EU persuades U.S. to ease COVID export restrictions for CureVac -sources

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FILE PHOTO: CureVac's experimental COVID-19 vaccine is given to a volunteer in clinical trials

By Francesco Guarascio and Ludwig Burger

BRUSSELS (Reuters) - Brussels has persuaded Washington to ease restrictions on exports of materials needed by German biotech firm CureVac to make its experimental COVID-19 vaccine, three people familiar with the matter said.

EU officials said the decision will enable CureVac to produce vaccines until August and is part of a months-long effort by Brussels to get the White House to drop or ease some of its export curbs, following the election of U.S. President Joe Biden.

Supplies beyond August, however, remain uncertain.

The U.S. Defense Production Act (DPA), a decades-old law, gives federal agencies the power to prioritise procurement orders related to national defence and to non-military crises.

It has been deployed during the pandemic to put the U.S. government first in line to buy American-made vaccines and treatments and control the inputs that go into them.

CureVac relies on U.S.-imported filters and bioreactor bags to manufacture its vaccines.

The German company and other vaccine makers including the Serum Institute of India, the world's largest producer of vaccines by volume, have criticised the U.S. law for hobbling supplies of critical equipment for their vaccines.

The government intervention comes as drugmakers scramble to boost output of vaccines and concerns grow that low supplies in poor countries will slow the fight against the pandemic which has killed more than 3.5 million people.

The German biotech confirmed it had received government help, but declined to give details of what was agreed.

"CureVac is grateful that with the help of the EU and U.S. officials, some critical issues could be resolved," the company said in a statement to Reuters.

It added that overall pressure on the mRNA vaccine manufacturing supply chain, which it relies on, remains intense. Vaccines developed by Pfizer-BioNTech and Moderna use mRNA technology.

The EU is a major producer of COVID-19 vaccines, with more than 200 million shots made in the bloc having been exported to dozens of countries since December, about half of the total produced on the continent. But EU factories rely on substances and equipment made in the United States.

URGENT BOTTLENECKS

The arrangement for CureVac was the result of regular meetings between a White House COVID-19 taskforce led by Biden's aid Jeffrey Zients, and an EU team of experts chaired by EU industry commissioner Thierry Breton, aimed at easing urgent bottlenecks in vaccine production, two EU officials familiar with the discussions said.

The meetings addressed CureVac's bottlenecks, one of the EU officials told Reuters, while a second EU official said the effort has "made sure that supplies from the U.S. continue to flow," allowing CureVac to ramp up vaccine production until August. They declined to be identified.

CureVac is manufacturing vaccines "at risk" as it has yet to win approval in the EU for its experimental COVID-19 shot. If authorised, the vaccine would be distributed across the 27-nation bloc under a deal to supply at least 225 million doses.

"Since its creation in February the task force has been in contact with CureVac and its suppliers as well as with our American counterparts to resolve bottlenecks," a spokeswoman for the EU Commission said, but declined to comment further.

The White House declined to comment.

A U.S. official said that, under the arrangement with the EU, Washington is prioritising requests from EU manufacturers with approved vaccines, but CureVac, which has yet to win EU authorisation, would have priority over companies with earlier-stage vaccine candidates.

The source added that communication lines had been established to deal with CureVac's needs, though no delivery guarantees were given.

PARTIAL SUCCESS

The CureVac case comes as a debate rages over the impact of trade barriers and patents on vaccine production.

The Biden administration earlier in May joined India, South Africa and many other developing countries in calling for a temporary waiver of patents, in the hope that would boost production.

EU nations and other vaccine-making countries have opposed that and urged instead the removal of U.S. trade barriers that they consider the main bottleneck preventing a ramping up of global vaccine production.

The EU-U.S. talks, however, have so far failed to convince Washington to end the use of the DPA for vaccine products, the EU officials said. They have also not persuaded the United States to export finished jabs to the EU.

Merck KGaA, one of the world's largest suppliers of lab gear and materials, this month said the DPA posed a challenge amid soaring global demand.

It is investing in U.S. and French sites that make vaccine production gear but the added capacity in France will not come on stream before year-end.

(Reporting by Francesco Guarascio @fraguarascio and Ludwig Burger in Frankfurt; Additional reporting by Jeff Mason in Washington; Editing by Josephine Mason and Susan Fenton)