Australia urges EU review after Italy blocks AstraZeneca doses

Australia asked the European Union to review a decision by Italy to block a shipment of AstraZeneca Plc’s coronavirus vaccine to the country and broached the topic in a previously planned call with the EU’s top trade official on Friday.

Italy informed the European Commission that it would withhold the vaccine shipment, using a new rule that obliges member states to inform the EU executive of its decisions to stop vaccine exports outside of the bloc. The commission didn’t oppose Italy’s decision, an EU official said. The company declined to comment.

“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.

Tougher Approach

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

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

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 over 170 requests have so far been authorized, according to a separate EU diplomat.

The decision could reignite 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 immunize 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 honored,” Morrison said.

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.