Covid vaccine makers kept advance payments for canceled vaccines for poor countries

 As global demand for Covid-19 vaccines dries up, the program tasked with vaccinating the world’s poor has been negotiating urgently to try to get out of its deals with pharmaceutical companies for vaccines it no longer needs.

Pharmaceutical companies have so far refused to refund $1.4 billion in advance payments for now canceled doses, according to confidential documents obtained by The New York Times.

Gavi, the international immunization organization that purchased the vaccines on behalf of the global Covid vaccine program, Covax, has said little publicly about the costs of order cancellations. But Gavi’s financial records show the organization tried to stem the financial damage. If he can’t strike a more favorable deal with another company, Johnson & Johnson, he might have to pay even more.

Gavi is a Geneva-based nongovernmental organization that uses funds from donors, including the US government and the Bill and Melinda Gates Foundation, to provide childhood immunizations to low-income countries. At the start of the pandemic, he was tasked with buying Covid vaccines for the developing world armed with one of the largest humanitarian funding rounds ever and began negotiations with vaccine manufacturers.

These negotiations went badly at first. The companies initially closed the market organization, prioritizing high-income countries that were able to pay more to lock in early doses. Gavi eventually entered into agreements with nine manufacturers.

But the shots only started reaching developing countries in significant numbers in mid-2022. By the time Gavi had a steady flow of supplies, demand had begun to wane: countries with weak health systems struggled to deliver vaccines, and the dominance of the milder variant of Omicron undermined the motivation of people to get vaccinated. Today, Covax is winding down well short of its goal of vaccinating 70% of the population in each country.

Vaccine makers have made more than $13 billion from vaccines that have been distributed through Covax. Under the contracts, the companies are not required to return the deposits Gavi made to them to reserve the vaccines that were ultimately cancelled.

But in light of the number of vaccine doses Gavi has had to cancel, some public health experts have criticized the companies’ actions.

Covid vaccine makers have a special responsibility because their products are a societal good and most were developed with public funding, said Thomas Frieden, chief executive of global health nonprofit Resolve to Save Lives and former director of the United States Centers for Disease Control. and Prevention.

That’s a lot of money that could do a lot of good, he says.

He added that other major global health programs have budgets roughly equal to the amount vaccine makers keep. The whole polio eradication effort costs about $1 billion a year, and it’s a huge infrastructure, he said.

Gavi struck deals with Moderna, the Serum Institute of India and several Chinese manufacturers to cancel unnecessary doses, returning $700 million in prepayments, the documents show.

Another pharmaceutical company, Novavax, is refusing to repay an additional $700 million in deposits for injections it never delivered.

Gavi and Johnson & Johnson are locked in a bitter dispute over payment for the injections that Gavi told the company months ago it would not need, but the company produced anyway. Johnson & Johnson is now asking Gavi to pay an additional undisclosed amount for them.

Gavi had an indirect supply relationship with Pfizer; the Biden administration bought him a billion vaccines to donate through Covax. Last year, the United States revised its agreement with the company, converting an order for 400 million doses into future options. The company said it doesn’t charge any fees to change the order.

The terms of Gavis’ agreements were kept secret because they were with private companies. There has been no public accounting of what drug companies have gained from canceled vaccines.

https://www.nytimes.com/2023/02/01/health/covid-vaccines-covax-gavi-prepayments.html