Vaccine Trade Wars Have Just One Winner: Covid-19

Vaccine nationalism is escalating in a world where Covid-19 is everywhere, yet the life-saving medicines needed to fight it are scarce. The temptation to hoard doses is rising, but that would prolong the pandemic by driving an even bigger wedge between leaders and laggards. Without a focus on increasing supply and sharing doses across borders, the virus will be with us longer than we fear.

If tempers are running hot, it’s because supplies are running low. The European Union, furious at a drastic cut in expected deliveries from AstraZeneca Plc, is introducing export curbs to prevent vaccines leaving its territory if it feels drugmakers aren’t living up to their commitments. “This is a race against the clock,” said EU Trade Commissioner Valdis Dombrovskis. “We cannot lose time because of vaccines not being delivered on schedule.” There will be exceptions for some neighboring and low-income countries.

In theory, as a quid-pro-quo, there’s nothing inherently wrong with the idea that doses bought with taxpayer money should be defended tooth and nail for the benefit of those same taxpayers. The U.S. government, for example, has so-called “march-in” rights to take over drug patents if it feels manufacturers aren’t producing enough. Given the cumulative Covid-19 death toll in the EU is now at more than 462,800, and with swathes of the continent under lockdown, there may be a moral as well as a contractual case to intervene.

In practice, though, these kinds of decisions have messy, global life-and-death ramifications in a pandemic. Seizing doses at the factory destined for elsewhere means depriving others of life-saving medicines. It makes tit-for-tat reprisals more likely, as seen last year in fights over masks and ventilators. Already Canada has had to reassure its population that EU curbs won’t hit supplies. The U.K., fearing disruption to its own deliveries, has warned the EU that it expects its own contracts to be honored — or, in the words of the Daily Mail, “No, EU Can’t Have Our Jabs.” What if India, producer of half the world’s vaccine supply, started to slap on its own curbs?

A focus on contractual terms is likely to backfire. The published terms of AstraZeneca’s deal with the EU show the firm did indeed promise to make its “best efforts” to hit its supply targets, but the idea that this is a question to be settled by lawyers misses the point. Some countries pre-ordered their vaccines before the EU, paid a premium and even helped fund the product’s development.

Consider the case of Valneva, a biotech company based in France, which has agreed to supply the U.K. with 60 million doses of its Covid-19 vaccine candidate for 470 million euros ($570 million). It’s also received investment to expand production at its plant in Scotland. Valneva’s chief financial officer, David Lawrence, tells me that negotiations are still ongoing with the EU. Curbs wouldn’t speed up deliveries — working with the U.K. would.

We are barely months into a global vaccination campaign that is set to stretch until late 2022 in China and India and into 2023 for more than 85 poor countries. Governments have an obvious responsibility to their own citizens, but that will need to be balanced with the epidemiological risks of leaving swathes of the planet unvaccinated for longer, especially with new strains are emerging all the time.

Given the U.S.’s welcome commitment to Covax, a 92-nation collaboration to ensure more equitable distribution of vaccines, it’s time the rich world set the example and worked out how best to share its own supply. Is it better to vaccinate the most vulnerable people in a neighboring country before the least vulnerable in one’s own? Contracts won’t tell us. Cooperation will.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering the European Union and France. He worked previously at Reuters and Forbes.

©2021 Bloomberg L.P.

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