The non-profit organisation Health Justice Initiative has released Covid-19 vaccination contracts, which show how the South African government was bullied by global pharmaceuticals and made to pay over the odds compared to wealthier countries like the United Kingdom for vaccines.
The reports, which show South Africa’s Covid-19 contracts with big pharmaceuticals such as Pfizer, Johnson and Johnson, Covax, and the Serum Institute of India, were released publicly for the first time on Tuesday after the Health Justice Initiative was granted access to the contracts by the Gauteng North High Court in August.
The contracts can be found here.
The contracts show how big pharmaceuticals insisted on indemnity clauses, forced the government to pay more than double what they charged wealthy countries in the west, forced government to have indemnity clauses, insisted on vaccine injury compensation funds on their own, and had sweeping waivers, effectively leaving governments hanging out to dry.
The Health Justice Initiative took the matter to court and secured a ruling in August. Part one of the contracts shows the purchase agreements and terms between the South African government and big pharmaceutical companies, including Johnson and Johnson (Jansen), Pfizer, Covax, and the Serum Institute of India.
Health Justice Initiative founder and director Fatima Hassan welcomed that the government did not appeal the court order and that the State was releasing the contracts to the HJI, saying it was “a strong signal to powerful pharmaceutical companies and others that in South Africa, transparency cannot be bartered and is not up for sale—there really is no room for this much of secrecy in the health or any other sector”.
Reflecting on the contracts during a webinar on Tuesday, Hassan said it was clear that big pharma was “holding the government ransom” and bemoaned how the government paid inflated prices for all the contracts.
“This should never happen again,” she said, calling on the matter of pharmaceuticals bullying governments to be addressed at a global level.
Other concerns that have been raised are about how big pharmaceutical companies in places like Latin America demanded sovereign assets such as control of bank accounts and state buildings as sureties as part of their Covid-19 vaccine agreements.
“We believe governments in the Global South need to take the necessary steps so that this type of bullying is not repeated in the next pandemic,” said Hassan.
She said South Africa had managed to avoid any pressure from pharmaceutical companies that wanted to include clauses demanding State assets as surety after one of the ministers went public with the matter, leading to a swift rethink and the matter being dropped.
“But they made the government setup a very speedy parliamentary process to create a vaccine injury compensation fund. Both J&J and Pfizer said if you don’t create this fund, they will not give a single supply. We also see how the Serum Institute also extracted the highest price possible and how it was also shrouded in secrecy,” said Hassan.
Hassan has called for the State to employ better contract experts and negotiators to avoid being bullied.
Jay Kruuse, the director of the Public Service Accountability Monitor of South Africa, who focused on the J&J vaccine, said South Africa paid $10 per dose, while the company said in a July 2021 Reuters report that it was charging between $5 to $8 per dose.
Professor Mathew Herder, a director at the Health Law Institute at the Schulich School of Law at Dalhousie University in Canada, who analysed the Pfizer contracts with South Africa, said there were “sweeping confidentiality and indemnity clauses”.
“The South African government is prohibited from sharing doses to neighbouring countries without consent from Pfizer,” he said.
Herder also said in the case of a product recall, SA had given surety it would be at its cost, and if Pfizer failed to deliver, only 50% of the money would be returned.
Professor Brook Baker from the Northeastern University School of Law in Boston, who is a policy analyst for the Health Global Access Project and focused on the Covax deal, said it was shameful that countries in the Global North got vaccine doses they needed at lower prices than in the developing south.
He said ultimately, South Africa only got a tenth, or one million doses, of the promised 10 million.
“South Africa was left without access and turned to the monopolies because Covax did not deliver…,” he said.
He found that the State negotiated from a disadvantage as pharmaceuticals threatened to pull out if non-disclosures weren’t promised up front.
“There is this implied threat that if you breach this, we will deal with you in the future. The power the companies have is quite real because of these threats,” he said.
Nick Dearden, the director of Justice Now UK, said the release of the contracts to the public was important as “big pharmaceuticals gain power during secrecy”.
“This is a sizable portion of the money the SA government. We will demand the contracts the British government signed be put in the public domain as well.
“It is not right that countries like South Africa were charged more than 2.5 times what the UK paid for the Serum Institute vaccine. How can it be?
“There are so many lessons we need to learn here. This is not going to be the last epidemic. We need to learn from this for the next time,” he said.
