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Letter and answer from COM on transparency of vaccine contracts

(Letter sent at 12th October 2020)

Honorable President von der Leyen,
Honorable Commissioner Kyriakides,
Honorable Commissioner Hahn,

we, the undersigned Members of European Parliament, who are responsible for the Budget 2020, have supported the Draft Amending Budget 8/2020 for the necessary and fast response to counteract the consequences of the COVID-19 on the European health systems and to bring forward a vaccine against COVID-19. We warmly welcome the strengthened activities on health and the production of vaccines from the European Commission. When it comes to health the European Union should take a leading role.

For the latter purpose, the Commission has already concluded Advance Purchase Agreements (APAs) with several pharma companies. In the Draft Amending Budget 8/2020 the European Parliament has approved up-front payments to the companies, like Astra Zeneca.

However, the Commission has so far denied providing the European Parliament with any further information on the procurement process as well as the contract conditionalities of the APAs referring to confidentiality of the contracts. Further, we are still waiting for an answer, how the Commission will ensure, that access to the vaccines will be granted in a just manner, reaching the most vulnerable first.

We as budgetary authority and Members of Parliament responsible for the budget 2020 regret the lack of transparency in this matter and call on the Commission to make the conditions of the APAs transparent as well as disclose all APAs to the Members of European Parliament.

Given that vaccines are being developed also thanks to the public financial support with taxpayers’ money from the EU and EU member states, it is especially important that the public interest of scientific rigor, safety and transparency is strongly preserved.

A disclosure of the APAs is key for ensuring our role as budgetary authority. If necessary, we would start parliamentary initiatives guaranteeing this will be respected.

We would like to thank the Commission in advance for their cooperation and the disclosure of the APAs concluded in 2020 and in the future.

Kind regards,
Rasmus Andresen (Greens/EFA),
Spokesperson of the Greens/EFA in the Committee of Budgets
Shadow rapporteur for the Budget 2020

Co-signatories:
Monika Hohlmeier (EPP),
President of the Committee of Budgetary Control,
Rapporteur for Budget 2020

Pierre Larrouturou (S&D),
Shadow rapporteur for Budget 2020,
Rapporteur for Budget 2021

Valerie Hayer (Renew),
Spokesperson for Renew in the Committee of Budgets

Dimitrios Papadimoulis (GUE/NGL),
Spokesperson for GUE/NGL in the Committee of Budgets,
Shadow rapporteur for Budget 2020 and Budget 2021

(Answer from 15th December 2020)

Dear Honourable Member,

I would like to thank you and the co-signatories for your letter on the Draft Amending Budget 8/2020 and the transparency regarding the financial support for COVID-19 vaccines via the Advance Purchase Agreements (APAs).

As you mention in your letter, a swift and coordinated response to counteract the consequences of COVID-19 on the European health systems is vital. The European Commission is taking, and will continue to take, a leading role in proposing mitigation measures and working hand in hand with the EU Member States in protecting lives and livelihoods.

An open and inclusive dialogue with the European Parliament and citizens on the European vaccine strategy and its implementation is essential. Commission representatives have attended Parliamentary Committee meetings and responded to numerous parliamentary questions. The Commission organised a public event on the EU Health Policy Platform to inform the public about. Moreover, the conclusions of each step of the strategy were announced publicly. The European Parliament ’s support is and remains indispensable, also to ensure a coordinated European approach. Iwould like to take this opportunity to thank you for this support.

The access and deployment ofCOVID-19 vaccine is key in containing the pandemic, saving lives, protecting health care systems and helping to restore our economy. Together with the Member States, the Commission has conducted intensive negotiations with several vaccine manufacturers at the same time in order to secure the best possible agreements with companies so that affordable, safe and effective vaccines become available to Member States as quickly as possible. Joint action at EU level has proven to be the surest, quickest and most efficient way ofachieving these objectives. No Member State on its own has the capacity to deploy the investment in developing andproducing a sufficient number ofvaccines to become available in such a short period oftime. Coordinated European action allows much more affordable deals than deals that individual Member States would have concluded and ensures that European taxpayers ’ money is used and spent in the most efficient and effective way. Based on its experience with the intense, sensitive and multiple negotiations at the same time, the Commission considers that providing access to the APAs during these negotiations would be harmful for the entire procurement procedure. It would put at serious risk the goal of realising cost-efficiently the advance purchase of COVID-19 vaccines for all the Member States. Each APA contains commercially sensitive information. Its release can also undermine the Commission’s negotiation position in trying to secure the best possible conditions infuture agreementsforthe next generation ofvaccines as well as  egatively affect the ongoing procurement procedure for the purchase of COVID-19 vaccines. It can also potentially damage the competitive position ofcompanies and erode their confidence in doing business in and with Europe.

In the case of COVID-19 vaccines, as you are aware, several negotiated procurement proceduresfor the award ofAPAs are ongoing at the same time. The Commission acts as a central purchasing body in the name and on behalfofall Member States for ensuring the advance purchase of vaccines against COVID-19, as provided for by the Council in the emergency support instrument (ESI) Regulation‘, under its Article 4(5)(b), 4(6)(b) and Article 4(7)1 2. The Member States have entrusted this role to the Commission, notforthe management ofone single procurement procedure, but for running the entire procurement process. The Commission therefore acts as a central purchasing body in all individual negotiated procurement procedures, which arepart andparcel ofa single, coordinatedprocess3 for the advance purchase of COVID-19 vaccines from different companies as explained in COM(2020)245 final 2.14. The final objective is to build a robust and diverse portfolio of vaccine candidates at the disposal ofMember States.

All Member States take part in the Steering Board (the Board)for the joint EU approach to COVID-19 vaccines procurement. The Board discusses and reviews all aspects ofevery APA before signature, including price, liability provisions and delivery schemes. The members of the Joint Negotiation Team, who negotiate the APA with the vaccine developers, are appointed by the Board and report to and seek guidancefrom the Board on a regular basis5.

All members are appointed by their Governments and signed declarations of absence of conflict ofinterest and confidentiality. The negotiations are therefore a truly collective effort in which all Member States are involved. The Commission is acting in full compliance with all applicable rules regarding good administrative practice andfinancial management, and it is confident that the process will
stand anyfuture review or audit.

Concerning liability, the Commission has ensured that all APAs arefully compliant with EU law andfully respect and protect citizens ’ rights, in line with the Product Liability Directive. In accordance with the EU liability rules, liability remains with the manufacturer. However, the APAs provide for Member States to indemnify the manufacturerfor possible liabilities incurred, under the specific conditions set out in the APA. The Commission has made clear throughout the implementation of the Vaccine Strategy that it will never make any compromises on the application of the existing rules that apply to bringing a medicinal product into the market. The provisions on liability and indemnification do not alter in any way either the applicable rules or the burden ofproofborne by the companies to demonstrate the safety and efficacy of their products.

Once a vaccine becomes available, all Member States will have equal access to the available doses, according to the terms ofthe APAs. The Agreements6 provide explicitly that access to vaccine doses will be allocated to participating Member States according to the population distribution key. The Member States will then decide to whom they will offer the vaccines among their population. It will be important to coordinate distribution and usage within the EU. To this end, the Commission has published a Communication on vaccine deployment7 and is working closely with Member States to define needs and coordinatefuture vaccination strategies.

As outlined by Commissioner Kyriakides during the European Parliament ’s Plenary debate, the Commission will, within the contractual constraints outlined above, make the information from the contracts available to nominated members of the Parliament, with specific arrangements, once the sensitive ongoing negotiations are concluded.

Iwould like to thank youfor your continued support and collaboration on these complex but extremely important aspects.

Yours faithfully,

Ursula von der Leyen

1 Regulation (EU)2016/369, as modified by Regulation (EU) 2020/521.
2 “Emergency support under this Regulation may be granted in any ofthefollowingforms: […] b)procurement
by the Commission on behalfofMember States based on an agreement between the Commission and Member
States’’. “In the event of procurement procedures as referred to in points (b) […] ofparagraph 5, the
Commission shallfollow the rulesset out in Regulation (EU, Euratom) 2018/1046forits own procurement“
3 COM(2020)245final §2.1,fourth indent in which the advantages ofa centralprocurementprocess are outlined.
4 “In order to scale this approach up to cover the whole EU, the Commission proposes to run a central
procurement process, which creates a number ofimportant advantages. In particular, all EU Member
States will be able to benefitfrom an option to purchase vaccines via a single procurement action. This
process also offers vaccine producers a significantly simplified negotiation process with a single point of
contact, thus reducing costsfor all. Centralising vaccine procurement at EU level has the merit ofspeed
and efficiency by comparison with 27 separate processes. A truly European approach would avoid
competition between Member States. It creates solidarity between all Member States, irrespective ofthe
size oftheirpopulation and their purchasing power. A рап-EU approach will increase the EU’s leverage
when negotiating with industry. It will also enable us to combine the scientific and regulatory expertise
ofthe Commission and the Member States. ”
5 Annex to C(2020) 4192final, “Process and governance”.
6 Annex to C(2020) 4192final, “Advance Purchase Agreements conditions“.
7 COM(2020) 680final Communication from the commission to the European Parliament and the Council
on Preparednessfor COVID-19 vaccination strategies and vaccine deployment.