Pfizer has backed down over its controversial demand that the South African government put up sovereign assets guaranteeing an indemnity against the cost of any future legal cases, the Mail & Guardian reports the Bureau of Investigative Journalism can reveal.
During COVID-19 vaccine negotiations, the company sought indemnity against civil claims from citizens who had experienced adverse vaccine effects – meaning that the government would have to cover the costs instead.
The report says last week South African Health Minister Zweli Mkhize, voiced frustrations about “difficult and sometimes unreasonable” terms his countryʼs government had been presented with during contract negotiations with vaccine manufacturers, including Pfizer.
The M&G reports that in its negotiations to provide vaccines to countries worldwide, Pfizer has asked governments for wide-ranging indemnity protection against any civil claims a citizen might file. This means that if Pfizer were to be sued by someone who had suffered a rare adverse effect from the vaccine, then the government, not the company, would have to pay for legal costs and compensation. This would apply even if the case were brought due to the companyʼs own acts of negligence, fraud or malice.
The M&G reports that in other negotiations, Pfizer went further. The company required some Latin American governments to put up sovereign assets, including federal bank reserves, embassy buildings or military bases — as a guarantee against indemnifying the cost of future legal cases.
Pfizer is quoted as saying: “Pfizer and BioNTech have no intention of interfering with any countryʼs diplomatic, military, or culturally significant assets.” But, the M&G reports, unredacted draft contracts between Pfizer and the Dominican Republic, Albania and Peru show that the company sought to be indemnified against problems at any step of the supply chain – including packaging, manufacturing and storage.
Experts are quoted in the report as saying it was “unreasonable” to require governments to pick up the bill for any negligence by Pfizer.
In South Africaʼs case, Mkhize said the clauses “posed a potential risk to our assets and fiscus (public purse)”. He described how Pfizerʼs late demand caused delays in the discussions, which in turn put back the anticipated vaccine-delivery dates. Mkhize wrote that the government was “relieved” when Pfizer eventually conceded and removed the “problematic term”.
Mkhize had earlier accused coronavirus vaccine manufacturers Johnson & Johnson (J&J) and Pfizer of making unreasonable demands that have delayed the delivery of shots to South Africa, reports BusinessLIVE.
The government faces growing pressure over its failure to begin rolling out vaccines to the general population. Despite having Africa’s biggest recorded COVID-19 caseload, South Africa lags behind in its vaccination efforts and has so far inoculated only 290,000 health workers with J&J’s vaccine under the Sisonke implementation study.
Addressing parliament’s portfolio committee on health on Wednesday of last week, Mkhize said negotiations with the vaccine manufacturers have been lengthy and difficult as they sought onerous terms. “We have found ourselves in the precarious position of having to choose between saving our citizens lives and risking putting the country’s assets into private hands,” he said.
BusinessLIVE reports that responding to questions sent to him by the committee’s chair, Sibongiseni Dhlomo, Mkhize said two agreements have been negotiated with J&J for a total of 31m doses of its single-shot vaccine, but only one has been signed. He accused J&J of holding the government to ransom over the second contract, saying it had demanded a letter from the minister of trade, industry & competition expressing support for its investment in pharmaceutical manufacturer Aspen Pharmacare before it would sign.
BusinessLIVE reports that J&J had not responded to a request for comment at the time of publishing.
Pfizer had initially demanded sole discretion to determine additional terms and guarantees for the government to fulfil its indemnity obligations, but had backed down after “intense negotiations”, Mkhize said. “This condition posed a potential risk to our assets and the fiscus.”
Business LIVE reports that the agreements with J&J and Pfizer both contain clauses saying down payments made to the vaccine manufacturers will not be refunded under any circumstances. Other key conditions required by both were that they be indemnified from adverse events due to their vaccines and that a no-fault compensation fund be established for paying claimants by 30 April.
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