OT agreements. Other transaction agreements, sometimes referred to as other transaction authority, offer one such contractual approach. In contrast to the standard federal procurement laws and regulations, OTs enable speed and flexibility in structuring agreements.15 They are particularly useful in government consortiums, and were commonly used by Warp Speed. Hepburn observes, “darpa has been using them for a very long time. HHS could use them but the DoD has been the best at using them.”
A Government Accountability Office (GAO) study explains their appeal: “To attract innovative companies that may not traditionally do business with DOD, the department can use flexible agreements known as ‘other transactions.’ Other transactions are not subject to certain federal contract laws and requirements.”16
But there are potential risks, even controversies, related to OTs. They bring reduced transparency, and some exemptions from regulations designed to protect taxpayers. Specifically, the concern around OWS is that OTs might have allowed pharma companies to circumvent the Bayh-Dole Act,17 which provides the public with rights in intellectual property arising out of federally funded research, including march-in rights.18
EUA. Emergency Use Authorization (EUA) is a mechanism to allow use of medical products without full FDA approval during a health emergency, such as a pandemic. Traditional FDA approval for a vaccine can take years, whereas an EUA is much quicker, though it still involves rigorous evaluation by the FDA. As the FDA notes, “efforts to speed vaccine development to address the ongoing Covid-19 pandemic have not sacrificed scientific standards, integrity of the vaccine review process, or safety.”19
The GAO, however, was slightly critical in its report assessing the use of EUAs during the pandemic. Its study in no way argued that the authorized medicines weren’t safe, but rather that “the FDA does not uniformly disclose its scientific review of safety and effectiveness data for EUAs,” as it does for traditional approvals.20
DPA. The Defense Production Act (DPA) expedites the supply of services and materials needed for national defense. Hepburn says, “the Defense Production Act is great for an emergency and prioritizing the vaccines in a portfolio but not great because it is encroaching upon traditional vaccine manufacturing. We used the Defense Production Act in Warp Speed and it was a good thing, but it had potential costs.” OWS had to make sure its use of the Defense Production Act did not impinge upon flu vaccine production, which is where the issue of supply chain management comes in.
A benchmark for using these types of expedited contracts, or rather not using them, is the experience of the European Commission.21 The Commission, which had no particular expertise in emergency vaccine procurements, haggled for months in contract negotiations with pharma companies. As a result, the EU was able to obtain slightly cheaper vaccines,22 but this achievement was only notional because it also resulted in almost no supply. The Commission’s solution was to use what it termed a “vaccine export transparency mechanism” to block exports to the UK and to keep vaccines for itself. This was for the “global common good,” said Commission president Ursula von der Leyen.23
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