY2021,
Division M of (P.L. 116-260) includes emergency appropriations directed for vaccine-specific activities.
Much of the HHS supplemental funding is available for multiple years or until expended. In addition,
HHS transfer authorities in the laws allow for transfers between funds in certain HHS accounts. This
Insight provides overviews of supplemental appropriations for selected vaccine-related activities and
available information on allocations and obligations. It does not address health care financing issues
related to vaccine administration or regular appropriations.
Vaccine Research and Development, Manufacturing, and Purchase
COVID-19 vaccine research and development (R&D), manufacturing, and purchasing efforts are largely
supported by OWS, a collaboration among several federal agencies, including the National Institutes of
Health (NIH), the Biomedical Advanced Research and Development Authority (BARDA), DOD, and
others. Some vaccine R&D is supported by NIH, BARDA, and DOD separately from the OWS efforts.
Appropriations
FY2020. In two of the four FY2020 coronavirus supplemental appropriations acts (P.L. 116-123 and P.L.
116-136)
, funding was made available for vaccine-related efforts to accounts at NIH, DOD, and the
Public Health and Social Services Emergency Fund (PHSSEF). (PHSSEF, the parent account for
BARDA, is an account for the HHS Secretary that funds additional emergency preparedness and response
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activities and is regularly used for one-time and pass-through funding to address public health
emergencies.) In particular, up to roughly $30 billion (accounting for set-asides and transfers) in the
PHSSEF account is available for vaccine development, manufacturing, and purchase until September 30,
2024. These funds are also designated for other emergency response activities, such as medical supply
procurement for the Strategic National Stockpile, supporting health care surge response, and the
development, purchase, and manufacturing of therapeutics and diagnostics.
FY2021. Division M of P.L. 116-260 appropriates $22.945 billion to the PHSSEF account to be available
for similar purposes as described above until September 30, 2024. Of the total, $19.695 billion is
available to BARDA for “necessary expenses of manufacturing, production, and purchase ... of vaccines,
therapeutics, and ancillary supplies.” The law directs the HHS Secretary to “purchase vaccines developed
using funds made available ... to respond to an outbreak or pandemic related to coronavirus in quantities
determined by the Secretary to be adequate to address the public health need.” Funds may reimburse
obligations for vaccines and therapeutics “planning, development, preparation, and purchase” incurred
prior to enactment.
Supplemental appropriations to NIH Office of the Director account could also be used, in part, for
vaccine-related R&D.
Allocations, Obligations, and Reporting
According to a Government Accountability Office (GAO) report published on November 30, as of
October 31, 2020, HHS had allocated about $13.8 billion in coronavirus supplemental funding for
“vaccines”—including $150 million in NIH allocations and the rest in BARDA allocations. Of this
allocated amount, about $13.3 billion had been obligated and $1.28 billion had been expended.
The report also states that DOD has allocated about $1.64 billion in funding from the CARES Act (P.L.
116-136)
toward a medical countermeasures development portfolio. DOD has five COVID-19 vaccine
development projects underway.
According to a separate November GAO report, as of October 15, OWS had announced contract awards
to support six vaccines, with obligations totaling at least $10 billion and a total estimated value of at least
$18 billion, with awards made by both DOD and BARDA.
P.L. 116-260 adds a reporting requirement on OWS funding that includes total obligations and funding
awards exceeding $20 million by department/agency and appropriations act, to be provided not later than
30 days after enactment, and regularly updated thereafter, to the House and Senate Appropriations
committees.
Vaccine Deployment and Distribution
As a part of OWS, CDC has been working with state, local, tribal, and territorial (SLTT) jurisdictions to
plan and implement a nationwide vaccination program.
Appropriations
FY2020. In two COVID-19 supplemental appropriations acts (P.L. 116-123 and P.L. 116-136), CDC
received
a total of $6.5 billion (of which $800 million is designated global funding). Much of this funding
is available broadly “to prevent, prepare for, and respond to coronavirus, domestically and
internationally.”
FY2021. Division M of P.L. 116-260 appropriates $8.75 billion to CDC, for “activities to plan, prepare
for, promote, distribute, administer, monitor, and track coronavirus vaccines to ensure broad-based
distribution, access, and vaccine coverage,” to be available until September 30, 2024. Of this total, $4.5


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billion is for SLTT grants (or cooperative agreements), of which $210 million is to be transferred to the
Indian Health Service (IHS) for tribes and tribal organizations and a separate amount of not less than
$300 million is for “high-risk and underserved populations, including racial and ethnic minority
populations and rural communities.” At least $1 billion in SLTT grants must be made available within 21
days, and funds can reimburse obligations incurred prior to enactment. PHSSEF appropriations described
above may also be relevant.
Allocations, Obligations, and Reporting
To date, CRS could not identify an exact amount of related allocations and obligations. Funding
announcements include the following:
 a contract to a company, McKesson, to manage the nationwide distribution;
 a partnership with commercial pharmacies for providing vaccines to long-term care
facilities;
 SLTT grants under an existing immunization cooperative agreementannounced in
September and December—and other smaller demonstration grants; and
 the first $3 billion in SLTT grants from P.L. 116-260 is to be provided by January 19,
2021.
DOD has assisted with logistics planning. Other agencies manage vaccine distribution efforts among their
employees and covered populations (e.g., IHS and the Department of Veterans Affairs [VA]), in
collaboration with the nationwide effort.
P.L. 116-260 adds a requirement that CDC “provide an updated and comprehensive coronavirus vaccine
distribution strategy and a spend plan, to include funds already allocated for distribution” to specified
congressional committees within 30 days.


Author Information

Kavya Sekar

Analyst in Health Policy




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IN11556 · VERSION 3 · UPDATED