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The European Union could block exports of COVID-19 vaccines to countries that themselves ban exports of vaccines or their ingredients, or that are far ahead of the EU in their vaccination efforts, under new rules that will take effect Thursday.
The decision could impact vaccine exports to some of the EU’s chief trading partners and allies—from Great Britain to the United States.
The shift is a modification to an existing regulation that the EU adopted in January and extended earlier this month, which allows countries to block exports of a particular manufacturer’s vaccines when that manufacturer is failing to deliver on its EU commitments.
In a press conference Wednesday, EU trade chief Valdis Dombrovskis indicated that the new rules—which will initially apply for six weeks—would give the EU “leverage” in its negotiations with vaccine suppliers, to make sure they deliver enough doses to the bloc.
“With better transparency and a possibility to negotiate also with other global vaccine producers, we are in a sense in a better position,” he said. “This mechanism will [provide] a certain leverage so we can engage in discussions with other major vaccine producers.”
Vaccine shipments will be allowed or blocked on a case-by-case basis, with authorities in each European nation responsible for making those decisions and carrying out any enforcement.
“Stabilize and accelerate”
So far, the main target of the EU’s ire has been AstraZeneca, which has fallen far short of its promised deliveries. However, Wednesday’s shift makes it possible that other manufacturers, such as BioNTech/Pfizer, could find themselves unable to export doses from their European plants to certain countries even though they have made good on their EU promises.
What’s more, the EU has also now removed exemptions from its January rules for neighboring countries such as Norway, Israel, and Serbia, on the basis that manufacturers might try to channel their exports through them in order to skirt the EU’s own potential export restrictions.
“Continued shortfalls in production are not distributed fairly across producing countries,” Dombrovskis said. “The most important thing at this crucial moment is to stabilize and accelerate the distribution of vaccines.”
Europe certainly finds itself in a precarious position right now.
Nineteen of the EU’s 27 countries are seeing increasing case numbers. Fifteen are experiencing rising levels of hospitalization, and death rates are going up in eight countries. Italy and France have retreated into lockdown, despite earlier hopes that it could soon be possible to open up their economies again.
This is largely due to the rapid spread of faster-moving coronavirus variants, chiefly the “U.K. variant,” more formally known as B.1.1.7. It is now the dominant strain across Europe, accounting for as much as 80% of infections in some countries. The South African variant (B.1.351) has been found in 18 countries, and the particularly malevolent Brazilian variant in nine.
Meanwhile, Europe’s vaccination rates are lagging behind those in other rich parts of the world, with just under 5% of the population having been fully vaccinated.
The slow pace is mostly the result of a shortage of doses at a time when the EU continues to export heavily; since it first tightened the rules in January, its countries have authorized requests for the export of 43 million doses, and only rejected one request: a 250,000-dose AstraZeneca shipment from Italy to Australia. The U.K. has been the top destination, receiving 10.9 million doses. Other recipient countries include Canada (6.6 million doses), Japan (5.4 million), Mexico (4.4 million), Hong Kong (1.3 million) and the United States (1 million).
The AstraZeneca question
AstraZeneca has been in a dispute with the European Union since the beginning of the year, after the company notified the bloc that it would be unable to provide the tens of millions of doses that it had promised. It said the issue stemmed from lower than expected yields at several manufacturing plants.
But the EU has tried to insist that the number of doses scheduled for delivery in its contracts with the pharmaceutical giant are binding. AstraZeneca, for its part, has pointed to clauses that specify it will make a “best effort” to supply those dose amounts from factories within Europe, but that it is not obligated to import doses from elsewhere to make up any shortfall.
That response has infuriated European politicians, who have accused the company of being slow to notify them of the problems at a key manufacturing plant in Belgium when they first arose in December. AstraZeneca has said it needed time to ascertain the nature of the issue and assess how it would impact supplies.
The contract dispute has exacerbated concerns in Europe that AstraZeneca has not been fully transparent in its public pronouncements, both about the efficacy of its vaccine and about the reasons it has been unable to meet projected European supply levels.
Adding to suspicions of AstraZeneca is the fact that several of AstraZeneca’s European facilities have shipped doses to the U.K., which is far ahead of the EU in vaccinating its population.
In the latest twist in this saga, Italian authorities have reportedly impounded some 29 million doses of AstraZeneca’s vaccine, discovered during a surprise inspection of a manufacturing facility near Rome that the company is using to “fill and finish” the vaccine, packaging it into vials, according to the Italian newspaper La Stampa. The paper said the doses were due to be exported to the U.K. Bloomberg News reported that the doses were made at AstraZeneca’s Halix contract-manufacturing facility in the Netherlands, and that they were slated to be shipped to the company’s distribution facility in Belgium.
But AstraZeneca said in a statement that 13 million doses at the Italian facility were made outside the EU and were bound for low- and middle-income countries under the World Health Organization’s Covax program. It said the remainder were “waiting for quality control release to be dispatched to Europe.” It said it expected 10 million doses to be distributed within the EU countries during the last week of March, with the rest due to be released in April.
The Halix facility, which is a new plant and not yet authorized by European regulators, has been a particular sore point for Europe, with politicians insisting that all production from the facility must go to the EU. But U.K. officials say they are entitled to vaccines produced there. The plant was used to produce the doses for British clinical trials of the jab, which was developed by scientists at the University of Oxford.
British Prime Minister Boris Johnson on Tuesday risked inflaming the growing spat between his country and the EU by reportedly telling lawmakers from his Conservative Party that the U.K.’s vaccination success was down to “greed, my friends”—apparently a reference to the profit motive of the manufacturers. According to The Sun, which reported his remarks, he then repeatedly asked others on the Zoom call to “forget I said that.”
The situation is further complicated by the fact that the U.S., which has not yet authorized the AstraZeneca vaccine, is sitting on tens of millions of doses. The Biden administration has so far refused to allow any doses to be exported, with the exception of 4 million doses that could go to Canada and Mexico as a “loan.” The rest is supposed to be used to vaccinate Americans, assuming the Food and Drug Administration does approve use of AstraZeneca jab.
This story has been updated to include AstraZeneca’s statement about the 29 million vaccine doses currently being held at a facility outside Rome.
More health care and Big Pharma coverage from Fortune:
- Online sign-ups made the U.S. vaccine rollout less fair. Here’s how to fix them
- CDC says three feet between students is now sufficient
- “Virus metrics are getting uglier”: Why COVID-ravaged Europe is locking down again
- The choice for rich nations: Help vaccinate the developing world, or face a prolonged pandemic
- Like it or not, vaccine passports are coming soon to an airport near you
