• SERSER
  • Assessing the EU’s Vaccination Strategy

    Let’s Not Put All the Blame on the European Commission

    Ever since the Anglo-Swedish pharmaceutical company, Oxford/AstraZeneca (AZ), announced that due to production problems at a Belgian site it will not be able to deliver the agreed number of vaccines to EU member states, the European Commission has been facing extensive criticism. Many wonder what the EU’s added value in the vaccine purchase actually is. In fact, the EU’s vaccination strategy, which included a joint procurement of the vaccines in the EU under the leadership of the Commission, has even been widely described as a “fiasco”. In this mess, it was the Commission’s President, Ursula von der Leyen, who was labelled as the key responsible figure. The aim of this blog is to analyse whether the Commission truly deserves to be seen as a “punching bag”. The key argument of this blog is that although the EU citizens cannot be satisfied with the vaccination rollout, the alternative to the joint approach would have resulted in poorer outcomes.

    • Signing contracts with pharmaceutical companies – One of the first complaints about the EU’s vaccination rate concerns the process of negotiation with the pharmaceutical companies. This argument states that “it took months to sign contracts for COVID-19 vaccines, something that could have been done in weeks.” In order to see whether that truly could have been the case, it is important to look at the timetable of negotiations – not only of the EU, but of the UK as well, a country which has been leading the vaccination process.
      • At the time the UK signed the first deal with the AZ back on 19 May 2020, the Commission still lacked a mandate to negotiate on behalf of the EU member states. Originally, only a smaller group of member states that gathered in an informal “Inclusive Vaccination Alliance” (France, Germany, Netherlands, and Italy) pursued negotiations. As such, this group managed to sign the first deal on 13 June 2020 with AZ, just 25 days after the UK. As there were fears that the Alliance would provide preferential treatment of the ‘big’ member states, its members allowed the Commission to take over its talks. Interestingly, once the Commission took over, the initial deal evolved into a fully-fledged contract on 27 August 2020, while the UK signed such a contract a day later on 28 August. Therefore, despite the fact that the UK had a head start with regard to signing the initial agreement with AZ, the Commission nevertheless managed to catch-up, and even surpassed the UK in terms of speed when it came to signing the formal purchasing agreement. This showcases that the criticism of the Commission’s speed with regard to the negotiations is unfounded.
      • The Commission’s approach to vaccination was essential for protecting the EU unity at a time of crisis. It was on 12 June 2020 that the Health Ministers agreed on the need for joint action, while the Health Commissioner Stella Kyriakides presented what would become the EU’s vaccination plan five days later. It envisioned a single and central procurement process for purchasing vaccines, with the aim of simplifying the process and avoiding having 27 separate processes. By avoiding competition among member states, the Commission hoped to make a step further in building a “truly European approach”. Such approach was supposed to result in providing vaccines to all EU citizens, while creating further solidarity among all member states, irrespective of the size of their population and their purchasing power. With this in mind, one can only imagine the severity of a blow to EU solidarity, and the EU project as a whole, had there not been a single EU system for vaccines which would preventing ‘a rat race’ between member states from taking place.
      • On top of that, by speaking with a single voice, the Commission planned on increasing the EU’s leverage when negotiating with the pharmaceutical industry. According to German media outlets, the Commission managed to lower the prices from originally required €54.08 per dose, as for example Pfizer/BioNTech, to €15.50 per dose. With regards the AZ, the EU managed to secure the price of €1.78 per dose, while the UK for example, is expected to pay €2.47 per dose. The fact the EU managed to collectively lower the prices represented one of the key benefits of joint negotiation. Another benefit was that the Commission’s insistence on ensuring civil liability of pharmaceutical companies for any vaccine defects, which was in contrast to the initial coordinated lobbying effort of these companies to secure protections if there were unexpected problems with the vaccines. Therefore, at the time of adopting of the vaccination plan, it seemed that joint action at the EU level was the solidest, quickest and most efficient way of achieving objectives with regards the public health, all while making further steps towards developing the Health Union.
      • It is important to note that the Commission never went behind the back of member states. In fact, all EU member states were continuously informed and involved in the process of Commission’s negotiation. In that regard, the decision mandating the Commission to conclude agreements with vaccine manufacturers also stipulated a creation of a Steering Board. This body included senior officials from all member states. The key role of the Board was to discuss and review all agreement contracts before signature. Furthermore, the Board appointed members of the Joint Negotiation Team, representing seven member states, with whom the Commission carried out negotiations. The Team included experts from the aforementioned Inclusive Vaccination Alliance, as well as experts from Spain, Poland, and Portugal, thus striking a balance of interests across the EU. Therefore, although it was the Commissioner for Health who was putting signature on relevant deals, member states were nevertheless fully involved in the process. For this reason, any criticism of the Commission with regard to the deal-making disregards that this EU institution has not done anything without the full approval of member states. That is why the responsibility for the successes and let-downs of the EU’s vaccination strategy should, in fact, be shared both by the Commission and member states.
      • The complexity of talks within the EU becomes particularly visible by taking another look at the UK. Although the UK has officially left the EU on 31 January 2020, it nevertheless remained a part of its orbit (albeit without voting rights), until 31 December as part of the agreed extension. Considering that the UK was free during this extension to pursue its own vaccine strategy, independently from the EU, it was not ‘burdened’ with the idea of balancing the interests of 27 different member states. It even explicitly refused the Commission’s offer to join the joint vaccine programme. For the UK, the sole priority was to provide vaccines for the British citizens, whereas the EU had to account for almost half a billion citizens across the continent. Such circumstances gave the UK a head-start with regard to signing the initial deal with AZ in May 2020. On top of that, as AZ is partly a British pharmaceutical company, which has built the largest and most efficient factory in the UK, it was much easier for the UK to engage in negotiations with this company early on, and under its own terms.
      • With regard to signing contracts with other pharmaceutical companies, the EU had mixed results compared to the UK. With the French Sanofi, the EU signed a deal on 18 September 2020, 51 days after the UK. Then, the EU signed a deal with the American Johnson&Johnson on 08 October, 55 days after the UK. When it comes to the American-German Pfizer/BioNTech, it took a bit longer for the EU to sign the deal. It did so on 11 November – 114 days after the UK had already done it. Yet, despite the relative disadvantageous position of the EU in comparison to the UK, it has nevertheless managed to pick up the pace. In fact, it managed to strike a deal with the American Moderna on 24 November, only a week after the UK. Such deed becomes all the more impressive, considering the structural differences between the EU and the UK.
      • Overall, with regard to the deal-making process, the EU was 50.6 days slower than the UK, if accounting for the negotiations done both by the Inclusive Vaccination Alliance and the Commission. Meanwhile, if accounting for the negotiations done solely by the Commission, the EU was, on average, 45.4 days slower than the UK. Such difference is not as large as it may seem, considering that the UK had signed its first agreement early on. It may therefore be concluded that the Commission has managed to pull an impressive feat in trying to simultaneously keep solidarity among its ranks, while striking cost-effective deals. Considering its size and complex decision-making process, the EU should in fact be complemented on how it handled the negotiation process with pharmaceutical companies throughout the 2020.

     

    Table 1 When the EU and the UK made deals with pharmaceutical companies (including the negotiations by the Inclusive Vaccination Alliance)

    Pharmaceutial Company

    The Date EU Signed a Deal

    The Date the UK Signed a Deal

    Date Difference

    AstraZeneca

    (initial agreement)

    13 June 2020 19 May 2020 25 days
    Sanofi 18 September 2020 29 July 2020 51 days
    Johnson&Johnson 08 October 2020 14 August 2020 55 days
    Pfizer/BioNTech 11 November 2020 20 July 2020 114 days
    Moderna 24 November 2020 16 November 2020 8 days
    Average difference:

    50.6 days

     

    Table 2 When the EU and the UK made deals with pharmaceutical companies (once the Commission took over the negotiations)

    Pharmaceutial Company

    The Date EU Signed a Deal

    The Date the UK Signed a Deal

    Date Difference

    AstraZeneca

    (formal purchasing agreement)

    27 August 2020 28 August 2020 -1 day
    Sanofi 18 September 2020 29 July 2020 51 days
    Johnson&Johnson 08 October 2020 14 August 2020 55 days
    Pfizer/BioNTech 11 November 2020 20 July 2020 114 days
    Moderna 24 November 2020 16 November 2020 8 days

    Average difference:

    45.4 days

     

    • Approving the Vaccines – After jointly signing deals with pharmaceutical companies, the next step was verification of the vaccines once they were produced. In this context, the UK was the first in the West to approve a vaccine. In fact, once it approved Pfizer vaccine as early as 21 December 2020, the alarm went off in the rest of the European continent. From then on, the “vaccine race” became even more evident than before, which is why first notable accusations against the EU started to be made.
      • When it comes to the EU, by February 2021, the European Medicines Agency (EMA) verified and approved vaccines produced by three companies: Pfizer/BioNTech on 21 December 2020, Moderna on 6 January 2021, and the aforementioned AstraZeneca on 29 January 2021. Johnson&Johnson and Sanofi were unsuccessful in producing their own vaccines, which is why they went out of the picture for the time being. More importantly, calculations show that the EU has significantly reduced its lag behind the UK. Namely, although the UK was ahead of the EU when it comes to signing deals with pharmaceutical companies, the EU nevertheless managed to expediate the date when it officially approved vaccines. In fact, it was 30 days slower than the UK to authorise AZ and only 18 days when it came to Pfizer. Moreover, the EU even managed to outpace the UK with regards authorising Moderna vaccine by two days.
      • One of the key reasons why the UK was faster in providing authorisation was the fact it dispensed with the requirement to submit a formal application for an emergency use authorization. For this reason, the UK Medicines and Healthcare Products Regulatory Agency gave a temporary approval on 2 December to Pfizer. By simplifying the “bureaucratic” steps, the UK insisted on practicality and speed. Therefore, it outpaced the EU member states which decided to wait for the formal approval by EMA, which took longer than its UK counterpart because it insisted on fully applying the existing rules which require more checks than emergency authorisation.
      • The fact that the EU member states patiently awaited the EMA’s decision is astonishing considering that they had the legal right to examine and approve the emergency use of vaccines even before EMA’s final decision. This was made possible based on a 2001 directive, which allows member states to temporarily authorise the distribution of a medicinal product which has not yet been authorised by EMA provided they assume full liability. It should be noted that this solidarity was almost complete, as it was Hungary who was the first to break the ranks. For now, it is the only one to have approved and ordered Chinese Sinopharm and Russian Sputnik V vaccines.
      • Overall, with regard to the process of authorising vaccines, the EU was on average 15.6 days slower than the UK. In other words, the time lag between the UK and the EU diminished by 65.6% if one compares the average date difference between signing the contracts and approving the vaccines. Despite the EU managed to substantially shorten the time lag, it was nevertheless seen as a ‘loser’ when compared to the UK. By looking at the efforts made by the EU in the analysed period, it becomes clear that strong criticism of the EU in this regard is exaggerated.

     

    Table 3 When the EU and the UK approved the vaccines

    Pharmaceutial Company

    The Date EU Approved Vaccines

    The Date the UK Approved Vaccines

    Date Difference

    Pfizer/BioNTech 21 December 2020 02 December 2020 19 days
    Moderna 6 January 2021 8 January 2021 -2 days
    AstraZeneca 29 January 2021 30 December 2020 30 days

    Average difference:

    15.6 days

     

    • First vaccination and first delays – this is where the true trouble begun. Although the previous phases of deal-making with companies, and approving of the vaccines were important, they were not under such a careful stakeholder, media, and public scrutiny, as the process of first vaccination became. As the pictures of people getting vaccinated in the UK circulated the world, the Commission’s ability to rapidly provide vaccines through centralised system was seriously brought into question. The fact that the first Pfizer vaccines arrived to the EU just 18 days after they arrived to the UK, while Moderna arrived to the EU without having arrived to the UK at all, the criticism continues to this day, as the EU based the largest part of its vaccination strategy on the AZ doses.
      • Despite slower start with providing first Pfizer vaccines, a true bombshell was the announcement that the AZ would provide to the EU only 40% of the initially foreseen 80 million doses in Q1. What made the news even more troubling is the fact the AZ also declined the EU’s subsequent request to redirect supplies from the UK factories, to make up for shortages, since these were intended first and foremost for the British market. Although, in the meantime, the EU and the AZ managed to raise the share of the doses to 50% of the foreseen shipment, the criticism remained as sharp as ever.
      • Although the EU managed to retain strong position regarding pricing and liabilities vis-à-vis AZ, the key ‘fault’ here appears to be that the EU was unable to agree on clear commitments regarding the timing of supply in their contracts, as the timelines are only approximate and indicative. Yet, it remains questionable whether the Commission could have done any different regarding the timetables, particularly as the contract was made when the vaccines were still in the making. In that regard, it would be unfair to label the Commission as a ‘bad’ negotiator, particularly as the redacted versions of contracts reveal that the EU’s contract, in fact, used the same language as the one of the UK.
      • The key issue here lies in the different legal interpretation of the agreement made by the Commission and the AZ. This became further complicated by the fact the EU is neither a party, nor subject to the obligations under AZ’s agreements with the UK. According to the AZ CEO, the company only committed to meet demand to its “best reasonable effort”, both when it comes to the EU and the UK. It was however explained that the UK was chosen to remain a priority recipient when it comes to vaccines coming out from factories located in the UK, as the UK was the first one to sign an initial deal back in May 2020. It appears that the UK managed, via this initial deal, to secure the British supply by the time the aforementioned Inclusive Vaccination Alliance signed its own initial deal with the AZ in June 2020.
      • Meanwhile, the EU continues to claim that such interpretation is not something they agreed to, which is why it remains adamant in rejecting “the logic of first come, first served”. Considering that the EU’s contract clearly lays out that British plants and other subcontractors are part of the EU’s supply chain, the EU keeps insisting that the vaccines should be shipped both to the UK and the EU, no matter from which factory vaccines come from and regardless of who was the first to sign a deal. The EU’s argument was strengthened by the fact that the UK has been receiving AZ vaccines made in Belgium. All in all, this legal mess has yet to have an epilogue. For now, it remains highly questionable whether AZ is allowed under the agreement to prioritise supply of the UK over the EU with its vaccines produced in the UK.
      • Considering that the AZ held its ground in providing a preferential treatment to the UK, this allowed the UK to become a leader in Europe when it comes to the vaccination rate. By mid-February 2021, it administered 18.5 doses per 100 population, Malta being the second best with 8.51. The EU’s average was much lower. Even Serbia outpaced the EU with 8 doses per 100 population. For this reason, the EU citizens have a reason to remain critical of the vaccination rollout. Yet, as the previous analysis of how the vaccination strategy was being implemented, any kind of responsibility should not be put solely on the Commission, but also on member states as well, who were involved throughout the whole process. Nevertheless, it is expected that the sooner AZ starts meeting its obligations, the easier it will be for the EU to defend its approach of joint procurement.

     

    Table 4. Dates of First Vaccinations (with Moderna included)

    Pharmaceutical Company

    The Date of First Vaccines in the EU

    The Date of First Vaccines in the UK

    Date Difference

    Pfizer/BioNTech 26 December 2020 08 December 2020 18 days
    Moderna 10 January 2021 Potentially in April Potentially 90 days
    AstraZeneca 7 February 2021 4 January 2021 34 days

    Average difference:

    -49 days

     

    Table 5. Dates of First Vaccinations (with Moderna excluded)

    Pfizer/BioNTech 26 December 2020 08 December 2020 18 days
    AstraZeneca 7 February 2021 4 January 2021 34 days

    Average difference:

    24.5  days

     

    EU’s drift to protectionism?

    Another aspect that threatened to impede EU’s image of a globally oriented entity is the fact the Commission adopted an interim regulation, in the aftermath of the AZ announcement. This regulation requires vaccine exports to be subject to an early notification and authorisation before they are effectively shipped outside the EU. The Commission’s measures stipulate that such authorisation shall be granted only to authorities of individual member states where the vaccines are manufactured. Therefore, it appeared as the EU turned to protectionism (at least in its soft form), the very thing it often fights against in the public sphere.

    However, although this regulation may appear as an example of protectionist policy, it should be highlighted that this regulation was only adopted as a precautionary measure in case things get any worse, particularly as the EU suddenly faced with significant shortages of its own. In that regard, it appears that none of the member states have applied measures by February 2021. Furthermore, the new mechanism was to be applied only through the end of March, which indicates a limited time scope. Finally, the regulation was not solely regarding the EU, as it is being accused of, as the EU exempted 92 countries which are low-and middle-income. On top of that, the EFTA members are exempt (Iceland, Liechtenstein, Norway, and Switzerland), as well as the Western Balkans, which reaffirms the EU’s consciousness of its surroundings.

    As the UK was not on the list of exemptions, alongside the rich countries such as the US, Canada, and Australia, the UK was strong in voicing its displeasure of such decision made by the EU. Such strong criticism of the EU was not in the spirit of partnership, considering that the UK has its own list of 174 medicines that are currently banned from being exported. The medicinal products in question are those that are necessary for fighting the COVID-19 virus. Moreover, the UK’s export ban decision is long-lasting, as it has been in place ever since March 2020. This showcases that the UK has been relying on a type of protectionism way before the EU even thought about it.

    While being concerned with taking rapid decisions, in the wake of growing sharp criticism, the EU, however, did make one irrational decision. Namely, the Commission invoked an emergency provision of the Northern Ireland Protocol (article 16). Such decision was made due to a fear that Northern Ireland would become a hub for illicit shipments from the EU to the UK. This was considered as a possibility considering that the Brexit negotiation resulted in a no border between the Republic of Ireland, a member state and Northern Ireland, a part of the UK. What made the Commission’s decision so disastrous is the fact that its implementation would have re-established the hard border on the island of Ireland – the very thing the Brexit negotiations were trying to prevent for years. Luckily for all, such decision was quickly reversed in a matter of hours, that is, before it was ever implemented. The fact that the EU’s top Brexit experts, nor the UK or Ireland were not consulted, truly stroke a blow to the post-Brexit relationship between the UK and the EU, while endangering peace. Now, the UK will not stop until it gets further concessions in the period to come. Although the Commission President took the blame for this blunder, it will not be enough. The EU should take this as a lesson, to better develop its internal decision-making process, while becoming more resilient to outside pressures created by various crisis.

    Quo Vadis, Europa?

    To sum up this long blog, although there are some reasons to be critical of the Commission’s approach to vaccination during the pandemic, particularly in terms of it intending to suspend the Northern Ireland Protocol, most of the widespread blows directed towards this EU institution were without merit. Despite the UK’s advancement in its vaccination strategy, the EU has nevertheless managed to keep a reasonable pace, without falling as much behind as one would first imagine when it comes to signing contracts and authorising vaccines. However, the rollout in the EU was indeed slow. Nevertheless, it would be unrealistic to put all the blame on the Commission, as previously explained in detail, particularly considering the complex circumstances on the ground. In fact, any future criticism directed towards the Commission should be borne by member states as well, as they were the ones to endorse the EU’s vaccination strategy and to closely follow the negotiations. In that regard, it will be essential for the EU to make substantial progress in the following weeks and months.

    Although the EU citizens have the right to be displeased with the slow pace of the vaccination rollout, an alternative scenario of having 27 separate vaccination deals and processes would have probably resulted in a harsh competition between member states, which could have potentially dealt a lethal blow to the project of EU unity and integration. This would also probably result in richer member states getting the vaccines for themselves, while leaving the poorer ones behind. In that scenario, the latter would be forced to rely on vaccines coming from Russia and China, and thus resulting in weakening of Europe’s strategic autonomy. The divisions in the EU would therefore continue to deepen, all while the external actors would continue increasing their leverage.

    Despite the bleak situation at the moment, there is room for optimism. The fact that the EU member states remained united and continue to do so (at least for the most part) is a message that the EU has a promising future. This future is a future of reforms, particularly with regard to those reforms aimed towards completing the EU Health Union. The reform process will not be one without hurdles, particularly as the vaccination strategy is complex (hence the long blog), which is why EU leaders and leaders from EU member states will have an important task of explaining the situation and making their case to the European citizens in the following period. What a better way to start doing so than at the upcoming Conference on the Future of Europe.

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