AGC had to review 'unfavourable clauses' found in Pfizer vaccine deal

KUALA LUMPUR: The Attorney-General's Chambers (AGC) had to propose amendments to Malaysia's vaccine procurement agreement with Pfizer (Malaysia) Sdn Bhd, after finding clauses which favoured the supplier.

This was revealed in the White Paper on Covid-19 Vaccine Procurement Management released in Parliament on Thursday (June 8).

After going through the draft agreement, the AGC and the legal advisor of the Health Ministry were of the view that the ministry had to review clauses related to policy, finance, technical procedures and specifications agreed in the agreement with Pfizer (Malaysia).

It then suggested on Dec 24, 2020, that necessary amendments should be made and the draft updated according to the government's terms before being submitted to the company.

"As for the provisions of the manufacturing and supply agreement (MSA), Pfizer (Malaysia) said the format of the agreement is uniform for all countries entering into an agreement with Pfizer and the proposal to amend the terms cannot be considered," the document revealed.

The paper said that the AGC had reviewed and proposed the amendment proposals to the MSA draft to protect the government's interest.

"The AGC had raised a few irregularities in the MSA draft agreement that was found to be more in favour of Pfizer (Malaysia). However, Pfizer did not agree to all substantive amendment proposals," it said.

The unfavourable clauses include the termination of the agreement.

"For example, if the agreement is ended by Pfizer (Malaysia) on the grounds of a breach by the government, the government will then have to pay the full price for the contracted doses to Pfizer (Malaysia) within 30 days (minus the sum that was already paid to the company)," it said.

On the contrary, no penalty will be imposed on Pfizer (Malaysia) if the government had ended the contract due to a breach by the company.

To this, the AGC had proposed an amendment, whereby if the agreement was terminated, the government would only be required to pay the "monies due and payable" as at the date of termination. However, the proposal was not considered by Pfizer.

Meanwhile, on Jan 6, 2021, the Cabinet found a clause that could leave the government at risk and have implications in terms of the finances, compensation, damages and liability that could stem from the negligence of the supplier or vaccine side effects.

Therefore, the AGC had also advised the government to take necessary steps outside the agreement, such as setting up a trust fund for compensation on an ex gratia basis for those experiencing negative effects after vaccination and educating the people on the impacts of the jabs.

The Cabinet had also agreed on the same date that the Health Minister could sign the MSA on behalf of the government once it had been finalised and agreed by both parties.

The MSA was inked on Jan 11, 2021. Additionally, five Amendments to Manufacturing and Supply Agreement (AMSA) were made which included changes in terms of vaccine doses and payment.

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