AstraZeneca threatens to move UK vaccine production to US amid funding row

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AstraZeneca has warned it could move its vaccine production facility from Merseyside to Philadelphia amid deadlocked talks with the Labour government over plans to cut promised state aid for the project.

People briefed on the government’s thinking say Prime Minister Rachel Reeves wants reduce quantity The state is providing funding for the British pharmaceutical company’s vaccine centre, cutting the previous Conservative government’s commitment from around £90m to £40m.

The previous offer included up to £70m in funding to develop the Speke facility, as well as £20m in research and development support from the UK Health Security Agency, according to two people briefed on the matter.

Senior AstraZeneca representatives have told government officials that they are considering moving planned vaccination operations to Philadelphia in the United States, which offers generous financial support for industrial projects.

The company also said manufacturing could take place in India, where it has made vaccines in the past, according to people briefed on the discussions.

The Conservative government announced in March that AstraZeneca was investing £450m in research, development and manufacturing of the new vaccine at Speke. The Financial Times reported at the time that the company is looking to secure up to £100 million in funding.

Britain’s decision to cancel some of the grants provided as part of a Treasury review of financial decisions made by the previous government stands in stark contrast to the lavish perks offered by US President Joe Biden as part of his campaign. protectionist industrial strategy.

Shadow technology minister Andrew Griffith, who was involved in the original deal with AstraZeneca, said if the new government did not increase its funding offer it would be “a huge setback for the UK”.

“This is the most valuable listed company in the UK, operating in one of the most valuable sectors, life sciences, and it is important that the UK remains at the heart of the research that AstraZeneca conducts,” he said.

“For AstraZeneca, they were promised by the previous administration that it was done,” said a person briefed on the discussions, adding that the company was “not happy” with the deal that was struck.

“We may have to import these vaccines instead of exporting them and we will lose a lot of sovereignty,” the person said, referring to the company’s possible move to produce vaccines abroad.

AstraZeneca set up its vaccine unit after partnering with Oxford University to develop a Covid-19 vaccine. It withdrew the vaccine in May, saying demand had fallen in favour of other treatments that could tackle new variants of the disease.

The vaccine is generally safe and effective, but confidence in it took a hit in 2021 after a series of rare blood clotting incidents prompted European authorities to restrict its use in younger populations.

The existing Speke facility, located south-east of Liverpool city centre, is used to produce a nasal spray flu vaccine called FluMist, which is designed using an egg-based manufacturing process.

AstraZeneca declined to comment.

A Treasury spokesperson said: “We are committed to making the UK one of the best places in the world to develop and manufacture new and innovative medicines, and we are in active discussions with AstraZeneca to support the delivery of this planned investment in Speke.”