Around 3% of EU citizens have received at least one dose of a Covid vaccine so far © Getty Images
Around 3% of EU citizens have received at least one dose of a Covid vaccine so far © Getty Images

What's behind the EU’s vaccine procurement woes?

5 February 2021

Since the Covid-19 pandemic spread across the world in 2020, hopes have been pinned on the fast distribution and delivery of vaccines to allow life to return to normal. 

Early concerns about vaccine delivery centred on ensuring an adequate cold chain was in place that could handle the capacity required to distribute a vaccine at a large scale. By the end of 2020, countries had been working to sign contracts with pharmaceutical firms ready for wide scale rollouts. 

In June, the European Commission (EC) unveiled its EU vaccine strategy, which included a joint procurement scheme to deliver vaccines across its 27 member states. The EC said joint procurement would simplify negotiation processes and give the EU the “merit of speed and efficiency” compared to running 27 individual procurements. 

However, the joint procurement has come under fire over perceived slow progress in delivering the vaccine to the EU’s 446m citizens. 

The EU had set an ambitious target of vaccinating 70% of adults in member states by summer, but since the scheme launched just 3% of EU citizens have been administered one dose of a vaccine, compared to 15% in the UK and 10% in the US.

Both the German chancellor Angela Merkel and French president Emmanual Macron have defended the scheme, but what have been the main issues impacting the EU’s joint approach to vaccine procurement? 

1. Speed 

One of the frustrations with the EU’s strategy is the speed with which vaccines have been distributed.

The EU joint procurement scheme for vaccines was announced on 17 June. It used a tool called the ‘Emergency Support Instrument’ to give Brussels the ability to directly purchase vaccines on behalf of member states, rather than going back and forth on approvals. 

The UK opted out of the scheme as it would not “have a say in decisions such as vaccine choice or key contract terms”.

While the UK has seemingly swiftly approved and signed contracts for doses of vaccines from multiple providers, some have been critical of the EU’s comparatively slow approach. 

The bloc reached a deal with pharmaceutical firm AstraZeneca (AZ) on 14 August, having taken over negotiations from a German-Franco-led initiative known as the ‘Inclusive Vaccine Alliance’. The UK signed off its deal with the firm in June. 

In January, Pascal Soriot, chief executive at AZ, reportedly told Italian newspaper La Repubblica that as a result of the UK signing a deal early, the firm’s manufacturing plant in the UK has been able to achieve a higher yield than plants elsewhere.

Soriot said: “With the UK we have had an extra three months to fix all the glitches we experienced.”

Last year, Stéphane Bancel, CEO of pharmaceutical firm Moderna, told AFP there was a lot of red tape involved in getting a vaccine approved, which had been complicated by the EU having 27 member nations.

As a result, delays to signing a contract with Moderna would mean the EU would not be one of the first to receive doses of the vaccine. “The longer they wait, the longer it will take,” he told AFP.

Merkel said while it “rankled” that other nations were vaccinating faster, the EU’s slower but collective strategy had been the right one.

“All in all, I don’t think anything has gone wrong,” she said.

2. Supply 

Another hurdle the EU has faced is securing supply, an issue highlighted in the dispute between the EC and pharmaceutical firm AZ.

AZ had been due to supply the EU with 400m doses of its Covid-19 vaccine. However in January, the firm flagged issues at its plants that would decrease the amount of supplies available, which the EC said was a breach of the contract. 

The EC took action by publishing a redacted version of the contract which EC chief Ursula von der Leyen said contained “binding orders”.

The firm has since agreed to provide an extra 9m vaccine doses, adding up to a total of 40m in the first quarter of 2021, but still considerably lower than 100m doses the EU was expected to receive in the time frame.  

Meanwhile, the bloc’s vaccination programme could be further hampered as Covid-19 vaccines ordered by the EU from Johnson & Johnson (J&J) will need to be shipped to the US for the last stage of production.

According to Bloomberg, a senior EU official told diplomats that completing some ‘fill and finish’ in the US was a condition of the contract with the drugmaker, and J&J had been transparent about the matter.

The EU has secured 200m doses of J&J’s single-shot vaccine, with an option for a further 200m.

Thorsten Schmidt from procurement adviser Kerkhoff Consulting told DW News the German government should have handled the transfer of responsibility to negotiate and finalise agreements with vaccine manufacturers differently. 

“In general you can say that the basics of all procurement contracts and agreements mean that you have the right product at the right location in the right amount, hopefully at the right time for a reasonable price,” he said.

“Many of these variables, which are truly the foundation of any procurement contract, have not been properly negotiated.” 

In comparison, Tom Sasse, associate director at think tank the Institute for Government, said the UK government had appeared to learn from the personal protective equipment crisis it faced last spring, where “supply was choked by huge international demand”.

In a blog post, Sasse said: “Then they were caught unprepared, without a large stockpile or contingency plans to adapt supply chains. This time the government supported the Oxford initiative, invested in domestic supply chains, and gave industry time to prepare.”

3. Cost

One area where the EU’s strategy seems to have paid off is in terms of lowering the cost of doses through its joint purchasing programme. 

According to Politico, published figures have suggested the EU is paying less than $2 for the AZ vaccine, while the US is paying around $4. It added the US had negotiated a $20 price tag with Pfizer for doses of its vaccine, while the EU’s price is less than $15. 

However, the delays in distributing the vaccine could cost more in the long run. Research by Allianz and Euler Hermes predicted the EU could face a €90bn hit to its economy this year if it does not speed up its vaccination programme.

“At the current vaccination speed, herd immunity would only be reached by the end of 2022. To at least allow for a sustainable economic recovery to take off in the second half of 2021, EU countries must urgently embark on a vaccination path that aims at vaccinating at-risk populations by mid-2021 to allow for an easing of sanitary restrictions without putting the healthcare system at risk,” the report said.

“The negative implications associated with a delayed vaccine rollout far exceed the immediate short-term economic costs of a double-dip recession at the start of 2021,” it said.

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