1. The AZ / EU supply issue is one of the most important and most difficult issues of the first half of 2021 with the potential for extremely damaging repercussions. You lost / we won takes are not at all helpful. Cool heads will need to prevail.

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2. Let’s begin by acknowledging that vaccine supply is a highly emotive subject. And for good reason. And that level of emotion has been exacerbated by Brexit related circumstances. Partisan bias is on display in all corners. But let us strive for some rational thinking.

3. I shall choose my words carefully. The reduction of Q1 AX supply to the EU by a rumoured 60% is an absolute clusterf*ck. A screw up of epic proportions. Yes of course it is not deliberate. And yes of course operational disasters happen (especially for complex processes).

4. But none of that helps. The situation is analogous to any other major company whose operations have public utility type functions. A bank’s payment system crashes due to an IT issue. Everyone goes nuts. An oil tanker crashes, spilling its cargo. Everyone goes nuts.

5. So, in the first instance, if you must point fingers (I am far too sagacious) then you might look towards the source of the problem (then compounded by some truly lousy client management).

6. But like an amateur archaeologist sifting through the bones let us dig into the problem. And here we come to the second major issue. Not only has there been a supply catastrof*ck but the company seems to be suggesting that there is nothing it can do to alleviate the situation.

7. It is what it is. That seems to be the message. But why is that (if that’s the case, I have my doubts)? Let’s take Pfizer as an example. The company also had a recent supply issue (though different and not as serious).

8. Its reaction (AFAICS) was not to say to customer A ‘it is what it is’ but to throttle back supply across all the customers (UK and European) of its EU based manufacturing plants. So everyone takes a bit of pain and we all move on.

9. AZ, on the other hand, seems to run a company specific supply model. There are manufacturing capabilities in Europe for Europe and in the UK for the UK. Furthermore, we discover a very important thing. The product from the UK factory is apparently exclusively for the UK.

10. On the one hand this seems to have been most sagacious of the UK because their supply has been protected from the disruption in Europe. True. True. But not so fast. Exclusivity undoubtedly has a most important benefit in this situation...

11. ...But also has two flaws that we should acknowledge. Firstly, what happens if the UK plant (god forbid) has a similar issue. As we can see, these things happen. Well, of course, it’s a disaster of epic proportions with NO POSSIBILITY OF SHORT TERM ALLEVIATION.

12. In other words, the UK has exactly the same risk as the EU. Personally, I think this is a huge flaw but perhaps people don’t care until the problem actually happens. That would be very modern.

13. The second problem with the regional exclusive model is, well, that it’s regional exclusive. We might even consider it to be a form of protectionism. And for good reason, you might say. We must have our own independent vaccine supply.

14. But what if everyone says that? And what if your supply is in part regionally distributed? And here we are. And now I take out my crystal ball and I speculate based on the EU’s press conference yesterday evening...

15. The EU thinks to itself, We have learnt an important and painful lesson. We must make sure that our own supply is safeguarded. We shall also move to a regional exclusive model.’ And hence all the talk of export controls (or at least the potential for export controls).

16. For good reason, many non EU people who might be impacted look at this development and their first reaction is to go nuts. And I do understand. But in between all the going nuts it is important to contemplate the complicated reality of the world.

17. What would the US do in a similar situation? What would the UK do? Can you imagine the headlines...And bear in mind that the EU would not be the first mover towards a regional exclusive model...

18. All of that said, I would be very surprised indeed if the new EU export control regime went as far as some fear. Personally, I see it more as a mechanism to address already contractually mandated supply issues (where there are multiple customers) vs an export ban.

17. In other words, in that situation the teeth only bite when there is a problem (vs uniform exclusivity). And I would imagine that even in that situation there would be room for judicious negotiation.

19. But we are all on a slippery slope. And why (apart from the virus of course)? Because the reality of vaccine supply is that it is an international business but with extremely painful national downsides.

20. Unless we want the whole situation to degenerate further into vaccine nationalism, I suggest that some measure of international coordination might be helpful. In the meantime, it would be very helpful if AZ could help clean up some of the mess. /ends