International pharmaceutical companies have held South Africa hostage with Covid-19 vaccines through contracts with one-sided conditions and inflated prices.
On Tuesday, the organization Health Justice Initiative (HJI) made public the contracts that the government entered into with these companies for the procurement of Covid-19 vaccines. This followed after the Pretoria High Court ruled in favor of HJI to compel the Department of Health to disclose all information regarding the procurement of all Covid-19 vaccines.
After studying the contracts and agreements, HJI decided they revealed punitive, one-sided terms, with South Africa forced to surrender sovereignty, with none of the contracts agreed under South African legal jurisdiction.
South Africa was liable for payments of at least $734 million, including advance payments of nearly $95 million with no guarantees of timely delivery.
“The country was forced to pay too much for vaccines, including 33% more than the African Union price for the Pfizer-BioNTech vaccine and 2.5 times more for a generic version of the Oxford-AstraZeneca vaccine compared with the United Kingdom.”
It was further found that South Africa and other countries were placed in the unenviable position of having to secure scarce supplies during a global emergency with unusually stringent demands and conditions, including secrecy, a lack of transparency, and very little or no leeway regarding delivery of supplies or high prices.
“The contracts reveal the phenomenal power that pharmaceutical companies wielded in negotiations. In our scramble for much-needed vaccines, South Africa has been forced to hand over unimaginable amounts of money for overpriced vaccine doses. We were bullied into unfair and undemocratic terms in contracts that were totally one-sided. Simply put, pharmaceutical companies held us to ransom. And we have to ask: have they also done this to other countries?” said Fatima Hassan, director of HJI.
The HJI found, among other things:
- J&J charged South Africa $10 per dose, which is 15% ($1.50 per dose) more than the company charged the European Union (EU) and about 25% more than the estimated unprofitable price. South Africa had to pay off $27.5 million.
- Pfizer charged South Africa $10 per dose, which is 32.5% more than the $6.75 “cost price” it allegedly charged the African Union. South Africa had to pay $40 million in advance, of which only $20 million was repayable.
- The Serum Institute of India charged South Africa $5.35 per dose, 2.5 times more than it charged the EU and for 1.5 million doses.
- J&J and Pfizer have banned South Africa from donating or exporting doses without the company’s consent.
- The Pfizer contract contains none of the public interest measures contained in some UK and EU vaccine agreements, such as access to trial data.
- Only $20 million of the $40 million that South Africa had to pay Pfizer in advance was repayable, should the company fail to deliver doses. J&J’s advance payment of $27.5 million was “under no circumstances” refundable.
- Pfizer, J&J and the Serum Institute have all set strict requirements regarding indemnity protection and the rapid establishment of compensation funds as a prerequisite for the supply of vaccines.
