How Europe Tripped in Covid-19 Vaccine Race

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How Europe Tripped in Covid-19 Vaccine Race

As Western governments faced criticism for their pandemic management last summer, European Union officials began work on a vaccine-procurement plan they hoped would put the continent at the forefront of efforts to banish the coronavirus and reopen economies.

Instead of its 27 member states fighting for doses from a few manufacturers, the European Commission, the closest the bloc has to a government, would centralize purchases for some 450 million inhabitants, bringing prices down and ensuring that residents of rich and poor countries alike would get equal access to the best shots available.

Half a year later, an acute shortage of doses is keeping the EU’s vaccination effort from taking off, making it likely that only a small portion of the general public will get a shot by the end of summer. The reasons: The EU was late in ordering vaccines compared with the U.S. and the U.K.; it bet on companies that have yet to deliver; and when delays started creeping in, it blamed the manufacturers instead of restarting negotiations.

“There are about 10 hard weeks of vaccine deficiency ahead of us,” German Health Minister Jens Spahn told journalists over the weekend. “More [vaccines] could have been ordered, and faster.”

‘There are about 10 hard weeks of vaccine deficiency ahead of us.’

— Jens Spahn, German health minister

Israel has vaccinated 55% of its population, the U.K. 14% and the U.S. 9.4%, against just 2.8% for the EU. At current rates, only two members, Malta and Romania, will have immunized one-third of their population by the end of the year, according to a Jan. 29 report by UBS.

With Europe’s vaccine drive struggling to keep up with infections, voters are growing impatient, adding pressure on governments already made unpopular by a year of on-again, off-again lockdowns, a stubborn infection surge and the daily litany of thousands of deaths.

Under fire, the EU has imposed a potential export ban on vaccines while opposition politicians across the bloc are talking of nationalizing manufacturers.

Yet many of the European Union’s difficulties seem to be self-inflicted, according to dozens of health experts, pharmaceutical executives and EU and national-government officials familiar with the negotiations.

An inoculation in the Netherlands last week.

Photo: Peter Dejong/Associated Press

While other governments were wooing vaccine makers with subsidies and immunity from liability in case of side effects, the EU focused on pushing prices down and slowing negotiations, which resulted in late orders. It also spread its purchases widely to reduce risk, signing deals with companies that are still months away from approved shots. And it was slow to authorize the vaccines it had purchased.

As a result, vaccination campaigns in the EU started late and were vulnerable to manufacturing hiccups. In January, the makers of all vaccines approved for use in the EU— Pfizer Inc. and BioNTech SE, Moderna Inc. and AstraZeneca PLC—announced cuts in deliveries because of manufacturing bottlenecks, forcing governments to slow or pause vaccinations.

Critics of the EU’s approach said the problems began last June, when the European Commission took over an effort by Germany, France, the Netherlands and Italy to jointly negotiate with vaccine manufacturers—an initiative that was already behind those in the U.S. and Britain. German Chancellor Angela Merkel, reeling from earlier criticism when Berlin had halted shipments of protective equipment on their way to hard-hit countries, backed the move.

But negotiating vaccine purchases wasn’t something the commission had done previously. Its main role is to draft European legislation that it submits to member states for approval. “They are not used to being so hands-on,” an official from a large EU state said.

So the commission took the playbook it knew, that of bare-knuckle trade negotiations that can take months, even years to conduct. It approached the vaccine talks as an exercise in extracting the best-possible deal, not the fastest, said an EU official briefed on the negotiations.

Injection Delays

The commission named Sandra Gallina, a veteran trade official, as its negotiator. Beyond keeping vaccines inexpensive, her goal was to ensure companies would retain liability should the shots cause side effects, according to officials and industry executives involved. Unlike the U.S. and the U.K., the EU and its member states offered limited subsidies to vaccine developers to speed up research, expand manufacturing and lock in priority deliveries.

Covid-19 Vaccines

The U.S.’s Operation Warp Speed, led by a four-star general and a pharmaceutical executive, had a budget of $18 billion and started paying out subsidies in March, including to European companies. The U.S. signed its purchasing contracts between May and July. The EU, by contrast, signed its main contracts between late August and November.

“We reject the logic of first-come, first-served,” Stella Kyriakides, the EU health commissioner, told journalists last week. “That may work at the neighborhood butcher’s, but not in contracts.”

Yet given how complex vaccine manufacturing is, industry experts say early bookers are less likely to get hit if manufacturing problems appear as production ramps up.

“We do allocation of doses by countries, and early movers do have an advantage,” said a senior executive of one of the main vaccine developers.

Considering its main yardstick, price, the EU did succeed. According to a price list posted by a Belgian politician on social media, the EU paid significantly less per dose of the vaccine marketed by Pfizer and BioNTech than the U.S.

“This is a matter of solidarity,” Ms. Gallina told EU legislators on Monday, pointing out that poorer member states might have been unable to afford the higher prices.

But critics said such an approach was shortsighted given the costs of lockdowns across a continent paralyzed by vaccine shortages.

“They should have spent 20 to 30 times more—and it would still have been much cheaper than the cost of the lockdown,” said Karl Lauterbach, a German professor of epidemiology and a federal legislator.

The EU was slow to authorize the vaccines it had purchased. A vaccination center at a fairgrounds in Hannover, Germany, on Monday.

Photo: Ole Spata/DPA/Associated Press

Besides being slower in signing contracts, the EU has drawn criticism for large orders it placed with several manufacturers that, in some cases, are months away from publishing efficacy data on their vaccine candidates.

After months of negotiations, the EU signed a deal on Nov. 11 to purchase 200 million doses from BioNTech and Pfizer, with the option for a further 100 million. The two had by then presented promising data that made it likely that they would become the first Western pharmaceutical companies to seek approval for a Covid-19 shot.

On Nov. 17, the EU bought twice as many doses from CureVac AG , a German company that was also pursuing a sophisticated messenger RNA vaccine. It had no study showing the efficacy of its product and no manufacturing partner.

The U.K., U.S. and EU authorized the BioNTech-Pfizer product in December. Curevac, which has since formed a partnership with Bayer AG , might seek approval in May at the earliest, according to a German government assessment seen by The Wall Street Journal.

Stefan De Keersmaecker, a commission spokesman, said the contracts were negotiated and concluded “in a context of uncertainty…This is why we invested in a diversified portfolio.”

As new coronavirus variants sweep across the world, scientists are racing to understand how dangerous they could be. WSJ explains. Illustration: Alex Kuzoian/WSJ

The EU wasn’t only slow to negotiate contracts. The European Medicines Agency trailed the U.S. Food and Drug Administration, Britain’s Medicines and Healthcare Products Regulatory Agency and other national agencies in authorizing vaccines for use.

EMA officials said the speed of their deliberation was determined by the thoroughness of their approach. Yet all their decisions so far closely matched earlier U.S. and British rulings.

As it became clear that a large chunk of the EU’s orders wouldn’t materialize in the first half of the year, threatening the region’s vaccination campaign, the EU began follow-up talks to boost existing orders. These too have been slow. In December, it called an option on an extra 100 million doses from BioNTech and Pfizer and started negotiating for an additional 300 million doses. The talks are continuing.

In the past two weeks, just as public anger over the lack of vaccines boiled across Europe, both Pfizer and AstraZeneca said they would cut supply. Moderna followed suit days later. (Pfizer has since pledged a boost in deliveries to meet its first-quarter targets).

In return, the EU began lashing out. Italy threatened to take legal action against the companies. The prime minister of Croatia, Andrej Plenkovic, said a “vaccine hijacking” was taking place. Belgium dispatched investigators to the AstraZeneca plant to verify the company’s claims about production problems.

Covid-19 vaccines were administered at a nursing home in Pisa, Italy, last week.

Photo: Enrico Mattia Del Punta/Nur Photo//Zuma Press

Now EU officials say they would rather avoid legal action, preferring to focus on getting vaccines delivered. Commission President Ursula von der Leyen welcomed a “step forward” by AstraZeneca on Sunday after it said it would deliver an extra nine million doses in the first quarter—still only half of what the EU ordered.

Eschewing solidarity, the guiding principle of the EU’s procurement effort, some EU capitals are now going it alone in the hope of speeding inoculations. Hungary said last month it would order Chinese and Russian vaccines not yet approved by the EU. The Czech Republic is debating the same.

In a bid to reboot its effort, the European Commision has brought in Moncef Slaoui, the chief scientist of Operation Warp Speed, as an adviser. Mr. Slaoui, a former GlaxoSmithKline PLC executive, said he told officials to abandon their adversarial approach to the industry.

Many EU officials remain unfazed.

“I would like to say that when we are trying to constantly compare with the U.S. we should not have any complex,” Ms. Gallina said. “We are boosting production. I am not jealous of what [U.S. President Joe] Biden is doing because in actual fact the situation here in Europe is, may I say, better.”

Write to Bojan Pancevski at bojan.pancevski@wsj.com and Laurence Norman at laurence.norman@wsj.com

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