GP Insights # 464, 30 January 2021
On 29 January, the European Union, amid a row with the vaccine manufacturers for delivery shortfalls, announced introducing export controls on the vaccines made in the bloc. "The protection and safety of our citizens is a priority and the challenges we now face left us with no choice but to act," the European Commission said. AstraZeneca, BioNTech, and Pfizer have their production units in the European Union. Under the new rule, vaccine firms will have to seek permission before supplying doses beyond the EU. The EU member states will be able to vet those export applications. Vaccine deliveries from two of the EU's biggest suppliers, AstraZeneca and Pfizer, have been falling short of promised numbers by up to 60 per cent.
What is the background?
First, the delay and supply in vaccine manufacturing. The EU's public dispute with the vaccine-maker AstraZeneca began when it was revealed that the bloc is set to receive only a quarter of the 100 million doses that were to be delivered to the EU by the end of March. Both AstraZeneca and Pfizer have communicated their inability to deliver to issues of production and management. With the new export controls, the EU has said that it would allow exemptions that would include vaccine donations to Covax, and the exports to Switzerland, countries in the western Balkans, Norway and North Africa. But the UK will not be exempted.
Second, coronavirus and the new variant in the region. As of 28 January, 18,849,065 cases and 449,395 deaths have been reported in the EU/EEA region. France, Spain, Italy, Germany and Poland have the top five highest number of cases. In December 2020, a new contagious variant of the virus spread across Europe, prompting the governments to introduce harsh new lockdowns and curfews. This saw some resistance in some countries in the region, inversely adding to the increase in the number of cases.
Third, the EU's logic and complaint. The dwindling supplies have caused many countries to redesign their vaccination schedules. Hungary has gone ahead and announced that it would acquire the Sputnik V vaccine for its population. Other member countries too, have begun to express their discontent with the situation with many countries announcing the desire to start procuring vaccines in their individual capacities. The problem of transparency in the deal that has been signed between the EU and the vaccine companies seems to be causing issues in the early months of delivery processes which is not a good sign for the bloc as a whole that is hoping to vaccinate a large chunk of its population in the first half of 2021.
What does it mean?
The EU hoped to project its vaccine procurement scheme to reflect the EU's solidarity and strength. However, when the new variant of the virus emerged, all countries in the region closed off their borders to each other with a stark contrast to the region's approach to 'vaccine nationalism' in the world. The capitalist business models have a history of overpromising and under-delivering. The promises made in the early days of vaccine announcement were clearly overestimated, considering AstraZeneca had to undergo an additional round of testing. The export control measures placed now may be targeted specifically towards manufacturing in the UK. Nevertheless, the process of vaccine manufacturing is expected to take more time than earlier estimated, and the decision taken by the EU to ensure export controls seem timely.