Why a vaccine should cost 250 EUR: Penny-wise and pound foolish

The global race for vaccinating all vulnerable people and eventually the entire world population against COVID-19 is in full swing. Some countries were very aggressive in negotiating down the price per jab, while others were more lenient and were willing to pay more per dose. But governing institutions like the European Union, which ratcheted down the prices per jab so much more than any other government might end up penny-wise and pound foolish.

The EU pays nearly half per AstraZeneca vaccine than the UK, and at 12 EUR, a third less for the BioNTech/Pfizer vaccine when compared to Brexit Britain. Israel, likely to be the first country to vaccinate its entire population, paid three times as much for the Pfizer vaccine.

For the sake of simplicity, let’s assume the EU would only use the mRNA vaccine from BioNTech for all of its 450 million residents. As the vaccine required two shots 21 days apart from each other, a total of 900 million doses would need to be purchased. At the currently negotiated price, it would cost the EU (and its member states) 10.8 billion EUR. At the higher price Israel was willing to pay, the EU would rack up a bill of 36 billion EUR. This sounds insanely high — but it isn’t! We are talking about a measly 80 EUR per EU resident. 

Last December, EU leaders agreed on an extra 700 billion EUR to be added to the bloc’s multi-year budget as a stimulus, called the COVID recovery fund. This averages 1,500 EUR per resident and nearly 20-times as much as just paying more for quick access to one of the leading vaccines. As of February 27th, the EU’s vaccination rate stands at a meager 7.2 shots per 100 residents: 3.6% of what’s required to immunize the entire population. Looking to the Levant, Israel is already at 92 jabs per 100 people.

Even if the EU would pay a whopping 250 EUR per dose and 500 EUR per resident, it would end up paying merely a third of what’s being earmarked for the recovery fund. 

Would it not be more ethical to quickly access as many vaccines as possible, give producers and suppliers a huge incentive to ramp up manufacturing capacities, and immunize the population at record speed? Instead, the EU and its member states focus on continuing furloughing schemes, missing tax revenues, prolonging lockdowns, crippling economic activity, and (the most tragic of all) prolonging human suffering during this pandemic. 

When we reflect back on these events, we should not be surprised if those countries that used sought a low price as the key success factor in vaccine negotiations will be served a much higher bill than countries that saw high volumes and quick access to vaccines as the key performance indicator for successful vaccine negotiations.

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