February 11, 2023: Big Pharma giants made a fortune by selling vaccines to governments and healthcare institutions at the height of the Covid-19 pandemic. But their hopes of amassing wealth many times more from the jabs hit a wall when the demand for coronavirus vaccines started to fall due to dwindling infections and increasing pushback from critical-thinking people. It has now emerged that some of the world’s leading drug makers have refused to return a whopping $1.4 billion they had lapped up earlier as advance payments for now-cancelled doses.
The startling revelation came in a New York Times report, which exposed hard negotiations between pharma majors and the Geneva-based vaccine-promoting organisation GAVI. Earlier known as Global Alliance for Vaccination and Immunisation, the international body had been running a programme to jab the world’s economically oppressed population against Covid-19.
The NYT report shows the extent to which drug makers can go to ruthlessly maximise their earnings from the pandemic. It is a testimony to the clout of these MNCs that can even take on a powerful organisation such as GAVI, which is funded by the US government, BMGF (Bill and Melinda Gates Foundation), and the World Bank, among others.
According to the report, which claimed to have accessed confidential documents, GAVI had made advance payments and reserved shots on behalf of the global Covid vaccination programme, COVAX. But when global demand for coronavirus vaccines tapered off, most of the leading drug companies started to play hardball.
GAVI was frantically negotiating to try to get out of its deals with the pharma companies for shots it no longer needed. But the vaccine makers bluntly decided not to refund the money to GAVI, triggering an ugly stand-off.
CHERRY-PICKING
RICH COUNTRIES
The report pointed out that the drug makers initially “shut” GAVI out of the market, as they gave priority to high-income countries “that were able to pay more” to lock up the first doses. However, GAVI finally signed agreements with nine manufacturers. But till mid-2022, the vaccines did not reach the economically deprived countries in significant numbers, defeating the whole purpose.
“By the time GAVI had a steady flow of supply, demand had begun to decline. Countries with frail health systems struggled to deliver the shots, and the dominance of the milder Omicron variant sapped people’s motivation to be vaccinated. Now, COVAX is winding down far short of its goal of vaccinating 70% of the population of each country,” the report said.
There is no public accounting of the earnings of pharma companies from cancelled Covid vaccine doses, and GAVI, too, has kept mum on the fiasco. The NYT report, however, cited the latter’s financial documents, claiming that the pharma industry received $13.8 billion for the shots distributed through COVAX, and 1.9 billion doses have been shipped to 146 countries. Over half of them were bought directly by GAVI.
Though there’s no contractual obligation on the part of the Big Pharma giants to return the prepayments to GAVI for the orders that have now been cancelled, public health experts criticised the companies’ actions, saying they “have a special responsibility” because the bulk of the vaccines were created with public funding.
Thomas Frieden, chief executive of the global health nonprofit Resolve to Save Lives, said the amount of over $13 billion that the pharma companies received for delivering Covid vaccines was “a lot of money that could do a lot of good”. To give some context, he told the NYT that the entire polio eradication effort costs about $1 billion a year.
GAVI has surrendered about $700 million in prepayments as it reached settlements with US-headquartered Moderna, SII (Serum Institute of India), and several Chinese manufacturers to cancel deals for doses no longer required. Another US drug company, Novavax, has declined to repay $700 million it received as advance for jabs it never delivered.
GAVI’s REQUESTS
SHOT DOWN
GAVI is now engaged in a tussle with US giant Johnson & Johnson over a payment issue for more than 150 million shots that it had categorically told the pharma company months back not to manufacture. J&J, however, went ahead and produced the doses and is now said to be demanding an additional undisclosed payment for the jabs, the NYT report said.
The GAVI documents reveal that it expected to receive a significant share of the doses by the end of 2021, though there was no contractual obligation for the company to ensure delivery within that period. J&J managed to deliver less than four million doses by that time, and GAVI requested it by mid-2022 not to produce 1.5 million doses because the demand for the shots had gone down. The pharma company paid no heed and manufactured the vaccines, seeking to deliver them by late 2022.
According to documents quoted by the US newspaper, GAVI suggested mediation to resolve the dispute, but the drug company has “until now refused to engage in meaningful negotiations”. A Johnson & Johnson spokesperson quoted by the newspaper claimed that the company made available the ordered doses to COVAX, keeping GAVI in the loop. Moderna and SII reportedly refused to comment on the matter.
It’s a similar story with Novavax, which, according to the GAVI documents cited by the news outlet, couldn’t meet the expectations of shipping supplies under the COVAX programme in the summer of 2021. “As a consequence, GAVI did not proceed with placing the orders for the vaccines it had originally reserved. Novavax said this was a breach of contract and cancelled the deal, keeping the $700 million,” the report said. The company has reportedly claimed that it was hoping to negotiate a new deal with GAVI.
PROBLEM OF PLENTY
To add to GAVI’s problems of plenty, rich countries that had ordered more doses than they needed have been trying to pass on their surpluses to the COVAX programme. As a result, GAVI is now sitting on a stockpile of vaccines, the report said.
The safety and effectiveness of Covid vaccines dished out by Big Pharma have been questioned the world over amid reports of deaths and injuries due to the largely untested jabs. Critics have pointed out that the hurried roll-out bypassed years of testing and trialling, practically rendering them untested, even as various governments took the unusual step of imposing direct and indirect mandates to compel people to get jabbed.
With the world reeling from the perceived impact of the virus, and people struggling to recover from the economic impact of lockdowns, Big Pharma has made a mockery of rules, regulations, and practices with its single-track devotion to profiting from the situation by dumping vaccines on unsuspecting populations. The reported refusal to return hefty prepayments is one of many examples of the arrogance and heartlessness that characterise the modus operandi of these modern-day corporate empires.
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