The answer is redacted. We pay for development, then give the patents away.
Eric
Governments Sign Secret Vaccine Deals. Here’s What They Hide.
Multibillion-dollar contracts give drug makers liability shields, patent
ownership and leeway on delivery dates and pricing — and promises that much of
it will not be made public.
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[https://static01.nyt.com/images/2021/01/28/world/28vaccine-contracts-2/merlin_182120736_32c93f0b-11dd-48c0-8ea5-2b5a55402432-articleLarge.jpg?quality=75&auto=webp&disable=upscale]
[A health care worker administering the Pfizer-BioNTech vaccine at a nursing
home in Reims, France, earlier this month.]
A health care worker administering the Pfizer-BioNTech vaccine at a nursing
home in Reims, France, earlier this month.Credit...Andrea Mantovani for The New
York Times
[Matt Apuzzo]<https://www.nytimes.com/by/matt-apuzzo>[Selam
Gebrekidan]<https://www.nytimes.com/by/selam-gebrekidan>
By Matt Apuzzo<https://www.nytimes.com/by/matt-apuzzo> and Selam
Gebrekidan<https://www.nytimes.com/by/selam-gebrekidan>
* Published Jan. 28, 2021Updated Jan. 29, 2021, 4:32 a.m. ET
BRUSSELS — 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 the 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 organizations
acquiescing to drug company demands for secrecy.
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Just weeks into the vaccination campaign, that secrecy is already making
accountability difficult. The drug companies Pfizer and AstraZeneca recently
announced that they would miss their European delivery targets, causing
widespread
concern<https://www.nytimes.com/2021/01/27/world/europe/eu-uk-covid-vaccine.html>
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 that drug companies demanded and received
flexible delivery schedules, patent protection and immunity from liability if
anything goes wrong. In some instances, countries are prohibited 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 program, an alliance of more than 190 countries, which is
buying from the drug makers 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.
The United States has secured 400 million doses of the Pfizer-BioNTech and
Moderna vaccines, enough for 200 million people, and is close to
arranging<https://www.nytimes.com/2021/01/26/us/politics/biden-coronavirus-vaccines.html?searchResultPosition=3>
200 million additional doses by summer, with options to buy up to 500 million
more. It also has advance purchase agreements for more than 1 billion doses
from four other companies whose inoculations do not yet have U.S. regulatory
approval.
The European Commission, the European Union’s executive branch negotiating on
behalf of its 27 member states, has nearly 2.3 billion doses under contract and
is negotiating for about 300 million more, according to data collected by
UNICEF<https://www.unicef.org/supply/covid-19-vaccine-market-dashboard> and
Airfinity, a science analytics company.
Editors’ Picks
<https://www.nytimes.com/2021/01/28/books/review/ethan-zuckerman-mistrust.html?action=click&algo=use&block=editors_picks_recirc&fellback=false&imp_id=305002620&impression_id=71b6e520-6241-11eb-a59f-7116892522dc&index=0&pgtype=Article®ion=ccolumn&req_id=459150941&surface=home-featured&variant=2_use&action=click&module=editorContent&pgtype=Article®ion=CompanionColumn&contentCollection=Trending>
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How Do We Regain Trust in Institutions?
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Welcome to the Graveyard of New Year’s Resolutions
<https://www.nytimes.com/2021/01/25/sports/football/kaepernick-kneeling-protests-super-bowl.html?action=click&algo=use&block=editors_picks_recirc&fellback=false&imp_id=156248149&impression_id=71b70c31-6241-11eb-a59f-7116892522dc&index=2&pgtype=Article®ion=ccolumn&req_id=459150941&surface=home-featured&variant=2_use&action=click&module=editorContent&pgtype=Article®ion=CompanionColumn&contentCollection=Trending>
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The Talk of the Super Bowl Is Quarterbacks, Except One
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Covax says it has agreements for just over 2 billion vaccine doses although it,
too, is keeping its contracts secret. Only about a dozen of the 92 countries
that qualify for vaccine subsidies under the alliance have managed to secure
separate deals with individual companies, for a combined 500 million doses.
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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.
[https://static01.nyt.com/images/2021/01/28/world/28vaccine-contracts-1/merlin_182911803_68b7e457-f939-46a5-a57a-a1882590b40c-articleLarge.jpg?quality=75&auto=webp&disable=upscale]
Image[Waiting in line to receive Moderna’s vaccine in San Diego. The company
said its vaccination program was fully funded by the federal government.]
Waiting in line to receive Moderna’s vaccine in San Diego. The company said its
vaccination program was fully funded by the federal government.Credit...Ariana
Drehsler for The New York Times
Governments Helped Create Vaccines
Vaccine development is a risky venture. Companies rarely invest in
manufacturing until they’re sure their vaccines are effective and can win
government approval. That’s 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 United States, for example, committed up to $1.6 billion to help the
Maryland-based company Novavax develop its coronavirus vaccine, according to
regulatory filings. CEPI kicked in up to about $400 million in grants and
no-interest loans.
Other companies have received even more help. The Massachusetts biotech company
Moderna not only used government-developed technology as the foundation of its
vaccine, it also received about $1
billion<https://investors.modernatx.com/news-releases/news-release-details/moderna-announces-expansion-barda-agreement-support-larger-phase>
in government grants to develop the drug. In August, the government then
placed an initial order for the vaccine for $1.5
billion<https://investors.modernatx.com/news-releases/news-release-details/moderna-announces-supply-agreement-us-government-initial-100>.
The company has said that the project was paid for entirely by the federal
government<https://www.axios.com/moderna-barda-coronavirus-funding-disclosure-2775a517-a775-485a-a509-b6906c8535a9.html>.
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These types of arrangements were designed to help companies jump-start
manufacturing and cover costs such as clinical testing.
But Companies Keep the Patents
Despite the tremendous taxpayer investments, typically the drug companies fully
own the patents. That means that companies can decide how and where the
vaccines get manufactured and how much they cost. As the CureVac contract
explains it, the company “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 Organization to
waive intellectual property rights so generic drug makers can begin producing
the vaccines. The World Health Organization has endorsed the idea, but it is
all but doomed by opposition from the United States and Europe, whose drug
makers
say<https://www.nytimes.com/2020/12/10/opinion/coronavirus-vaccine-patents.html>
patents, and the profits that flow 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.”
[https://static01.nyt.com/images/2021/01/28/world/28vaccine-contracts-2sub2/merlin_182120787_40237cf1-9946-425a-ae48-d0a18c023a73-articleLarge.jpg?quality=75&auto=webp&disable=upscale]
Image
[Administering the Pfizer-BioNTech vaccine in France earlier this month. The
European Union is paying much less than the United States for each dose of the
shot.]
Administering the Pfizer-BioNTech vaccine in France earlier this month. The
European Union is paying much less than the United States for each dose of the
shot.Credit...Andrea Mantovani for The New York Times
Prices Will Vary
One of the key terms of the vaccine contracts — the price per dose — is
frequently 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 that their pricing remains confidential, the drug makers have the
upper hand over government negotiators who do not know what other countries are
paying.
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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 AstraZeneca, while South
Africa paid more than twice as much, $5.25, according to media
reports<https://www.reuters.com/article/health-coronavirus-safrica-vaccines/update-3-south-africa-to-pay-525-a-dose-for-astrazeneca-vaccine-from-indias-sii-idUSL1N2JW0KI>.
Drug companies did not respond to requests to view their unredacted contracts
or explain why secrecy was necessary. A spokeswoman for Moderna pointed only to
a regulatory 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<https://www.nytimes.com/2020/12/18/upshot/coronavirus-vaccines-prices-europe-united-states.html>,
which showed that United States taxpayers were paying $19.50 per dose for the
Pfizer vaccine, while Europeans paid $14.70.
Dag Inge Ulstein, Norway’s minister of international development, said
countries and international organizations must do more to make contracts
public. He also called on countries to share vaccine technology and said rich
governments should donate vaccines to poor countries early — even while still
vaccinating their own citizens, as Norway plans to
do<https://www.telegraph.co.uk/global-health/science-and-disease/norway-share-covid-19-vaccine-poorer-countries-time-protecting/>.
“There must be transparency related to the agreements on procurements,” he said
in an interview. To that end, he shared with The New York Times his country’s
purchase agreement with Covax. That organization has refused to make public its
deals — either with the drug makers or with the countries it is selling to.
Covax contracts with countries assume a cost of $10.55 per dose but warn that
the final cost could be higher after including an “access/speed premium,” which
Covax said is used to help companies rush their vaccines to market.
Donations and Resales Are 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
countries. But contracts may restrict buyers’ ability to export doses, which
could depress drug company sales.
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The CureVac contract, for example, prohibits European countries from reselling,
exporting or donating doses — including to Covax — without permission from the
company. Some contracts in the United States have similar restrictions.
<https://www.nytimes.com/spotlight/coronavirus-vaccine?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
Covid-19 Vaccines ›
Answers to Your Vaccine Questions
Am I eligible for the Covid vaccine in my state?
Currently more than 150 million people — almost half the population — are
eligible to be vaccinated. But each state makes the final decision about who
goes
first.<https://www.nytimes.com/interactive/2020/us/covid-19-vaccine-doses.html?name=styln-coronavirus-vaccines&action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq®ion=TOP_BANNER%E2%96%88=storyline_menu_recirc&action=click&pgtype=Interactive&impression_id=262176c0-6174-11eb-9bbe-43be4a0f7ee0&variant=1_Show>
The nation’s 21 million health care workers and three million residents of
long-term care facilities were the first to qualify. In mid-January, federal
officials urged all states to open up
eligibility<https://www.nytimes.com/2021/01/12/us/politics/vaccine-states.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
to everyone 65 and older and to adults of any age with medical conditions that
put them at high risk of becoming seriously ill or dying from Covid-19. Adults
in the general population are at the back of the
line.<https://www.nytimes.com/interactive/2020/12/03/opinion/covid-19-vaccine-timeline.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
If federal and state health officials can clear up bottlenecks in vaccine
distribution, everyone 16 and older will become eligible as early as this
spring or early summer. The vaccine hasn’t been approved in children, although
studies are underway. It may be months before a vaccine is available for anyone
under the age of 16. Go to your state health
website<https://www.nytimes.com/2021/01/15/us/coronavirus-vaccine-states.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
for up-to-date information on vaccination policies in your area
Is the vaccine free?
<https://www.nytimes.com/2020/12/17/upshot/vaccines-surprise-bills.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq><https://www.nytimes.com/2020/12/17/upshot/vaccines-surprise-bills.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
Can I choose which vaccine I get?
<https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
How long will the vaccine last? Will I need another one next year?
<https://www.nytimes.com/2020/11/17/health/coronavirus-immunity.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
Will my employer require vaccinations?
<https://www.nytimes.com/2020/12/18/us/eeoc-employers-coronavirus-mandate.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
Where can I find out more?
<https://www.nytimes.com/interactive/2021/well/covid-vaccine-questions.html?action=click&pgtype=Article&state=default&module=styln-coronavirus-vaccines®ion=MAIN_CONTENT_3&context=styln-vaccines-faq>
A spokesman for the European Commission has said the companies included that
provision to guarantee that, wherever their drugs were used, they were covered
by the same legal protections.
And governments are trying to find other ways to restrict exports.
On Tuesday, Germany lobbied the European Commission to allow its member states
to block exports of vaccines to countries outside of the bloc after the
stuttering start of vaccine distribution in Europe.
[https://static01.nyt.com/images/2021/01/28/world/28vaccine-contracts-4sub/merlin_182363643_b238776c-b782-4044-b8e1-a4f4696a7e37-articleLarge.jpg?quality=75&auto=webp&disable=upscale]
Image
[Packing boxes of Covishield, the AstraZeneca-Oxford vaccine, at an assembly
line in Pune, India.]
Packing boxes of Covishield, the AstraZeneca-Oxford vaccine, at an assembly
line in Pune, India.Credit...Atul Loke for The New York Times
Vaccines Arrive When They Arrive
Delivery times are considered proprietary information, so there are no public
benchmarks to measure a company against.
Nowhere is that clearer than in the European Union’s fight with AstraZeneca
over the company’s announcement that it would not deliver the expected number
of doses in the first quarter of this year. European officials say they
received specific, contractual assurances for such deliveries. The company says
it promised only to make its best efforts 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.
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But there is no question that the drug makers have built themselves plenty of
wiggle room for such an ambitious, complicated rollout. The CureVac contract
says that 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 that 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<https://www.sec.gov/Archives/edgar/data/0000078003/000007800320000060/pfe-06282020x10q.htm>.
That uncertainty has frustrated health officials. When Pfizer recently told
Italy that it was temporarily cutting deliveries by 29
percent<https://www.nytimes.com/2021/01/20/world/pfizer-delay-in-vaccine-italy.html>,
the government said it was considering taking the company to court. That
lawsuit, if it materializes, could make public some details of the European
Union’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 virologist. “And in the end they couldn’t
deliver.”
Some Governments Are Profiting
Early in the pandemic, the European Investment Bank, the lending arm of the
European Union, provided a $100 million
loan<https://www.eib.org/en/stories/eu-financing-for-covid-19-vaccine> to the
German company BioNTech, which partnered with Pfizer in producing a vaccine.
In addition to the interest on the loan, the European bank will receive up to
$25 million in vaccine profits, according to a redacted version of the
contract<https://www.sec.gov/Archives/edgar/data/1776985/000119312520195916/d830259dex1046.htm>
that BioNTech filed with securities regulators.
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The bank said profit-sharing arrangements reflect the risk involved in early
financing. Mr. Rizvi, of Public Citizen, argued that it puts governments on the
same side as the drug makers and reduces any incentive to make drugs cheap and
widely available.
[https://static01.nyt.com/images/2021/01/28/world/28vaccine-contracts-4/merlin_181807989_1d218a8e-01b9-4157-a43e-da541287158e-articleLarge.jpg?quality=75&auto=webp&disable=upscale]
Image
[Patients sitting in a waiting area after being vaccinated in Berlin last
month.]
Patients sitting in a waiting area after being vaccinated in Berlin last
month.Credit...Lena Mucha for The New York Times
Companies Get Liability Protection
In the United States, drug companies are shielded from nearly all
liability<https://crsreports.congress.gov/product/pdf/LSB/LSB10443> if their
vaccines don’t work or cause serious side effects. The government covered
Covid-19 drug makers under the PREP Act, a 2005 law intended to speed up access
to medicine during health emergencies.
That means that people cannot sue the companies, even in cases of negligence or
recklessness. The only exceptions are cases of proven, “willful 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-E.U. contract does shield the company from significant liability,
but with exceptions. Those exceptions are redacted.