Brussels – When members of the European Parliament sat in January to read the first publicly available contract for the purchase of coronavirus vaccines, noticed that there was something missing. In fact, a lot was missing.
The price per serving? It wasn’t there. The release schedule? It wasn’t there. How much money is being paid in advance? It wasn’t there either. And this contract, between the German pharmaceutical company CureVac and the European Union, is considered one of the most transparent in the world.
Governments have spent billions of dollars to help pharmaceutical companies develop vaccines and are spending billions more to buy doses. But the details of these deals remain largely secret, with governments and public health organizations agreeing to the secrecy requirements of pharmaceutical companies.
Just a few weeks after the vaccination campaign, this secrecy is already making accountability difficult. Pharmaceutical companies Pfizer and AstraZeneca recently announced that they would not be able to meet their European delivery targets, causing widespread concern now that dangerous variants of the virus are spreading. However, the terms of their contracts remain well-kept secrets, making it difficult for companies or government officials to question guilt or the possibility of appeals.
The available documents, however, suggest that pharmaceutical companies have demanded and guaranteed flexible delivery dates, patent protection and the privilege of not being liable if something goes wrong. In some cases, countries are prohibited from donating or reselling doses, a ban that could hamper efforts to bring vaccines to poor countries.
Governments are closing at least three types of vaccine deals: some are buying directly from pharmaceutical companies. Others acquire them through regional bodies such as the European Union or the African Union.
Many will turn to Covax, a nonprofit coalition in more than 190 countries that it is buying from drug makers to make immunizers available worldwide, especially to poor countries, free of charge or at a reduced cost. Some governments have signed agreements with manufacturers and with Covax.
Despite secrecy, government and regulatory documents, public statements, interviews and occasional slips revealed some important details of the negotiations. Here’s what we found.
Governments helped create vaccines
Vaccine development is a risky undertaking. Companies rarely invest in manufacturing until they are sure the products are effective and can earn government approval. This is part of the reason why it usually takes so long to develop and launch them.
To accelerate this process, governments – mainly the United States and Europe – and nonprofit groups such as the Coalition for Epidemic Preparedness Innovations, or Cepi in the acronym in English, took part of these risks, or all.
The United States, for example, has invested up to $ 1.6 billion to help the Maryland-based Novavax company develop its coronavirus vaccine, according to regulatory records. Cepi contributed about $ 400 million in grants and interest-free loans.
Other companies received even more help. Massachusetts, Massachusetts, not only used technology developed by the government as the basis for its vaccine; it also received about $ 1 billion in government grants to develop the immunizer. In August, the US placed an initial order for $ 1.5 billion. The company said the project was paid in full by the state.
These types of arrangements are designed to help companies accelerate manufacturing and cover costs such as clinical trials.
But companies keep patents
Despite the taxpayers’ tremendous investments, pharmaceutical companies are usually the exclusive holders of patents. This means that they can decide how and where vaccines are made and how much they cost. As CureVac’s contract explains, the company will have the exclusive right to exploit any property rights.
This has been a matter of controversy for months. A coalition of countries, led by India and South Africa, has asked the World Trade Organization to waive intellectual property rights so that generic drug manufacturers can start producing vaccines. The World Health Organization has endorsed the idea, but there has been opposition from the United States and Europe, whose drug makers claim that patents – and the profits from them – are the lifeblood of innovation.
“Governments are creating artificial scarcity. When public money supports the knowledge needed to end a pandemic, it must not be kept secret, ”said Zain Rizvi, of the Public Citizen watchdog group.
One of the key terms of vaccination contracts – price per dose – is often hidden in public versions of government contracts. Companies consider this a trade secret. Some pharmaceutical companies have included clauses in their supply contracts that allow them to suspend deliveries if countries reveal the amount paid.
By insisting that their prices remain confidential, manufacturers guarantee the advantage over government negotiators, who do not know how much other countries are paying.
Governments accepted this provision, but leaks and some official reports show some of the disparities. The European Commission paid $ 2.19 for each dose of the vaccine developed by the University of Oxford and AstraZeneca, while South Africa more than doubled, $ 5.25, according to media reports.
Pharmaceutical companies have not responded to requests for disclosure of their contracts or to explain the reason for secrecy. A spokesman for Moderna mentioned only one regulatory document that said the contract “contains terms and conditions that are customary”.
That was why there was a lot of unrest last month, when a Belgian official mistakenly revealed a price list that showed that US taxpayers were paying $ 19.50 a dose of Pfizer vaccine, while Europeans were paying $ 14 , 70.
Donations and resales are restricted
Proponents of public health have asked rich countries – which have appropriated the market for first doses – to donate or sell vaccines to poor countries. However, contracts may restrict buyers’ ability to export doses, which could affect sales by pharmaceutical companies.
The CureVac contract, for example, prohibits European countries from reselling, exporting or donating doses – including to Covax – without the company’s permission. Some contracts in the United States have similar restrictions.
No delivery time
Delivery times are considered proprietary information, so there is no public standard to impose on a company.
Nowhere is this more clear than in the European Union’s struggle with AstraZeneca over the company’s announcement that it would not deliver the expected number of doses in the first quarter of this year. European authorities say they have received specific contractual guarantees for such deliveries. The company claims that it has promised only to do as much as possible to achieve these goals.
European officials, who initially agreed to keep the contract a secret, have now asked the company to make it public. Unless this happens, there is no way to assess who is responsible.
But there is no doubt that drug manufacturers have a good deal of room for maneuver in such an ambitious and complicated launch. The CureVac contract says that delivery dates (all confidential) should be considered estimates. “No product will be available on the scheduled delivery dates, or perhaps only reduced volumes of the product”, as stated in the contract. Similar provisions exist in other contracts.
Almost all vaccine manufacturers have told investors that they may not achieve their goals. “We may not be able to create or increase manufacturing capacity in a timely manner,” warned Pfizer in a corporate notice last August.
This uncertainty frustrated health officials. When Pfizer recently announced to Italy that it was temporarily cutting deliveries by 29 percent, the government said it was considering taking the company to court. This process, if materialized, may make public details of the European Union’s contract with Pfizer, which remains completely secret.
“At one point, they promised more vaccines or faster vaccines. And in the end, they failed to keep their promise, ”summarized Steven Van Gucht, the Belgian government’s leading virus expert.
Some governments are profiting
At the start of the pandemic, the European Investment Bank, the European Union’s lending arm, provided a $ 100 million loan to the German company BioNTech, which partnered with Pfizer to produce a vaccine.
In addition to the loan interest, the bank will receive up to $ 25 million in vaccine profits, according to a version, with confidential data, of the contract that BioNTech presented to securities regulators.
The bank said the profit-sharing agreements reflect the risk involved in pre-financing. Public Citizen’s Rizvi argued that this puts governments on the same side as manufacturers and reduces any incentive to make drugs cheap and widely available.
Businesses get protection against liability
In the United States, pharmaceutical companies are protected from almost all liability if their vaccines do not work or cause serious side effects. The government protects drug makers against Covid-19 under the 2005 Prep Act, designed to accelerate access to drugs during health emergencies.
This means that people cannot sue companies, even in cases of negligence or recklessness. The only exceptions are cases of “intentional misconduct”.
Pharmaceuticals are seeking similar disclaimers in negotiations with other countries. European negotiators rejected such requests. Covax also insists that countries accept all responsibility as part of the contracts.
The CureVac-UE contract protects the company from significant liability, but with exceptions. These exceptions are confidential.
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