Parliament approves only 7 million doses for 2023

Back to normal operation. In the end, that is the core message of Parliament in the controversy surrounding the procurement of the Covid-19 vaccines for 2023. The Federal Council wanted to proceed according to the motto “rather too many than too few vaccines” – knowing that the criticism of waste was far less would fail than the criticism of too tight vaccine orders.

The government therefore applied for a credit line of CHF 780 million for 2023. Part of this is intended for retrospective coverage of vaccine contracts for 2020. The controversial remainder – 461 million – was intended for the procurement of a total of 14 million vaccine doses for 2023. Half each should come from the suppliers Moderna and Pfizer. With this strategy, the Federal Council wanted to insure itself against a scenario in which the majority of the population is vaccinated again as a result of a dangerous virus variant and at the same time one of the two suppliers is completely absent due to production or quality problems.

Half should be enough

The National Council had supported this course, but the Council of States saw this as an exaggerated luxury solution. The small chamber wanted to reduce the loan amount by 220 million francs – which would be enough for 7 million instead of 14 million cans at the same price. According to the proponents of this variant, the federal government should secure 3.5 million cans from each of the two manufacturers.

The conflict was decided on Thursday. The unification conference, composed of representatives from both chambers of parliament, came out in favor of the lower variant. As a result, both chambers could only accept this variant or reject the proposal of the unification conference. But if the proposal of the unification conference is rejected, as is usual with credit decisions, the lower of the previously discussed credit amounts applies – which would result in the same thing. That is why the Council of States, with its more in-depth proposal, held the better cards from the start.

renegotiation necessary

The contracts negotiated between the federal government and the vaccine suppliers for 2023 contain a proviso for approval by Parliament. The federal government can now withdraw from the treaties as a result of the parliamentary rejection. He has to start renegotiating with suppliers. The supporters of the Federal Council course had warned of the uncertainty about these renegotiations: In the middle of the year you suddenly found yourself without a secured vaccine for 2023, which weakened the negotiating position.

The proponents of the lower variant put it into perspective: Internationally, there is currently an oversupply of vaccines rather than a shortage, which is why the negotiating position of the states towards the suppliers is less bad than in earlier phases of the pandemic. Voices from high-ranking federal representatives had also indicated that renegotiations should be “feasible”.

Normally, 7 million cans should be enough for 2023 – and this without considering the possibility that some of the excess cans for 2022 may also be needed in the following year. In the probable scenario of the federal government for 2023, a (further) booster vaccination for the risk groups can be expected.

These groups include people over the age of 65, the chronically ill and health workers. The estimated requirement for the risk groups is a good 4.1 million doses. For some, that might already be the third booster vaccination, since the recommendation for the second booster vaccination may follow this fall. For comparison: According to federal data, almost 3.8 million people have received their first booster vaccination so far.

Just in case

In this main scenario, the reduced budget would also allow for a considerable reserve for the unforeseen. The budget would probably be too tight if two serious incidents occurred at the same time: A dangerous virus mutation means that a large part of the entire population wants to be vaccinated (again or for the first time), and one of the two main suppliers is absent for whatever reason.

After all, a safety valve is also useful for such a crisis scenario. For example, the federal government should try to secure an option in the renegotiations, as with the previous contracts, that would enable the purchase of additional vaccines if necessary. According to the contracts that are now null and void, the possible additional purchases from Moderna and Pfizer each amounted to 7 million doses; the total purchase for 2023 would have doubled from 14 to 28 million cans. If one assumes that the lower level that has now been decided on doubles this through optional additional purchases, the option from both suppliers could include an additional 3.5 million cans each with unchanged prices.

The credits for any additional payments have not yet been granted, since the federal government would not commit to this either. In urgent cases, however, credit decisions would be possible in the shortest possible time. If the ordinary parliamentary procedure required too much time for this, the six-strong parliamentary finance delegation could approve large amounts within days. This has happened before, for example in the initial phase of the pandemic and in the Swissair and UBS crises.

For the normal scenario, the question arises as to whether the CHF 241 million now approved by Parliament for vaccine procurement in 2023 will be booked as an extraordinary or ordinary federal expense. The question is important because if it is booked as an extraordinary expense, the normal rules of the debt brake do not apply – i.e. Parliament would not have to save these funds elsewhere in the 2023 budget. According to previous practice, Corona expenses were booked as extraordinary. According to those involved, the formal decision for 2023 has not yet been made. In the main scenario, with society returning to normal operations, this should logically also apply to the rules of fiscal policy.