Health activists have accused pharmaceutical manufacturers of holding the SA government to ransom over Covid-19 vaccine contracts, forcing it to pay a premium on the millions of doses it procured at the height of the pandemic while shielding themselves from potential lawsuits and penalties for late deliveries.
SA’s previously secret Covid-19 vaccine deals were released on Tuesday by the Health Justice Initiative (HJI) following a high court ruling in August ordering the department of health to provide the advocacy group with the contracts it signed with pharmaceutical manufacturers Pfizer, Johnson & Johnson (J&J) and the Serum Institute of India (SII), and the international vaccine sharing mechanism Covax.
Bullying
These deals were concluded at a time of global scarcity, when Western governments with domestic vaccine manufacturing capacity prioritised their own citizens, leaving African nations that relied entirely on imports scrambling for supplies.
“It [is a] story of pernicious bullying and heavy-handedness. The terms and conditions are so one-sided they beggar belief,” said HJI director Fatima Hassan.
“There was no transparency, little leverage against late or nondelivery of supplies and we paid inflated prices in almost all of these contracts, resulting in gross profiteering [by the vaccine manufacturers],” she said.
The department of health initially declined to provide details of the contracts even to parliament, citing nondisclosure agreements. Over time, aspects of the deals emerged, but the full picture has until now remained shrouded in secrecy.
The agreements, analysed and published by the HJI and a multistakeholder group reveal that SA paid:
- $10 a dose to J&J, a 15% premium on the price the company charged the EU, for at least 30-million doses;
- $10 a dose to Pfizer, a 32.5% premium on the price the company charged the AU, for at least 30-million doses;
- $5.35 a dose to the SII for AstraZeneca’s shot, more than 2.5 times the price the EU paid AstraZeneca directly, for 1.5-million doses; and
- At least $10.55 a dose to Covax, which media reports previously indicated agreed to supply SA with doses to cover 10% of its population (58.5-million at the time).
It calculated that SA agreed to pay $734m (R14.1bn) for the more than 60-million doses it ordered from these suppliers, including advance payments of $94m that were not fully refundable.
J&J SA spokesperson Kafi Mojapelo disputed the pricing attributed to the company, saying that it supplied vaccines to SA at its “final global price” of $7.50 a dose.
The department of health said it entered into the agreements to protect South Africans from Covid-19, which had claimed at least 100,000 lives.
“There is no argument that low- and middle-income countries around the world, including SA, had limited bargaining power to secure vaccine doses and negotiate the price of vaccines due to a number of reasons, including the limited number of manufacturers and vaccine hoarding and nationalism by high- and upper-middle-income countries,” said its spokesperson, Foster Mohale.
Business Day’s attempts to obtain comment from Pfizer, Covax and the SII were unsuccessful.
The contracts show the $27.5m advance payment required by J&J was non-refundable. Only half the $40m advance payment required by Pfizer was repayable.
Sovereignty
Covax provided no guarantees for the number of doses it would provide or the delivery dates, yet required SA to pay in full even after it was forced to order from other suppliers because the organisation failed to deliver timeously.
The HJI said its review of the contracts found they were “overwhelmingly one-sided” in favour of multinationals. “The most egregious example of this has been J&J trading scarce or very delayed supplies for extractionist terms that undermine national sovereignty,” it said, citing a requirement that SA seek permission from J&J to divert, sell or donate doses it had already paid for.
The government agreed not to impose an export ban, enabling J&J to ship vaccines bottled at Aspen Pharmacare’s plant in Gqeberha to EU customers when shots were in short supply in SA. Pfizer also barred SA from exporting its jabs without its consent.
“Frankly, in a global pandemic this is paternalistic and imperialist, harms public health programming and deliberately reduces the autonomy of African states,” said the HJI.
The contracts also reveal the department of health agreed not to take any action to override the intellectual property rights of the SII or Gavi for their shots, even as SA was working with India to try to get the World Trade Organisation to waive intellectual property rules on Covid-19 vaccines.
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