Mario Draghi takes action. Barely in office, the new head of government of Italy initiated an export ban on deliveries of the AstraZeneca vaccine to a third country. Originally, around a quarter of a million cans were to go to Australia from one of the Group’s Italian plants. But because the British-Swedish group has not yet kept its contractual commitments to the EU, Draghi pulled the rip cord after consultation with the EU Commission last Friday – as the first EU member state ever.
While Rome and Brussels see themselves in the right in view of the sluggish vaccine deliveries from AstraZeneca, the German pharmaceutical industry has sharply criticized the approach. “We don’t believe in export bans. Measures like the one now in Italy can become a boomerang that puts the entire global supply chain in the pharmaceutical industry at risk, ”said the president of the pharmaceutical association vfa, Han Steutel, to WELT.
In the midst of the corona crisis, the pharmaceutical companies had proven last year that their supply chains for the global supply of drugs and vaccines are robust. “The EU and the individual member states shouldn’t endanger that.”
The association president also refers to the complex production, which consists of several intermediate steps and is dependent on preliminary products from different countries. “If the example catches on, it could happen that countries do not approve intermediate products for export to Europe – because they fear that they will not get anything from the finished product afterwards,” warned Steutel.
Another problem is the large amount involved in the specific dispute in Italy. “The fact that over 250,000 doses are now blocked for the first time in the midst of the pandemic and are not inoculated at all for the time being is extremely problematic,” he criticized. The industry has developed vaccines in record time, but it is not possible in advance to estimate exactly how high the yield will actually be, especially with vaccine production, which is prone to fluctuations.
The EU Commission in Brussels introduced a license requirement for exports of corona vaccines in January after a dispute with AstraZeneca. Since then, manufacturers have had to obtain approval for the export of corona vaccines produced in the EU to third countries. The measure, initially limited to the first quarter and now extended to June, is intended, in the Commission’s view, to ensure more transparency and prevent the export of large quantities of vaccine if manufacturers have not yet fulfilled their obligations towards the EU.
Italy in particular has taken a particularly tough stance in this regard under Draghi. Like Germany, the country suffers from a vaccination rate that is far too slow: Both countries are currently on par with the vaccination rate at 5.4 percent – and far behind countries such as Israel, the USA and Great Britain. Around 500,000 doses of AstraZeneca’s vaccine have been inoculated in Italy so far.
For the EU, the dispute over vaccine exports is a dilemma: On the one hand, Europe is under massive pressure to increase vaccine production and improve the vaccine supply for its 450 million citizens. Several EU countries such as Hungary and, most recently, Austria and Denmark have already pulled out and have concluded their own contracts or alliances because the route via Brussels is too slow for them.
On the other hand, such a control system has an extremely deterrent effect on the export-oriented pharmaceutical industry – and could thus become a penalty for Europe as a location. “Pandora’s box has been opened. A mistake if the transparency mechanism de facto leads to an export ban, ”criticized Bernd Lange (SPD), chairman of the EU Parliament’s trade committee, on Twitter. “Could have fatal consequences for global supply chains, for example.” An escalation is virtually programmed.
In Brussels, on the other hand, they point out that exports would not be stopped as long as contracts with the EU are complied with. So far there have already been 174 such applications, all of which have been approved – while almost no corona vaccines have been exported to other countries from the USA and Great Britain.
Australia needs help
Overall, the EU had invested heavily in vaccine research and the development of production capacities in the past year. Under the direction of Brussels, contracts were signed with six different manufacturers for the EU member states, including the delivery of up to 400 million cans from AstraZeneca. Most recently, the company reduced the promised delivery volume for the first quarter from 80 to 40 million. The reason is manufacturing problems in an important plant in Belgium.
The dispute over exports is also so delicate because continental Europe has so far been one of the most important locations for the production of corona vaccines by Western manufacturers – and supplies from Canada, Japan or Australia, for example, depend on Europe delivering. The government down under has therefore now asked the EU Commission for help in order to get the expected vaccine from AstraZeneca.
This has so far been produced in Belgium, the Netherlands and Italy. In addition, further capacities are currently being built in Germany in cooperation with IDT Biologika in Dessau. “In the short term, global demand is much greater than can be produced. But it’s not far to breakeven, ”said vfa President Steutel.
This year, nine billion doses of corona vaccine would be produced in the western world alone. If you add in the production from Asia, this number grows to 13 billion cans. “70 to 80 percent of the global production of corona vaccines takes place within the EU. This is a huge boost, especially for Germany with its important pharmaceutical industry, especially since the need for it will remain great in the future. “
The research institute Prognos has calculated on behalf of the vfa how great the weight of the pharmaceutical industry is for German exports. The study is exclusively available to WELT. Accordingly, the German pharmaceutical industry has increased its share in the past eleven years, despite the financial crisis in 2009 and now the Corona crisis.
Between 2008 and 2019 there was a huge increase in exports of pharmaceutical products. According to the study, these increased by 90 percent to over 80 billion euros. Italy developed even more dynamically. The value of pharmaceutical exports tripled between 2008 and 2019 to 30 billion euros. Overall, with a world export share of 15 percent, Germany is one of the most important pharmaceutical export countries in the world.
The distortions caused by the Corona crisis could not have harmed pharmaceutical exports Made in Germany. In the second quarter of 2020, and thus in the middle of the first wave of the pandemic, these increased by seven percent compared to the previous year. Similar effects could have been seen in the other large EU countries with a noteworthy pharmaceutical industry.
Despite the strength of the industry, it is not a good idea to bring pharmaceutical production back to Germany and Europe, as politicians at times called for in the midst of the pandemic. “Bringing back production makes no sense – we should rather rely on expanding our expertise and our capacities in high-tech pharmaceutical products,” says Steutel. “With mRNA vaccines in particular, Germany has the chance to go into the fast lane – we shouldn’t ruin that with export bans.”