A vial of the AstraZeneca Covid-19 vaccine. Picture: REUTERS/CLODACH KILCOYNE
A vial of the AstraZeneca Covid-19 vaccine. Picture: REUTERS/CLODACH KILCOYNE

Frankfurt/Brussels/Rome — Italy has blocked a shipment of the AstraZeneca coronavirus vaccine to Australia, using a recently introduced EU regulation for the first time, in a move that risks triggering a global backlash.

Under the export transparency mechanism, countries have to inform the European Commission, the EU’s executive arm, of their decisions to block or allow exports of vaccines outside the EU. The commission didn’t oppose Italy’s decision, an EU official said. The company declined to comment.

The move comes after Italian Prime Minister Mario Draghi, during an EU summit last week, called for a tougher approach against companies that don’t respect their delivery commitments.

The Italian foreign ministry said the decision involving 250,700 doses was taken as a consequence of continued vaccine scarcity in Europe and Italy, and taking into account AstraZeneca supply delays. It also said Australia is considered a “non-vulnerable” country.

Australia has asked the EU to review the decision by Italy and broached the topic in a previously planned call with the EU’s top trade official on Friday.

“Australia has raised the issue with the European Commission through multiple channels,” Greg Hunt, Australia’s health minister, told reporters. “We have asked the European Commission to review this decision.”

The EU’s top trade official Valdis Dombrovskis spoke with his Australian counterpart on Friday, according to EU officials familiar with the discussion. They asked not to be identified because the talks were private.

The impact is likely to be largely symbolic given that the number of the vaccines blocked is relatively small compared to the company’s expected deliveries in the EU and elsewhere. But the move highlights Draghi’s intention to be tougher on pharmaceutical companies that don’t respect their commitments to the EU, and could encourage retaliatory protectionist measures by other governments.

In January, the commission introduced legislation that allows curbs on exports of coronavirus vaccines if drugmakers fail to meet delivery targets within the bloc. The rules came into force after AstraZeneca had informed the EU that it was unable to meet its commitments under an advance purchase agreement.

Damaging protectionism

Italy is the first country so far to block the export of vaccines outside the EU, while more than 170 requests have been authorised so far, according to a separate EU diplomat.

The decision could re-ignite concerns echoed by many, including the World Health Organization, that the EU is engaging in damaging protectionism, at a time when countries around the world race to immunise their populations amid growing concerns over fast-spreading coronavirus variants.

Asked by a reporter in Sydney on Friday whether he blamed Italian authorities for the block, Prime Minister Scott Morrison said: “They’re certainly responsible for exercising the veto right they had through the EU process about those supplies coming to Australia. “It’s important contracts are honoured.” 

Australia’s health minister Greg Hunt downplayed the impact, even as the nation starts its rollout of the AstraZeneca vaccine. The company has a “deep, broad, global supply chain”, Hunt said.

Still, Italy’s move was a reflection of “arguably the most intensely competitive international environment since, perhaps, World War 2” as nations jostle to secure vaccines, masks and ventilators, Hunt told reporters.

Australia began its rollout of the Pfizer-BioNTech vaccine about two weeks ago. It’s set to start domestic production of the AstraZeneca product, targeting 1-million doses a week from late March.

The nation of 26-million people has recorded about 29,000 cases of Covid-19 since the pandemic began, and has come close to eliminating community transmission of the virus through mandatory 14-day quarantine for overseas arrivals, vigilant contact tracing methods and encouraging frequent testing.

The EU has so far administered doses equivalent to just more than 8% of its population, compared to 32.3% and 24.3% in the UK and the US, respectively, according to Bloomberg’s vaccine tracker. The EU’s target is to inoculate at least 70% of the region’s adult population by the end of its summer.

The export controls may also prove to be a growing headache for drugmakers with so many manufacturing sites in the EU. Most companies at the forefront of the vaccine effort have production capacity in the bloc that is used to serve countries beyond it, or must be sent outside for completion before returning.

Johnson & Johnson, which is expected to receive approval for its vaccine from Europe’s medicines regulator next week, explicitly agreed in its contract with the EU that it would be sending vaccines to the US to be put in vials and packaged before returning them.

Draghi asked leaders at the latest summit to adopt a more resolute and pragmatic approach to speed up vaccinations and told them the EU’s rollout has to move much faster. He wasn’t convinced by a slide shown to leaders indicating that available doses will be sufficient to vaccinate the bulk of the EU’s population by the end of September. Draghi said deliveries in the second and third quarters couldn’t be predicted.

The new Italian prime minister is working on an overhaul of Italy’s slow and uneven vaccination campaign, focusing on logistics and recruiting the military to help, as new variants accelerate the spread of Covid-19.

Update: March 5 2021 
This article has been updated with comment from Australian authorities.

Bloomberg

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