Contracts drawn up during the EU’s first phase of Covid vaccine procurement failed to include clauses around ability to fulfil supply, leading to a slower vaccine rollout, according to a report.
The report, by the European Court of Auditors, said in contracts signed in 2020 the European Commission (EC) had “limited leverage to overcome supply challenges”.
The lack of specific clauses to address supply disruption began to impact the EU in the first half of 2021, when supply shortfalls became apparent.
Most of the contracts did not include specific provisions to prioritise deliveries to member states. Despite Pfizer and BioNTech enabling the EU to overcome these shortfalls, the delays meant the EU was slower to vaccinate its population than the UK and the US. The report noted specifically the US had legal recourse to support security of supply.
The EC did not fully analyse the production and supply chain challenges of vaccine production until after signing most of the contracts. Supply shortfalls from AstraZeneca and Janssen highlighted production issues, as each delivered just a third of contractually-agreed volumes. Other suppliers experienced temporary disruption.
“The Commission only set up a task force to support manufacturing and supply chains in February 2021 and while it did help resolve bottlenecks, the size of its impact on the ramp-up of vaccine production was unclear,” the report found. The president of the EC admitted at the time: “Overall we have underestimated the difficulties inherent in mass production.”
This came after the OECD pointed out there was “a high degree of trade interdependence in the goods needed to produce, distribute and administer vaccines”, and “existing evidence on production capacity is scarce”.
In one case, the EC took a manufacturer to court over inability to supply according to contract.
The EU has not yet scrutinised or benchmarked the processes for future lessons, not does it plan to test its pandemic procurement through simulations, the report found.
It recommended further scrutiny on the EU’s procurement process and stress-tests for future pandemics.
The report praised the EU for its ability to source from a diverse array of suppliers in the initial procurement phase from different companies and using different technologies.
To avoid similar issues in future, the report recommended three actions to the EC:
- Produce pandemic procurement guidelines and “lessons learnt” for future negotiating teams;
- Carry out a risk assessment of the EU’s procurement approach and propose appropriate measures;
- Run exercises to test all parts of its updated pandemic procurement framework, including information and intelligence gathering, to identify any weaknesses and areas for improvement and publish the results.