NDAs Violate Transparency and Accountability

By Rep. Edcel C. Lagman

THE non-disclosure agreements (NDAs) shrouding the purchase of COVID-19 vaccines could constitute dubious schemes. They could be covering up the avarice for exorbitant profits of the vaccine manufacturers and distributors. They could hide their enormous profits from the taxman. They could mask corrupt practices of government officials who negotiate and sign the sales contract. They could conceal from State auditors and the people the marauding of scarce public funds by government functionaries.

When people worldwide are dying from the onslaught of the viral pandemic, it is criminal for pharmaceutical companies to amass huge profits at the expense of humanity’s tragedy. Nations, particularly the poorer economies, are constrained to surrender to the trade and pricing impositions of drug manufacturing giants so as to desperately secure essential vaccine supplies. Officials procuring vaccines may take advantage of furtive deals by veiling their predilection for graft. The ailing population and the national treasury are the victims of these clandestine transactions.

NDAs cover the confidentiality of vaccine prices, volume of vaccines purchased, flexibility of delivery schedules, liability shields to drug manufacturers in case of adverse effects on the inoculated, and ban on the purchaser from donating the vaccines to needy countries. They are purportedly designed to protect the pharmaceuticals’ interests and patents, as if they are not amply protected by existing laws and heavily subsidized by select governments to develop the vaccines.

Copies of the “Manufacturing and Supply Agreement” dated June 19, 2021 between Pfizer, Inc. (Philippines) and the Department of Health (DoH) and the National Task Force Against COVID-19 (NTF); the undated “Government Purchase and Supply Agreement” between the Government of the Philippines (GOP) and Sinovac Life Sciences Co., Ltd.”; and the undated “Bilateral Supply Agreement” between the GOP, through the DoH and/or the Vaccine Czar and Chief Implementer of the NTF, and Moderna Switzerland, that were furnished to the House committee on appropriations by Finance Secretary Carlos Dominguez 3rd, are destitute of relevant information because the principal terms and conditions are all redacted as “confidential”.

With the major provisions of the purchase agreements covered by confidentiality, how can the Congress exercise its oversight function to determine, among others, how much of the appropriations for the procurement of vaccines has been utilized, and how much more should be budgeted for future purchases? The NDAs blindfold the Congress and mock the legislature’s plenary power to adequately appropriate public funds.

Controversies surrounding the imposition by pharmaceutical giants of NDAs have hounded negotiations for the purchase of vaccines worldwide.

For example, although Nepal had finally signed an NDA to buy Chinese vaccines, the purchase agreement’s legality remains questionable according to Nepal’s health ministry officials, because their existing laws do not legalize NDAs in public procurement. Nepal’s Public Procurement Act of 2007 and COVID-19 Crisis Management Ordinance do not sanction NDAs. An official of the Public Procurement Monitoring Office stressed that except in procuring “defense-related materials, which are sensitive from a national security point of view, details of all other procurements must be disclosed as per the existing law.”

Nepalese finance ministry authorities argue that NDAs complicate the government’s ability to secure foreign aid to procure vaccines if foreign donors and lenders are not informed about procurement details. They added that their budget for the procurement of vaccines is mostly funded by World Bank and Asian Development Bank which demand transparency in the procurement of vaccines.

A finance ministry official said that “if we procure any goods or services with the money received from donor agencies … we have to send all the procurement-related documents to them.”

Since the Philippines, like Nepal, extensively depends on foreign loans for the procurement of vaccines, Nepal’s predicament also bedevils the Philippines. However, while the Nepalese health and finance authorities denounce the NDAs, our health and finance officials act as co-conspirators in the furtive deals.

The UK-based Bureau of Investigative Journalism revealed that Pfizer committed “high-level bullying” against Latin American countries, particularly Brazil and Argentina. It reported that Pfizer also demanded for: a) sovereign guaranties wherein “federal bank reserves, embassy buildings or military bases” are put up as collateral; b) indemnity to Pfizer even for its “fraud, gross negligence and mismanagement”; and c) the deposit of the indemnity fund in a foreign bank account.

The same iniquitous and onerous conditions could have been imposed on the Philippine negotiators whose lips are now sealed by the NDAs under the despicable threat that disclosures will deprive the country of much-needed vaccines.

Mark Eccleston-Turner, a global health law lecturer at England’s Keele University, opined that Pfizer is “trying to eke out as much profit and minimize its risk at every juncture with this vaccine development”. Some poor countries suspect that due to the NDAs, they are paying as much, or even more, than the wealthy nations. Why can’t the World Health Organization and World Trade Organization stop these shenanigans of pharmaceuticals?

Invocating NDAs to conceal the prices of procured vaccines violates Philippine laws on transparency and accountability in the purchase of goods and services.

The recent “COVID-19 Vaccination Program Act of 2021” requires that the “amount of contract as awarded” must be posted at the procuring entity and in the Government Procurement Policy Board’s online portal. Moreover, the “Government Procurement Reform Act” demands “transparency in the procurement process and the implementation of procurement contracts” and the prosecution, once warranted, of public officials and private parties involved in the procurement.

The NDAs also infringe the Constitution, which mandates the Commission on Audit (CoA) to investigate and audit government expenditures. CoA Chairman Michael Aguinaldo categorically committed to audit the government’s vaccine purchases notwithstanding the NDAs since pertinent disclosures to state auditors are not considered public revelations. Perforce, CoA’s special audit must now commence since the purchases have been paid for, even as more appropriations are sought for future procurement.

Rep. Lagman’s email address is edcel.lagman@house.gov.ph.

This article also appears in The Manila Times