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The Procurement of EU Covid-19 Medical Supplies: Rights and Wrongs of the Joint Procurement Agreements versus Advanced Purchase Agreements

Emma McEvoy and Delia Ferri (Maynooth University)

Last month we witnessed the escalation of the EU-UK row over vaccine supplies, namely regarding the distribution of the AstraZeneca vaccines, which was discussed by Glencross in this blog. The tipping point of the row occurred when the European Commission President, Ursula von der Leyen, suggested that the EU should consider placing tougher controls on exporting vaccines to vaccine-producing countries. Speaking to a German media group, she said, “We have the option of banning a planned export… that’s the message to AstraZeneca: you must fulfil your contract with Europe first before you start delivering to other countries.” Specifically, President Ursula von der Leyen was referring to the point that the EU had exported 10.9 million jabs to the UK since February and had received no imports from the UK. The row subsided, and no export ban was introduced. Instead, the UK and the EU issued a harmonised and collegial joint statement, with both sides agreeing to “create a win-win situation and expand vaccine supply for all”.

This political spat was in reality the tip of the iceberg, as the conclusion of the EU contracts for the procurement and supply of the vaccines has been highly controversial. The slowness of the vaccination process across the EU and the lack of availability of doses across Member States has raised harsh criticism since January. The initial refusal of the Commission to give public access to documents concerning the purchase of vaccines against COVID-19 prompted the European Ombudsman to open an inquiry. During the course of the inquiry, the Commission eventually published redacted versions of contracts with pharmaceutical companies, however information regarding the conclusion of the EU contracts for the procurement and supply of the vaccines remains elusive.

It is worth recalling that, as noted in an earlier research piece, over the last year and following a rocky start, the EU has made the best use of the “Joint Procurement Agreement (JPA)” to procure urgent medical supplies. The JPA is the main innovative instrument available to the European Commission to organise the procurement of vaccines and medications in preparation for pandemics. In particular, the JPA was designed to secure equitable and cost-effective access to medical supplies for participating EU Member States during serious health crises. The JPA was introduced in 2014 after the H1N1 influenza pandemic influenza highlighted the costs and inefficiencies of Member States competing against each other for scarce medical resources. On the basis of Article 168(5) TFEU, Decision 1082/2013/EU on serious cross border threats to health was then adopted, allowing the EU institutions and the Member States to engage in joint procurement procedures “with a view to the advance purchase of medical countermeasures for serious cross-border threats to health”. Since the JPA was introduced, it has rarely been used, bar the purchase of antivirals and medical countermeasures for serious cross-border threats to health. Within the first six months of the outbreak of the Covid-19 pandemic, the Commission relied heavily on the JPA to co-ordinate and organise the purchase of medical supplies and equipment. On behalf of participating states, contracts were concluded for gloves and coveralls (for a maximum amount of €1.4 billion), eye and respiratory protection (for a maximum amount of €150 million), ventilators/respirators (for a maximum amount of €790 million) and laboratory equipment. Those contracts effectively and efficiently assisted with the fair distribution of in-demand medical supplies. Furthermore, the JPA strongly signalled the willingness to pool overstretched national resources for the collective good.

However, separately from the JPA, perhaps (we can say ex post) less successfully, the Commission concluded a series of Advanced Purchase Agreements (APAs) with producers. By January 2021, the Commission, together with a Joint Negotiation Team, representing Member States secured over 2 billion doses, based on agreements with; BioNTech-Pfizer for up to 600 million doses; AstraZeneca for up to 400 million doses; Sanofi-GSK for up to 300 million doses; Johnson and Johnson for up to 400 million doses; CureVac for up to 405 million doses; Moderna for up to 160 million doses; Novavax for up to 200 million doses, and with Valneva, for up to 60 million doses. Once the vaccines become available to the European Commission, the participating states to the contract are responsible for paying for the supplies. Those APAs have been concluded by the Commission on behalf of Member States as part of its vaccine strategy, and via the Emergency Support Instrument.

Hence, the process for the procurement of the vaccines differed to those used for the co-ordinated procurement of the medical supplies and equipment. Why so? The process naturally had to differ, as the Commission was not able to purchase ‘off the rack’ products, and instead invested in the purchase of proposed Covid-19 vaccines. So, what has gone so wrong? The Commission concluded enough contracts for the purchase of vaccines to protect the entire EU population. While the details of the contracts are now relatively known, limited information has been made available to the public on the general considerations relating to production capacity and the ability to deliver on time. The Commission has been publicly very critical of AstraZeneca’s failure to deliver ordered supplies, with the company vehemently denying that they breached any of the contractual conditions. From the outset, the problem does not appear to lie purely with the procurement or legal mechanics relied on to conclude the various contracts for the supply and provision of vaccines. Instead, the problems seem much more straightforward. The EU acted too slowly, and ultimately, overestimated the production ability of the vaccine producers. These reasons were as much as accepted by President Ursula von der Leyen, who has previously agreed that “We were late to authorise. We were too optimistic when it came to massive production and perhaps too confident that what we ordered would actually be delivered on time.” Production problems, equitable global distribution concerns and issues relating to potential side effects were not unimaginable and were considered, but overall, poorly managed.

Where to go next? The WHO has clearly stated that there is no cure for Covid-19, and they do not expect one to be found in the near future. Countries will therefore need to continuously update and rollout annual vaccination plans. From an economic perspective, the IMF have estimated that the global economy is expected to expand by 6% as vaccines are deployed. In order to re-build economies and protect the most vulnerable citizens, the Commission should now formulate a stronger plan to utilise the JPA to secure the equitable purchase of timely and cost-effective vaccines for all members of society, and ideally, this should be done in partnership with the UK, as well as other third countries.

Emma McEvoy is a Postdoctoral Researcher in the SHAPES Project at the ALL Institute, Department of Law, Maynooth University.

Delia Ferri is a Professor of Law at Maynooth University and co-Director of the ALL Institute.

The views expressed in this blog reflect the position of the authors and not necessarily that of the Brexit Institute Blog.

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