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Vulcan Insight | European Union moves to tighten oversight of vaccine exports

As the public conflict between the European Commission and the British-Swedish pharma giant over apparent shortages in COVID-19 vaccine deliveries continues to heat up, the Commission has today implemented a new export transparency regime, allowing Member States to potentially block their exports.

In recent days, Commission considerations of whether to institute greater oversight of which, and crucially how much, Covid-19 vaccines, manufactured in the EU, have raised considerable fears across the globe of an EU “export ban.”

Under the new mechanism, which is set to come into force in the coming days and be in place until the end of March, the EU’s 27 national customs authorities will be able to prevent manufacturers from exporting their Covid-19 vaccines unless they have previously been granted export authorisations. Under the mechanism, manufacturers would still be allowed to export EU-made vaccines to customers around the globe, in line with their respective contractual obligations, but only as long as they have supplied the EU with the contractually promised doses as per the different “advanced purchasing agreements” with the different EU Member States. According to European Health Commissioner Kyriakides, the new regulation is an “insurance policy” to make sure companies live up to their “moral, contractual and social responsibilities.”

The EU’s new regime is a direct fallout of the public spat that exploded this week between the European Commission and AstraZeneca, after the latter announced last Friday that it would not be able to supply level of vaccines ordered for Q1 2021. According to the company, due to supply chain issues in the EU, it would have to reduce its supplies by approximately 60%. Moreover, the company has since also claimed that, because of contractual obligations with the UK Government and separate supply chains, it would not be possible to make up the shortfall with help from two manufacturing plants in the UK.

The European Commission and the EU Member States, however, have expressed serious doubts over the company’s justification arguing that the Commission’s contract with AstraZeneca foresees doses for the EU being manufactured at four sites – one in Belgium, one in Germany and two in the UK. Additionally, the company’s earlier claims of separate supply chains, have been undermined by UK officials’ announcements last December that the UK’s initial batch had actually been manufactured in Germany and the Netherlands.

In essence, the Commission now accuses AstraZeneca of selling the doses it was meant to pre-manufacture for the EU since October last year to other markets, including the UK and Israel, leaving European citizens with a shortage of available vaccines. While it does not accuse them of selling them necessarily for profit, it does accuse the pharma giant of breaching its contractual obligations.

With both Pfizer/BioNTech and AstraZeneca currently significantly behind on their delivery schedules to EU countries, the Commission’s new oversight mechanism would mean that, until rectified, EU national authorities will ban vaccine exports to countries around the globe heavily dependent on deliveries from the EU. Meanwhile, shipments to the COVAX-alliance and third-world countries will be exempt from the restrictions.

Compliments of Vulcan Consulting – a member of the EACCNY.