Matthew Lynn

The EU has botched its vaccination programme

The EU has botched its vaccination programme
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It was the most excruciating moment of Ursula von der Leyen’s short tenure as President of the European Commission. On Friday morning she hastily put together a press conference to counter the growing media storm across Europe over the EU’s handling of vaccine procurement. She doubled down on ‘solidarity’, announcing that the Commission had managed to secure more doses of the BioNTech/Pfizer vaccine, but also that the EU would stick absolutely to buying together. ‘We have all agreed, legally binding, that there will be no parallel negotiations, no parallel contracts,’ she insisted testily. ‘We’re all working together.’ At the same moment, however, her former colleagues in Berlin, where she was never popular, were busily undermining her. Germany, it turned out, had secured an extra 30 million doses directly from the manufacturer. Vaccine nationalism, it turned out, was bad for everyone except Germany.

It was not the first time national health ministers had broken ranks. In June the health ministers of Germany, France, Italy and the Netherlands were forced by their respective Chancellors and Prime Ministers to write to von der Leyen, apologising for their efforts to buy Covid-19 vaccines on behalf of their health systems. It was, they conceded, ‘of utmost importance to have a common single and joint approach to the various pharmaceutical companies’.

At that moment, with the new coronavirus raging across Europe, and economies in lockdown, the EU was busily putting together a plan that would make sure that if and when a vaccine became available, the continent’s citizens would be the first to get the shot. ‘When it comes to fighting a global pandemic, there is no place for “me first”,’ argued von der Leyen when she announced the scheme, before pointing out that ‘harmful competition’ for scarce resources should be avoided. Instead, budgets would be pooled, and the mighty buying and regulatory power of the world’s largest trading bloc would secure access and terms far better than any could individually. Smaller countries, such as a typically eccentric UK, which opted out of the scheme, would be left to fend for themselves as best they could. It would be a powerful symbol of how the EU could protect its citizens from the gravest threat in a generation. Vaccine ‘nationalism’ would be crushed for the common good.

Fast-forward seven months, however, and it is clear that it is not working out quite as planned. Europe is falling woefully behind in the race to vaccinate its citizens. Ugur Sahin, the founder of the German company BioNTech, which jointly created the first jab with Pfizer, has revealed that a slow, bumbling, arrogant EU failed to order enough supplies, while approvals have been sluggish, and the rollout across the continent has barely begun. In truth, the vaccination campaign is turning into the greatest EU catastrophe since the euro crisis of 2010-11. And while that only bankrupted three countries and condemned a generation of Greeks to poverty, this one will result in the deaths of tens of thousands of people.

The facts are clear enough. At the time of writing, tiny Israel has carried out 1.2 million vaccinations, or 13 per cent of its population, the US 4.6 million and Britain 1.3 million. But Germany has managed only 265,000, Italy 128,000 and France a mere 516. Even Russia, hardly anyone’s idea of an advanced state, has managed 800,000. Worse, it doesn’t look as if the situation will change any time soon. According to Sahin, the EU ordered so few doses of the BioNTech shot in the summer that it is now at the back of the queue for scarce supplies.

Meanwhile, the vaccine it has ordered in big quantities, the Oxford-AstraZeneca shot, has not even started the EU approval process, even though it has already been sanctioned in Britain and India. It might be the end of 2021 before Europe is vaccinated, and perhaps even 2022.

Unsurprisingly, people are starting to get angry. Markus Söder, the leader of the Bavarian Christian Social Union, sister party of Angela Merkel’s ruling CDU, blasted the programme at the weekend: ‘It is difficult to explain that a very good vaccine is developed in Germany but is inoculated more quickly elsewhere.’ The Italians are complaining that the Germans have stolen their supplies, while the Finnish health ministers complained the country received only 10,000 doses in the first batch.

So what went wrong? There were, as so often, three big problems: people, politics and bureaucracy. The EU has long harboured ambitions to take control of health policy, at the moment still reserved in the main for member states. Covid-19 presented the perfect opportunity. A virus, kind of obviously, has no great respect for national borders. It crosses them with ease. The crisis was a perfect moment for the EU to bounce back from Brexit, and take charge of coping with the epidemic with a transnational strategy based on science and co-operation. It would be a magnificent demonstration of the EU at its best, delivering for its citizens. It was hardly surprising that the Commission was so anxious to stop national health ministers buying their own supplies.

The trouble is, the people in charge were not up to it. In Germany, von der Leyen was notorious for a spell as Germany’s defence minister that was characterised by a string of procurement scandals and disasters. The Bundeswehr concluded she was hopelessly out of her depth. Buying military and medical supplies is very similar, with the admittedly significant difference that one is designed to end lives and the other to save them: both involve lots of complex, expensive contracts struck in an emergency for stuff you aren’t yet sure works. Putting von der Leyen in charge of vaccine procurement was a little like getting Gavin Williamson to run the British effort: you can hardly be surprised if things start going wrong.

Nor did the EU’s health commissioner inspire much confidence. Stella Kyriakides was appointed in 2019 after a brief career in Cypriot politics; with no disrespect to the Mediterranean island best known for a ramshackle blend of tourism and Russian money laundering and a population of less than a million, it is hardly the place to prepare for an administrative task on the scale of vaccinating Europe.

So it turned out. The EU was late to the party, placing too few orders, and at the wrong moment. Its initial budget for buying vaccines was just over €2 billion. In comparison, the UK, with 66 million people instead of 448 million, is set to spend £12 billion purchasing, manufacturing and deploying vaccines. The EU’s strategy was to pool its buying power to stop the drugs companies exploiting it. In fact, the vaccines are pretty cheap. The Oxford-AstraZeneca jab is just £3 a shot. At £20, the Pfizer vaccine is still great value (it would cost the UK about £2.4 billion to vaccinate everyone). Speed was the real issue; the money was largely irrelevant.

Even worse, politics got in the way. Germany’s Der Spiegel has made the explosive allegation that France insisted the EU couldn’t buy more of the BioNTech jab than the one its national champion, Sanofi, was working on. But the Sanofi vaccine stumbled, making that worthless. As Sahin has revealed, the EU assumed that it would have a whole range of vaccines to choose from and became complacent. Finally, the European Medicines Agency has been painfully slow. Ironically, Britain’s own health regulator took advice from a Munich-based consultancy, Biopharma Excellence, on speeding up the regulatory process. As with the vaccine itself, plenty of German expertise, brilliant as always, has been deployed everywhere except in Germany.

The EMA, the EU’s health regulator, approved the Pfizer vaccine before Christmas only under pressure from Berlin, and weeks after the UK. There is no sign of approval for the Oxford vaccine, even though it is the only one that has been ordered in bulk. The EMA says AstraZeneca hasn’t submitted its application yet; it doesn’t seem to occur to anyone to pick up the phone and ask. EU institutions still see their role as blocking what could be dangerous innovations. No one has stopped to wonder if sometimes — such as in a pandemic, for example — it might be better to encourage technology. But that’s bureaucracy: it sticks to the script long after it stops making sense.

In truth, Vaccine-gate, as it is starting to be known in Germany and elsewhere, is turning into a rerun of the euro crisis. The EU, as so often, wills the ends but then hopelessly fails to put together the means to deliver them. It created a single currency with none of the mechanisms in place to make it work. This time around it has created a health policy, but without the budgets or expertise to deliver. Perhaps the most important lesson is this: the EU is governed by the idea that bigger is always better, and that co-operation is always better than competition. But it is clear that when it comes to creating and rolling out vaccines, that is far from true.

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Written byMatthew Lynn

Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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