EU seeks fines for AstraZeneca over COVID vaccine delays

EU lawyers asked Belgian judges to fine the Anglo-Swedish pharma giant AstraZeneca millions of euros on Wednesday, as a long-running row over the supply of coronavirus vaccines reached a Brussels court.

The European Union is suing the British-Swedish drugmaker over COVID jab delivery delays that hampered efforts to kickstart vaccination across the bloc.

The EU has accused AstraZeneca — which worked with Oxford University in developing its vaccine — of favoring the United Kingdom in its deliveries.

Rafael Jafferali, representing the EU executive, asked judges to fine the drugmaker €10 million ($12.2 million) per infraction and to force AstraZeneca to pay €10 per dose for each day of delay as compensation for breaching the EU contract.

Delivery delays: What are the arguments?

AstraZeneca had initially committed to deliver 300 million doses from December to the end of June. But due to shipment delays, only 30 million doses arrived in the first quarter.

According to the Commission, the company is set to provide only 70 million doses in the second quarter of this year, as opposed to the 180 million it had promised.

With this lawsuit, the EU is hoping to pressure AstraZeneca to deliver 90 million more doses of its coronavirus vaccine before July.

The EU accused AstraZeneca of misleading the 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,'' the EU lawyer, Rafael Jafferali, told the court on Wednesday. 

Jafferali said AstraZeneca expects to deliver the total number of doses by the end of December. "With a six-month delay, it's obviously a failure," he said. 

AstraZeneca has repeatedly denied having failed in its commitments and denounced the lawsuit as "unfounded." 

According to the company's lawyer, AstraZeneca was not obliged to deliver the entire volume of doses, claiming it had only committed to doing its "best reasonable efforts."

What about production?

Jafferali's main argument is that AstraZeneca should have used production sites in the bloc and the UK for EU supplies as part of the "best reasonable effort'' clause in the contract. 

The EU had said it invested €2.7 billion ($3.8 billion), including €336 million ($408 million), as part of an agreement with vaccine companies, to finance the production of AstraZeneca's jab at four factories.

Another lawyer on the EU team, Charles-Edouard Lambert, said the drugmaker reserved 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.

AstraZeneca lawyer hits back

AstraZeneca has long insisted that the doses mentioned were not binding targets and that the deal stated it only had to "best reasonable efforts" in delivering them.

Hakim Boularbah, a lawyer for the drugmaker, said the company’s May 2020 agreement with the British government and Oxford University, the vaccine’s co-developer, gave priority to Britain for 100 million doses.

"It’s very shocking to be accused of fraud," Boularbah said, branding the EU's claim "a groundless accusation."

"This is not a contract for the delivery of shoes or T-shirts," he argued, stressing the complexity of manufacturing a new vaccine under huge demand pressures.

The European Commission wants UK-produced AstraZeneca jabs to be sent to the EU and has warned it will use powers to block exports until the contract is fulfulled.

Did AstraZeneca favor the UK?

AstraZeneca chief Pascal Soriot told the Financial Times that the UK government had been guaranteed priority for deliveries from the UK vaccine supply chain.

He said it was part of the deal it sealed with Oxford University in return for investment, before AstraZeneca joined as a development partner to produce and distribute the vaccine.

"Of course, when you do something like this as a government, you don't do it for free,'' Soriot said. "What you want in return, and it's fair enough, is priority.''

While the EU insists the AstraZeneca jab remains part of its vaccine strategy, the Commission has not yet contracted the company for additional doses. 

The Commission, however, has doubled down on securing more BioNTech-Pfizer coronavirus vaccine shots. 

The dispute over AstraZeneca grew even more complex after several European countries moved to curb its use after the jab was linked to extremely rare, but serious blood clotting side effects.

The ensuing back and forth and renewed regulatory review sparked what health officials have described as an outsized public fear of the jab.

EU taps other manufacturers for doses

Since the row erupted earlier this year, senior Commission officials have suggestedthat they will not seek to buy any more jabs from AstraZeneca.

The EU also has supply deals with Pfizer, Moderna and Johnson & Johnson.

Didier Reynders, the EU commissioner for justice, said in an interview on Wednesday that it was "nonsense" to think about renewing its deal with the company. 

"In the first quarter we didn’t receive what was put on the contract and for the second quarter it will be the same," Reynders told CNBC.

"For the moment, it’s no," he said when asked if the EU could sign a fresh agreement with AstraZeneca. 

"This is nonsense, to think about a new contract," he told the US broadcaster.

Earlier this week, Ursula von der Leyen, the European Commission president, said that the EU was on track to vaccinate 70 of the bloc's adult population by the end of July.   

"If we continue like this, we have confidence that we will be able to safely reopen our societies," she said.

fb-jf/rs (AFP, AP)