January 8, 2021

State of the Union - Week 1 - The great European vaccine race: The battle between national interests and a common European vaccine procurement programme

As 2020 passed and we entered 2021 filled with hope and excitement, many Europeans believed that the new year would bring progress, a rapidly implemented vaccine programme, an end to the tight restrictions on movement and the return of normal everyday life. But just as the Pfizer/BioNTech vaccine was approved by the European Medicines Agency before Christmas a heated debate ensued on whether or not the EU had secured enough vaccines via its common procurement deals. As it stands now, an effective vaccine roll out looks set to be three months behind those of the US and UK due to different approval mechanisms and procurement processes. In this blog, the Ulobby team will take you through how the EU has managed to become a central player in the Covid-19 vaccine procurement process.

During the spring, when Europe was under a strict lockdown, European capitals began assessing how to vaccinate their citizens. France, Italy, the Netherlands and Germany lay the footprints for a common procurement collaboration in order to secure enough vaccine supply for themselves. This then raised fresh concerns about equal access for all Europeans. The Commission - in an effort not to be sidelined from crucial new political developments - proposed to create a common EU procurement process in order to make vaccines available for smaller and less wealthy member states. This makes logical sense - a skewed reopening of the Single Market is not desirable for anyone, and ensuring equal access to vaccines is a strategically important goal for the Commission.

The common procurement process was thus structured around buying vaccines via the finance streams of the EU budget, with member states then buying the vaccines from the Commission according to their population size. The central monitoring body is the Steering Committee, on which all member states have a seat, typically occupied by a national expert on the topic, which in June agreed on a secret negotiation mandate. A team was then appointed to negotiate with vaccine manufacturers. 

One peculiar fact here is that this negotiation team is supported by the Commission's DG TRADE - trade experts - but not by DG SANTE - the civil servants with expertise in health policy. Member states effectively sidelined EU health experts and relied on the EU's experienced trade negotiators - accordingly drawing from national policy expertise on vaccine and health matters. During the late summer and into the fall, the team managed to strike deals with several manufacturers with additional options to buy extra doses if the vaccines proved successful. 

One would think that with such a backing by all Member States in the Steering Committee national governments would have foreseen the ongoing debate and criticism concerning vaccine shortages, and that the pace of delivery from the manufacturer would be affected by a bottleneck in production

In Germany, Health Minister Jens Spahn (SPD) has been a vocal critic of the EU’s handling of the process and the expected vaccine shortages. This criticism has been raised in many EU capitals from governments and opposition parties fearing that restrictions will last longer and that this could have been avoided by securing larger batches of the Pfizer/BioNTech vaccine. 

The Commission should allegedly have declined to buy even more of the Pfizer/BionTech vaccine in the late fall when it became clear that they were at the most advanced phase in their development of a vaccine. Accusations have emerged that the range of different deals done does not match the need for Europeans to be vaccinated quickly and systematically. 

Sources say that French officials in particular have been working to ensure national interests are satisfied by securing purchasing parity between French Sanofi, German BioNTech and American Moderna.  

The legacy of the Commission’s crisis management

Considering that there are still many loose ends in this vaccine procurement process, and that the negotiation mandate is secret and will probably remain so for a long time still, it is hard to assess the boundaries of the mandate given by member states in the negotiation team. These are most likely to pertain to setting the price frame for a dose and the amount of doses they are allowed to contract. Furthermore, we do not know yet when other vaccines will be approved by the EMA. But it is certain that the US, UK and Israel have managed to close much more favourable deals with Pfizer/BioNTech, guaranteeing them a larger supply of the vaccine than the EU when it comes to the final development phases.

Whether this is due to poor risk assessment by EU negotiators or to national interests being asserted when formulating the mandate is uncertain. However, the costs of the current lockdown and restriction measures over a protracted period by far outweigh the costs of not ensuring a large supply of vaccine doses in the negotiations six months ago. This is a major failure of either the Commission negotiators or the member states limiting the team in arriving at the mandate. 

Noteworthy is that the Commission managed to become a key player in this area despite an unclear division of competencies or a treaty base beforehand. This appeared as a victory for the Commission in the beginning, but now seems to be a failure. This will affect the Commission in similar crisis situations when firm and rapid decisions need to be taken. It discloses that the decisiveness that national governments are able to exact is not present in the Berlaymont building - with or without the assertion of national interests in any particular steering committee.

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