South Africa says non-refundable downpayments among onerous vaccine terms

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  • Country has signed big vaccine deals with J&J, Pfizer
  • Minister says manufacturers made difficult demands
  • Paused J&J rollout on Tuesday over U.S. blood clot reports
  • Minister signals pause may be short-lived

CAPE TOWN, April 14 (Reuters) - South Africa agreed to onerous conditions like non-refundable downpayments to secure COVID-19 vaccines from Johnson & Johnson (J&J) (JNJ.N) and Pfizer (PFE.N), its health minister said on Wednesday, describing terms vaccine manufacturers had demanded as "difficult and sometimes unreasonable".

The country worst-hit by the pandemic on the African continent in terms of coronavirus infections and deaths is counting on the single-dose J&J and double-shot Pfizer vaccines to ramp up immunisations after a slow start. It has signed deals with the two firms for a combined 61 million doses, enough to vaccinate 46 million people out of its population of 60 million.

"As government we have found ourselves in a precarious position of having to choose between saving our citizens' lives and risking putting the country's assets into private companies' hands," Health Minister Zweli Mkhize told a parliamentary committee about vaccine negotiations, adding procurement efforts were now largely concluded.

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Mkhize did not give a value for the non-refundable payments, which are in the spotlight after South Africa paused use of the J&J vaccine on Tuesday to investigate a potential link to rare blood clots - following the lead of U.S. regulators. read more

Mkhize reiterated on Wednesday the pause was likely to be short-lived.

J&J and Pfizer did not immediately respond to requests for comment.

Mkhize said Pfizer initially wanted "sole discretion to determine additional terms and guarantees for us to fulfil indemnity obligations" but had backed down after "intense negotiations".

He said J&J was holding out for a letter from the trade minister expressing support for its investment in local pharmaceutical company Aspen (APNJ.J), which will be making J&J doses under licence.

South Africa is setting up a no-fault compensation fund to indemnify the manufacturers against third-party claims, Mkhize continued.


Opinion among ordinary South Africans appears divided over whether South Africa was right to pause use of the J&J vaccine.

"I think it's a little bit premature given the fact that we have had no local reports in terms of the blood clots, but ... what happens in the U.S. tends to influence what happens in the rest of the world," Johannesburg resident Ntokozo Mhlongo told Reuters TV in the city's financial district Sandton.

Around 290,000 doses of the J&J vaccine have been given in South Africa in a study targeting up to 500,000 health workers.

Mkhize said officials were still expecting the first batch of commercial doses from J&J later this month and they were not considering terminating their contract.

The suspension was the latest setback for South Africa's immunisation efforts, after it ditched plans to kick-start vaccinations with AstraZeneca's (AZN.L) shot in February. A trial showed that vaccine had greatly reduced efficacy against the dominant local coronavirus variant. read more

Regulator SAHPRA said on Wednesday it had found no major safety concerns with the J&J shot after reviewing data from the research study that started in February. It said further data were being obtained from J&J and the U.S. Food and Drug Administration and that reviewing that could take a few days.

Mkhize said South Africa was paying $10 per dose for the J&J and Pfizer vaccines and talks were continuing over Russian and Chinese shots.

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Additional reporting by Shafiek Tassiem; Editing by Joe Bavier and Mark Potter

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