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US company faces scrutiny over Covid profits after UK agrees to secrecy clause
Ministers have agreed a secrecy clause in any dispute with the drugs manufacturer Pfizer over Britain’s Covid vaccine supply. Large portions of the government’s contracts with the company over the supply of 189m vaccine doses have been redacted and any arbitration proceedings will be kept secret.
The revelation comes as Pfizer is accused by a former senior US health official of “war profiteering’’ during the pandemic. In a Channel 4 Dispatches investigation to be broadcast this week, Tom Frieden, who was director of the US Centers for Disease Control and Prevention under Barack Obama, said: “If you’re just focusing on maximising your profits and you’re a vaccine manufacturer … you are war profiteering.”
Zain Rizvi, research director at Public Citizen, a US consumer advocacy organisation which has examined Pfizer’s global vaccine contracts, said: “There is a wall of secrecy surrounding these contracts and it’s unacceptable, particularly in a public health crisis.”
Rizvi said the UK needed to explain why it had agreed to secret arbitration proceedings. He said: “It’s the only high-income country we have seen that has agreed to this provision. It allows pharmaceutical companies to bypass domestic legal processes.
“The UK government has allowed the drug firms to call the shots. How did we end up in a situation where a handful of drug firms were able to exert so much control over the most powerful governments in the world? It points to a broken system.”
Pfizer has won plaudits for its vaccine delivery programme, but the US multinational faces growing scrutiny over the scale of its profits and the proportion of doses it has delivered to low-income countries.
While AstraZeneca agreed to sell its vaccine at cost during the pandemic, Pfizer wanted to secure its profits. The Pfizer/BioNTech vaccine, which now has the brand name Comirnaty, will be one of the most lucrative drugs in pharmaceutical history.
The Channel 4 investigation reveals analysis by one biological engineering expert claiming the Pfizer vaccine costs just 76p to manufacture for each shot. It is reportedly being sold for £22 a dose to the UK government.
The estimated manufacturing costs do not include research, distribution and other costs, but Pfizer says its profit margin as a percentage before tax are in the “high-20s”. Pfizer expects to deliver 2.3bn vaccines this year with predicted revenues of $36bn (£26.3bn).
A report last month by the People’s Vaccine Alliance, a coalition of organisations including aid charities, said Pfizer and other drug firms have sold the majority of doses to rich countries, leaving low-income countries “out in the cold” . Only 2% of people in low-income countries had been fully vaccinated against coronavirus. Drug firms should suspend intellectual property rights for Covid-19 vaccines, tests, treatments and other medical tools.
Pfizer has faced increased scrutiny allegations of excessive global profits after its partner, the biotechnology company BioNTech, announced in September 2020 it was to receive up to €375m (£320m) from the German government to fund vaccine development.
Anna Marriott, Oxfam’s health policy manager said: “It is deplorable that billions of people around the world are being denied vaccines so that pharmaceutical companies can make obscene profits. Given that public investment was crucial to vaccine development, it’s incomprehensible that pharma monopolies are being prioritised over people’s lives.”
Pfizer has to date pledged 40m doses out of global production to Covax, the UN-backed initiative delivering vaccines for low income countries. This is less than 2% of its global production for 2021. The firm says it aims to deliver at least two billion doses to low- and middle-income countries by the end of 2022.
Pfizer said vaccine production was the “biggest scale-up” in the firm’s history and it was proud to have delivered more than 2bn vaccines to 162 countries. It supplied low-income countries on a not-for-profit price and all other countries were being offered the vaccine at a significantly discounted price.
The company added: “The pandemic has highlighted the extraordinary value that a vibrant private sector can deliver to society.” It said confidentiality agreements were standard practice. The estimated cost of manufacturing the vaccine by a biological engineering expert was grossly inaccurate and meaningless because it did not reflect the true costs of bringing the vaccine to patients, including clinical studies, increased manufacturing efforts and global distribution.
The government said its vaccine contracts were commercially sensitive and it could not disclose any further details. BioNTech did not respond to a request for comment.
Vaccine Wars: The Truth About Pfizer is on Channel 4 at 7.30pm on Friday