Vaccine deals cloaked in secrecy

Hard to ask questions of drug companies and Govts about blame or recourse, write Matt Apuzzo and Selam Gebrekidan

When members of the European Parliament sat down this month to read the first publicly available contract for purchasing coronavirus vaccines, they noticed something missing. Actually, a lot missing.

The price per dose? Redacted. The rollout schedule? Redacted. The amount of money being paid up front? Redacted.

And that contract, between German pharmaceutical company CureVac and the European Union, is considered one of the world’s most transparent.

Governments have poured billions of dollars into helping drug companies develop vaccines and are spending billions more to buy doses. But the details of those deals largely remain secret, with governments and public health bodies acquiescing to drug company demands for secrecy.

Just weeks into the vaccination campaign, that secrecy is already making accountability difficult. Drug companies Pfizer and AstraZeneca recently said they’d miss their European delivery targets, causing widespread concern as dangerous virus variants spread. But the terms of their contracts remain closely guarded secrets, making it difficult to question company or government officials about either blame or recourse.

Available documents, however, suggest companies demanded and received flexible delivery schedules, patent protection and immunity from liability if anything goes wrong. In some instances, nations are banned from donating or reselling doses, a ban that could hamper efforts to get vaccines to poor countries.

Governments are cutting at least three types of vaccine deals: Some are buying directly from pharmaceutical companies. Others are buying through regional bodies like the European Union or the African Union. Many will turn to the nonprofit Covax programme, an alliance of more than 190 countries, which is buying from the drugmakers with an eye toward making vaccines available worldwide, especially to poor countries, free or at reduced cost. Some Governments have signed deals with manufacturers and Covax alike.

Despite the secrecy, government and regulatory documents, public statements, interviews and the occasional slip-up have revealed some key details about the vaccine deals. Here is what we learned.

Govts helped create vaccines

Vaccine development is a risky venture. Companies rarely invest in manufacturing until they are sure their vaccines are effective and can win government approval. That is part of why it typically takes so long to develop and roll them out.

To speed up that process, Governments — primarily the United States and Europe — and nonprofit groups like the Coalition for Epidemic Preparedness Innovations, or CEPI, absorbed some or all of that risk.

The US, for example, committed up to $1.6 billion to help Marylandbased company Novavax develop its Covid-19 jab, regulatory filings show. CEPI gave up to about $400 million in grants and no-interest loans.

Other companies have had even more help. Massachusetts biotech company Moderna not only used government-developed technology as the foundation of its vaccine; it also got about $1 billion in government grants to develop the drug. In August, the US then placed an initial order for the vaccine for $1.5b. The company has said that the project was paid for entirely by the federal government.

These types of arrangements were designed to help companies jumpstart manufacturing and cover costs such as clinical testing.

But companies keep the patents

Despite the tremendous taxpayer investments, typically the drug firms fully own the patents. That means they can decide how and where the vaccines get made and how much they cost. As the CureVac contract says, it “shall be entitled to exclusively exploit any such” property rights.

This has been a matter of contention for months. A coalition of countries, led by India and South Africa, have petitioned the World Trade Organisation to waive intellectual property rights so generic drugmakers can begin producing the vaccines. The World Health Organisation backs the idea, but it is all but doomed by opposition from the US and Europe, whose drugmakers say patents — and the profits from them — are the lifeblood of innovation.

“Governments are creating artificial scarcity,” said Zain Rizvi of the watchdog group Public Citizen.

“When the public funds knowledge that is required to end a pandemic, it shouldn’t be kept a secret.”

Prices will vary

One of the key terms of the vaccine contracts — the price per dose — is often redacted in the public versions of government contracts. The companies consider this a trade secret. Some drug companies have included clauses in their supply contracts that allow them to suspend deliveries if countries reveal the price.

By insisting their pricing remains confidential, the drugmakers have the upper hand over government negotiators who do not know what others countries are paying.

While Governments accepted that provision, leaks and some official reports show some of the disparities. The European Commission paid $2.19 for every dose of the vaccine developed by the University of Oxford and Astra Zeneca, while South Africa paid more than twice as much, $5.25, according to media reports.

Drug companies did not respond to requests to view their unredacted contracts or explain why secrecy was needed. A Moderna spokesperson pointed only to a document that said the contract “contains terms and conditions that are customary.”

That is why it caused such a stir last month when a Belgian official mistakenly revealed a price list, which showed US taxpayers were paying $19.50 per dose for the Pfizer vaccine, while Europeans paid $14.70.

Donations and resales restricted Public health advocates have called on wealthy countries — which have all but cornered the market on the early doses — to donate or sell vaccines to poor ones. But contracts may restrict buyers’ ability to export doses, which could depress drug company sales.

The CureVac contract, for example, prohibits EU nations from reselling, exporting or donating doses — including to Covax — without the company’s permission. Some US contracts have similar restrictions.

Vaccines arrive when they arrive

Delivery times are considered proprietary information, so there are no public bench marks to measure a company against.

Nowhere is that clearer than in the EU’s fight with AstraZeneca over the company’s news that it would not deliver the expected number of doses in this year’s first quarter. EU officials say they received specific contractual assurances for such deliveries. The drug firm says it promised only to do its best to hit those targets.

European officials, who initially agreed to keep the contract secret, have now asked the company to make it public. Unless that happens, there’s no way to assess who is responsible.

But there is no question that the drugmakers have built themselves plenty of wiggle room for such an ambitious, complicated rollout.

The CureVac contract says the delivery dates (which are all redacted) should be considered estimates. “No product or only reduced volumes of the product may be available at the estimated delivery dates,” the contract reads. Similar provisions exist in other contracts.

Nearly every vaccine-maker has similarly told investors they might not hit their targets.

“We may not be able to create or scale up manufacturing capacity on a timely basis,” Pfizer warned in a corporate filing last August.

That uncertainty has frustrated health officials. When Pfizer recently told Italy it was temporarily cutting deliveries by 29 per cent, the Government said it was considering taking the company to court. That lawsuit, if it materialises, could make public some details of the EU’s contract with Pfizer, which remains entirely secret.

“At one point they promised more vaccines or faster vaccines,” said Steven Van Gucht, the Belgian Government’s top virus expert. “And in the end they couldn’t deliver.”

Companies get liability protection

In the United States, drug companies are shielded from nearly all liability if their vaccines don’t work or cause serious side effects.

The Government covered Covid-19 drugmakers under the PREP Act, a 2005 law intended to speed up access to medicine during health emergencies.

That means people cannot sue the companies, even in cases of negligence or recklessness. The only exceptions are cases of proven, “wilful misconduct”.

Drug companies are seeking similar liability waivers in negotiations with other countries. European negotiators have balked at such requests. Covax also insists that countries accept all liability as part of its contracts.

The CureVac-EU contract does shield the company from significant liability, but with exceptions. Those exceptions are redacted.