Pfizer Allegedly Pressured UNICEF to Keep Secret, Pricing for Anti-Viral Treatment Paxlovid. UNICEF Yielded.
Newsletter Edition #133 [Geneva Health Files News Flash]
Today we bring you an important story that encapsulates the nature of power, and the loss of agency during the current pandemic.
No where is it more acutely witnessed than in Global Health, a field where the pandemic transformed from a health crisis to a political and an economic one.
We know pharmaceutical companies have had immense negotiating power, that grew manifold during the pandemic putting the industry in a influential position to determine everything from the supply to the pricing of medical products.
But what has also been painfully witnessed is the loss of agency of governments, international organizations, civil society and individuals. It is most striking, considering some of these actors were promising the industry an unprecedented demand for their products for the world’s people. This immense leverage was lost behind the opacity of decision-making.
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STORY OF THE WEEK
Pfizer Allegedly Pressured UNICEF to Keep Secret, Pricing for Anti-Viral Treatment Paxlovid. UNICEF Yielded.
Pharmaceutical giant Pfizer allegedly pressured UNICEF to agree to non-disclosure requirements on pricing that would protect information on the prices of the company’s anti-viral treatment for COVID-19 Paxlovid, sources told Geneva Health Files. UNICEF, a procurement partner for the ACT Accelerator, recently concluded a supply agreement with Pfizer for up to 4 million courses of treatment.
It is further learned that UNICEF reportedly took a unilateral decision to finalise the supply agreement with Pfizer without taking into account other partners of the therapeutics pillar of the ACT Accelerator (ACT A) including WHO, Global Fund, Unitaid. (Charitable Foundation Wellcome Trust is also a part of the therapeutics pillar of the ACT A.)
Experts point out that Pfizer has required confidentiality with respect to pricing in many of its vaccine purchase or sale agreements with international organizations and governments.
WHAT PFIZER HAS TO SAY
In response to our queries, a spokesperson from Pfizer told us that the details of supply agreements – including the agreement with UNICEF – remain confidential. Pfizer refused to comment on whether it indeed insisted that UNICEF sign a non-disclosure agreement on pricing information related to the supply agreement.
A statement from Pfizer said:
“Pfizer, its partners and all other stakeholders are guided by a shared sense of urgency to try to solve this devastating pandemic. We remain committed to understanding the access challenges and to working closely with all stakeholders, including UNICEF and the ACT-A partners, to overcome them, aiming to deliver safe and effective antiviral therapeutics as soon as possible to all those who need it and at an affordable price.
To enable broad reach, we have established a comprehensive strategy in partnership with worldwide governments, international global health leaders and global manufacturers that considers the current evolution of the disease and the impact of infection prevention and control measures to optimize overall supply and access of a safe and effective treatment to the most vulnerable parts of the world. This includes deploying a tiered pricing approach based on the income level of each country; offering a not-for-profit price to LMICs. As well as our recently announced supply agreement with UNICEF, Pfizer has signed a voluntary license agreement with the Medicines Patent Pool (MPP) for its oral treatment to help expand access, pending country regulatory authorization or approval, in 95 low- and middle-income countries that account for approximately 53% of the world’s population. Our work is not done - we are in continued conversations with a number of private partners and international organizations to provide PAXLOVID to lower income countries.”
When the supply agreement with UNICEF was made public on March 22, Pfizer had said that the company expects “supply to be available to support orders in April 2022, and supply will continue throughout 2022, pending regulatory authorization or approval and according to country needs.” (It has projected production of up to 120 million courses of treatment by the end of 2022, pending global demand.). Pfizer had also said that high and upper-middle income countries will pay more than lower income countries.
According to the company, Paxlovid is generally administered at a dose of 300 mg (two 150 mg tablets) of nirmatrelvir with one 100 mg tablet of ritonavir, given twice-daily for five days. One carton contains five blister packs of PAXLOVID, as co-packaged nirmatrelvir tablets with ritonavir tablets, providing all required doses for a full five-day treatment course, the company has said. In December 2021, the US Food and Drug Administration issued an Emergency Use Authorization for the use of Paxlovid for the treatment of mild to moderate cases of COVID-19.
WHO RECOMMENDS PAXLOVID, BUT CAUTIONS ON PRICE AND TRANSPARENCY
Last week, on April 22, WHO recommended the treatment. “…WHO made a strong recommendation for nirmatrelvir and ritonavir, sold under the name Paxlovid, for mild and moderate COVID-19 patients at highest risk of hospital admission, calling it the best therapeutic choice for high-risk patients to date.”
But it also added, “However, availability, lack of price transparency in bilateral deals made by the producer, and the need for prompt and accurate testing before administering it, are turning this life-saving medicine into a major challenge for low- and middle-income countries.”
Lisa Hedman, technical officer, access to medicines, at WHO said at a briefing last week:
“The price is currently covered by confidentiality agreements and it has not been publicly released. There is very little information on price in the public domain. So that confidentiality has applied to a large number of deals. We have experienced situations like this before and it is clear that this may actually delay access to some countries.”
WHO is concerned that bilateral deals may constrain supply in the short term.
She also indicated that confidentiality clauses apply to UNICEF.
“Transparency of pricing, is a really critical component of access to medicines and we will continue to stress the importance of that to manufacturers that are working particularly in this space. Tiered pricing confidentiality agreements, those types of things are fairly standard in commercial [contracts], sales of medicines and maybe even in long-term agreements. But in an emergency setting, we really think that transparency aspect becomes very, very critical,” Hedman emphasized.
Sources familiar with the discussions, also said that what each country will pay to UNICEF for doses supplied will be UNICEF’s decision.
Hedman, said that the organization is working with The Global Fund on an equitable allocation mechanism to ensure that those four million doses that have been secured for low and middle income countries are delivered to those that need them the most and in an equitable transparent and fair manner.
Experts believe demand for the treatment is expected from countries that have lower vaccine coverage who are at higher risk, and countries that have higher incidence rates of the comorbidities.
THE UNICEF POSITION
In response to our queries, UNICEF said, that the agency has demonstrated transparency by publishing negotiated prices for a range of commodities over the last decade. However, publication of prices in this way requires consent by suppliers, it admits.
“UNICEF did not sign a specific NDA. Non-disclosure is a part of supply agreements. In such a situation, information is not disclosed without supplier consent. However, our preference is to conclude agreements with price transparency measures in place. It should be noted that countries wishing to procure products do have access to contractual terms for planning and procurement purposes,” a UNICEF spokesperson said.
Citing progress on transparency, UNICEF said, “Most COVID-19 vaccine related procurement agreements have been confidential, at least initially. As a result of continued advocacy, we are pleased to see that many of the previously confidential pricing details in many of our agreements with vaccine manufacturers are now public. We hope that this progress toward greater transparency can be applied to other agreements. We support WHO’s calls for greater transparency”, according to the responses from UNICEF.
Specifically on pricing and access, UNICEF said:
“UNICEF secured a certain volume of Paxlovid, however we still continue to negotiate some of the terms of the agreement, including price transparency. In this regard, UNICEF and ACT A partners have continued to advocate jointly to Pfizer for an expansion of the scope of countries that can access supply from generic voluntary license holders, ensuring that affordability is not a barrier to access, ensuring transparency on commercial terms and price in all low- and middle-income countries, removing any contractual conditions that can delay access and providing visibility on plans to expedite generic manufacturing of nirmatrelvir/ritonavir.”
UNICEF IN THE ACT ACCELERATOR
Sources alleged opacity in the decision-making around this supply agreement suggesting that UNICEF did not bring on board other partners of the ACT Accelerator before concluding the deal with Pfizer. It is understood that The Global Fund has been working closely with UNICEF on this deal.
Some even suggested that this might prompt a re-think on how future agreements should be discussed within the therapeutics pillar of the ACT A. (The ACT A did not respond to our queries on this by the time this story went to print.)
It is not clear why UNICEF would not take into account other partners of the ACT Accelerator. The agency did not respond to this specific query. ( In an earlier statement, UNICEF had said that it will work closely with ACT A partners)
Unitaid, another Geneva-based agency is also a part of the ACT A Therapeutics Pillar. A spokesperson from Unitaid told us, “All the ACT-Accelerator partners share common principles promoting equitable access to better health tools. Procurement partners are currently working to secure arrangements based on these principles and in the interest of global health.”
Sources also told us that Peter Sands who heads The Global Fund, was not happy with the way UNICEF had negotiated the agreement. The Global Fund, a key financing actor making drugs and diagnostics available during the pandemic, did not respond to our queries.
It is also understood that ACT A had never directly managed funds for procurement. “Procurement deals have always been managed through partner organizations. For Personal Protective Equipment, diagnostics, and therapeutics the partners have included UNICEF, the Global Fund, Unitaid, and others,” a source familiar with the working of ACT A told us.
UNICEF’s supply deal with Pfizer has an option allowing 95 low- and lower-middle-income countries (COVAX Facility eligible countries and IDA eligible ones) to procure at a set price with their own resources, one source familiar with the discussions said.
Countries will have to make their own decisions on whether they will opt for the treatment course through UNICEF’s supply deal, or if they will wait for generic production to ramp up. This, experts say is a function of the burden of the disease and the population level characteristics.
Unlike COVAX, that consolidates funding to buy vaccines for countries, the therapeutics space does not have a comparable mechanism. National budgets and select donor support for eligible countries determine access to therapeutics, WHO officials explained.
In a statement on March 22, UNICEF said, “UNICEF procurement of nirmatrelvir/ritonavir (PAXLOVID™) is dependent on country demand, clinical recommendations and necessary approvals.”
ON THE GENERIC PRODUCTION OF PAXLOVID
Last year in November 2021, Pfizer and the Medicines Patent Pool signed a voluntary licensing agreement for Low- and Middle-Income Countries. In March 2022, MPP announced that 35 generic manufacturers signed agreements with MPP to produce low-cost, generic versions of Pfizer’s treatment.
Last month, Pfizer said it has “initiated bilateral outreach to more than 100 countries around the world and has entered into agreements with multiple countries.”
WHO is of the view that “a licensing agreement made by Pfizer with the Medicines Patent Pool limits the number of countries that can benefit from generic production of the medicine.”
In its statement last week, WHO said:
“The originator product, sold under the name Paxlovid, will be included in the WHO prequalification list today, but generic products are not yet available from quality-assured sources. Several generic companies (many of which are covered by the licensing agreement between the Medicines Pool and Pfizer) are in discussion with WHO Prequalification but may take some time to comply with international standards so that they can supply the medicine internationally.
WHO therefore strongly recommends that Pfizer make its pricing and deals more transparent and that it enlarge the geographical scope of its licence with the Medicines Patent Pool so that more generic manufacturers may start to produce the medicine and make it available faster at affordable prices.”
REVENUE PROJECTIONS FOR COVID-19 ANTI-VIRALS
Last week, life sciences analytics firm, Airfinity said, “Pfizer’s Paxlovid is predicted to dominate the market with sales of $23.6 billion, taking 72% of the 2022 market.”
According to Airfinity, almost all of the first quarter revenue for Paxlovid (Pfizer) and Molnupiravir (Merck) is expected to come from high income countries only, based on publicly announced supply deals. High income countries currently account for over two-thirds of agreed antiviral supply deals and those still in talks, the company said. (The Airfinity analysis excludes any revenue which would potentially be generated from any MPP countries.)
“Antiviral pills are going to play a vital role as the COVID-19 pandemic moves to endemic. The treatment is attractive to governments for many reasons. It is cheaper and easier to administer. Its efficacy is not affected by evolving variants, they have a longer shelf life and can be stored at room temperature,” Airfinity’s Lead Analyst for Treatments Dr Arsalan Azad said in a statement.
(WHO officials cited a media report that disclosed a full course of Paxlovid costs $530 in the United States. They also indicated a price of $250 in an upper-middle income country based on another report. WHO is following up on this information.)
Clearly, given foreseeable demand, pricing becomes crucial for governments already straining under pressure, as the pandemic is well into its third year. (Pfizer CEO Albert Bourla has predicted a future for treatments like Paxlovid with booster vaccinations on the wane.)
WHY DISCLOSURE ON DRUG PRICING MATTERS?
WHO is worried that “the lack of transparency on the part of the originator company is making it difficult for public health organizations to obtain an accurate picture of the availability of the medicine, which countries are involved in bilateral deals and what they are paying.”
“WHO is extremely concerned that -- as occurred with COVID-19 vaccines -- low- and middle-income countries will again be pushed to the end of the queue when it comes to accessing this treatment,” a statement said. Specifically with this drug, WHO highlighted that that the medicine can only be administered while the disease is at its early stages. This means, the access to early testing and diagnosis in primary health care settings will be key for the global rollout of this treatment, according to WHO.
But this is an obstacle for low- and middle-income countries. WHO cited data from its diagnostics partner FIND that shows that the average daily testing rate in low-income countries is as low as one-eightieth the rate in high-income countries.
THE WHO TRANSPARENCY RESOLUTION
Although many may have reconciled to non-disclosure agreements and confidentiality clauses in commercial contracts as standard practices, WHO member states specifically brought in a resolution in 2019 to address opacity in a bid to improve transparency. Clearly this has implications for countries’ budgets, and, importantly, rectifies a balance of power between buyers and sellers.
In 2019, WHO member states adopted a resolution on improving the transparency of markets for medicines, vaccines and other health products to expand access. The objective of the resolution, WHO had said, was to improve “the public sharing of information on actual prices paid by governments and other buyers for health products, and greater transparency on pharmaceutical patents, clinical trial results and other determinants of pricing along the value chain from laboratory to patient.”
It was hoped that this would help countries to be better informed while procuring medical products and to help them negotiate more affordable prices. The resolution also tasked WHO secretariat to monitor the impact of transparency on affordability and availability of health products, including the effect of differential pricing.
"Compelling global health agencies to agree to non-disclosure requirements on Paxlovid vitiates the WHO transparency resolution. The disclosure of pricing information is important in view of the commitments to transparency that WHO member states and the WHO have made. This has implications not only for other COVID-19 therapeutics, but also for medical products beyond the pandemic,” Knowledge Ecology International’s Thiru Balasubramaniam said. KEI has been one of the key activist groups that has worked on transparency issues in the access to medicines.
RESISTANCE TO INCLUDE THERAPEUTICS IN THE TRIPS WAIVER TALKS
Experts believe that therapeutics for COVID-19 will remain essential as the disease evolves. And yet, in the discussions on the TRIPS Waiver at WTO, there have been efforts to keep therapeutics out of a potential waiver. The US has long held the position that any waiver must apply only to vaccines, and not include therapeutics and diagnostics.
Compulsory licensing is being pushed as a solution, chiefly by the EU at the WTO, to counter the TRIPS Waiver proposal. And yet, Pfizer filed an opposition in March 2022 to an application for a compulsory license on Paxlovid patents in the Dominican Republic, that was brought in by Knowledge Ecology International. (Also see Amicus Brief of Professor Brook Baker on the human right principles and TRIPS-compliant interpretation of the compulsory license petition filed by KEI in the Dominican Republic).
At a briefing by industry leaders earlier this month, the TRIPS Waiver proposal was dismissed as dangerous and toxic.
THE IMPLICATIONS OF KEEPING PRICING SECRET?
The implications on opacity on pricing can be wider than an impact on health expenditure. It translates into broader access matters and ultimately, influences power dynamics between countries and companies.
Will this set a precedence in the negotiations for other therapeutics for COVID-19 or other diseases?
Brook Baker, Professor of Law, Northeastern University, School of Law, who is also associated with discussions at the ACT Accelerator, told us:
“The biggest concern about this UNICEF Supply agreement is that the quantity reserved is trivial compared to the potential need for outpatient antiviral therapy for highest risk and high risk covid patients in LMICs. Past estimates were that 50% of the people in the world at higher risk because of age and underlying health conditions live in LMICs. Pfizer is promising a set-aside of only 4 million courses of treatment out of an estimated 2022 supply capacity of 120 million courses of treatment. This equals 6.7% of LMICs fair share. Moreover, the promised no-profit price will only be made available to the 95 poorest countries. Upper-middle income countries in particular will be paying much higher tiered prices.”
He also cited the example of Panama, that is reported to be paying $250 a course of treatment, nearly 47% of the U.S. price even though Panama’s per capita income is only 19.6% of US per capita income (2020: $11,800 vs. $63,416).
He also added:
“A negative precedent is also being set with respect to transparency for public resources spent in procuring COVID-19 therapeutics. Not only has the world allowed biopharmaceutical companies to maintain monopoly control over the supply, price, and distribution of COVID-19 countermeasures, it has also consistently allowed them to achieve their profiteering under a veil of secrecy. This imposed confidentiality also undermine public trust, accountability, and fair bargaining.
Pfizer gets away price secrecy on deals worth billions of dollars. It seeks both to avoid informing the public about its self-policed no-profit price and also about the differential tiered prices it charges countries around the world. Pfizer can always claim the buyers are getting a special or favorable deal without ever having the truthfulness of such claims tested with actual facts about prices charged.”
Other relevant reading:
PFIZER’S POWER, by Zain Rizvi, Public Citizen, October 2021
Pfizer accused of holding Brazil ‘to ransom’ over vaccine contract demands: The Guardian, September 2021
‘Held to ransom’: Pfizer demands governments gamble with state assets to secure vaccine deal: The Bureau of Investigative Journalism, February 2021
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