EU launches legal Action Against AstraZeneca Due To Vaccine Shortages

Brussels is suing AstraZeneca over an alleged breach of its deal
to supply vaccines to the EU, setting up a bruising legal battle
after months of bitter disputes over large delivery shortfalls.

The company immediately responded that it regretted the move and
would “strongly defend” itself against litigation that it
considered “without merit”.

The European Commission announced on Monday that it had launched
the legal action on behalf of itself and the 27 EU member
states.

“Some terms of the contract have not been respected and the
company has not been in a position to come up with a reliable
strategy to ensure timely delivery of doses,” the commission
said.

“What matters to us, in this case, is that we want to make sure
that there’s a speedy delivery of a sufficient number of doses that
European citizens are entitled to and which have been promised on
the basis of the contract,” it added.

AstraZeneca is likely to deliver no more than a third of the
300m doses originally targeted in the contract for supply to the EU
by the end of June.

The company insisted it had “fully complied” with the supply
agreement, under which it had committed to making “best reasonable
efforts” to meet the delivery goals.

“Vaccines are difficult to manufacture, as evidenced by the
supply challenges several companies are facing in Europe and around
the world,” AstraZeneca said in a statement. “We are making
progress addressing the technical challenges and our output is
improving, but the production cycle of a vaccine is very long,
which means these improvements take time to result in increased
finished vaccine doses.”

The Commission said a first hearing in the case would take place
before the Brussels Court of First Instance on Wednesday. The
contract was drawn up under Belgian law.

The EU is taking a gamble by escalating the dispute to the
courts. Lawyers have suggested the deal’s terms mean AstraZeneca
should be able at least to construct an arguable case in its
defence.

Some observers are also concerned that the case will use up
valuable time and resources without achieving the Commission’s
stated aim of speeding the supply of AstraZeneca vaccines now. This
fear caused some EU member states to hesitate last week before
eventually backing the move, diplomats said.

The EU and AstraZeneca have been locked in acrimony since the
company revealed in late January that it would deliver only a
quarter of the up to 120m doses it was originally scheduled to
deliver by the end of March. Brussels called on the company to
fulfil its “contractual, societal and moral obligations”, as the
EU’s inoculation drive lagged those in the US and UK.

AstraZeneca later downgraded its second quarter supply estimates
from 180m shots to 70m. It said on Monday it was on track to
deliver almost 50m doses to European countries by the end of April,
in line with its revised forecast.

Brussels is suing AstraZeneca over an alleged breach of its deal
to supply vaccines to the EU, setting up a bruising legal battle
after months of bitter disputes over large delivery shortfalls.

The company immediately responded that it regretted the move and
would “strongly defend” itself against litigation that it
considered “without merit”.

The European Commission announced on Monday that it had launched
the legal action on behalf of itself and the 27 EU member
states.

“Some terms of the contract have not been respected and the
company has not been in a position to come up with a reliable
strategy to ensure timely delivery of doses,” the commission
said.

“What matters to us, in this case, is that we want to make sure
that there’s a speedy delivery of a sufficient number of doses that
European citizens are entitled to and which have been promised on
the basis of the contract,” it added.

AstraZeneca is likely to deliver no more than a third of the
300m doses originally targeted in the contract for supply to the EU
by the end of June.

The company insisted it had “fully complied” with the supply
agreement, under which it had committed to making “best reasonable
efforts” to meet the delivery goals.

“Vaccines are difficult to manufacture, as evidenced by the
supply challenges several companies are facing in Europe and around
the world,” AstraZeneca said in a statement. “We are making
progress addressing the technical challenges and our output is
improving, but the production cycle of a vaccine is very long,
which means these improvements take time to result in increased
finished vaccine doses.”

The Commission said a first hearing in the case would take place
before the Brussels Court of First Instance on Wednesday. The
contract was drawn up under Belgian law.

The EU is taking a gamble by escalating the dispute to the
courts. Lawyers have suggested the deal’s terms mean AstraZeneca
should be able at least to construct an arguable case in its
defence.

Some observers are also concerned that the case will use up
valuable time and resources without achieving the Commission’s
stated aim of speeding the supply of AstraZeneca vaccines now. This
fear caused some EU member states to hesitate last week before
eventually backing the move, diplomats said.

The EU and AstraZeneca have been locked in acrimony since the
company revealed in late January that it would deliver only a
quarter of the up to 120m doses it was originally scheduled to
deliver by the end of March. Brussels called on the company to
fulfil its “contractual, societal and moral obligations”, as the
EU’s inoculation drive lagged those in the US and UK.

AstraZeneca later downgraded its second quarter supply estimates
from 180m shots to 70m. It said on Monday it was on track to
deliver almost 50m doses to European countries by the end of April,
in line with its revised forecast.