The COVID-19 procurement contracts South Africa signed with various pharmaceutical companies were “unethical, immoral, and imperial minded”, says Health Justice Initiative (HJI) director, Fatima Hassan. She says the contracts made no provision for transparency and government as the purchaser had little leverage.
Hassan was speaking at a press briefing on Tuesday. Last month, the Pretoria High Court ordered the Department of Health to hand over the COVID-19 vaccine contracts on September 1st. The judgement stipulated that the department hand over the vaccine contracts, as well as documents related to the negotiations with pharmaceutical companies. HJI and the department have agreed on an extension to the end of September 2023 to submit the negotiations document.
“Unfortunately the contracts prove what we already suspected; that they are one-sided. All the power remains with the pharmaceutical industry and it is basically pharmaceutical bullying,” she says.
“We are calling for governments in the global south, and boards to provide open procurement negotiations.”
Johnson and Johnson (J&J) contract
Jay Kruuse, director of Public Service Accountability Monitor South Africa, says there’s a strong bias in favour of the pharmaceutical industry in the J&J contracts. The Public Service Accountability Monitor is a non-profit and part of the School of Journalism and Media Studies at Rhodes University.
“Delivery terms for doses were vague. The contracts allowed for J&J to not deliver on a fixed time frame, putting the South African government in a difficult position. There was a very extensive confidentiality clause.”
Kruuse says the indemnity clause in the J&J contracts provides extensive cover to the pharmaceutical industry and puts the government – the purchaser – in an unfavourable position.
“South Africa paid $10 per dose more than some countries, including countries that are considered high-income countries,” he says.
“The Pfizer contract for South Africa was quite similar to some other countries,” says Professor Mathew Herder, director at the Health Law Institute at Schulich School of Law, Dalhousie University in Canada.
Herder says few measures were taken to protect public interest and the contracts were more in Pfizer’s favour.
The contract stated that South Africa was prohibited from sharing doses with neighbouring countries, and that Pfizer can stop South Africa from sharing the vaccines indefinitely. It also stated that they have sole complete control over where doses are made in the country.
“The contract actually does not guarantee delivery of doses and if they are not delivered, the most South Africa can get back in terms is 50% of the money already paid, which is not standard. In terms of indemnification, South Africa was basically told to state to the public that the Pfizer vaccine is harmless,” he says.
According to Herder, the contract required South Africa to cover all costs and burdens that may arise from vaccine complications.
The COVAX contracts were initially set up for the benefit of low-middle income countries but the global north got the doses they needed, leaving many without vaccines.
Professor Brook Baker, a senior policy analyst for the Global Access Project at the Northeastern University’s School of Law in the USA, says “COVAX failed in South Africa in every respect. Gavi projected to supply 20 million doses by the end of 2021 and they fell short.”
Gavi is the global vaccine alliance, and the co-lead of COVAX.
“The contract guaranteed no number of doses or actual price. South Africa only got one million doses from the COVAX contract even though Gavi raised $10 billion to procure vaccines,” Baker explains.
Baker adds there were massive indemnifications absolving Gavi of any loss.
Lessons to be learned
Nick Dearden, director of Global Justice Now in the UK, says what the HJI has done is important.
“When secrecy is allowed to rule, pharmaceuticals gain power undermining public interest. Countries like South Africa were charged two and a half times more than countries like the UK and this is not right,” he says.
Dearden says that there are so many lessons to be learned and it’s vital that people know what happened.
Supporting the importance of transparency, Tahir Amin, director of the Initiative for Medicines, Access and Knowledge, a US based non-profit, says these kinds of agreements often get redacted.
“We’re all operating in the dark which is why the HJI court case is important. It’s imperative for all governments to try to protect the public first,” he says.
The contracts are now available and live on the HJI website. – Health-e News