MAPGuideⓇ
Equitable Access Toolkit
Establising Product Supply Commitments in Funding Agreements
Product supply commitments in funding agreements can help to secure sufficient and timely supplies of quality-assured funded products for the populations that need them. Considerations for developing and negotiating supply-related agreement provisions include:
What commitments should the funded partner make in relation to fulfilment of demand for the access territory?
How should the funded product be made available for purchase by procurement entities falling within the scope of the agreement access commitments?
What is the risk of disrupted or delayed supply, and what steps could be taken by the parties to mitigate this risk?
1. Sufficient supply
Funding agreements can include different types of provisions aimed at reserving sufficient supplies of a funded product for the agreement access territory. The commitments negotiated will depend on a number of factors including the context of the agreement, the availability of information related to anticipated manufacturing capacity and expected demand for the funded product, and consideration of an appropriate balance between commercial market and access territory supplies to support a sustainable business model.
Approaches to sufficient supply obligations may include:
A general commitment to making the funded product available along with a requirement to establish a more detailed volume commitment as part of an evolving access plan when there is more information available with regards to manufacturing capacity and product demand;
Annual minimum or maximum volume commitments expressed as an absolute volume or as a proportion of the funded partner’s total manufacturing capacity or sales volume;
A tiered volume commitment linked to the scale of public and philanthropic funding for the development of the product and/or manufacturing facilities;
Use of forecasting mechanisms to inform manufacturing volumes and help the funded partner to develop a sustainable supply strategy that balances access commitments with commercial supplies; and/or
Mechanisms to allow for an adjustment of a volume commitment based on actual procurement of the product.
Examples from the MAPGuide
The Equitable Access Plan shall include a commitment from the Partners to negotiate future purchase, allocation and supply commitments in respect of the Project Vaccine(s), with purchasers in LMICs and UMICs, including with relevant international public health stakeholders such as Gavi, UNICEF and the Pan American Health Organisation.
Source: taken from a USD $34.8 million funding agreement between CEPI (Funder) and the University of Oxford and Barinthus Biotherapeutics (Developers). Partner types: non-profit funder, industry/academic institution; Product type: MERS vaccine; Development stage at signature: early stage development. Read in context.
The Company shall make the Global Access Products available to both public and private purchasers in the Target Countries at a reasonable volume that is sufficient to meet the demands of non-profit organization and public-sector purchasers […].
Source: taken from a global health agreement between Adjuvant Global Health Technology Fund (Funder) and AN2 Therapeutics (Developer) signed in connection with a USD $7 million share purchase by Adjvant. Partner types: impact investor, industry; Product type: melioidosis and tuberculosis therapeutic (Epetraborole); Development stage at signature: preclinical. Read in context.
In each calendar year during the Commitment Period commencing in 2017, the Company will fulfill in accordance with the Company’s ordinary course of business all reasonable orders for [Product] from Purchasers up to an aggregate maximum of 300 MT of [Product] […].
Source: taken from a letter agreement between the Gates Foundation (Funder) and Amyris (Developer) signed in connection with a USD $5 million stock purchase by the Gates Foundation. Partner types: philanthropic funder, industry; Product type: input material for malaria therapeutics (artemisinic acid and amorphadiene for use in artemisinin-based combination therapies (ACTs)); Development stage at signature: licensed product. Read in context.
[Developer] shall: […]
- during the Pandemic Period […], offer the Volume Commitment Percentage of the [Product] produced pursuant to Clause [x] for purchase by Gavi, [Funder] or their respective designees pursuant to Clause [x] during the Pandemic Period. For clarity, [Developer] may not allocate or agree to supply such [Product] doses to other third parties, other than as required pursuant to the Pre-existing Agreements, during the Pandemic Period without the express written permission of Gavi, [Funder] or their respective designee; […]
- […] use its Commercially Reasonable Efforts to provide an amount of doses to be reasonably determined by [Funder] based on the [Developer]’s worldwide supply capacity and the level and timing of [Funder]’s funding contribution to the global initiative “Access to COVID-19 Tools (act) Accelerator” so as to ensure availability for all, subject to the inclusion of satisfactory liability protection (which may include participation in the Gavi no fault compensation programme) and regulatory conditions. This Agreement does not cover specific details with regard to the provision of doses to the COVID-19 Tools (act) Accelerator to be concluded and agreed separately with the relevant parties involved.
Related definitions:
“Volume Commitment Percentage” means the relevant percentage of the [Developer]’s capacity to produce [Product] together with Trusted Manufacturer, where the relevant percentage shall be calculated as follows: **% for any [Product] for which [Funder] provides preclinical funding, **% for any [Product] for which [Funder] funds through Phase 1 clinical study, **% for any [Product] for which [Funder] funds through Phase 2 clinical study, **% for any [Product] for which [Funder] funds through Phase 3 clinical study, and **% for any [Product] for which [Funder] funds through to (i) approval and registration as set out in the iPDP; (ii) WHO pre-qualification or emergency use listing; and (ii) reasonably sufficient commercial manufacturing capabilities as required to meet [Developer]’s obligations hereunder. In the event that [Funder] co-funds with a third party organization, [Developer], [Funder] and the third party organization will negotiate an appropriate Volume Commitment Percentage commensurate with the respective interests of the party, funding contributions and stage of investment (provided always that such Volume Commitment Percentage shall be no lower than the Volume Commitment Percentage applicable to the funding stage immediately prior to the latest stage to which [Funder] has provided funding).
Source: taken from a development funding agreement for up to USD $33 million between CEPI (Funder) and Variation Biotechnologies (Developer). Partner types: non-profit funder, industry; Product type: COVID-19 vaccine; Development stage at signature: early stage development. Read in context.
The [Developer] agrees to manufacture Access Country Doses in an amount based on a rolling forecast provided by the [Funder] to the [Developer] of expected demand for Access Country Doses up to a maximum of [*****] of its New Facility Total Manufacturing Capacity (or the reasonable equivalent thereof in the event the New Facility is combined with or replaced by other manufacturing facilities, including, without limitation, as a result of a Change in Control). For such purpose, the [Funder] will provide the [Developer] with at least [*****] prior notice before it is required to begin manufacturing Access Country Doses. Unless and until such notice has been given by the [Funder] , the [Developer] will have the right to allocate 100% of its New Facility Total Manufacturing Capacity at the [Developer’s] discretion.
Related definitions: “Access Country Doses” means vaccines and drugs the Company has developed using funds from the [Funder] or [Funder]-supported Entities in connection with Projects and that are intended for use in the Access Countries (including, without limitation, vaccines and drugs for use in clinical trials).
Source: taken from a global access commitments agreement between the Gates Foundation (Funder) and CureVac (Developer) signed in relation to an investment in CureVac by the Foundation. Partner types: philanthropic funder, industry; Product type: vaccines and drugs for target diseases using mRNA platform technology; Development stage at signature: preclinical. Read in context.
The Company will work with the [Funder] to develop (by the time of completion of Phase II clinical trials) and execute a manufacturing and supply plan that will enable to be met the reasonably expected demand in Developing Countries for any Products. The expected demand will be determined by The [Funder] and the Company based upon review of the [Funder]’s target markets for the applicable product and other relevant considerations, including cost-effectiveness.
Source: taken from a strategic relationship agreement between the Gates Foundation (Funder) and Arsanis (Developer) signed in connection with an USD $8 million investment by the Foundation. Partner types: philanthropic funder, industry; Product type: neonatal sepsis mAb (staphylococcus aureus); Development stage at signature: discovery. Read in context.
The volume of Program Products made available for the Global Health Purchasers […] shall meet the demands of the Global Health Purchasers, as confirmed by the Global Access Committee, up to 20% of the Company’s annual unit sales volume (unless adjusted jointly by a majority of the Board of Directors and Global Access Committee); it being understood, however, that the Company shall have the right to supply more at its sole discretion.
Source: taken from a global health agreement between the AXA Prime Impact Master Fund (Funder/Investor) and Revelation Biosciences (Developer) signed in connection with a USD $4 million preferred stock purchase agreement. Partner types: impact investor, industry; Product type: allergic rhinitis therapeutic & diagnostic; Development stage at signature: early stage development. Read in context.
Upon obtaining applicable regulatory approvals and in accordance with applicable laws, [Developer] will use reasonable efforts to ensure that it or its manufacturing and/or commercial partner(s) will manufacture, package, label, store and ship the quantities of [Product] necessary to fulfill all purchase orders awarded and bound to [Developer] and/or its manufacturing and/or commercial partner(s) from Public Sector Purchasers to purchase [Product] for use in the Eligible Countries for the Charitable Purpose in the following quantity: a. an annual capacity available to Eligible Countries that is at least [***] of [Developer]’s Total Annual Doses (the “Annual Volume Commitment”).
[…]
If, for [***], [Developer] and/or its manufacturing and/or commercial partner(s) fulfill all of their obligations pursuant to Section [x] and through no fault of [Developer] and/or its manufacturing and/or commercial partner(s) there are insufficient purchase orders to enable [Developer] and/or its manufacturing and/or commercial partner(s) to sell at least [***] of [Developer]’s Total Annual Doses of [Product], for each Annual Period, then the applicable Price Commitment and Annual Volume Commitment set forth in Section [x] and Section [x] shall terminate beginning with the next Annual Period, and the [Funder] and [Developer] will meet and discuss in good faith the applicable Price Commitment and Annual Volume Commitment for the remaining Annual Periods.Related definitions: “Total Annual Doses” means the total number of doses of [Product] produced by [Developer] and/or its manufacturing and/or commercial partner(s) in a given 12-month period commencing on the date that [Developer] and/or its manufacturing and/or commercial partner(s) commenced supplying [Product] to a Public Sector Purchaser.
Source: taken from a global access and price commitments agreement between the Gates Foundation (Funder) and Icosavax (Developer), signed in connection with a USD $10 million grant agreement between the parties. Partner types: philanthropic funder, industry; Product type: COVID-19 vaccine; Development stage at signature: preclinical. Read in context.
Volume Commitment Rollover. During the Term of this [Agreement], in the event that during a calendar year the full amount of the Annual Minimum Supply is not committed for purchase by applicable Public Sector Purchasers (“Undemanded Capacity“), Company shall have the right to allocate such Undemanded Capacity as it sees fit and the same amount of Undemanded Capacity shall be rolled over into one or more extended years, depending on the amount of such Undemanded Capacity, which shall thereby extend the Term of this [Agreement] (“Extended Term“). During the Extended Term, the terms and conditions of this [Agreement] shall apply, until the Aggregate Minimum Supply is met. For the avoidance of doubt and notwithstanding any other provision of this [Agreement], this volume commitment rollover provides for an Extended Term that ensures that Company provides the Aggregate Minimum Supply over the Term or Extended Term. Notwithstanding the foregoing, Company may, but will not be obligated to, provide more than the Annual Minimum Supply to Public Sector Purchasers within any given calendar year during the Term or Extended Term. The Parties agree that in any event, the Extended Term shall not exceed five (5) additional years at which time the Volume Commitment will be deemed fulfilled.
Expanded Capacity. In the event the [Funder] desires additional expanded capacity beyond the Aggregate Minimum Supply, the [Funder] may at its full discretion request a proposal from Company detailing whether and how Company would meet such increased capacity and Company will respond promptly and in good faith with such a proposal; provided, however, that nothing in this paragraph is or will be deemed a promise of future funding and any such proposal is subject to all internal reviews, processes and approvals by the [Funder] and any applicable laws and regulations, and any such proposal or future funding must be reflected in a definitive written agreement between the Parties. Nothing in this [Agreement] is a promise or obligation for either Party to enter into any future agreement.
Source: taken from a global access commitments agreement between the Gates Foundation (Funder) and Novavax (Developer) signed in relation to a USD $83 million grant from the Foundation to Novavax. Partner types: philanthropic funder, industry; Product type: RSV vaccine; Development stage at signature: late stage clinical trials. Read in context.
2. Procurement mechanisms
In addition to obligations to make a sufficient volume of the funded product available, funders may wish to consider establishing a specific requirement for the funded partner to actively engage with applicable procurement mechanisms. These obligations could include participation in public sector tender processes and/or entering into good faith negotiations for a purchase agreement.
Examples from the MAPGuide
Company will use reasonable and diligent steps to: […] promptly, upon WHOPQ or any applicable regulatory approval for distribution of Released Products in a Developing Country for Maternal Immunization, provide reasonable publicity of the availability of the Product for sale for Maternal Immunization in each applicable Developing Country including to Public Sector Purchasers (regardless of the location of such Public Sector Purchaser, provided the Released Product procured is intended for use in or distribution to the applicable Developing Country) and responding to tender offers applicable to the Released Product for Maternal Immunization, subject to the Price Commitment outlined in Section [x] below.
Source: taken from a global access commitments agreement between the Gates Foundation (Funder) and Novavax (Developer) signed in relation to a USD $83 million grant from the Foundation to Novavax. Partner types: philanthropic funder, industry; Product type: RSV vaccine; Development stage at signature: late stage clinical trials. Read in context.
Awardee shall respond promptly to any Gavi or UNICEF or [Funder] identified Request for Proposal for a [Product]. Awardee shall negotiate in good faith with Gavi (or as otherwise reasonably directed by [Funder]) to sign a purchase commitment or purchase order to supply [Product] […].
Source: taken from a development funding agreement for up to USD $33 million between CEPI (Funder) and Variation Biotechnologies (Developer). Partner types: non-profit funder, industry; Product type: COVID-19 vaccine; Development stage at signature: early stage development. Read in context.
3. Supply security
Funding agreements may need to include provisions designed to mitigate potential risks to maintaining sufficient, stable and timely supply of the funded product for the access territory. These risks may arise for a number of reasons including prioritization of more profitable commercial markets over the access territory, or external disruptions to supply chains or to business as usual processes. Some of the ways in which agreements can address these risks include:
A commitment to timely product delivery and fulfilment of purchase orders for the access territory;
Obligations for the funded partner to prioritize delivery of supplies for use in the access territory over commercial market orders;
Identification of alternative developers or manufacturers who could continue development and/or commercialization operations in the event that the developer is unable to do so;
Establishment of geographically diversified manufacturing sites, for example through licensing and technology transfer to manufacturers in the access territory; and/or
A requirement for the funded partner to notify the funder if it becomes aware of any factors that might impact product supplies, for example a government’s exercise of eminent domain or sovereign rights.
Examples from the MAPGuide
Awardee shall ensure its Sub-Awardees, to the greatest extent possible, prioritise the supply of Product to public health systems in Non-Traveler’s Market Countries taking into consideration public sector demand, production capacity and contractual obligations existing prior to any public sector purchase agreements entered into in accordance with [the paragraph below].
Awardee shall ensure its Sub-Awardees shall use all reasonable endeavours to bid on applicable public sector tenders for the supply of Product in Non-Traveler’s Market Countries in time and at the price specified in the relevant tender (and [***]). Awardee shall ensure its Sub-Awardees use all reasonable endeavours to deliver the Product in accordance with the tender, or any subsequent purchase agreements with any public sector purchaser and meet the lead-time specified in the tender and/or purchase agreement.
Nothing in this Clause [x] shall preclude Awardee and its Sub-Awardees from supplying Product to the private market in Non-Traveler’s Market Countries as long as the Awardee or Sub-Awardee does not discriminate against the public health system in the Non-Traveler’s Market Countries in favour of the private market in such countries. In the event there is insufficient Product for Sub-Awardees to be able to fulfil orders to public sector markets, Awardee shall ensure its Sub-Awardees prioritise supply to the public market in accordance with Clause [x].
Related definitions:
- “Awardee’s Traveler’s Market” means those countries listed below and any country that is defined by the Organization for Economic Co-operation and Development from time to time as a high income country; provided that if any such country becomes an LMIC, such country will no longer be included in the Awardee’s Traveler’s Market and will become a Non-Traveler’s Market Country.
- USA, Canada; and
- Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, Andorra, Iceland, Lichtenstein, Malta, Monaco, Norway, San Marino, Switzerland; and
- Japan, South Korea, Taiwan, Singapore, Hong-Kong; and
- Australia, New Zealand; and
- Israel, Bahrain, Turkey, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates.
- “Non-Traveler’s Market Countries” means all countries of the world other than the countries in the Awardee’s Traveler’s Market.
Source: taken from a USD $41.3 million funding agreement between CEPI (Funder) and Valneva (Developer). Partner types: philanthropic funder, industry; Product type: Chikungunya vaccine; Development stage at signature: licensed product. Read in context.
[Developer] shall fill, or cause to be filled, Developing Country requirements for [product] by using commercially reasonable efforts to supply [product] to Public Sector purchasers in such quantities and timeframes sufficient to fulfill the purchase orders for use in Developing Countries.
Source: taken from a USD $1.9 million formulation development agreement between PATH (Funder) and Aridis (Developer). Partner types: PDP, industry; Product type: rotavirus vaccine; Development stage at signature: vaccine formulation. Read in context.
Developer Contingency plan: [Developer] shall create and maintain a contingency plan, reasonably approved by [Funder], to address the possible impacts of the [pandemic] on its own organization as relates to the Project, as described in the [product development plan].
Product Continuity Plan: Because of the exigent nature of the Outbreak, the [product development plan] shall include a Project Continuity Plan that, at a minimum, shall address the following items: […]
- responsibilities and level of access on the part of other collaborators, Subawardees and consortium members, if any, to Project Results and Enabling Rights;
management of key Project Materials through participants in the Project and other entities such as the BioEscrow® deposit service of the American Type Culture Collection;- identification of a proposed third party, for example, a Subawardee, under contract to [Developer] that is capable of performing the activities in agreed Work Packages, Additional Work Packages or a Project Expansion (“Trusted Collaborator”), in the event that [Developer] is unable to continue its activities under this Agreement or declines [Funder’s] request to undertake additional Work Packages or a Project Expansion; and
- at least a preliminary identification of one or more geographically dispersed manufacturing sites, under contract with [Developer], to produce [product] for use in the Field (“Trusted Manufacturer”). [Developer] shall make a final designation of one or more Trusted Manufacturers, in consultation with [Funder], and prior to the start of a Phase II clinical trial.
Manufacturing in Multiple Countries: [Developer] shall use [***] to establish operational manufacturing facilities in one or more geographically dispersed manufacturing sites as described in the Work Packages.
[Developer] Representation. During the Term of this Agreement, [Developer] shall: […] notify [Funder] promptly if it becomes aware that any actions are likely or have already been taken by the government of any country in which [Developer] shall conduct Project activities that may adversely affect [Developer]’s commitments in this Agreement, including Equitable Access. For clarity, such government actions may relate, for example, to the exercise of eminent domain or sovereign rights over Project Vaccine doses.
Source: taken from a development funding agreement for up to USD $384 million between CEPI (Funder) and Novavax (Developer). Partner types: non-profit funder, industry; Product type: COVID-19 vaccine; Development stage at signature: phase I clinical trials. Read in context.
Do the agreement supply commitments align with the likely procurement mechanisms and levels of demand?
What are the manufacturing scale-up plans to ensure that the supply obligations can be fulfilled?
To which markets and purchasers do the supply commitments apply?
What are the requirements to make the product available for purchase at an affordable price?
What is the timeframe for obtaining marketing authorizations in the access territory?
How can the funder verify compliance with supply commitments?
What happens if the funded partner does not or cannot comply with its supply commitments?
This toolkit has been built based on the data in the MAPGuide and the GHIAA team’s experience of negotiating and implementing agreements. We intend that the toolkit will evolve and expand over time based on input from MAPGuide users and availability of new agreements showing examples of alternative approaches. We welcome ongoing constructive dialogue around these materials and encourage you to contact us or fill in our feedback survey to share your thoughts, questions and suggestions.