ImpactAlpha, June 10 – Legal agreements between the Bill and Melinda Gates Foundation and private biotechnology companies were supposed to be the great equalizer between rich and poor in the high-risk, high-cost world of drugs, vaccines and therapeutics.
The Global Access Agreements require recipients of Gates Foundation funding to provide low-income countries with affordable access to drugs, vaccines and other health innovations.
Included with all grants or investments in the Gates Foundation’s multi-billion portfolio in pharmaceutical, biotech and public health ventures, the agreements are central to the foundation’s strategies around neglected diseases, global health – and pandemic readiness.
When it came to providing global access to life-saving COVID vaccines, the Global Access Agreements appear to have failed their biggest real-world test.
The Gates Foundation has provided funding to most of the companies that jumped into the race to deliver a vaccine for COVID- 19, including large equity investments in CureVac and BioNTech and grants to Moderna. Each included a Global Access Agreement. It is also a major backer of the Coalition for Epidemic Preparedness Innovations, or CEPI, which has provided funding to at least nine vaccine efforts.
“All Gates Foundation funded projects – including those supported by grants, contracts, or program-related investment – contain Global Access terms to ensure that knowledge gained from the project can be promptly and broadly disseminated and products funded by the foundation are made available and accessible at an affordable price to the world’s poorest,” a foundation spokesman told ImpactAlpha.
But because the foundation’s program-related investments in Biological E, BioNTech, CureVac, and Kymab, and separate grants to Moderna, were made prior to COVID-19, the spokesman said, the agreements “do not cover COVID-19 infection as a target condition.”
For months, the foundation’s inability or unwillingness to use the Global Access Agreements to help broker deals with vaccine suppliers to supply doses at affordable prices undermined the effectiveness of COVAX, the Gates-backed U.N. buyers’ club that was meant to secure vaccine doses for the 91 low- and middle-income countries that qualify for foreign aid, or official development assistance.
COVAX, managed by Gavi, the global vaccine alliance also backed by the Gates Foundation, was set up to pool donations from rich countries and philanthropies and use collective bargaining power to negotiate prices with the pharmaceutical companies on behalf of developing countries. The market-based solution enabled pharmaceutical companies to preserve their intellectual property, while securing vaccine access to the global poor.
But COVAX has so far supplied fewer than 82 million vaccine doses to 129 countries. The World Health Organization estimates that only 0.3% of all vaccines administered have gone to low-income countries.
Leaders of the G7 industrialized nation are patching together a backup plan at this weekend’s meetings in Cornwall, England. Ahead of the confab, the Biden administration today is expected to announce the U.S. will provide 500 million doses of the Pfizer-BioNTech vaccine over the next year.
That is a far cry from the aspirational vision painted by the Gates Foundation-backed Global Alliance for Vaccines when it launched the COVAX initiative last April. “What is so unique about this is that these doses will be made available to people in all participating economies – rich or poor – at the same time,” GAVI’s Seth Berkley wrote last year.
COVAX’s original goal was to secure and deliver two billion doses by the end of 2021, enough vaccines to inoculate 20% of the populations of the world’s 92 poorest countries.
That did not happen, of course, and the reasons range from Trump-era vaccine nationalism to the shutdown of exports from India, where the Serum Institute was tasked with the bulk of COVAX vaccine manufacturing. In the end, COVAX found itself at the back of the vaccine line, outbid by the same rich countries that backed the initiative with donations in the first place.
COVAX’s revised goal is to ship 1.3 billion doses this year and 1.8 billion doses by the end of the first quarter of 2022.
The International Monetary Fund’s Kristalina Georgieva, WHO’s Tedros Adhanom Ghebreyesus, World Bank’s David Malpass and World Trade Organization’s Ngozi Okonjo-Iweala are calling for a stepped-up strategy, backed by $50 billion in funding, to vaccinate at least 40% of the world by the end of this year and 60% through the middle of next year. Other advocates, including the Gates Foundation, are calling on high-income countries to donate at least one billion excess COVID-19 vaccines to lower-income countries as soon as possible.
In any history of the global response to COVID, the efficacy of the Gates Foundation’s Global Access Agreements will be only one question among many. The foundation has stepped up with more than $1.8 billion in additional funding for the COVID-19 response. The foundation’s decades of investments in pharmaceutical and biotechnology companies, and especially for the breakthrough ‘messenger RNA’ technology, laid the groundwork for the historic sprint to develop effective vaccines.
But when it came time to distribute those vaccines, the toothlessness of the Global Access Agreements left champions of a more equitable distribution without crucial negotiating leverage with vaccine makers and rich countries.
A critical post-mortem of the Gates Foundation’s Global Access strategy could inform preparedness planning for future pandemics, as well as policy debates over intellectual-property protections for health innovations. Bill Gates, the Gates Foundation and others have cited voluntary agreements, including the Global Access Agreements, as part of their arguments against waivers of global intellectual-property protections for vaccine producers.
The performance of the Global Access Agreements also raise questions about whether the foundation’s strategic investments in for-profit pharmaceutical and biotech companies fulfill the “charitable purpose” requirements of U.S. tax law governing investments by philanthropic foundations in for-profit companies. If that charitable purpose is not being served, the foundation has the right and obligation to claw back its investments.
The Gates Foundation’s $2.5 billion Strategic Investment Fund of program-related investments has pushed the bounds of those tax laws with its broad portfolio of investments in biotech and pharmaceutical companies. It’s “nudge” strategy includes taking ownership stakes in private biotech startups and funding research to push companies to use their platforms to develop vaccines and therapeutics for neglected diseases such as HIV and Tuberculosis.
“The Gates Foundation’s influence—a combination of its mission, money, reputation, and willingness to take considered risks— allows it to negotiate especially favorable terms for the benefit of the poor,” Paul Brest, a former president of the Hewlett Foundation and a former dean of Stanford Law School, wrote in a 2016 review of the foundation’s investment strategies. “Its Global Access agreements with pharmaceutical companies and other investee partners, for example, provide preferential pricing for the foundation’s target beneficiaries.”
The foundation’s rights, outlined in a legally binding side-letter agreement, allow the foundation to obtain the intellectual property rights necessary to take the project forward with another partner, Brest reported. “The foundation also reserves the right to withdraw its investment if the agreed-upon charitable purposes are not being fulfilled. (Disclosure: The Gates Foundation partnered with ImpactAlpha to produce the review of its program-related investments, “Making Markets Work for the Poor.”)
The Gates Foundation is known as an eagle-eyed steward of its rights and responsibilities under its investment agreements. In 2018, the foundation played a key role in the financial oversight that ultimately brought down the Abraaj Group and forced the transfer of its $1 billion global healthcare fund, which Bill Gates himself helped launch. In another episode, the foundation’s program-related investment team used technical violations of its investment agreements to force investee Root Capital to improve its internal controls and systems.
The Gates Foundation’s early funding was critical in the decades-long effort to develop vaccines using mRNA, a holy grail that vaccine developers have been chasing success for decades. Those bets paid off in the record speed with which the first COVID vaccines were ready. The foundation has made grants and/or investments in most, if not all, of the companies that jumped into the race to deliver a vaccine for COVID- 19.
Just months before the novel coronavirus arrived, the foundation made a $55 million equity investment in German company BioNTech, which teamed with Pfizer to develop an mRNA-based vaccine. The BioNTech-Pfizer vaccine became the first COVID vaccine approved by the U.S. Food and Drug Administration. A Gates Foundation spokesman said the foundation’s investment does not relate to BioNTech’s COVID-19 work.
Earlier, the foundation made a $52 million equity investment in 2015 in CureVac, another German biotech company, whose COVID-19 vaccine is awaiting approval in the E.U. and U.S. The foundation has provided multiple grants to Moderna, the Seattle-based biotech, whose work with National Institutes of Health delivered the world’s second COVID vaccine approved by the FDA.
Bets on multiple platforms, according to the strategy, could ultimately speed vaccine development. Global Access Agreements would ensure equitable access to the poor.
Gates Foundation is also a major backer of the Coalition for Epidemic Preparedness Innovations, which it co-founded at the World Economic Forum’s Davos conference in 2017 with Norway, India and the Wellcome Trust. Among CEPI’s missions: develop vaccines against emerging infectious diseases and enable broader access to these vaccines during outbreaks.
Just days after the WHO declared COVID a pandemic in January 2020, CEPI gave a grant to Moderna to put its COVID vaccine into development. CEPI’s Richard Hatchett told Stat last August that global access was not a condition of CEPI’s grant to Moderna or the eight other vaccine providers it funded.
“We moved money very, very quickly, in small increments,” said Hatchett, who said in a do-over he would again give money with no strings attached. “I think that was critically important to initiating programs.” (The Gates Foundation did not respond to questions about whether CEPI sought or received a release from its Global Access requirements.)
Funding from CEPI for Moderna was ultimately dwarfed by financing from the U.S., which placed no conditions on fair access. “As a result, any commitment they might have had to global equitable access and at cost pricing went out the window,” says Michael Sheldrick of Global Citizen, the nonprofit advocacy organization. “The reality is money talks – but governments can leverage their power for the public good.”
Early on, COVAX was able to strike deals with AstraZeneca and Johnson & Johnson. Serum Institute, which produced the AstraZeneca vaccine for COVAX, delivered the vaccine at $3 to $5 a dose. That supply of vaccines was halted in March when the surge in India’s COVID caseload caused the government to shut down vaccine exports.
COVAX struggled to make headway with Pfizer and Moderna, which were reportedly selling doses to the U.S. and other wealthy countries for upwards of $20 to $40 a dose and prioritizing rich countries in the queue. “It’s just impossible for COVAX to negotiate access in those circumstances,” says Sheldrick.
COVAX has since negotiated deals with Pfizer-BioNTech, Moderna and Novavax. COVAX and the pharmaceutical companies have declined to publish the negotiated prices. The U.S. reportedly negotiated a “not for profit” price in its new agreement to supply 500 million doses of the Pfizer vaccine to lower-income countries.
The 500 million new doses from the U.S. are in addition to the 80 million unused doses President Biden pledged to send overseas by the end of June. Three-quarters of those will run through COVAX. The World Health Organization estimates 11 billion doses are needed to vaccinate the world.
At last week’s COVAX AMC Summit, the Gates Foundation pledged an additional $50 million to Gavi to support vaccine purchases through COVAX. The commitment brings Gates Foundation’s total support for the COVID-19 response to more than $1.8 billion for “the development of tests, treatments, and vaccines for COVID-19,” according to a press release.
“The world must urgently come together to expand equitable access to COVID-19 vaccines, or we risk more deaths and the emergence of new variants that could prolong the pandemic for everyone,” Mark Suzman, CEO of the Gates Foundation, said at this month’s COVAX summit.
For now, such global access remains a promise unfulfilled.