AstraZeneca did not concede to an EU demand on Tuesday to divert Covid-19 vaccine doses from the UK to Europe to make up for a shortfall in deliveries.
The request came after the UK-headquartered pharmaceutical company unexpectedly announced last week that it would cut vaccine supplies to Europe because of production issues.
Europe had planned to vaccinate up to 70 per cent of adults by August but the campaign is now in doubt.
The fresh setback added to woes brought on by Pfizer/BioNTech's decision to delay shipments for the next few weeks because of work to increase production capacity at a key Belgian plant.
EU chief Ursula von der Leyen said on Tuesday the bloc "means business" about getting its fair share of vaccines after British officials feared the EU could restrict exports of vaccines manufactured in Europe.
EU officials denied they would restrict vaccine exports but proposed a new "transparency mechanism" to ensure manufacturers met their contractual obligations to the EU.
Under the scheme, the companies would be required to notify authorities of any vaccine exports outside the EU, amid concern pharmaceutical groups might be selling the earmarked doses to higher bidders outside the bloc.
The European Commission had asked for answers from both AstraZeneca and Pfizer about the delays.
One EU official involved in the talks told Reuters the EU explicitly asked AstraZeneca whether it could divert to the bloc doses produced in Britain, at least through March.
But the company did not answer these questions, the official said.
The UK government said there would be no change to the UK's vaccination campaign because of AstraZeneca's decision to reduce deliveries to the continent.
UK Vaccines Minister Nadhim Zahawi warned the EU against adopting "the dead end of vaccine nationalism", while Health Minister Matt Hancock said "protectionism is not the right approach in the middle of the pandemic" when asked about the EU potentially restricting exports.
The extraordinary row came as two German newspaper reports suggested the German government had concerns over the effectiveness of AstraZeneca's vaccine.
The Handelsblatt economic newspaper reported that Berlin estimated the efficacy of the drug among over-65s to be only 8 per cent.
The Bild newspaper reported that the German government did not expect the vaccine to be approved for use among the elderly.
Germany's health ministry was forced to deny that government officials had briefed the newspapers, saying there was no evidence supporting the lower efficacy claim.
It said the 8 per cent figure potentially referred to the number of people in the study between 56 and 69 years old.
AstraZeneca said the newspaper reports were "completely incorrect”.
“Reports that the AstraZeneca/Oxford vaccine efficacy is as low as 8 per cent in adults over 65 years are completely incorrect,” a spokesman said.
"In November, we published data in The Lancet demonstrating that older adults showed strong immune responses to the vaccine, with 100 per cent of older adults generating spike-specific antibodies after the second dose."
Gregor Waschinski, who wrote the Handelsblatt piece, cited unnamed sources within the German government as the basis for the report. He admitted on Twitter that he had not seen data supporting the 8 per cent efficacy claim.
Why are the EU and AstraZeneca in disagreement?
UK-headquartered AstraZeneca said "reduced yields at a manufacturing site within our European supply chain" now meant the number of initial doses for EU member states would be lower than planned.
Officials have not confirmed the extent of the shortfall but Reuters reported that deliveries would be reduced to 31 million – a cut of 60 per cent – in the first quarter of this year.
The EU warned it could tighten export controls on the vaccine amid the shortfall, potentially jeopardising the UK’s vaccine supply which is shipped from Europe.
EU threatens strict controls of vaccine exports
The European Commission proposed requiring drug makers to flag exports of coronavirus vaccines in advance under a new “transparency mechanism”.
Ms von der Leyen said pharmaceutical companies must deliver on their contractual agreements with the bloc.
"Europe invested billions to help develop the world's first Covid-19 vaccines," she told the World Economic Forum.
"And now, the companies must deliver. They must honour their obligations."
In a sign of concern that pharmaceutical groups might be selling the earmarked doses to higher bidders outside the bloc, the EU is making a move to require the companies to notify authorities of any exports to outside the bloc.
German Health Minister Jens Spahn backed a proposal on export limits, arguing that the continent should have its "fair share" of doses.
"I can understand that there are production problems but then it must affect everyone in the same way," he said. "This is not about Europe first but about Europe's fair share."
UK ministers fear that deliveries of vaccines could be delayed by extra paperwork and that the EU could try to stop doses being delayed to non-EU countries, The Telegraph reported.
Their fears were compounded after an EU official said the bloc would “take any action required to protect its citizens”.
UK Vaccines Minister Nadhim Zahawi warned the EU against engaging in “vaccine nationalism” as he said Britain is confident of hitting a mid-February target to inoculate the majority of its most vulnerable citizens despite the row.
“I have every confidence we will get our deliveries as scheduled,” he told LBC Radio. “Vaccine nationalism is the wrong way to go.”
With a string of bad news delaying a return to normality, EU governments are eager to dodge the blame. Last week, a group of leaders criticised the bloc’s drugs regulator over a perceived slow approval process, while others have accused the commission of failing to secure sufficient doses early enough on behalf of member states
“We could deliver many more vaccines, we just don’t have access to them,” Greek Prime Minister Kyriakos Mitsotakis told the World Economic Forum on Monday.