Vaccine Showdown: What Would the EU Blocking Exports Mean?

Even as the U.K. sets records for Covid-19 vaccines administered in one day, the European Union’s inoculation campaign continues to sputter, while member countries face a fresh round of lockdowns. Against that backdrop, the bloc is ready to start withholding shots from the U.K., according to a senior EU official.

Such a move would set off a chain of potential consequences.

What is the EU threatening to do?

The EU will probably reject authorizations to export AstraZeneca Plc’s vaccines and their ingredients to the U.K. until the drugmaker meets its obligations for deliveries to the 27-nation bloc, the official said. The European Commission laid the groundwork for the move last week, saying it would restrict vaccine exports to countries that don’t allow exports to the EU.

That means vaccines and ingredients produced in European factories would be reserved for local deliveries, the EU official said. No final decision has been made, however, and member states have been divided on the idea of an export ban.

Where does Astra make shots in the EU?

AstraZeneca has been using production facilities in the U.K. for that market, and has been supplying the EU from a site in Belgium. Another plant, in the Netherlands, is at the heart of the discussion over an export ban. It could eventually ship to both the EU and U.K. -- if allowed. The facility isn’t yet cleared for commercial production.

“The site was originally meant to supply clinical trial material, so it hasn’t been used yet for commercial supply,” Ruud Dobber, executive vice president of Astra’s biopharmaceuticals business unit, told Bloomberg Television.

The Commission may present a proposal for additional vaccine export curbs as soon as Wednesday, people familiar with the matter said. Leaders will assess any such restrictions over a video summit on Thursday and Friday.

How has the U.K. responded?

U.K. leaders have urged against impeding exports. European Commission President Ursula von der Leyen “made a commitment to the prime minister that the EU wouldn’t block companies from fulfilling their contractual obligations to supply vaccinations,” Helen Whately, a junior U.K. health minister, told Sky News on Monday.

Prime Minister Boris Johnson said he is “reassured” that the bloc doesn’t want to launch a vaccine battle. Avoiding blockades of vaccine supplies is vital because immunization programs require countries to work together, he said in a pooled interview with broadcasters Monday.

The U.K. is the biggest destination for Covid vaccine doses made in the EU, receiving more than 10 million of the almost 42 million shots that have been exported from the bloc so far. Much of this supply has come from Pfizer Inc. and its German partner, BioNTech SE.

Vaccine Showdown: What Would the EU Blocking Exports Mean?

What will happen if the EU blocks shipments?

Any reduction in supply could undermine the U.K.’s progress toward giving everyone a first dose of vaccine by the end of July. For the EU, which has not yet ratified a post-Brexit trade agreement with the U.K., the price could be damage to global relations. “The Commission knows deep down that this would be counterproductive,” U.K. Defense Secretary Ben Wallace told Sky News on Sunday.

If extended to the Pfizer-BioNTech shot and those from Johnson & Johnson and Moderna Inc., a ban on exports of vaccines from the EU to the U.K. would delay Britain’s reaching a level of supplies needed to vaccinate 75% of its population by at least two months, according to London-based analytics firm Airfinity Ltd.

Could other vaccine producers be affected?

There could be knock-on effects. Pfizer has warned that it needs free movement of materials between the U.K. and EU in order to make the messenger RNA vaccine it produces with BioNTech. The company relies on a secret U.K. production site to make lipids, the fatty material used to encase and protect mRNA so it won’t break down when put into the body. Little used before the advent of mRNA vaccines last year, the lipids are now in short supply around the world.

A spat that disrupts supply chains and slows vaccine production could have repercussions beyond Europe. Many developing nations are counting on the Astra shot, which is lower cost and easier to transport than those of Pfizer-BioNTech and Moderna.

Meantime, results of a U.S. trial released Monday indicate the Astra vaccine is safe and highly effective. That could put to rest lingering concerns about efficacy and potential side effects that have slowed uptake in the EU and elsewhere. Dobber, who spoke on a media call about the new clinical trial data, reiterated the need for goods to move unimpeded between countries.

“We are highly dependent on our global supply network,” Dobber said. “For Europe, we are highly dependent on the drug substance coming from the United States. It’s incredibly important that our goods can move from one geography to another.”

©2021 Bloomberg L.P.

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