Stichting Farma ter Verantwoording

Guidelines for Responsible Pharmaceutical Behaviour during Covid-19

Pharmaceutical companies have a duty of care, especially in the midst of global health crises such as a worldwide pandemic, and especially when so many of the pandemic countermeasures were significantly supported by public financing. PAF has been ranking pharmaceutical company behaviour during the pandemic according to a set of guiding principles, and releasing this information in a scorecard. Below are the principles PAF uses to make this ranking.

This set of recommendations are directed exclusively at the pharmaceutical companies, for improving their practices across the board. Ideally, these guidelines would be legally binding on the companies to create a human rights-based accountability framework for pharmaceutical companies in relation to all medical products.

Vaccine and therapeutics companies should…

COMMIT TO INTERNATIONAL HUMAN RIGHTS PRINCIPLES AND STANDARDS WHEN DEVELOPING AND MARKETING COVID-19 PRODUCTS

  1. Publicly commit to adhering to the United Nations Guiding Principles on Business and Human Rights and to the Human rights responsibilities for pharmaceutical companies in relation to access to medicines 
  2. Devise and publish a human rights strategy for their product. This should include a plan for equitable global distribution of Covid-19 medical products and conducting regular human rights impact assessments to identify the adverse effects of the business plan.

STEP UP INTERNATIONAL COOPERATION EFFORTS

  1. The company commits to an international responsible licensing mechanism, such as the WHO Covid-19 Technology Access Pool (C-TAP), or the  Medicines Patent Pool (MPP), and discloses which information it has shared, or is intending to share, with such a mechanism, as the MPP full disclosure policy dictates. 
  2. The company commits to not enforcing intellectual property rights related to Covid-19 products. Patents are meant to stimulate innovation and research into life-saving products. However, they also give the patent-holder market exclusivity, meaning that the patent-holder can set as high a price as it likes. Because of this monopoly, the product often becomes excessively expensive. Patents and other exclusive rights also have a huge impact on global production capacity, which is especially important regarding shortages for Covid-19 vaccines. Companies can avoid these issues by licensing the product for use in LMICs (through C-TAP or MPP), or by developing a differential pricing strategy that ensures fair pricing for all.
  3. The company signs agreements to supply the vaccines/therapeutics pillar of the ACT Accelerator (COVAX) with their products. Vaccine hoarding by high-income countries has so far severely limited COVAX’s ability to buy enough doses to distribute to lower income countries. Companies can limit this by prioritising purchase agreements with COVAX rather than with high-income countries. 

COMMIT TO EQUITABLE DISTRIBUTION, PRICING & KNOWLEDGE-SHARING

  1. Therapeutics companies make the active pharmaceutical ingredient (API) for their product available at a ‘fair’ price and on reasonable grounds.
  2. Vaccines and therapeutics companies commit to full technology transfer to other manufacturers. This involves many channels, including the transfer of physical equipment, providing training for researchers, and licensing the technical, organizational and procedural knowledge required to manufacture the product. So far, the companies that have shared technology have done so in a restrictive way, resulting in ‘fill-and-finish’ sites instead of a full production process. [1]
  3. Companies commit to non-profit pricing, at best, or ‘fair’ pricing, at the least. For any medical product, this means a price that is ‘affordable to the buyer while covering the seller’s costs and providing a reasonable profit margin’. A fair price will also differentiate between low-income and high-income countries. There is no ‘set’ threshold of fairness, as many factors determine the price of a product, including R&D expenditures and efficacy. Transparency in a company’s purchasing agreements is therefore also key to determining and achieving a fair pricing strategy.  
  4. Vaccine companies commit to equitably distributing their supplies around the world. This could involve setting up an internal quota system within the company, which would allocate a certain number of doses to low- and middle- income countries, and prevent high-income countries from stockpiling supply. 
  5. The company agrees to waive exclusive rights in regulatory test data where applicable.

[1] Eg Novavax with the Serum Institute in India. See here for a comprehensive overview of why technology transfer is necessary.

TRANSPARENCY IS KEY

  1. The company publishes its R&D costs, profit margin, and average costs of production. This information should be easily available in the public domain because it is ‘vital for the public to assess the prices set’. It should also be available per product. This data is also necessary to verify any claims made by the company – for example, a commitment to non-profit pricing should be backed up by quarterly financial reports and information on the costs of production. 
  2. The company publishes its production capacity. This is crucial for transparency in the supply chain and, in the context of a global pandemic, to accurately predict how many doses will become available. 
  3. The company publishes the amount of public subsidies it received during product development and/or testing. This greatly influences the amount of leverage governments have for making companies adjust their prices, for example. [2]
  4. The company publishes the text of licensing agreements. This allows for scrutiny of the deals made with manufacturing companies. Given that many vaccines are publicly funded, this is information that the public has a right to know. Ideally, a ‘good’ license should contain provisions on global access and generics to drive down prices and increase access, and remove any additional barriers to access such as patents or data exclusivity.

[2] The UAEM framework on Global Access Licensing is a useful guide.

Policy Recommendations

For companies developing/manufacturing Covid-19 medical products

  1. Follow PAF’s ‘Guidelines on responsible pharmaceutical behaviour in Covid-19’. Using these concrete and verifiable criteria, companies can publicise their commitments to international human rights standards and improve their public image. 
  2. Reflect on the GCCP score given and use PAF’s recommendations on how to improve it.

For governments

  • Use public funding to negotiate ‘fairer’ contracts. Governments have the power to negotiate conditions in their deals with vaccine and therapeutics providers. Governments can apply funding conditionalities to publicly funded developers of Covid-19 products. These terms could make government funding conditional on: 
    • The companies setting a fair price for the product.  
    • The companies committing to a responsible licensing mechanism such as WHO C-TAP or the MPP
    • Data transparency in the event of public funding of Covid-19 vaccine/therapeutics clinical trials, licensing deals, costs and research.
  • Provide funding for international licensing mechanisms such as CTAP and MPP
  • Support the waiving of IP rights. More than 100 governments support the TRIPS waiver proposal, but a number of high-income countries are blocking it (The EU led by Germany, the UK, and Switzerland). The waiver would speed up worldwide access to Covid-19 medical products by removing legal barriers to their production.
  • Stimulate companies to adhere to GCCP. Observance of our ‘guidelines for responsible pharmaceutical behaviour in Covid-19’ and scoring system could be included as a requirement in procurement contracts.

For WHO/GAVI/CEPI

  1. WHO in collaboration with the MPP should provide model licensing agreements for companies and governments to easily conform to international human rights standards in these deals 
  2. WHO should provide regular updates on progress made with C-TAP. C-TAP can provide incentives for companies to support it, such as investing in new drugs. 
  3. GAVI/CEPI should require companies contracted by the ACT Accelerator (vaccines and therapeutics) to adhere to GCCP.

For institutional investors

  • Implement and follow the United Nations Principles for Responsible Investment (UNPRI), involving a 3-part responsibility to respect human rights:
    • Adopt policy commitments to respect internationally recognised human rights
    • Conduct due diligence processes to identify potential human rights implications of vaccine developers’ activities 
    • Enable or provide access to a remedy: both procedural and substantive, through national judicial or grievance mechanisms, or through non-judicial means that are legitimate, equitable, & transparent in accordance with the UN Guiding Principles on Business & Human Rights.
  • Tie pharma CEO pay to equitable vaccine distribution: as a group of 65 asset managers have called for in January.