Questions & Answers on vaccine negotiations

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This article is brought to you in association with the European Commission.


For months, the European Commission has been building a portfolio of several vaccines, based on different technologies, at a fair price. A common, diversified portfolio of vaccines maximises our chances of securing them at the scale needed and as quickly as possible.

Choosing several suppliers increases the chances of having faster access to one or several successful vaccines. In addition, when negotiating together, the purchasing power is greater and conditions such as price and delivery times can be more advantageous. 

So far, the EU’s portfolio of vaccines totals 2.3 billion doses – more than enough to protect the entire EU population.

Did all Member States agree with this approach?

All Member States have endorsed this approach, which is at the heart of the EU Vaccines Strategy. At the European Council in June 2020, the Member States of the European Union mandated the Commission to organise the joint procurement of vaccines. As a result, the European Commission has started talks with the most promising vaccine manufacturers.

Who carries out the negotiations?

The Commission jointly with a Joint Negotiation Team carries out the negotiations with vaccine suppliers. The members of the Joint Negotiation Team – representing seven Member States – are appointed by a Steering Committee. The Steering Committee discusses and reviews all aspects of the Advanced Purchase Agreement (APA) contracts before signature. All EU Member States are represented in this Committee, which meets on a weekly basis.

How are Advanced Purchase Agreements negotiated?

The Negotiation Team first holds exploratory talks with the company to find out if there is sufficient common ground to proceed with detailed contractual negotiations. If that is the case, a tender invitation is sent to the company, which then has to propose an offer.

An APA is concluded when both sides have finalised the contractual work. This is discussed and agreed with the Steering Committee. The conclusion of an APA requires the approval of the Commission.

If the APA provides for an obligation for the Member States to purchase vaccine doses Member States have five working days to notify if they wish to opt out. The contract is only signed if at least four Member States are ready to be bound by it.

How is an APA different from a contract for deliveries?

In the negotiation process, Member States tell the Commission how much of a certain vaccine they want to order. 

But they are then responsible for purchasing the vaccines when they become available, once they prove to be safe and effective. The Commission does not sign contracts for deliveries to individual countries. Advance Purchasing Agreements allow the Commission to secure a certain number of doses. It is then for Member States to purchase these doses, activate potential options included in the APA to order additional doses, and conclude specific contracts with the companies.

What were the results of this joint approach so far?

The EU has secured 2.3 billion doses, based on the agreements with six different companies:

In addition, the Commission concluded talks with Novavax, for up to 200 million doses. The vaccines produced by two of these companies have been approved and placed on the market by the Commission: BioNTech/Pfizer (21 December 2020) and Moderna (6 January 2021).

Who approves a vaccine?

A vaccine developer that wishes to put a vaccine on the market in the EU needs to request a marketing authorisation for the vaccine. The request is submitted to the European Medicines Agency (EMA), which assesses the safety, efficacy and quality of the vaccine. If the EMA gives a positive recommendation, the Commission can proceed with the authorisation of the vaccine on the EU market.

What were the criteria for deciding which vaccines should be ordered?

The production capacity and the ability to deliver on time are the main considerations. Other criteria include liability issues with respect to all contracts and prices. To decide whether an Advance Purchase Agreement should be concluded, the following non-exhaustive criteria were taken into account:

  • Soundness of scientific approach and technology used
  • Speed of delivery at scale, capacity, timelines for supply
  • Logistical challenges, cooling chains etc.
  • Costs
  • Liability
  • Coverage of different technologies in order to maximise the chances of having a successful candidate
  • Global solidarity, i.e. a commitment to making future doses of vaccines available for lower and middle income countries

What is the price of the vaccine?

Vaccines have to be affordable. This is also part of the rationale for doing this together as a team: this reduces costs for everyone and gives us a stronger negotiating position.

When it comes to prices, all companies require that such sensitive business information remains confidential between the signatories of the contract.

The details of the contracts concluded are known to the Commission and all 27 Member States, who make the decisions for the vaccine of their choice and pay the purchase price.

Even after a contract has been concluded with the EU, the manufacturers still have an interest in marketing their vaccines on the world market in the best possible way. Therefore, there is a legitimate interest of the companies, which have made very large investments in research and in production capacity, that the terms of the contracts with the EU are not publicly available during this phase of intense global competition. Due to contractual obligation, the Commission cannot indicate at this stage the specific pricing per dose.

The Commission has mobilised funds to increase the production capacity of the suppliers that it signed APAs with. It has provided more than €2 billion from the Emergency Support Instrument. Member States have agreed to contribute an additional €750 million.

An important point and principle is that the price of the vaccine is the same for all EU Member States.

Who decides how many vaccines a Member State gets?

Member States indicate early on in the negotiation phase with a company if they are interested in a particular vaccine and what quantity they would want to buy.

Once the contract is concluded, the vaccines are allocated according to a distribution key, based on the size of the population. So Member States receive vaccines under the same conditions – on a pro-rata basis, at the same price.

Adjustments of quantities of vaccines between Member States are possible, according to their needs. For instance, a Member State may decide not to buy additional vaccines from the options negotiated, in which case other Member States can take over those options and buy more of that particular vaccine.

Who orders the vaccines?

Member States place orders with vaccine suppliers directly, indicating the timing and place of deliveries of vaccines, for instance, and specifying logistic aspects.

Who distributes the vaccines?

Delivery to national distribution hubs is ensured by the manufacturers. Further distribution to vaccination centres is ensured by Member States, who are also responsible for the vaccination of their population.

Do producers have enough capacity to manufacture the vaccines?

There is already substantial vaccine production capacity in the EU. The Commission has supported the increase in production capacity – and continues doing so.

It has frontloaded money to support the production capacities of all the vaccine suppliers it signed contracts with, allowing larger volumes of vaccines to be produced. The European Investment Bank is providing additional financial support, backed by the EU budget. This has been the case for CureVac and BioNTech, for example. 

The capacity to supply within the EU is also one of the main criteria taken into account when engaging on negotiations with companies.

What was the timeline of negotiations with the vaccine suppliers?

June 202011European Investment Bank (EIB) and BioNTech conclude a €100 million debt financing agreement to support the company´s vaccine programme and to expand the firm´s manufacturing capacity. 
 17    Adoption of the EU Vaccines Strategy  Start of negotiations with all six companies 
July31Conclusion of the exploratory talks with Sanofi-GSK
August13Conclusion of the exploratory talks with Johnson & Johnson
14Commission approves APA (Advanced Purchasing Agreement) with AstraZeneca (for the purchase of 300 million doses of the vaccine, with an option to purchase 100 million more)
20Conclusion of exploratory talks with CureVac
24Conclusion of exploratory talks with Moderna
27Entry into force of the APA with AstraZeneca
September9Conclusion of exploratory talks with BioNTech Pfizer
18Entry into force of the APA with Sanofi-GSK (option to purchase up to 300 million doses of the Sanofi-GSK vaccine)
October8Commission approves APA with Johnson & Johnson (purchase of vaccines for 200 million people, and option for an additional 200 million people)
21Entry into force of the APA with Johnson & Johnson
November11Commission approves the APA with BioNTech Pfizer (purchase of 200 million doses, plus an option to request up to a further 100 million doses)
19Commission approves the APA with CureVac (purchase of 225 million doses, plus an option for a further 180 million doses)
20Entry into force of the APA with BioNTech Pfizer
25Commission approves APA with Moderna (purchase of 80 million doses, plus an option for a further 80 million doses)
30Entry into force of the APA with CureVac
December4Entry into force of the APA with Moderna
15Commission adopts decision to exercise option of up to 100 additional doses (BioNTech Pfizer) and 80 million additional doses (Moderna)
17Conclusion exploratory talks with Novavax (100 million doses, plus option of 100 million additional doses)
January 20208Proposal to purchase an additional 200 million doses of the BioNTech Pfizer vaccine (with the option to acquire another 100 million doses)

Are the contracts with the companies publicly available?

Contracts are protected for confidentiality reasons, which is warranted by the highly competitive nature of this global market. All companies require that such sensitive business information remains confidential between the signatories of the contract. This is in order to protect sensitive negotiations as well as business-related information, such as financial information and development and production plans.

Disclosing sensitive business information would also undermine the tendering process and have potentially far-reaching consequences for the ability of the Commission to carry out its tasks, as set out in the legal instruments that form the basis of the negotiations.

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Comments

  1. Very good article, with a lot of valuable info.
    Just to be precise, EMA recommends national authorities to grant a marketing authorization. So, the green light is given by the National Agencies.
    Congratulations!

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