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EU states want changes as Covid vaccine demand wanes
Covid costs

EU states want changes as Covid vaccine demand wanes

3 min. 21.05.2022 From our online archive
Luxembourg and others want to slow down deliveries as need and cold space diminishes
A child in Lox Angeles, California, receives a dose of Pfizer's Covid-19 vaccine last November.
A child in Lox Angeles, California, receives a dose of Pfizer's Covid-19 vaccine last November.
Photo credit: AFP

A year after struggling to find adequate supplies of Covid-19 vaccines, a number of European countries are overflowing with shots they can’t use -- and they’re telling drug companies they don’t want to pay for more. 

Health officials from European Union members including Luxembourg, Poland, Slovakia, Romania, Bulgaria, Finland, the Netherlands and the three Baltic states met on Wednesday to discuss amendments to contracts with producers such as Pfizer Inc., as supplies overflow and storage costs mount for shots with short shelf lives.

The virtual meeting, organized by Polish Health Minister Adam Niedzielski, follows appeals in recent weeks from some individual EU members to the European Commission, the bloc’s executive arm. This time, the governments agreed to write a joint letter to the commission on the need to renegotiate the vaccine contracts, the ministry in Warsaw told Bloomberg News.

“We hope that the discussion with the commission and among member states will allow flexibility in the vaccine agreements,” it said. “We are also counting on vaccine producers to show understanding to the exceptional challenges that Poland is facing supporting Ukraine and giving shelter to millions of Ukrainian citizens fleeing the war.”

Some countries are seeking to amend so-called advanced purchase agreements signed with producers, as demand for shots wanes and budgets come under strain from the fallout of the war in Ukraine and the costs of accommodating refugees.

Adjusting deals with suppliers could grant member states the right to “re-phase, suspend or cancel altogether vaccine deliveries with short shelf life,” Estonia, Latvia and Lithuania’s prime ministers wrote in a joint letter to Commission President Ursula Von Der Leyen late last month.

In a separate letter, the health ministry of Bulgaria, which has the EU’s lowest vaccination rate, called for an “open dialog” with the commission and pharmaceutical companies, saying the current arrangement forces member states to “purchase quantities of vaccines they don’t need.” Vaccine purchase commitments are also limiting the ability to provide health services to refugees from Ukraine, the letter said.

Commission Role

The commission has spearheaded vaccine provision for the bloc and other European countries, leading to deals with Pfizer and BioNTech SE and with Moderna Inc. that assured billions of shots at the height of the pandemic. But many nations, including some with low vaccination rates, are now scrambling to cut costs as demand for vaccines falls off.

Romania, one of the EU’s least vaccinated countries, has sold doses to Germany and Hungary in the face of oversupply and storage shortages. Hungary in turn sat out a recent round of joint purchases to reduce its own excess supply. 

Poland last month triggered a “force majeure” clause after failing to renegotiate a deal with suppliers, refusing to take on new supplies or pay for additional doses.

The commission said May 13 that it reached an agreement with BioNTech and Pfizer to adjust delivery schedules to member states. Doses originally set for delivery in June and throughout the summer will now be shipped in September and during the autumn and winter, the commission said, without providing a copy of the agreement.

It’s too early to prejudge when talks with the producers may end and what their result will be, according to the Polish Health Ministry, which said it’s seeking a “mutually acceptable” solution. 

Pfizer and BioNTech have both said they’re working collaboratively with the commission to address needs created by the evolving pandemic. The companies can’t comment on potential or ongoing discussions, BioNTech said Friday. 

The push to change agreement terms highlights how the 27-nation bloc has shifted to a new phase in its battle against the virus. While demand is falling just a year after countries had to scramble to gain access to supplies, many EU members remain far from the goal of a 70% inoculation rate. 

Covax, the global vaccine initiative backed by the World Health Organization, has said it has enough doses for countries to meet their vaccination goals, but deliveries are slowing as the focus shifts from pumping out supplies to overcoming distribution hurdles, hesitancy and other factors that have hampered rollouts. 

Data firm Airfinity Ltd. recently slashed its 2022 global vaccine revenue estimate to about $64 billion from $81 billion.

©2022 Bloomberg L.P.

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