Over 50 civil society groups have written to the leaders of the world’s biggest medicine procurement programmes urging them to reject “secrecy clauses” in their agreements with pharmaceutical companies. 

The letter, which has been shared exclusively with Health Policy Watch, was sent to the heads of UNICEF, the Pan American Health Organization (PAHO), vaccine alliance Gavi, The Global Fund to Fights AIDS, Tuberculosis and Malaria and the US President’s Emergency Plan for AIDS Relief (PEPFAR) on Tuesday.

The civil society groups, which include the People’s Vaccine Alliance, Public Citizen, Health GAP and a multitude of local patient advocacy groups, express “deep concern about the increasing use of confidentiality and non-disclosure clauses” in contracts between drug manufacturers and government, multi-stakeholder and humanitarian buyers.

They appeal to the big five procurement agencies to use their buying power to reject secrecy clauses that are hindering “equitable access to essential medicines by making it harder to establish fair terms, reasonable prices, and timely supply”. 

In 2021, the United Nations system alone spent $10.6 billion on medical products.

COVID-19 stoked secrecy

“Secrecy imposed by private industry across the entire value chain of medical products became the norm during the COVID-19 pandemic. There was secrecy with respect to many publicly funded R&D agreements and an absence of terms and conditions requiring transparency of research outcomes and conditions on commercialization,” they write.

Companies claim “trade secret protection” in relation to a range of issues including public investments and incentives in the research and development of new drugs; prices and pricing policy; procurement agreements and supply commitments. 

“Regrettably, PEPFAR has recently sidestepped transparency obligations by allowing its contracted bio-pharmaceutical distributor, Chemonics, to sign a non-disclosure agreement with ViiV,” the letter notes.

Contract transparency is a key issue in the current pandemic accord negotiations, and the current draft negotiating text includes transparency as a core principle, but does not include any legally binding provisions.

Activists in Spain and Colombia have taken legal action to establish “the principle that drug prices are not protected trade secrets”, according to the letter.

Meanwhile the Health Justice Initiative in South Africa secured a court order compelling the government to make full disclosure of its procurement agreements with Johnson & Johnson, Pfizer, Serum Institute, and Gavi’s COVAX program during the COVID-19 pandemic.

It emerged that Johnson & Johnson (J&J) and the Serum Institute of India (SII) charged the South African government more than the European Union for COVID-19 vaccines – and South Africa assumed all the risk in ‘take-it-or-leave-it’ contracts with Pfizer, J&J and SII. 

Lack of transparency enables corruption

Interestingly, at the World Health Organization’s (WHO) Fair Pricing Forum on Wednesday ,South Africa’s Deputy Director General of Health, Dr Anban Pillay, said that pharmaceutical companies had taken advantage of COVID-19 to secure high prices for vaccines from his government.

Addressing the morning plenary on drug price transparency, Pillay also paid tribute to civil society organisations for their advocacy on access to affordable medicines.

Meanwhile, Dr Yupadee Sirisinsuk, Thailand’s Deputy Secretary-General of Health Security, called for international regulations to make sharing of medicine prices compulsory.

Billy Mweetwa, former Director General of the Zambia Medicines and Medical Supplies Agency, told the plenary that the lack of transparency in medicine procurement weakened governments’ negotiating power as they “have no price benchmarks”, and could also lead to corruption in the negotiations.

Sabine Vogler, head of the pharmacoeconomics at the Austrian National Public Health Institute, described payers as entering negotiations “blindfolded” as they had no idea what others were paying. 

New transparency policies 

Charles Gore, executive director of the Medicines Patent Pool, said that where governments provided public funds for R&D, there were often clauses related to product access “but governments then don’t actually enforce them”. 

“COVID really highlighted the lack of enforcement of access rights,” said Gore.

International agencies could be “important advocates” of pooled procurement to drive down costs, he added.

However, the civil society groups want far more in their letter to the “Big Five”.

“We believe it is time for the largest procurers of medical products, including UNICEF, PAHO, Global Fund, PEPFAR and Gavi, to act individually to adopt new transparency policies and collectively to support the adoption and enforcement of a new common standard that rejects secrecy, and that supports more robust, accessible reporting of procurement contract terms and agreements,” they argue.

“Similarly, governments should reject coercive non-disclosure agreements, and simultaneously they should clarify or modify their freedom of information and drug procurement laws to ensure that supply, price, and distribution terms are publicly available,” they conclude, saying that they were ready to engage on the issue with the agencies.

‘Unintended consequences’ of transparency

However, Richard Torbett, head of the Association of the British Pharmaceutical Industry, said that “sometimes the sharing of information is really helpful and sometimes the sharing of information can have some unintended consequences”.

Industry needs incentives to create the best medical products for patients, said Torbett.

“Pharmaceutical prices need to be scrutinised, but I’m much happier about pharma companies being scrutinised on clinical data on how well their products work for patients, rather than an accounting debate about how to portion R&D costs,” he added.

Torbett said that while transparency was important, particularly in regard to “multi-source products, where that transparency can drive better competition, lower prices, and I would hope that translates into better access around the world”.

But he was sceptical that price transparency about new medicines would drive prices down: “It’s not that the industry is against transparency for the sake of it. It’s a real sense that, through international reference pricing and some of the consequences of that, there is a belief that transparency of net prices could lead to price convergence, and that price convergence ultimately is likely to be detrimental to the poorest countries in the world.”

Torbett also noted that “countries want to strengthen their negotiating position by understanding the prices charged elsewhere. I’d be very interested to know whether some of those countries would be willing to share their own prices.”

Frustration at being disempowered

Concluding the forum’s plenary on transparency, Dr Suerie Moon, co-director of the Global Health Centre at the Geneva Graduate Institute, said she sensed “frustration in the room” was disheartened about the “circular discussion” from one forum to the next.

“On the part of payers, there is frustration at being disempowered by information asymmetry and a strong desire to have more transparency, not only in order to negotiate fair prices, but also to be more accountable to the public and to address the risk of corruption,” said Moon.

Countries had also felt frustrated when trying to act alone, said Moon.

“There’s a very strong role for international cooperation and coordination, whether that is through information sharing, joint negotiations, training or pooled procurement.”

Image Credits: Jernej Furman/Flickr, Prachatai.