Home Commercial Awareness The EU vs AstraZeneca- The Dispute Explained

The EU vs AstraZeneca- The Dispute Explained

by Elena Alonso

Tensions have escalated after the pharmaceutical company announced that it will not be able to deliver the number of vaccine doses it agreed with the EU.

How the dispute began

Last Friday, the Anglo-Swedish pharmaceutical company suddenly announced to the European Commission (EC) that it would initially be unable to deliver the planned number of doses. “During today’s Steering Committee with the Member States on the EU Vaccine Strategy, AstraZeneca representatives announced delays in the delivery of vaccines compared to the forecast for the first quarter of this year,” said European Commissioner for Health Stella Kyriakides on Twitter.

According to Reuters, the EU would get 60 per cent fewer doses than promised for January-March 2021. The EU signed an agreement with AstraZeneca in August for the purchase of 300 million doses, with an option to buy an additional 100 million doses.

The Contract

The contract published on Friday contains blacked-out parts belonging to confidential information, such as details of invoices, says Brussels. 

Following the European Commission’s request on 27 January 2021, after the interview of AstraZeneca’s CEO Pascal Soriot, in which he gave details of its content, it has agreed to publish the contract signed between the two parties on 27 August 2020. Soriot’s most controversial point was when he said there was no agreement on deliverables beyond “reasonable best efforts”.

The contract defines it as follows: “In the case of AstraZeneca, the activities and degree of effort that a company of similar size with a similarly-sized infrastructure and similar resources as AstraZeneca would undertake or use a vaccine at the relevant stage of development or commercialisation having regard to the urgent need for a vaccine to end a global pandemic which is resulting in serious public health issues, restrictions on personal freedoms and economic impact, across the world but taking into account efficacy and safety” .

The dispute with the UK

Despite these announced delays for the EU, AstraZeneca does expect to deliver the planned UK doses, which also generated controversy. In an interview, the company’s chief executive explained that the lack of EU doses is due to a loss of efficiency at a plant in Belgium and that if the UK has more doses than the EU, it is because it signed the contract three months earlier. “The lowest-performing plants in the network are the ones supplying Europe. We have not done this deliberately,” Soriot explained in the interview, according to the Italian daily La Republicca.

What is the EU demanding now?

At a press conference on Wednesday, the EU health commissioner demanded some of the doses produced in the UK plants, which have not suffered problems. ‘We reject the logic of first come first served. That may work at the neighbourhood butchers but not in contracts’ said Mrs Kyriakides. 

Kyriakides explained that the contract with the Anglo-Swedish pharmaceutical company contains “production risk” clauses, according to which the company should have produced a certain quantity of vaccines for distribution as soon as it receives authorisation to market them in the EU. It was also pointed out that the agreement contains no hierarchy between AstraZeneca’s four production plants in Europe – two in the UK, one in Belgium and one in the Netherlands – so that if one of them does not perform as expected, the company must ship doses from the other three.

The intention of Brussels is to lift the lift the contractual veil “because several of the clauses in the contract are already in the public debate”, a source in the EU executive said this week.  “We want to be in a position to make the contract available so that the debate is out there in the open.” Health commissioner Stella Kyriakides said in midweek, as the dialectical battle between Brussels and the company grew and she called for the agreements to be made public. “We believe that sharing them will satisfy many of the questions that have been raised.”  

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