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How big pharma ‘held South Africa to ransom’

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Picture: Phando Jikelo/African News Agency (ANA)/Taken February 14, 2021 President Cyril Ramaphosa gets his Covid-19 vaccination at the Khayelitsha District Hospital.The vaccination from Johnson and Johnson arrived in South Africa on February 13, 2021. But a report shows how difficult it was for South Africa to procure vaccines. ‘We were bullied into unfair and undemocratic terms,’ said public health campaigner, Fatima Hassan, according to the writer.

By Jake Johnson

Newly disclosed Covid-19 vaccine procurement contracts that the South African government signed with pharmaceutical companies included “overwhelmingly one-sided” terms that favoured drug companies’ bottom lines over public health, according to a review conducted by a coalition of experts and advocates.

Last month, a South African court ruled that the nation’s government must make its vaccine contracts with pharmaceutical companies public after the Health Justice Initiative (HJI) sued in an effort to shine light on the secretive agreements.

HJI has published the government’s contracts with Pfizer, Johnson & Johnson subsidiary Janssen, the Serum Institute of India, and Covax online, arguing that they reveal how Big Pharma “held South Africa to ransom”.

In a detailed report released Tuesday, HJI and other organisations wrote that the contracts “placed governments in the Global South, and in turn, the people living in these countries, in an unenviable position of having to secure scarce supplies in a global emergency (2020-2022) with unusually hefty demands and conditions, including secrecy, a lack of transparency, and very little leverage against late or no delivery of supplies or inflated prices, resulting in gross profiteering”.

The “most egregious example”, according to the new report, was the South African government’s deal with Johnson & Johnson, which traded “scarce or very delayed supplies for extractionist terms and conditions that undermine national sovereignty”.

The US-based company charged South Africa $10 per dose for its vaccine in the agreement, which was carried out under English and Welsh law. (The European Union reportedly paid $8.50 per dose for the Johnson & Johnson vaccine.)

Additionally, the deal required South Africa to make a nonrefundable down payment of $27.5 million.

According to HJI, the contracts with pharmaceutical giants made South Africa liable for at least $734 million in payments “with no guarantees of timely delivery”. The contracts, none of which were agreed to under South African legal jurisdiction, also required South Africa to “seek permission” from drug companies to “divert or donate or sell doses which have already been paid for by the [South African] public, despite the benefit to other poorer countries or buyers”.

“In a global pandemic, this is paternalistic and imperialist, harms public health programmatic planning, and deliberately reduces the autonomy of African states,” the report says. “In particular — J&J, Pfizer, and COVAX did not commit … to supply volumes and dates, making it increasingly difficult to plan and run a timely and proper vaccination programme.”

Fatima Hassan, HJI’s director, said Tuesday that “this deference to and fear of powerful pharmaceutical companies — in the middle of a crisis and in a constitutional democracy — is incredibly concerning”.

“It shows how much power was put into the hands of private sector actors and how few options governments had, when acting alone, in the middle of a pandemic,” Hassan said.

The pharmaceutical industry’s control over vaccine supply and distribution in South Africa and around the world spawned what public health advocates described as vaccine apartheid, a system under which poor nations were left with little to no access to lifesaving shots as rich countries and drugmakers prioritised upholding restrictive patents in the face of a catastrophic pandemic.

Hassan said the newly disclosed contracts “reveal the phenomenal power that pharmaceutical companies wielded in negotiations”.

“In our scramble for desperately needed vaccines, South Africa was forced to hand over unimaginable sums of money for overpriced vaccine doses,” Hassan added. “We were bullied into unfair and undemocratic terms in contracts that were totally one-sided. Put simply, pharmaceutical companies held us to ransom. And we must ask: did they do it to other countries too?”

A 2021 report by the US-based consumer advocacy group Public Citizen — which uncovered several unredacted Pfizer vaccine contracts — detailed how the corporation used its power in agreements with Brazil, Colombia, the European Commission, and the US to “silence governments, throttle supply, shift risk, and maximise profits in the worst public health crisis in a century”.

Jake Johnson is a senior editor and staff writer for Common Dreams

This article was first published on Common Dreams