Now is not the time to start being nationalist about vaccines yet the EU appeared to have missed that message last week. It tightened vaccine export controls and almost implemented a hard border between the Republic of Ireland and Northern Ireland to prevent supplies of vaccines leaving the EU. The U-turn was almost immediate under pressure from Northern Ireland, the Republic of Ireland and the UK.
In essence the issue was a contractual one and not a political one: at 10pm on Friday there was a hard border but by early the next morning, it had disappeared. By the end of a crazy weekend, AstraZeneca had assured an increase of vaccine supply of 30% and to bring forward its supply by one week. Perhaps the EU’s Trump-esque moment would pass unnoticed?
There’s no chance of that in the current febrile environment. Perhaps it can be excused as Lockdown-induced Cabin Fever. What the whole incident has done though, is underscore a latent vaccine nationalism that, if left unfettered, could obstruct the efforts to supply vaccines around the world, and especially to emerging markets in the coming months.
At present there are some 98 countries who have restrictions on some or all parts of their Covid 19 supply chain. According to Coriolis research, for vaccines alone, the UK’s restrictive trade measures affect some 77 countries, second only to Brazil whose measures will affect 50 countries and the US whose measures will affect 10. There were a total of 534 news stories about vaccine supply chain blockages in the US in the last month to the 27th January, the UK reported 285 and across the whole of the EU, 196. If news is anything to go by, it suggests a higher senstivity to Covid vaccine supply chain issues in the US and the UK than in the EU as well as higher levels of protectionism.
The EU on the face of it should not be concerned that it cannot access vaccine supply. The global vaccine market was worth around $42bn US dollars globally in 2020 and seven out of the top 10 vaccine exporters are EU member states. The US, the UK and India are the three largest non-members. Belgium and Ireland were the largest exporters; the UK ranks number six. Coriolis expects the overall vaccine market to grow at an annualised rate of above 10% to the end of 2023 so the issue is not one of capacity in the longer term but rather of distribution and logistics in the short term.
For example, Pfizer-BioNTech’s vaccine will be distributed primarily to the US and Europe because these countries have cold chain distribution systems to deal with the extreme temperatures at which this vaccine type needs to be stored. Germany has already complained that it has insufficient doses given that the vaccine originated there, and has ordered 30 million doses outside of the EU vaccine strategy accordingly. The Moderna vaccine is similarly focused on the US and Europe, although it also has orders in Japan and Australia as well.
AstraZeneca has global orders for its vaccine, including in emerging markets – this is because it does not require storage at ultra-low temperatures; and as the technology to produce the vaccine is known, it is both cheaper and easier to scale. However, the vaccine cultures have a short shelf-life once they are grown so they need to be manufactured close to where they are used, and this is one of the causes of delays at the start of the distribution process. The UK experienced delays in November that were similar to those that spooked the EU last week.
The everyday politics of vaccine nationalism are obvious: governments, understandably, want to get doses of the vaccine to their citizens as soon as possible and will bang the nationalist drum when they do. However the means of getting the vaccines into people’s arms has differed: the EU’s vaccine strategy assumed that all vaccines would come on tap at roughly the same time, giving them enough doses to go round EU member states in a fair and structured way once the vaccines were approved. By January 8th the EU had ordered 1.2bn doses – more than enough to go round, but had distributed the orders fairly evenly over a number of producers, some of which did not yet have their vaccines approved by EU regulators, including AstraZeneca.
The UK, in contrast, ordered 367 million doses from seven different manufacturers as soon as they were developed with 100m doses from AstraZeneca alone. It too experienced supply chain issues at the outset in November and early December, but since January distribution in the UK has involved the largest military deployment in peacetime – 5,000 people are now manage the logistics around manufacturing, distribution, delivery and indeed vaccination itself. The result is that the UK has done well in getting the vaccine rolled out but because it has moved quickly, not because it is out of the EU.
The issue is not that vaccines won’t be delivered – this isn’t in anyone’s interest. It is just that manufacturing and distribution will take time to scale up and the EU was slow to decide on its framework. On current estimates it will take producers until the end of 2023 to produce enough to vaccinate the world’s population. Precisely how this happens should stay in the realms of logistics strategy globally. Disruption is inevitable but trade protectionism and nationalism is not the answer if we are ever to get back to normal.