EU Risks Global Vaccine Battle With Bold Export Control Plan
(Bloomberg) -- The European Union risks sparking a global vaccine battle after unveiling a drastic plan to restrict exports of Covid-19 shots.
The move affects drug companies such as Pfizer Inc. and AstraZeneca Plc, with the EU accused by an international trade group and the World Health Organization of engaging in damaging protectionism. The U.K. government, fresh from negotiating its exit from the bloc, called on the EU to refrain from disrupting Britain’s vaccine supply and demanded an explanation.
Europe’s escalation seeks to compensate for perceived missteps in negotiations with drugmakers and the slow rollout of national vaccination programs. While governments are under intense pressure as deaths mount and voters grow frustrated with recurring lockdowns, Pfizer Chief Executive Officer Albert Bourla warned that the EU’s bid to intervene in a global supply chain could backfire.
“I am afraid that could become a lose-lose situation rather than a win for Europe,” he said on a World Economic Forum panel on Friday. “If a war starts that one will try to ban either the final product or the supplies from free trade, I think that could create a situation that is not good for anyone.”
Europe’s struggle for a coordinated response was on display as Germany excluded seniors from its AstraZeneca vaccination plans, reaffirming its policy even after the European Medicines Agency cleared the shot for the elderly.
French President Emmanuel Macron was holding the line: “What I can tell you, officially, is that the feedback we have is not encouraging today for those over 60 to 65 on AstraZeneca.”
End in Sight?
In a potentially hopeful sign, the EU cleared a Covid-19 vaccine by Astra and the University of Oxford for all adults. Faced with pressure from EU politicians, Astra said later Friday it’s examining a possible partnerships to increase vaccine output.
Less than a month after Brexit took effect, the curbs also risk restricting vaccine exports across the Irish border by temporarily suspending provisions for free trade after Brexit.
That’s because the European Commission’s decision will oblige drug companies to obtain prior authorization before sending shots manufactured in the EU to other countries -- and the U.K., U.S. and Canada aren’t on a list of more than 90 exempted countries.
“The challenges we now face left us with no choice but to act,” EU Trade Commissioner Valdis Dombrovskis said. “This is a race against the clock. We cannot lose time because of vaccines not being delivered on schedule.”
The U.K. “is urgently seeking an explanation” and “would not expect the EU, as a friend and ally, to do anything to disrupt” legally binding vaccine supply contracts, Prime Minister Boris Johnson’s office said in a statement late Friday.
The statement cited the important of preserving commitments made over Ireland, where the EU border now runs between the Irish Republic and Northern Ireland.
Faced with EU pressure for faster supplies, AstraZeneca Chief Executive Officer Pascal Soriot said the company had sourced additional vaccine-drug substance from other parts of the world to bolster the 31 million doses the company can currently supply the EU.
“We have a large quantity that we are delivering starting this month to the European Union but it is not as much as we would have hoped,” he said.
Speaking after the EMA approved the company’s shot, the CEO said AstraZeneca is looking at possible partnerships with other companies to increase capacity, though this wouldn’t fix supply issues in the short term. European Commission President Ursula von der Leyen said the EU expects Astra to meet its commitments.
Under the EU’s measures, vaccines will only be allowed to leave the EU if the amount doesn’t threaten agreed deliveries in the bloc.
They will run until the end of March, affecting production and filling facilities operated by Astra, Moderna Inc. and Pfizer in Belgium, the Netherlands, Spain, France and elsewhere.
German Health Minister Jens Spahn defended the EU’s clampdown, saying it “set a sign” that Europe is determined to get vaccines.
“I mean, the U.S. is not without any measures either, if I just might put it that way,” he said on the WEF panel with Pfizer’s Bourla.
While officials were emphasized that the EU stopped short of blanket bans, there were calls to rethink the decision.
“Regardless of the calibration of export control measures, today’s announcement sends a dangerous signal to the world,” said International Chamber of Commerce Secretary General John Denton.
The WHO said trade barriers aren’t the solution and are ultimately self-defeating.
“The people at the top of the queue are fighting over where they are in the queue -- that’s what it looks like, fighting over the cake,” said Mike Ryan, head of the organization’s emergencies program.
The EU’s announcement comes a week after its already underwhelming vaccination pace hit a new major stumbling block. Last Friday, Astra warned that deliveries of doses this quarter would be less than half what was initially planned. That sparked a standoff, with the EU claiming the company breached terms by prioritizing Britain over the EU.
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