Charity is a good way to gain kudos. AstraZeneca boss Pascal Soriot is finding out that his Covid-19 vaccinations, on which he is making zero profit, still carry a cost. A spat with the European Union on quantity and another with Germany over quality shows why.
It has been a fraught week for the Anglo-Swedish drugmaker. On Monday a row erupted with the European Union over a large cut to the delivery of its Covid-19 jab to the bloc. On Thursday, with the two sides locked in crisis talks, Germany’s public health agency recommended blocking the use of AstraZeneca’s Covid-19 vaccine for people over 65.
On vaccine quality, both sides could be right. So far, there is little data to show whether or not AstraZeneca’s vaccine is effective on the elderly, a group most at risk of hospitalisations and death from the coronavirus. South Koreans tend to agree with Germany’s assessment and have launched a review of the use of the vaccine on the elderly due to limited efficacy data. Yet Britain’s strategy of fast-tracking approvals of three vaccines and hoping they work has inoculated over 10% of its population in under two months.
On vaccine quantity, who’s right is still the subject of much debate. What’s clear is that Europe is off to a much slower start and will have access to fewer doses than it had originally planned as a result of supply issues at Pfizer and AstraZeneca manufacturing sites. That makes it harder for everyone to keep their tempers.
Either way, AstraZeneca is paying a heavy price. Soriot is not only supplying vaccines at cost, the political row with Europe and rejection by Germany also risk hurting its reputation. Future damaged relations with Europe, a key customer for its drugs and treatments, may be why investors have shaved 5% off its share price since Monday. That makes it more likely that in future he will follow Pfizer and Moderna’s lead and require a profit.