A peek into COVAX machine; The curious case of prequalification of Remdesivir

Newsletter Edition #8

Hi,

Leaves are changing colour here in Switzerland. Just like during the spring when new leaves appeared at the height of “lockdowns”. This beauty is deceptive. 

Worldwide more people continue to fall sick and many continue to die from the COVID-19 pandemic. 

We are heading into not only harsher weather and hospitals straining at capacity, but also what seems like a severe winter as far as global health is concerned. A little bit of color in these grim times is therefore welcome. 

This dichotomy between what we see and what we choose to see has been instructive in these difficult times. 

Our story this week, takes a close look inside Gavi’s COVAX Facility - its governance structures and contracts with countries. Thorny issues of liability provisions and cost-sharing, especially with respect to low-income countries continue to be hashed out. Read on.

In addition, we also try to understand why Remdesivir was prequalified a day before WHO announced the results of its Solidarity Trial, declaring its ineffectiveness in treating COVID-19. This was brought to our attention by one of our sources (We truly welcome this engagement to help us report on stories you think we must). 

If you have found value in what we do, consider supporting us with financial contributions. Paying for analysis you value, will enable us to provide this service. Help us reach funders, open the doors on our behalf, for this to become sustainable. Buy us a modest lunch or a coffee or two, every month and we will be over the line! We believe that global health is richer by the work we are committed to do, help us fulfill this need. 

Finally, Kaitlyn and I, are presenting Geneva Health Files at the Polygeia conference this weekend on October 24. Come and check out our poster!

Share, source and support us.

Best, 

Priti 

Feel free to write to me: patnaik.reporting@gmail.com; Follow us on Twitter: @filesgeneva

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1. Story of the week

INSIDE COVAX: CONTRACTS & GOVERNANCE

A closer look at the model contracts issued by the COVAX Facility and how it will be governed

Gavi’s COVAX Facility is gearing into operations mode, from acquiring an approved legal status, to building its governance structure; issuing contracts to participating countries to negotiating deals with vaccine manufacturers; the COVID-19 vaccine machine is here. Contentious issues including liability provisions for participating countries and cost-sharing for vaccines doses for low and middle-income countries continue to hashed out behind the scenes. More than 180 countries are set to have joined the Facility.

This story is based on a review of recent decisions by the Gavi board and the resultant questions on governance. You can read in two parts, the state of play on the contracts negotiated by the COVAX Facility; and the proposed governance structures.

Given the pace at which global health governance is being remade as we speak, one may have overlooked a key detail in these past weeks. Gavi is the legal entity to administer the COVAX Facility as approved by its board in July 2020. Readers know that Gavi is a Swiss-based non-profit foundation, “granted privileges and immunities by the Swiss authorities”. Gavi makes it explicit that while it is the legal entity administering the Facility, participating countries “will take title to the vaccines and any associated risks.”

The Facility itself is being described as a passthrough mechanism “matching limited supply in 2021 with expressed demand”, as cited in a report to its Board at the end of September 2020. This report – COVAX Facility Operationalisation and Vaccine Programme – discussed in detail, all aspects of the Facility. This has been seen by Geneva Health Files.

I. CONTRACTS

A mesh of agreements, memoranda of understanding, contracts and other legal instruments tie the different pieces of the COVAX Facility together.

MANUFACTURER AGREEMENTS

According to Gavi, manufacturer agreements are structured into two parts - commitments for the purchase of a pre-defined number of doses of COVID-19 vaccine once the vaccine has been approved and the option to purchase a pre-defined number of additional doses.

In its report, it explains:

“These agreements will require some payments to manufacturers in advance of vaccine approval – to cover scale-out to further increase manufacturing capacity and enable production of vaccine prior to licensure – with these upfront costs converting into initial payment for doses if vaccine candidates are successful. The Facility will also incur costs associated with financing (e.g. insurance, interest costs) – and operating costs. The Participants’ arrangements are structured to cover these upfront costs.”

It also clarifies that:

“To minimise financial liabilities and risk, the Office of the COVAX Facility will only enter into binding agreements with manufacturers once these are backed by legally binding financial commitments with appropriate financial backing for such commitments.”

AGREEMENTS WITH PARTICIPATING COUNTRIES:

Earlier this week, Gavi published on its website, the Terms and Conditions for Self-Financing Countries. It also explained the two kinds of agreements with Self-Financing Countries (albeit, redacted) – the committed purchase arrangement and the optional purchase arrangement. (There was no similar agreement for AMC-countries on its website, when this story went to print.)

COMMITTED PURCHASE ARRANGEMENT

“The ‘Committed Purchase’ arrangement commits Participants to purchase allocations of approved vaccines from the Facility. Participants make an upfront payment of US$ 1.60 per dose (in order to cover a proportion of the pre-approval costs to manufacturers and Facility financing and operating costs) and provide a financial commitment of US$ 8.95 per dose for the remainder owed…”, as explained in the report to the Board last month.

In its terms and conditions for self-financing countries, Gavi explains that:

Participants of the “Committed Purchase Arrangement” will be required to indicate the number of doses they wish to procure through the Facility (the “Total Participant Doses”). The Total Participant Doses will be expressed as an absolute number of doses corresponding to the percentage of the Participant’s Population that the Participant seeks to cover assuming a 2-dose regimen. Participants may commit to purchase doses to cover between 10% to 50% of their Population through the Facility. Participants will make a binding financial commitment of the Committed Amount. The “Committed Amount” shall be the All Inclusive Weighted Average Estimated Cost per Dose (as defined below) multiplied by the Total Participant Doses.

According to Gavi, “The “All-Inclusive Weighted Average Estimated Cost per Dose” is $10.55. It indicates that an All-Inclusive Weighted Average Estimated Cost per Dose is $21.10. (It also refers to this as  “Maximum Adjusted Cost Per Dose” in its template contract.)

In addition, the Facility also allows participating countries to “trade” vaccines doses. (See our earlier story on the COVAX Exchange here).

In its terms and conditions, it says:

“Participants may have the option to trade allocated doses of Approved Vaccines on the proposed COVAX Exchange… Participants will purchase Approved Vaccines either through their own processes or leveraging existing mechanisms such as UNICEF SD or the PAHO Revolving Fund and would be subject to the terms of the arrangement between the Participant and the procurement agent or manufacturer. Any cost associated with utilising such a mechanism is not included in cost estimates and will need to be separately met by the Participant.”

THE OPTIONAL PURCHASE AGREEMENT:

“The “Optional Purchase” arrangement allows Participants to decide whether to purchase any approved vaccine candidate allocated to them. Participants make a higher upfront payment of US$ 3.10 per dose to reserve options to purchase vaccine doses through the Facility….Under this arrangement Participants are additionally asked to provide a risk-sharing guarantee of US$ 0.40 per dose to help protect Gavi against the risk of opt-outs and any liabilities resulting from Participants deciding not to purchase a particular vaccine candidate after the Facility has already entered into a contract with the manufacturer…”, Gavi explained in its report to the Board.

In the terms and conditions, it further clarifies that:

“Execution of a Commitment Agreement for the Optional Purchase Arrangement will require a Participant to make the Upfront Payment, but the Participant will not be obliged to purchase any vaccine subsequently and will have the ability to decide which specific vaccine candidates it will purchase, for example, based on alignment to national vaccination strategies…”

COVAX CONTRACTS WITH LMICs

There is not enough clarity on how contracts with LMICs are being negotiated. (It appears that the contracts could vary for example, if a MIC is a donor to the Facility, or has some unique arrangement with the Facility.)

At the meeting of the Board, members discussed the cost-sharing arrangements for LMICs. Although initial discussions had suggested that LMICs would not have to pay for vaccine doses, the policies have now evolved towards a cost-sharing arrangement.

According to sources familiar with the proceedings, this was contested during the Board meeting. It is understood that some Board members were of the view that asking LMICs to co-finance for vaccines amounted to resource mobilisation for Gavi. Members feared that countries would not have enough resources for routine immunization programs, if they are also asked to pay for these vaccines. It is understood that representatives from the Gates Foundation and WHO, on Gavi’s board pushed back against co-financing as suggested by the Secretariat.

In its report to the Board, Gavi said:

“…AMC-eligible economies will be expected to co-finance COVID-19 vaccines with tiered contributions that reflect economies’ ability to pay…. The goal of this longer-term cofinancing will be to promote financial sustainability….However, in the acute phase of the pandemic, given the urgency of bringing it under control, the primary objectives of a short-term, exceptional ‘cost sharing’ model should rather be to promote solidarity and country ownership and to mobilise additional resources for COVID-19 vaccines…”

Gavi has reasoned that these cost-sharing contributions from LMICs, “will be used to fund critical investments such as reservation fees or vaccine procurement, but they will not be used for at risk investments.”

The immunization agency is hoping to work with multilateral development institutions, including the World Bank to “identify resources and structure instruments (including grants, loans, and concessional loans)” to meet cost-sharing requirements. It appears, Gavi is also counting on World Bank’s recent announcement for $12 billion for buying and distributing COVID-19 vaccines in developing countries. Gavi suggests that lower-income economies could receive more grants and more concessional lending terms from these institutions.

However, it also clarifies that it is open to being flexible. In its report to the Board, it said:

“Should multilateral development bank financing not be available, and should economies express that they are unable to meet the expected cost sharing contributions for vaccines, it is proposed that Gavi exercise flexibility with economy vaccine dose cost-sharing contributions during this initial acute phase, recognising the fiscal pressures economies are facing and the difficulty of mobilising and budgeting funds in such a compressed timeline. Gavi will work with economies on a case-by-case basis to adjust vaccine dose cost-sharing contributions as needed (i.e. partial or no costsharing)”

In response to queries from Geneva Health Files for this story, a Gavi spokesperson confirmed the following,

“In order to promote country ownership, global solidarity, and unlock new funding from sources such as multilateral development banks, the Gavi Board has approved the policy that AMC-eligible economies would share the costs of COVID-19 vaccines and delivery, up to US$ 1.60 – US$ 2 per dose – a mirror of the amount paid upfront by self-financing participants. A key part of this decision is the clear understanding that flexibilities will be required on a case-by-case basis until at least the end of 2021, to make certain that cost-sharing will not prevent or delay the introduction of COVID-19 vaccines in AMC-eligible economies and ensure that these economies do not need to reallocate existing budgets, diverting resources from other vital routine vaccine programmes.”: [Gavi Spokesperson]

The above is in line with its report to the Board, where Gavi said that both contracts between self-financing countries and AMC countries have similar cost-sharing terms: “The AMC will initially reserve doses of vaccines for eligible economies and with respect to upfront payments and procurement it is analogous to the Committed Purchase model…”

ON LIABILITY

There has been much discussion on what will be the implications on potential liabilities arising for countries as a result of the vaccines for COVID-19. This has been a key issue at negotiations at the European level. This assumes even more significance at the multilateral level, given that unlike rich countries that might have contingency funds to account for liabilities, while many developing countries do not have such reserves.

It is also understood that some high income countries were allowed to negotiate on liability provisions, simply because they are donor countries. Geneva Health Files was not able to confirm this at time of writing, queries sent to some countries went unanswered.

In response to our queries, a Gavi spokesperson told us:

“All participants (AMC eligible and self-financing) will be responsible for deployment and use of vaccines within their territories and assuming any liability associated with such use and deployment.

The foundational goal of COVAX is global equitable access to COVID-19 vaccines, which includes working to ensure that ability to pay is not a barrier to access. As we strive towards this goal at an unprecedented scale and speed, the issue of liability is one of many complex problems for which the world must design new solutions. Indemnification is a standard requirement for all deals – including bilateral ones. COVAX is working to make sure that a maximum amount of support is provided for countries procuring vaccines through the COVAX Facility (particularly lower-income ones) so that this requirement will not be a barrier to access; and will not undermine confidence in vaccines. We will share further information on this process as soon as it is available.”

In the terms and conditions, Gavi states:

“Participants will be responsible for deployment and use of Approved Vaccines within their territories and assuming any liability associated with such use and deployment. Prior to shipping Approved Vaccines to Participants, it is likely that vaccine manufacturers will require Participants to provide an indemnity against product liability claims….”

“… Understanding that Participants would have different domestic laws with respect to these issues, and that what works for one Participant may not work for another, the Facility will be transparent with Participants on the manufacturer requirements on these issues and will work with Participants on the best approach to liability and indemnity issues..”

II. THE COVAX GOVERNANCE STRUCTURE:

A number of different governance and technical bodies are set to take shape under the COVAX Facility – a veritable alphabet soup - comprising representatives from participating countries, scientific experts, and key global health representatives.

Here are some notable features of the governance mechanisms in the COVAX Facility, as described in Gavi’s report to its Board:

  • The proposed new bodies under the Facility:

-          The COVAX Shareholders Council: Represented by self-financing countries.

-          A smaller Executive Committee (ExCom) in the Shareholders Council.

-          The AMC Engagement Group: This will include representatives from implementing economies, donors and other parties engaged in the financing and operation of the AMC portion of the Facility.

-          An AMC Stakeholders Group, within the AMC Engagement Group – with representatives from AMC donors, procurement organisations such as UNICEF and PAHO and, multilateral development banks

-           A COVAX Consensus Group to support consensus-based decision-making to ensure “effective operation of the COVAX Facility”. This group will include members of the Gavi Board, COVAX Shareholders Council; the AMC Engagement group and in non-voting capacity  the three leads of the ACT-Accelerator COVAX Pillar

  • Technical bodies

- Independent Product Group (IPG) to provide technical advice to the Facility on the prioritisation and inclusion of suitable vaccines in the COVAX portfolio based on factors including clinical development, manufacturing and supply.

- Procurement Reference Group (PRG) to provide advice on procurement strategy and proposed advance purchase commitments with the manufacturers of vaccine candidates recommended by the Independent Product Group.

- Gavi’s Market Sensitive Decisions Committee (MSDC) will review terms of proposed agreements with manufacturers to vet associated risks and ensure availability of resources to back proposed agreements. To review COVAX-related agreements with manufacturers, the committee will now include members from the COVAX Shareholders Council that is composed of self-financing countries.

  • Allocation Mechanism governance

According to Gavi’s plans, the Allocation Mechanism will comprise the Joint Allocation Taskforce and the Independent Allocation Validation Group

-          The Joint Allocation Taskforce (JAT) comprising of WHO and the Gavi Secretariat. This Task Force will prepare a Vaccine Allocation Decision (VAD) proposal based on a data-driven allocation model. “The JAT will review all the data inputs needed for the allocation model and verify its output,” according to Gavi.

-          The Independent Allocation Validation Group (IAVG) – This group will review the proposals on Vaccine Allocation Decision. “The IAVG will validate that the proposed VADs are technically informed, transparent and free from conflicts of interest,” according to Gavi.

On the inclusion of civil society in the COVAX facility, Gavi notes that “CSOs have expressed a clear recommendation that participation in the COVAX effort through existing governance mechanisms is not sufficient.” It has proposed additional CSO representation at the various levels of the Vaccines pillar of the ACT Accelerator. (Read our earlier story on Gavi and CSOs)

CONCERNS ON GOVERNANCE

May stakeholders are of the view, decisions around the COVAX Facility need more transparency and debate, as illustrated by the reportedly extensive discussions on these matters at Gavi’s Board meeting. In addition, as we reported earlier, countries have called for greater clarity on these issues, most recently at WHO Executive Board meeting.

There is a perception that the Gavi secretariat has not been following its own due diligence governance practices in terms of COVAX Facility matters that they are bringing to the Board for decision.

Kate Elder, Senior Vaccines Policy Advisor, MSF Access Campaign told Geneva Health Files, “It appears some Board members weren’t pleased that Gavi had skipped the usual governance and policy routes and instead was bringing very key elements for the COVAX Facility to them for a decision.  Apparently the Secretariat seemed to be rushing through them, determined to get decisions on very important COVAX Facility policy elements without sufficient time to review”.  

Both Gavi and WHO, must ensure that all countries irrespective of the terms of their participation in the COVAX facility must have access to deeper consultations and meaningful engagement in governance processes.

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2. What we found interesting this week:

I. The curious case of WHO prequalification listing for Remdesivir

Questions are beginning to emerge as to why WHO proceeded to give a prequalification listing to Remdesivir, when it was aware of the results of its Solidarity Therapeutics trial on the drug’s lack of impact on the treatment for COVID-19.

At the bi-weekly presser (on 16.10) last week, WHO’s top officials discussed briefly the independent processes of the prequalification process for Remdesivir (officially announced on the 15th) and the results of the Solidarity trial (highlighted on the 16th.)(See Soumya Swaminathan and Mariangela Simão address this question, half way into the briefing)

It is also understood that the results from the Solidarity trial were confidential until the night of publication and the prequalification process had already been completed.

We sent queries to WHO to examine this further, when a source brought this to our attention.

Manufacturers of potential COVID-19 treatments (including remdesivir and dexamethasone) were first invited to submit their products for WHO prequalification in early July 2020.

According to WHO, this was done based on the best available evidence at the time as per interim results from the Recovery trial (for dexamethasone) and the NIAID-ACTT-1 (for remdesivir). The invitation was issued with a view to speed up regulatory assessment processes and ensure increased manufacturing capacity in case the final results proved that the medicines were both safe and efficacious. This approach has been used in previous emergencies. WHO says that the issuing of the EoI for Remdesivir was done as a preparedness measure, based on the interim results from the NIAID trials, allowing for increased generic production.

A WHO spokesperson told Geneva Health Files:

WHO prequalification can occur in 2 ways: 1) a full assessment where WHO evaluates all the evidence related to the quality, safety and efficacy of the products; and (2) an abridged assessment where WHO relies on evaluations carried out by stringent regulatory authorities. In the case of remdesivir, the abridged process was adopted, based on the EMA’s conditional approval of the product.

The Solidarity trial and Prequalification are separate processes: The prequalification procedure for remdesivir started long before the Solidarity trial results were analyzed and needed to be completed, despite the trial results that emerged.

Prequalification listings can be reviewed: Prequalification listings can, and have been reviewed based on any new information that might change the basis for the listing. In this case, the PQ listing of remdesivir will be reviewed immediately following the recommendations from the WHO Guidelines Review Panel, or review of the conditional approval of the product by EMA, which was the basis for the listing.

It was also pointed out that the prequalification of remdesivir was based on the EMA’s conditional approval of the product, as part of a collaborative agreement between EMA and WHO.

It gets more curious. Politico ran a story about European Commission’s position on this.

According to Politico [COMMISSION, EMA ASSESS WHO REMDESIVIR DATA]:

Excerpts:

“…WHO shared data with Gilead at least two weeks prior to signing the contract with the Commission, although the drugmaker said it was a “heavily redacted” manuscript…”

“…The WHO verbally shared the topline results from its study with the EMA on October 9 — a day after the Commission announced its latest deal with Gilead for the drug — an EMA spokesperson told POLITICO in an email Monday evening. The data was immediately shared with its pandemic task force, which includes a Commission rep. The agency noted the data are not yet peer reviewed, but it will assess them when they are made available…”

We leave you with this headline we found:

Image Source: Clip of headline from Genetic engineering and biotechnology news

II. South Africa-India TRIPS Waiver proposal

The TRIPS waiver proposal was brought to brew at WTO last week. (See our in-depth story on this). It has been reported that more than 30 countries supported the proposal, but others including the United States, the European Union, Japan, Norway, and Brazil, opposed the proposal. And still, a few others have sought clarifications.

Read South Africa’s statement here where it emphasized that “the waiver does not imply any change of the substantive treaty obligations.” It also pointed out, “Nine months into the pandemic voluntary approaches have proven to be insufficient.”

It suggested that the discussions on the proposal continue.

We request that this item remain open for discussion for the intervening period. This can be done on the basis suspending this item and reconvening the TRIPS Council formally or informally or through consultations that may be convened by you or a combination of both modalities: South Africa

Read the statement by India, where it notes that the Secretariat’s report on IP and COVID-19, a day before the TRIPS Council report was “not merely coincidental”.

Also:

We have included four sections of TRIPS Agreement namely patents, copyrights, industrial designs and undisclosed information or trade secrets, in our proposal. This is because the health products and technologies like test kits, masks, medicines, vaccines, components of ventilators like valves, control mechanisms and the algorithms and CAD files used in their manufacturing are protected by these four types of IPRs. This ensures that our waiver proposal does not suggest a waiver from all TRIPS obligations, but only from these specific sections and that too only to the extent the same are essential for effective handling of the COVID-19 crisis: India

And here is the statement from the European Union:

There is no indication that IPR issues have been a genuine barrier in relation to COVID-19-related medicines and technologies. While we agree that maintaining continued supply of such medicines and technologies is a difficult task we all face, non-efficient and underfunded healthcare and procurement systems, spike in demand and lack of manufacturing capacity or materials are much more likely to have an impact on the access to those medicines and technologies: European Union


3. We are also watching:

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