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Legal showdown between EU and AstraZeneca begins, with EU seeking huge fine

The Anglo-Swedish company is set to provide 70 million doses in the second quarter – it had promised 180 million.

Lawyers stand in front of documents in the courtroom prior to a hearing European Commission vs AstraZeneca, at the main courthouse in Brussels
Lawyers stand in front of documents in the courtroom prior to a hearing European Commission vs AstraZeneca, at the main courthouse in Brussels
Image: Virginia Mayo

THE EU IS taking on vaccine producer AstraZeneca in a Brussels court, accusing the drugmaker of acting in bad faith to provide jabs to other nations when it had promised them for delivery among the 27 member states.

The bloc accused the Anglo-Swedish company of pushing EU deliveries back so it could service the UK among others.

AstraZeneca’s contract signed with the European Commission on behalf of member states foresaw an initial 300 million doses for distribution among all 27 countries, with an option for a further 100 million.

The doses were expected to be delivered throughout 2021, but only 30 million were sent during the first quarter.

Deliveries have increased slightly since then but, according to the commission, the company is set to provide only 70 million doses in the second quarter. It had promised 180 million.

virus-outbreak-eu-astra-zeneca Lawyer for the European Commission Alain Foriers carries documents as he arrives for the hearing. Source: Virginia Mayo

EU lawyer Rafael Jafferali told the court the company expects to deliver the total number of doses by the end of December, but he added that “with a six-month delay, it’s obviously a failure”.

He asked the court to impose a fine of €10 million per infraction to the company, and to force AstraZeneca to pay €10 per dose for each day of delay as compensation for breaching the EU contract.

His main argument is that AstraZeneca should have used production sites in the bloc and the UK for EU supplies as part of a “best reasonable effort” clause in the contract, adding that the European Commission had agreed to pay €870 million for the jabs.

He said 50 million doses that should have been delivered to the EU went to third countries instead, “in violation” of the contract.

virus-outbreak-eu-astra-zeneca Lawyers for AstraZeneca - Clémence Van Muylder, right, and Hakim Boularbah, left - wait for the start of a hearing in Brussels today. Source: Virginia Mayo

Charles-Edouard Lambert, another lawyer on the EU team, said AstraZeneca decided to reserve production at its Oxford site for Britain.

“This is utterly serious. AstraZeneca did not use all the means at its disposal. There is a double standard in the way it treats the UK and member states,” he said.

The EU also accused the company of misleading the European Commission by providing data lacking clarity on the delivery delays.

“The information provided by AstraZeneca did not allow us to fully understand the situation before mid-March 2021,” Jafferali said.

The EU has insisted its complaints are about deliveries only and has repeatedly said it has no problems with the safety or quality of the vaccine. The jabs have been approved by the European Medicines Agency, the EU’s drug regulator.

While the bloc insists AstraZeneca breached its contractual obligations, the company says it has fully complied with the agreement, arguing that vaccines are difficult to manufacture and it made its best effort to deliver on time.

Lawyers for the company will address the court later.

2.57326808 Source: PA Images

As part of an advanced purchase agreement with vaccine companies, the EU said it invested €2.7 billion, including €336 million to finance the production of AstraZeneca’s serum at four factories.

The long-standing dispute drew media attention for weeks earlier this year amid a deadly surge of coronavirus infections in Europe, when delays in vaccine production and deliveries hampered the EU’s vaccination campaign.

Cheaper and easier to use than a rival jab from Pfizer-BioNTech, the AstraZeneca vaccine developed with Oxford University was a pillar of the EU’s vaccine rollout, but the EU’s partnership with the firm quickly deteriorated amid accusations it favoured its relationship with British authorities.

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While the UK made quick progress in its vaccination campaign thanks to the AstraZeneca jabs, the EU faced embarrassing complaints and criticism for its slow start.

Concerns over the pace of the rollout across the EU grew after AstraZeneca said it could not supply EU members with as many doses as originally expected because of production capacity limits.

In total, the European Commission has secured more than 2.5 billion of vaccine doses with various manufacturers, but is now shying away from further orders with AstraZeneca.

It recently sealed another major order with Pfizer and BioNTech until 2023 for an additional 1.8 billion doses of their jab to share between the bloc’s countries.

A judgment in the case is to be delivered at a later date.

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