The contracts the South African government signed with big pharmaceutical companies during the height of the Covid-19 pandemic has been exposed and has shed light on the exorbitant prices taxpayers were forced to pay.
The non-profit organisation Health Justice Initiative (HJI) — who won a high court case forcing the government to hand over the contracts — released its findings on Tuesday which revealed that the country overpaid by a staggering amount during the pandemic's peak
The multi-stakeholder group led by HJI, after analysing the contracts handed over to them, found that South Africa paid 33 percent more than the African Union price for the Pfizer-BioNTech vaccine.
Furthermore, the country paid the Serum Institute of India (SII) 2.5 times more for a generic version of the Oxford-AstraZeneca vaccine compared to the United Kingdom.
The contracts, which were not under South African legal jurisdiction, revealed that the country was liable for payments of at least $734 million USD (R13.9 billion), including advance payments of almost $95 million USD (R1.8 billion), with no guarantees of timely delivery.
J&J charged South Africa $10 (R190) a dose, 15 percent more than the European Union (EU) and 25 percent more than the estimated not-for-profit price.
Pfizer's charge to South Africa was $10 a dose, 32.5 percent more than the $6.75 (R128) “cost price” it reportedly charged the African Union.
The SII charged South Africa $5.35 (R101) a dose, 2.5 times more than it charged the EU.
The contracts also exposed the “pernicious nature of pharmaceutical bullying and GAVI’s heavy-handedness,” with terms and conditions overwhelmingly favouring multinational corporations.
Such agreements placed nations in the Global South in a vulnerable position, forcing them to secure scarce supplies during a global emergency with little leverage against inflated prices or late deliveries.
Fatima Hassan, Director of HJI, expressed deep concern over the power dynamics.
“In our scramble for desperately needed vaccines, South Africa was forced to hand over unimaginable sums of money for overpriced vaccine doses. We were bullied into unfair and undemocratic terms in contracts that were totally one-sided,” she said.
The report also highlighted the unethical conditions weighted in favour of pharmaceutical companies.
For instance, J&J's agreement barred South Africa from imposing any export restrictions, even for doses produced in the country.
Both J&J and Pfizer prohibited South Africa from donating or exporting doses without the company's consent.
Furthermore, while South Africa and India led efforts to waive intellectual property rules on Covid-19 vaccines, the Serum Institute of India made South Africa agree not to take any action that might affect its proprietary rights in the vaccine.
The HJI report underscores the need for a regional and global solution to address the power imbalance between governments and pharmaceutical companies.
The group emphasised that this issue should be a focal point in the upcoming United Nations General Assembly and in revisions of the International Health Regulations.
In an email to IOL on Wednesday, the Janssen Pharmaceutica, the company behind the Johnson & Johnson vaccine said South Africa paid the same per instance, its vaccine, as all nation-partners did globally at USD 7.50 per dose.
It said in a statement: "Johnson & Johnson supported and worked closely with South Africa in every phase of our response to the pandemic. We supplied our vaccine to South Africa at our final global price of $7.50 per dose, transferred our technology to Aspen Pharmacare in Gqeberha to enable the local fill and finish of the Johnson & Johnson Covid-19 vaccine and later enabled Aspen to manufacture, market and sell its own Covid-19 vaccine, “Aspenovax.” In addition, we advocated for and supported the donation of hundreds of millions of vaccine doses by the U.S. Government, EU Member States, the United Kingdom, Canada and New Zealand to COVAX to under-resourced countries. To date, more than 85 percent of our doses have been delivered to low- and middle-income countries".