The EU’s specialized centralized vaccine procurement system has managed to create an initially diversified portfolio of vaccine candidates and procure sufficient doses of Covid-19 vaccines, the European Audit Office said.
“However, the EU started procurement later than the UK and the US, and when a severe supply shortfall occurred in the first half of 2021, it became clear that most contracts signed by the European Commission did not include specific provisions to address supply disruptions.” The performance of the procurement process has not been sufficiently evaluated, concludes a special report published by the European Court of Auditors (ECA).
The auditors also note that the Commission has not yet studied and benchmarked the process to draw lessons for the future, and it currently has no plans to test its pandemic procurement system through stress tests or simulations.
“Whether the Commission and Member States have effectively procured vaccines against Covid-19 is a very pressing question,” said Joelle Elvinger, the ECA member who led the audit.
“We chose this topic given the central role that vaccines play in the fight against the Covid-19 pandemic, the unprecedented nature of the EU’s involvement in vaccine procurement and the costs involved. Our findings are intended to contribute to the ongoing development of the EU’s pandemic preparedness and response capabilities.”
When the EU started its vaccine procurement process in mid-2020, it was not known whether a Covid-19 vaccine would reach the market. The EU had to act in anticipation of clear scientific data on the safety and efficacy of candidate vaccines and therefore decided to support a number of candidates to create an initial portfolio of different vaccine technologies and manufacturers. By November 2021, the Commission has signed contracts worth €71 billion on behalf of Member States for the procurement of up to 4.6 billion doses of the Covid-19 vaccine. Most of these contracts are advance purchase agreements, in which the Commission shares the risk of vaccine development with vaccine manufacturers and supports the preparation of large-scale production facilities through advance payments from the EU budget, according to the ECA.
The negotiations took place in accordance with the procurement process set out in the EU Financial Regulation, while the essence of the process was the preliminary negotiations that took place before the invitation to tender was sent. The EU has secured sufficient doses to vaccinate at least 70% of the adult population by the end of summer 2021, following severe supply shortfalls from two manufacturers in the first half of 2021. The commission could, and in one case did, prosecute manufacturers, the ECA said.
However, according to auditors, EU negotiators did not fully analyze the production and supply chain issues of vaccine production before signing most contracts. The terms of the contracts have changed over time, and contracts signed in 2021 have tighter provisions on key issues such as delivery schedules and production locations than contracts signed in 2020. The terms negotiated differ for each contract, with the exception of compliance with the principles of the Product Liability Directive, the ECA said.
“Member States have agreed to reduce manufacturers’ risks related to liability for adverse effects (the principle of risk sharing in the vaccine strategy). The terms of the contracts entered into with the manufacturers of the Covid-19 vaccines differ from those before the pandemic, as member states have assumed some of the financial risks that vaccine manufacturers normally assume.”
The Commission proposed to continue the procurement approach established for Covid-19 for future health crises, but neither the Commission’s nor the Council’s “lessons learned” reports on the Covid-19 pandemic addressed the effectiveness of the vaccine procurement process beyond its general results, – noted the auditors. The auditors recommend creating pandemic procurement guidelines based on lessons learned, and stress testing the EU’s approach to procurement of medical countermeasures to be better equipped in the event of a future need.
