The EU started procurement later than the UK and the US, and when severe supply shortfalls occurred in the first half of 2021, it became clear that most contracts signed by the EU Commission did not include specific provisions to address supply disruptions, according to a overview released this month by the European Court of Auditors (ECA).
The EU’s negotiators did not fully analyse the production and supply chain challenges of vaccine production until after signing most of the contracts, concluded the auditors.
Procurement conditions were tightened, though, in the later contracts with vaccine manufacturers. Those signed in 2021 had stronger provisions on key issues such as delivery schedules and production location than those signed in 2020, found the audit.
But the ECA team also identified as troublesome the fact that netiher the Commission’s nor the Council’s review of the COVID-19 pandemic examined the performance of the vaccine procurement process, beyond its overall outcome.
Recommendations
The auditors highly recommend that the EU executive create pandemic procurement guidelines on the basis of lessons learnt.
They also suggest that the Commission carries out stress tests, running exercises to evaluate all parts of its updated pandemic procurement strategy and framework, including information and intelligence gathering, to identify any weaknesses and areas for improvement and publish the results.
In a published response to the ECA document, the Commission said it has accepted the auditors' recommenations.
“Whether the Commission and member states have procured COVID-19 vaccines effectively is a very pertinent question,” said Joëlle Elvinger, the ECA member who led the audit. “We chose this topic given the central role that vaccines played in the response to the COVID-19 pandemic, the unprecedented nature of the EU’s involvement in vaccine procurement and the expenditure involved. Our findings are intended to contribute to the ongoing development of the EU’s pandemic preparedness and response capabilities.”
EU’s vaccine procurement process
When the EU’s vaccine procurement process started in mid-2020, it was not known if or when a COVID-19 vaccine would reach the market. The EU had to act ahead of clear scientific data on vaccine candidates’ safety and efficacy, and therefore chose to back a range of candidates to create an initial portfolio of different vaccine technologies and manufacturers, reported the ECA.
By November 2021, the Commission had signed €71bn worth of contracts on behalf of the member states to purchase up to 4.6bn COVID-19 vaccine doses. Most of these contracts are advance purchase agreements in which the Commission shares the development risk of a vaccine with the vaccine manufacturers and supports the preparation of at-scale production capacity through upfront payments from the EU budget.
Negotiations followed a procurement process laid down in the EU’s Financial Regulation, while the heart of the process was the preliminary negotiations that took place before a tender invitation was sent out.
The EU had secured sufficient doses to vaccinate at least 70% of the adult population by the end of the summer of 2021, after experiencing challenging supply shortfalls from two manufacturers in the first half of 2021. The Commission could, and in one case did, take manufacturers to court.
Funding for vaccine procurement came partly from the Emergency Support Instrument (ESI) – a financing instrument directly managed by the Commission that allows it to provide support within the EU in case of disasters – and mainly from direct contributions from member states’ budgets.