By Manas Mishra

(Reuters) – Pfizer Inc said on Thursday the U.S. government would pay $5.29 billion for 10 million courses of its experimental COVID-19 antiviral drug, as the country rushes to secure promising oral treatments for the disease.

The deal is for around twice as many treatment courses as Merck & Co Inc has agreed to supply the United States under its contract. The price for the Pfizer pill is nearly 25%lower at roughly $530 per course, compared with about $700 for Merck’s.

Pfizer applied for emergency authorization of the drug, branded as Paxlovid, this week after reporting data showing that it was 89% effective at preventing hospitalization or death in at-risk people. The trial’s results suggest that Paxlovid surpasses Merck’s molnupiravir which was shown last month to halve the risk of dying or being hospitalized for COVID-19 patients at high risk of serious illness.

“While this pill still requires a full review by the Food and Drug Administration, I have taken immediate steps to secure enough supply for the American people,” President Joe Biden said in a statement. He added that his administration was making preparations to ensure the treatment is easily accessible and free.

Pfizer said it would begin deliveries of the treatment as soon as this year if it is authorized by the U.S. FDA.

Shares of Pfizer were up 0.65% at $51.20 on Thursday afternoon, while shares of Merck were nearly flat at $82.63.

Getting vaccinated should still be the priority for Americans but having pills that can keep people out of the hospital “could be a lifesaver,” said U.S. Secretary of Health and Human Services Xavier Becerra.

Pfizer has said it expects to manufacture 180,000 treatment courses by the end of next month and at least 50 million courses by the end of 2022.

Countries have scrambled to secure doses of the Pfizer and Merck oral drugs, based on promising data reported by both companies.

The U.S. government has so far secured 3.1 million courses of Merck’s COVID-19 pill for $2.2 billion, with the right to buy 2 million more courses in the future.

Drugs in the same class as Merck’s pill have been linked to birth defects in animal studies. Merck has said similar studies of its drug – for longer and at higher doses than used in humans – show that it does not cause birth defects or cancer.

(Reporting by Manas Mishra in Bengaluru, Additional reporting by Michael Erman in New Jersey; Editing by Ramakrishnan M. and Matthew Lewis)