It took a while, but the bill finally came.
On Tuesday evening, Gazeta Prawa reported that U.S. pharmaceutical giant Pfizer is taking the Polish government to court over missing payments for 60 million doses of the COVID-19 vaccine it developed with BioNTech.
The lawsuit, which comes as Poland prepares for a change in government following its October election, marks the culmination of a 19-month struggle between Warsaw and Pfizer over a glut of vaccine doses.
But the roots of the clash can be traced back further: to the enormous 1.1 billion-dose contract the European Commission signed with Pfizer in 2021, which has become controversial for the reported exchange of text messages between Commission President Ursula von der Leyen and Pfizer CEO Albert Bourla in the run-up to negotiations.
According to the Polish newspaper, Pfizer brought the civil case before a Brussels court because the doses were purchased through EU joint procurement contracts, drawn up under Belgian law. The first hearing will reportedly take place on December 6; a spokesperson for Pfizer said BioNTech is also joining the proceedings.
Here’s how we got to this point.
Too many vaccines
In 2021 the Commission signed a game-changing contract with Pfizer for up to 1.8 billion doses of its COVID-19 vaccine; of those, 1.1 billon doses would eventually be ordered. This joint purchase agreement, negotiated by the Commission on behalf of EU countries, dwarfed the bloc’s previous vaccine purchases, and led other vaccine makers to complain they were being squeezed out of the market.
The size of the contract has been a millstone around the Commission’s neck ever since, and not merely because of transparency concerns around von der Leyen’s refusal to discuss any personal role she may have played in the negotiation. It also tied countries into buying doses that, it turns out, they wouldn’t need.
In April 2022, then-Polish Health Minister Adam Niedzielski announced the country had stopped taking vaccine deliveries. He said Poland had invoked a force majeure clause in the contract, citing financial strain caused by the influx of refugees from the Ukraine war and the economic disruption that followed. He also explained that the improving pandemic situation meant there was less need for vaccines. At the time, the Polish government was led by populist firebrand Mateusz Morawiecki of the Law and Justice (PiS) party, and on many issues Poland was largely isolated.
Growing dissent
However, it didn’t take long for a group of nine other countries, all in Eastern and Central Europe, to follow Poland’s lead. While they didn’t go as far as halting deliveries, they did complain that they had been trapped into spending money on doses they didn’t need at a time of economic turbulence. The countries pressured the Commission to re-open the deal, and raised the issue repeatedly in meetings of EU health ministers.
The Commission was able to extract commitments from Pfizer to reschedule some deliveries, but this didn’t go far enough to appease the capitals.
As vaccination rates flatlined, countries outside the Central and Eastern European group started joining the call for a renegotiation. At one point capitals even began asking for greater transparencyon the original negotiations between Pfizer and the Commission. “What was promised? We would really like to know,” said Belgian ambassador Pierre Cartuyvels in December 2022.
In May this year, the Commission quietly announced a substantial renegotiation of the offending deal. It was reducing — by an unspecified amount — the number of doses outstanding, while the deliveries would also be more spread out, into 2026. Poland, however, refused to sign up to the revised deal.
Time to collect
The matter seemed to be dead, with no news that Pfizer was ready to sue the government until now. The timing is notable, coming after Poland’s October election that saw PiS lose its ruling majority and the opposition win enough seats to put the center-right moderate Donald Tusk in power.
Pfizer is presenting Tusk with a salty bill, which could reach as high as €1.2 billion based on a price of €19.50 per dose as reported by the Financial Times (the exact details of the contract remain secret). It also comes at a time when Poland’s usually muscular economy is in the doldrums; for Pfizer, however, it’s a clear signal to any countries that may want to wiggle out of paying what they owe.
But it will be a pickle for Tusk, who will want to keep good relations with Brussels and may feel more pressure to honor agreements negotiated through a Commission joint procurement contract.
A spokesperson for Pfizer said the decision had been made “following a prolonged contractual breach, and a period of discussions in good faith between the parties.”
“Pfizer and BioNTech are seeking to hold Poland to its commitments for COVID-19 vaccine orders placed by the Polish Government, as part of their contract to supply the European Union signed in May 2021,” the spokesperson added.
