The European Commission has had it with the sputtering vaccine deliveries from AstraZeneca and is taking the Belgian court. The British-Swedish vaccine manufacturer is not impressed.
Relations between AstraZeneca (NASDAQ: AZN) and the European Commission have been clouded for months. Of the 300 million contracted vaccine doses by the end of June, at most 100 million will actually be delivered. That’s a paltry 30 million in the first quarter and at most 70 million in the current quarter.
AstraZeneca will have delivered just 100 million doses of vaccine by the end of June instead of the promised 300 million. The European Commission no longer wants to be fooled and is drawing its conclusions. An option for 100 million additional doses in the European contract with AstraZeneca was not exercised.
In addition, the many letters, meetings and private talks did not appear to have any effect on the deliveries of the vaccine. A dispute settlement mechanism included in the contract did not help.
The measure is full for the European Commission, it goes to court. According to the Commission, AstraZeneca has violated the supply contract on several points. As stipulated in the contract, the matter will be fought in a Belgian court.
“We have tried everything to avoid that step,” diplomats said last week when member states gave the green light for a lawsuit. The summary proceedings are also a political signal. Europe wants to continue to put maximum pressure on the vaccine manufacturer to deliver.
Legal proceedings are much more targeted than the export controls that the Commission used. This export control can also affect vaccine manufacturers who do honour their contracts, EU diplomats emphasize.
AstraZeneca reacts lukewarm to the European demarche. It regrets the move and maintains full compliance with its purchase agreement with the Commission. The entire dispute is ‘devoid of purpose’, according to the vaccine maker. The company is convinced that it will comply with the purchase agreement. AstraZeneca will fully defend itself in court.
AstraZeneca has consistently maintained that the contract contains an obligation of engagement, not an obligation of result. “We believe that every procedure is without purpose and we, therefore, welcome the opportunity we now have to settle this dispute as quickly as possible,” it says.
The pharmaceutical company also emphasizes that the production of a vaccine takes a lot of effort and that companies all over the world are facing supply problems. “We are making progress in solving technical difficulties and producing more and more, but it takes time for these improvements to result in higher numbers of finished doses.”
Some Member States, meanwhile, fear that the legal wrangling will further erode the credibility of the vaccine. In addition to the delivery problems, there are indications that the vaccine in very rare cases leads to the formation of life-threatening blood clots in the brain.
The European Medicines Agency EMA advised on Friday to continue to use the vaccine for all age and risk groups. But the older someone is or the greater the risk of infection, the more the benefits of the vaccine outweigh the disadvantages, the EMA says.