“[**] Costs” means the costs incurred that are necessary to complete production of Product [**] and are deemed to include [**]. For the avoidance of doubt, [**] Costs will not include [**].
3. Global Access Commitments
In furtherance of the Charitable Purpose, Company agrees to the following “Global Access Commitments”:
(b) Availability and Accessibility at Affordable Price to People in Developing Countries. Company will use reasonable and diligent steps to:
(xii) pursue applicable regulatory approval of Released Product for Maternal Immunization in those countries listed on Appendix A as “Additional Countries” after WHO PQ, and, upon such approval, commit to make such Released Product available to Public Sector Purchasers in such countries at a price per dose to be negotiated in good faith by the parties.
c) Price Commitment
(i) Upon WHOPQ, and in compliance with applicable laws and regulations, Company will offer and provide to Public Sector Purchasers the Aggregate Minimum Supply at the Annual Minimum Supply (as set forth in section 3(d)) of the Released Product for Maternal Immunization in the Developing Countries at a maximum price as reflected in Table A:
“Price Commitment” is equal to the [**] Costs (as adjusted from time to time under this section 3(c)) plus [**] mark–up but provided always that such price does not exceed:
[**] per Dose (USD) herein after the “[**]”
(i) The Parties acknowledge and agree that (1) the [**] described in Table A above is based on principle assumptions about Novavax future manufacturing efficiencies at the time of WHOPQ as set forth on Appendix C attached hereto and incorporated by reference herein, and (2) to the extent that actual results differ from such Appendix C principal assumptions, then the Parties shall take such factors causing differing results into account and will thereafter adjust such [**] pursuant to Section 3(c)(ii).
(ii) Notwithstanding Table A, within three (3) months prior to the estimated date for WHOPQ, and unless otherwise agreed by the Parties, at every third anniversary thereafter, coinciding with UNICEF tenders, the Parties shall, in good faith, discuss applicable adjustments to the Price Commitment (whether upwards or downwards) to proportionately, fairly, and reasonably reflect the factors set forth in Appendix C, including the impact on such factors caused by external or internal circumstances, including inflation, currency fluctuations, efficiencies of scale, product demand and yield improvements. In preparation for considering any such price adjustment, in the event that there are changes in [**] Costs that, in the aggregate exceed [**] since the last calculation, then Company shall provide to the Foundation an update to its [**] Costs consistent with Appendix C and the Foundation’s COGS Principles and Assessment Methodology Handbook, at least sixty (60) days in advance of such third anniversary and the Parties shall meet in good faith to discuss such changes within sixty (60) days after Company provides the Foundation with such update. In the event of any conflict between Appendix C of this GACA and the Foundation’s COGS Principles and Assessment Methodology Handbook, Appendix C of this GACA shall control. Upon agreement of the Parties to any price adjustment (which shall be reflected in a signed writing by the parties), the applicable price adjustments shall become effective within three (3) months after such written agreement or in time for the coinciding UNICEF tender, whichever is earlier. In the event that the Parties are unable to agree on a revised Price Commitment, an independent third–party, with specific expertise in assessing costs, [**]. and with experience with vaccines, reasonably acceptable to both Parties, shall be appointed to provide analysis of such potential adjustment upon the request of either Party and the cost of such analysis shall be shared equally by the Parties. That analysis will be shared with Company and the Foundation who will work together to resolve any adjustments to the Price Commitment. If there is no resolution within forty–five (45) days, the matter will be referred to Company’s President/CEO and the Foundation’s President of Global Health (or the equivalent in the event of any reorganization following which such position no longer exists). If these individuals are unable to resolve the matter of the revised Price Commitment based on this analysis within a further forty–five (45) days, then the price will be adjusted upwards in event that the third party analysis points to an upward adjustment or downwards if the third party analysis points to a downward adjustment, in each case, capped as follows: if the parties are unable to agree with respect to the first adjustment of the [**], then the adjustment shall be [**], as the case may be (based on the direction of the third party analysis) and if the parties are unable to agree as to any subsequent adjustments to the [**], then the adjustment shall be [**] as the case may be (based on the direction of the third party analysis).
(iii) Upon the written request of the Foundation and not more than once in each calendar year, Company will permit an independent third party accounting firm, with specific expertise in assessing costs [**] and with experience with vaccines selected by the Foundation and reasonably acceptable to Company, at Foundation’s expense, to have access during normal business hours to such of the records of Company as may be reasonably necessary for any year ending not more than three (3) years prior to the date of such request for the sole purpose of verifying the basis and accuracy of [**] Cost consistent with Appendix C and the Foundation’s COGS Principles and Assessment Methodology Handbook, for determining [**] Cost. Such third party accounting firm shall provide any such report to both the Foundation and Company and if such third party accounting firm identifies a discrepancy in [**] Cost made during such period, appropriate adjustments will be determined within ninety (90) days of the date such accounting firm’s written report is delivered to both Parties.
(iv) Multi Dose Vial Options: Notwithstanding the foregoing, if the Parties agree that to the extent the Company switches to a multi–dose presentation of the Product that meets WHOPQ requirements and satisfies the Company’s Global Access Commitments, the Price Commitment shall be appropriately reviewed and may be adjusted by mutual written agreement of the Parties, consistent with the process described in Scction 3(c)(i) above.
(v) Notwithstanding section 3(c)i) above, in the event that Company sells Released Product for Maternal Immunization to a Public Sector Purchaser in any country (whether a Developing Country or a Developed County) at a lower than the Price Commitment in subsection 3(ci) above, Company will promptly offer such Released Product for sale at such lower price to any Developing Countries in which the sale, use or marketing of Released Product is authorized by WHOPQ or applicable country registrations. Company will promptly notify the Foundation of any price decrease of the Released Product for Maternal Immunization.
Principal Assumptions for Price Cap Calculation
The initial Maximum Price Cap described in Table A is based on the assumptions of Novavax’ US–based facility having the capacity to produce, [**] by the date of WHOPQ, 120 microgram (120 μg) Doses of Product annually using up to [**] reactors (or equivalent) assuming [**] weeks of production per year, an overall batch success rate of [**] percent [**], and an average of [**] yield, and [**] percent [**] overage/loss (averaged over all batches per year). These assumptions are expected to be a base case for production at the time of WHOPQ. Since a primary objective of this GACA is to assure affordable and accessible Product to people in Developing Countries, the Company agrees that a decline in the overall batch success rate below [**] from the base case will not have an upward impact on the Product cost per Dose nor an upward impact on the [**].
TABLE C: Components of [**] Cost