The European Union is reportedly paying a premium in its new supply contracts with Pfizer-BioNTech and Moderna. According to the Financial Times, the vaccine makers hiked their prices on billions of new doses. Meanwhile, the European Commission has struck a deal with U.S. firm Novavax for a vaccine that hasn't yet been approved for use.   

All the details below.  
 

How much of a price hike are we talking?

According to a report in the Financial Times on Sunday, Pfizer-BioNTech raised its prices by more than a quarter in its new supply contract with the EU. The price for a Pfizer-BioNTech shot is now $23.13 (19.50 euros), up from $18.40 (15.50 euros) previously.  

Moderna also increased its price, from $22.60 per dose to $25.50. It's important to note here that Brussels would not confirm whether Pfizer or Moderna raised their prices. Even though the shots are being paid for with European taxpayers' money, the price tag is considered "confidential information." 

In May, the Commission signed a new supply deal with Pfizer for 1.8 billion doses through 2023, while Moderna in June promised another 150 million doses for 2022.  

Why would the price go up?

For one thing, Pfizer and Moderna have more bargaining power this time around. They have proved themselves reliable with highly effective vaccines and on-time deliveries. While the EU was embroiled in a very public row with AstraZeneca over delivery shortfalls earlier this year, Pfizer and Moderna were keeping mostly to schedule. 

Like most of us, Brussels is likely happy to pay a bit more to avoid the headache.  

Competition from other vaccine makers has also weakened. Many member states imposed restrictions on the use of the Johnson & Johnson and AstraZeneca vaccines over concerns they can cause a rare form of blood clotting. This undermined public confidence in the jabs and mainly pushed them to the sidelines.  

What's been the reaction?

Mixed and quiet. It probably helps that most Europeans are out of the office trying to catch whatever summer holiday they can. According to Reuters, EU lawmaker Tiziana Beghin said the EU was being ripped off and called it "inexplicable." 

France's European Affairs Minister Clement Beaune said on French radio that negotiations were still under way and were the result of stricter clauses on variants, production and deliveries.

A Commission spokesperson said on Tuesday that lots of factors were at play when negotiating a deal and price is only one of them.  

"We also look at the production capacity, the technology used, the delivery schedule, the experience gained from the previous deliveries with these companies," said Vivian Loonela.

What about other vaccine suppliers?

It's true, the EU has contracts with other suppliers and is still out there striking deals. On Wednesday, the European Commission agreed to buy up to 200m doses from U.S. vaccine maker Novavax. 

But there is a catch. Novavax's protein-based vaccine has not yet been approved by European regulators. It's under rolling review at the European Medicines Agency, but the formal paperwork is yet to be filed. 

Still, doses could start reaching Europe's shores in the fourth quarter of the year, once regulators approve it for use, of course. This will give the bloc more options, but Pfizer and Moderna will remain main suppliers.