Picture: REUTERS/DADO RUVIC
Picture: REUTERS/DADO RUVIC

Brussels — AstraZeneca should pay multimillion-euro daily penalties if it still fails to deliver Covid-19 vaccines on time, the EU told a court in the latest round of a bitter legal dispute over the drugmaker’s alleged broken promises.

AstraZeneca’s “failure” to deliver the 300-million doses the EU ordered from it in 2020 is hurting the region’s vaccine rollout and Europe’s attempts to recover from the pandemic, lawyers for the European Commission said a hearing in Brussels on Wednesday.

The company should pay €10 a day for each overdue vaccine, said Fanny Laune, a lawyer representing the EU. Fast deployment of AstraZeneca’s vaccine is essential “to bring the mortality rate down”.

The EU wants the court to order Astra to supply 20-million more doses than it now plans to deliver by the end of June. If the court backed the EU, the company could have to pay out as much as €200m a day for those shots. A ruling on an urgent order could come within a month.

AstraZeneca’s supply contract with the EU came into focus after it delivered just 30-million doses in the first quarter, compared with an original target of 120-million. The company blamed the shortfall on difficulties producing the vaccine at European plants. The EU has insisted the company should have relied on British facilities, raising questions over AstraZeneca’s separate deal with the UK.

Slow start

Europe had a slow start in vaccinating its 448-million population, partly due to uncertainties over vaccine supplies, hampering efforts to reopen economic activity after the coronavirus pandemic forced the region into an unprecedented downturn last year.

AstraZeneca’s lawyer, Hakim Boularbah, argued that the company made it clear to the EU that it would make its best efforts to rapidly manufacture a new vaccine in circumstances fraught with uncertainties.

“AstraZeneca has honoured and continues to honour that commitment,” he told reporters after the hearing. The company “provided evidence today that the European Commission was made aware” in 2020 negotiations of “our priority to the UK supply chain contrary to the repeated and incorrect arguments of the commission”.

The drugmaker also argued that the contract includes a provision that the company would not be liable for any delay. It countered the EU’s call for urgent deliveries, saying the commission has stated it doesn’t need the AstraZeneca vaccine for the inoculation campaign.

The European Commission’s legal action against AstraZeneca follows a blame game over its own role in prioritising cost savings over securing supplies.

Long battle

The EU has recently turned to Pfizer/BioNTech for an additional 1.8-billion vaccines.

Nearly half of EU adults have now received at least one shot of a vaccine, European Commission president Ursula von der Leyen said in a tweet on Tuesday.

AstraZeneca hasn’t been selling its shot for profit, but the prospect of a long legal battle with 27 governments raises the risk of litigation costs and damage payments.

The EU wants the court to demand that AstraZeneca delivers a further 90-million doses by the end of June, to reach the 120-million target. The EU is also asking for 180-million doses by the end of September, to fulfil the full contract of 300-million doses ordered in 2020.

The same court will examine later in 2021 whether Astra violated the terms of its contract.

Another lawyer for the EU, Rafael Jafferali, told judges earlier that the company hadn’t tried to use all its production facilities to meet the EU order and the company’s record so far is “obviously a failure”. It was “flagrant” that the company had exported some 50-million doses outside the EU, mostly to the UK and Japan, at the same time.

Aside from the dispute over deliveries, AstraZeneca’s vaccine has been mired in controversy in Europe over alleged clotting side effects, which have led some EU members to limit its use to specific age groups. The European Medicines Agency has warned doctors to check on patients who may be vulnerable to clots.

Bloomberg News. More stories like this are available on bloomberg.com

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