Opinion

Increasing the global supply of essential medical supplies: Time for Europe to step up its global leadership

Europe has already made a significant financial contribution to beating the pandemic, now it has the opportunity and moral responsibility to do more.

By: and Date: July 19, 2021 Topic: Global Economics & Governance

Versions of this piece were originally published in Caixin, Capital, El País, Helsingin Sanomat, Il Sole 24 Ore, Le Grand Continent, Nikkei Veritas and Rzeczpospolita.

caixin logo english

Capital (Bulgaria) logo

El País logo

Rzecszpospolita logo

The COVID-19 pandemic is nowhere near its end at a global level. What is worse, new pandemics are likely to endanger global health in the coming decades, with severe consequences for livelihoods and economic activity. Preventing pandemics is a global public good like climate change mitigation: the world needs to act collectively to avoid future episodes like COVID-19.

It should be a priority to find money to invest in pandemic prevention, preparedness and response, as argued in a report to the G20 finance ministers to which we contributed. This financing would fill major gaps in global health security. In the report, we take a conservative approach and focus exclusively on the funding needs for global public goods needed to prevent pandemics. We estimate that US$15 billion would be needed annually to improve global pandemic surveillance capacities, improve essential elements of national health systems and, very importantly, the supply of medical countermeasures and tools. Spending on pandemic prevention, preparedness and response delivers by far the best return on any public investment. The International Monetary Fund, for example, estimates that a faster global vaccine roll-out could spare the world US$9 trillion in foregone income.

The pandemic has shown how crucial the adequate supply of medical countermeasures is. So far, the global supply of COVID-19 vaccines has been insufficient with billions of people not yet vaccinated. In a business-as-usual scenario, the IMF estimates that vaccine production could reach 6 billion doses by the end of 2021, enabling vaccination of 45% of the world population. This would leave large regions vulnerable and would not prevent the emergence of new variants. In the early phases of the pandemic, personal protective equipment and other medical equipment were also in short supply. This lack of capacity means more severe human suffering, longer-lasting constraints on our social lives and significant losses in terms of global economic activity.

This dangerous situation requires bold global action. Europe can play a major role in providing the world with vaccines now and for future pandemics. European companies have been at the forefront of developing effective COVID-19 vaccines. European Union policymakers have resisted the temptation to using the production primarily for the domestic market. Instead, about half of the vaccines produced in the EU have been exported – contrasting starkly with many other parts of the world, which gave exclusive priority to their people. The EU can thus rightly claim to be a reliable partner to the rest of the world. And the EU should step up even further. It is in Europe’s interest to vaccinate as many as possible as quickly as possible: no one is safe until all are safe.

Three steps are essential. First, many countries still do not have access to sufficient numbers of vaccine doses. And while the EU has been championing multilateral approaches to increase the global supply of vaccines, initiatives such as COVAX have fallen short of what is needed. The June 2021 G7 pledge to increase the supply of vaccines by 1 billion also falls short. Instead of waiting for global consensus, we advise the EU to keep helping the developing world gain access to vaccines. Such support can take the form of donations or grants, or concessional lending to countries for purchase of vaccines. It could also be done through contributions to the COVAX facility. The issue is not only access but also affordability: the EU should help poorer countries to purchase vaccines on terms comparable to domestic purchases when negotiating with European suppliers.

Second, as our G20 report argued, the world needs greater supply capacities for vaccines and other medicines and equipment when there is no global pandemic raging. With potential losses of half a trillion dollars a month, as estimated by the IMF for COVID-19 in the first part of 2021, accelerating vaccine production during pandemics brings huge benefits. But building this capacity in ‘peace-time’ requires a certain degree of subsidisation as private firms by themselves do not have sufficient incentives to maintain redundant production capacities. As the world emerges gradually from the pandemic, and the demand for COVID-19 vaccines declines, the EU would be well advised to continue supporting vaccine supply chains to ensure higher capacities are available. Multi-modal manufacturing capacity (mRNA, protein, and virus-based vaccines and therapeutics) can rapidly ramp up production of pandemic-specific medicines and treatments when needed. Financing is needed for manufacturing of multiple prototype pathogen vaccine/diagnostic/therapeutic candidates before outbreaks. Dual-use purposes should be sought for such capacity, which could contribute to controlling endemic diseases and improving health outcomes in inter-pandemic years. The EU has some of the world’s best research centres in this area and should further build on those by increasing research spending.

Third, production capacities in different regions would make the system more resilient and contribute to more equitable global distribution of scarce supplies. The Franco-German initiative to boost BioNTech vaccine production in South Africa is a positive example of this.

Europe has already made a significant financial contribution to beating the pandemic. It needs to step up further in the short-term by buying and distributing more vaccines. Supporting global efforts, as recommended in our G20 report, also offers opportunities for expansion of an important European industrial sector. It is a moral imperative and a huge opportunity for Europe to step up its efforts to combat pandemics.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to [email protected].

Read article More on this topic More by this author
 

Opinion

Making supply chains more resilient

After the current global semiconductor shortage, business leaders and policymakers must think now about how to minimise the effects of future exogenous shocks on production networks and the global economy.

By: Dalia Marin Topic: Global Economics & Governance Date: September 14, 2021
Read article More on this topic
 

External Publication

EU-India trade relations: assessment and perspectives

In-depth analysis prepared for the European Parliament's Committee on International Trade (INTA).

By: Suman Bery, Sonali Chowdhry, Alicia García-Herrero and Niclas Poitiers Topic: Global Economics & Governance Date: September 10, 2021
Read article Download PDF More on this topic
 

Policy Contribution

A green fiscal pact: climate investment in times of budget consolidation

Increasing green public investment while consolidating deficits will be a central challenge of this decade. A green fiscal pact would address this tension, but difficult trade-offs remain.

By: Zsolt Darvas and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: September 9, 2021
Read about event More on this topic
 

Past Event

Past Event

Conference on the Future of Europe: envisioning EU citizens engagement

Bruegel Annual Meetings, Day 3 - Panellists will discuss different options and what they may entail while revisiting the debates on the future of Europe at national and EU-level that have been conducted thus far.

Speakers: Caroline de Gruyter, Kalypso Nicolaïdis, Niclas Poitiers and György Szapáry Topic: European Macroeconomics & Governance Location: Palais des Academies, Rue Ducale 1 Date: September 3, 2021
Read article Download PDF More on this topic More by this author
 

Essay / Lecture

Global asymmetries strike back

This essay addresses an old question that international relations scholars view as fundamental, but which economists regard as secondary: that of asymmetries in international economic relations.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: September 2, 2021
Read about event More on this topic
 

Past Event

Past Event

Towards a new global trade regime: reform of the WTO

Bruegel Annual Meetings, Day 2 - the World Trade Organisation has been going through trying times, a phenomenon amplified by the pandemic. Why are we headed towards a new global trade regime? And what lies ahead for the WTO?

Speakers: Ngozi Okonjo-Iweala and Guntram B. Wolff Topic: Global Economics & Governance Location: Palais des Academies, Rue Ducale 1 Date: September 2, 2021
Read about event More on this topic
 

Past Event

Past Event

Resolving today’s global health crisis, and avoiding future pandemics

Bruegel Annual Meetings, Day 1- How do we exit the COVID-19 pandemic and ensure the world of tomorrow is less vulnerable to future pandemics?

Speakers: Jeremy Farrar, Amanda Glassman, Sri Mulyani Indrawati, Tharman Shanmugaratnam and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 1, 2021
Read article More on this topic More by this author
 

Blog Post

The great infodemic: time to consider a fake news tax

A content-based tax on the revenue from digital advertising is needed to prevent the monetisation of fake news by both creators and platforms.

By: Georgios Petropoulos Topic: Innovation & Competition Policy Date: August 26, 2021
Read article More on this topic
 

Blog Post

A world divided: global vaccine trade and production

COVID-19 has reinforced traditional vaccine production patterns, but the global vaccine trade has changed considerably.

By: Lionel Guetta-Jeanrenaud, Niclas Poitiers and Reinhilde Veugelers Topic: Global Economics & Governance Date: July 20, 2021
Read article
 

Blog Post

Will European Union recovery spending be enough to fill digital investment gaps?

The recovery facility will boost digital transformation, but questions remain whether it will be sufficient to achieve Europe’s digital ambitions.

By: Zsolt Darvas, J. Scott Marcus and Alkiviadis Tzaras Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: July 20, 2021
Read article More by this author
 

Blog Post

The European Union’s carbon border mechanism and the WTO

To avoid any backlash, the European Union should work with other World Trade Organisation members to define basic principles of carbon border adjustment mechanisms.

By: André Sapir Topic: Energy & Climate, Global Economics & Governance Date: July 19, 2021
Read article Download PDF
 

Policy Contribution

A new direction for the European Union’s half-hearted semiconductor strategy

The EU needs a more targeted strategy to increase its presence in this strategic and thriving sector, building on its existing strengths, while accommodating its relatively low domestic needs.

By: Niclas Poitiers and Pauline Weil Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: July 15, 2021
Load more posts