Stricter terms: why the EU should pay more for new Covid lenses

European officials said that the EU has agreed to pay a premium for new orders for the Covid-19 vaccine because it needs to meet stricter terms as the group tries to protect the supply after the vaccination campaign started difficult.

The higher price is lower than the price agreed to by the United States in its latest order in July.

On Sunday, the Financial Times reported that the European Union had agreed to pay 19.5 euros (23.1 U.S. dollars) for each Covid-19 injection by Pfizer and BioNTech under a contract signed in May, up to 1.8 billion injections, which is higher than According to the contract, each dose is 15.5 euros. Two initial supply contracts totaling 600 million vaccines. This is consistent with previous reports.

The paper stated that the price of Moderna vaccine rose to US$25.5 per dose, referring to a US$300 million vaccine transaction, which was higher than the original 160 million vaccine transaction of US$22.6.

Tiziana Beghin, an EU legislator and member of Italy’s five-star ruling party, said the EU is being deprived.

“It’s puzzling,” she said.

Moderna’s price is still at the low end of the $25-37 range that the company said last year, but Pfizer and BioNTech have previously stated that if the transaction volume is larger, the price will be lower.

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Others said that there are good reasons to pay more, and that the situation with the initial deal with the drugmaker last year has changed a lot.

French Minister of European Affairs Clement Beaune told French radio station RFI on Monday that the possibility of a possible price increase is still under negotiation due to stricter terms for variants, production and delivery.

A European official familiar with negotiations with vaccine manufacturers said that the value of vaccine injections by drugmakers has risen because of evidence of their efficacy and their positive impact on helping the economy recover from the recession caused by the pandemic.

“Several factors played a role,” the official said on condition of anonymity.

bargaining power

All vaccines used in Europe have been shown to have beneficial effects, but the use of vaccines produced by AstraZeneca and Johnson & Johnson in the EU is restricted because of concerns that they may cause blood clots in rare cases.

The two vaccine manufacturers also encountered supply problems, which in the case of AstraZeneca caused legal challenges in the European Union.

Although the bargaining power of Pfizer/BioNTech and Moderna has improved, the additional demand from the EU may increase the cost of manufacturing and delivering vaccines.

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A Pfizer spokesperson declined to comment on European prices, but said that the latest contract with the EU is different from the original contract, including production and delivery matters.

Moderna did not respond to a request for comment.

The European Commission, which coordinates negotiations with vaccine manufacturers and representatives of EU governments, declined to comment on prices.

However, a spokeswoman said at a press conference on Tuesday that in negotiations with vaccine manufacturers, the EU considered several factors, including the company’s production capacity, delivery schedule and the technology they use.

Earlier this year, legislators, the media and some analysts criticized the European Union for paying too little for the early supply of the Covid-19 vaccine, saying this caused the initial delay in vaccination efforts.

Giovanna De Maio, a non-resident researcher at the Brookings Institution, an American research institution, said: “It is easy to criticize the EU because it spends less, spends too late, or spends too much.”

“The reality is much more complicated, and given the speed of transmission of the Delta variant, it may be right to prioritize access to vaccines over cost,” she added, referring to the more transmissible variant first discovered in India.

The company said that on July 23, Washington purchased another 200 million vaccines from Pfizer at a price of 24 U.S. dollars (20.1 euros) per dose, which is higher than the $19.5 that the United States paid for its first 300 million vaccines.

Pfizer said the US price increase reflects the investment required to produce, package and deliver new vaccine formulations, as well as the additional cost of producing smaller packaging sizes suitable for “personal supplier offices including pediatricians.”

Made in EU

When the EU reached a third supply agreement with Pfizer in May, the agreement could provide up to 1.8 billion doses. The European Commission stated that the new contract requires vaccines to be manufactured in the EU and basic ingredients to be purchased from the region.

In its first supply transaction, the EU required the EU to only produce vaccines, not its ingredients.

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Since the production line has been established and the demand for room for maneuver is small, centralized production in Europe will help ensure supply, but it may also increase costs.

The European Commission also stated in the statement that according to the new contract, “supplied from 2022 and guaranteed delivery to the European Union”, and according to the first contract, Pfizer only needs to “do its best” to ship the pre-agreed quantity.

So far, Pfizer has complied with its commitments to the European Union, and deliveries in the first quarter of this year were slightly higher than originally planned.

Another major change since the early contract is the emergence of variants, and fears that vaccines may be ineffective against them.

EU officials said that the government can refuse to buy vaccines that cannot prevent mutations, and companies are expected to adjust their vaccines quickly, possibly at a high price.