Reneging on the ‘no-profit pledge’ to supply Oxford vaccine

On April 30, 2020, the day the University of Oxford signed an agreement with the UK-based AstraZeneca for development, manufacture and distribution of the COVID-19 vaccine (ChAdOx1 nCoV-19) that was then undergoing clinical trials, both partners committed to “operate on a not-for-profit basis for the duration of the coronavirus pandemic, with only the costs of production and distribution being covered”.

Pascal Soriot, Chief Executive Officer, AstraZeneca repeated the company’s no-profit pledge on June 4, 2020 when the company signed agreements with CEPI and Gavi and the Serum Institute of India. He said: “We are working tirelessly to honour our commitment to ensure broad and equitable access to Oxford’s vaccine across the globe and at no profit.”

Repeated promise

This promise was repeated on multiple occasions by both Oxford University and AstraZeneca. On November 23, when the interim results of the phase-3 trials were announced, Oxford University in a release went a step further to point out the duration to which the vaccines would be made available at cost. “A key element of Oxford’s partnership with AstraZeneca is the joint commitment to provide the vaccine on a not-for-profit basis for the duration of the pandemic across the world, and in perpetuity to low- and middle-income countries,” the release said. The same day, Pascal Soriot, CEO of AstraZeneca reiterated his commitment to make the vaccines available at cost. “Our no-profit pledge and commitment to broad, equitable and timely access means it will be affordable and globally available,” he said.

On December 30, the day the vaccine was approved for emergency use in the U.K., AstraZeneca reassured that it was working to “ensure broad and equitable access to the vaccine at no profit for the duration of the pandemic”.

However, as early as October last year, it became clear that AstraZeneca’s no-profit pledge came with riders. In an agreement with the Brazilian public research body Fiocruz, AstraZeneca walked back on its promise when the company said it has “right under contract to declare pandemic over by July 2021”, the Financial Times reported. This is despite Brazil being one of the countries where AstraZeneca conducted the phase-3 trials.

Good faith

As per the agreement, AstraZeneca will produce 100 million doses worth $300 million for Fiocruz till July 2021 when the “definitive pact” will end. According to the Financial Times, the company can extend the agreement beyond July 2021 but only in “good faith” and if it considers that COVID-19 pandemic is not over. Answering how it would determine the end of the pandemic, Mr. Soriot said the company would seek “expert guidance, including from global organisations, as to when we can say that the pandemic is behind us.”

Incidentally, in early June, AstraZeneca had reached a $750 million agreement with CEPI and Gavi to support the manufacturing, procurement and distribution of 300 million doses of the vaccine.

AstraZeneca is not alone in reneging on the promise made. The Pune-based Serum Institute has signed an initial deal to sell 11 million of the shots to the Indian government for ₹200 (about $2.74) per dose. “We are giving it at a very special price of ₹200 for the first hundred million doses. Then there will be tendering and then different prices will be available,” Adar Poonawalla, CEO of Serum told NDTV. When the government permits the company to sell the vaccines in the private market, the vaccines will be priced at Rs.1,000 per dose, he added.

“I think we should ask that all companies make a commitment to access. Cost of goods plus certain percentage, rather than something that is five times the cost of goods,” Professor of Microbiology at CMC Vellore Dr. Gagandeep Kang said during a webinar organised by the Indian Scientists’ Response to COVID-19 (ISRC). “I think transparency of cost of making a vaccine is essential during a pandemic, and then price it as cost of goods plus 10-20% and no more than that until the pandemic is over.”

She also cited an instance where companies make a profit: “All companies try to make a profit. For example, Rotavac sold by Bharat Biotech was $1 a dose for the public market and ₹700 in the private market in India.” But the difference is that unlike the COVID-19 vaccines, Rotavac was not developed during and for fighting a rotavirus gastroenteritis pandemic.

Also, Serum has received funding from GAVI and Bill & Melinda Gates Foundation to produce Covishield vaccines both for India and the global South. “Through our collaboration with GAVI and the Serum Institute of India, we are financing the manufacture of 200 million vaccine doses for low- and middle-income countries,” Trevor Mundel, President of the Global Health Division, Bill & Melinda Gates Foundation told The Hindu.

Ceiling price

According to the company’s September 29, 2020, press release, it received $300 million funding from Gavi and the Gates Foundation to “accelerate the manufacture and delivery of up to 100 million doses of vaccines for India and low-and middle-income countries”. The release also says: “The vaccines will have a ceiling price of $3 per dose, a price enabled by investments made by CEPI, the Gates Foundation and SII.”

Most importantly, ICMR is a co-sponsor of the phase-1 and phase-2 trials carried out in India and met the trial expenses of some of the trial sites, says Dr. Samiran Panda of ICMR.

Other countries

Despite the agreements to sell vaccines at cost, it comes to light that Serum has begun selling vaccines to other countries at fairly high prices. In the case of Bangladesh, the vaccines have been priced at $4 a dose, about 47% more than what India pays for the vaccines, Reuters reported.

In the case of South Africa, Serum will be supplying vaccines at $5.25 a dose, which is much higher than the price under the African Union agreement for Covishield, and also what the European countries have agreed to pay AstraZeneca. Ironically, South Africa was the third country where AstraZeneca had conducted the phase-3 trials, the data of which were used by the Indian regulator to grant restricted use approval to Covishield. Serum’s supply of three million doses to Saudi Arabia is also priced at $5.25 a dose.

The intent to profiteer during the pandemic flies in the face of the attempts made by India and South Africa to seek for a waiver from certain provisions of the TRIPS agreement for the prevention, containment and treatment of COVID-19. A specific mention in the communication was with regard to rapid access to affordable medical products including vaccines. “As new diagnostics, therapeutics and vaccines for COVID-19 are developed, there are significant concerns, how these will be made available promptly, in sufficient quantities and at affordable price to meet global demand,” the communication reads.