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The legal dispute between the European Union and AstraZeneca continues to heat up. At a hearing that began today, the EU seeks a court order that the British-Swedish pharmaceutical company supply the 27-nation bloc with more doses of its vaccine.
The European Union made its case before a Brussels court, declaring an emergency situation warranting AstraZeneca to provide 20 million additional shots by the end of June. Rafael Jafferali, the European Commission’s lawyer, told the court that “AstraZeneca did not even try to respect the contract.”
In the past month, however, AstraZeneca stated that it fully complied with its contract. As a result, the company believes that “any litigation is without merit”.
Later this year, the Belgian court will investigate whether the drug-maker violated the terms of its agreement with the EU.
The EU and AstraZeneca have been at odds since the beginning of 2021 over their initial agreed upon contract. Signed in August 2020, the agreement stated that AstraZeneca would supply the EU with 300 million doses of its COVID-19 vaccine.
In the first three months of 2021, AstraZeneca was supposed to deliver 90 million doses. However, the European Commission says only 30 million jabs arrived.
Adding further fuel to the fire, AstraZeneca said it could only deliver 70 million of the promised 180 million jabs in the second quarter of the year.
AstraZeneca blamed the dose shortage on production issues it faced at European plants. However, the pharmaceutical company was able to rely on UK factories if needed, raising questions over its separate deal with the UK.
Europe’s vaccine rollout got off to a rocky start due to supply uncertainties. The setback led to a delay in reopening economic activity as cases continued to surge. As a result, the financial impact of the global pandemic was felt for far longer.
The vaccine rollout has now picked up momentum in Europe. Yesterday, European Commission President Ursula von der Leyen tweeted that 46% of EU adults have had at least one dose of a COVID-19 vaccine.
However, if the delivery of AstraZeneca’s additional doses is further delayed, potential repercussions may arise. A new variant that originated in India has made its way to Europe, causing an uptick in new travel bans. Studies have shown that two doses of AstraZeneca’s vaccine offer protection against the new variant, but there are citizens still waiting on their second jab.
Pascal Soriot, AstraZeneca’s Chief Executive, suggests that the slower rollout in Europe is not due to delivery delays but instead a less aggressive investment from the EU. He pointed out that the UK government had been guaranteed priority in vaccine supplies owing to an agreement previously struck with Oxford University. Soriot also noted that the US had achieved a high vaccination rate without being supplied by AstraZeneca – “they don’t have our vaccine. So if our vaccine is the problem in Europe, you tell me how the US has achieved such a high vaccination rate?”
Soriot also addressed the fact that the pharmaceutical company doesn’t sell the vaccine for profit, saying, “we wanted to provide this vaccine at no profit because we saw, as an industry, we should not be seen as profiteering from this type of pandemic.”
This is in contrast to rival companies supplying the COVID-19 vaccine, some of which are forecasting tens of billions of dollars in revenue from this year alone. Therefore, the cost of a long legal battle with the 27-nation bloc will likely weigh heavily on AstraZeneca.
However, Soriot remains positive that there is a market for AstraZeneca’s vaccine even without the EU. “I’m a European so I love Europe, don’t get me wrong,” he said. “But at the end of the day Europe is part of the world, it’s not the whole world. And there are many countries around the world who actually want this vaccine, so this vaccine has a future.”
Stefan De Keersmaecker, the EU’s executive arm’s spokesperson, pointed out that the need for the doses was urgent to continue the vaccination programs in member states. To stay on track, the EU turned to Pfizer and BioNTech to fill the gaps in its vaccine supply, securing an additional 1.8 billion doses.
It could take as little as 30 days for the Brussels Court to decide on the EU’s request to deliver the vaccine doses. If the outcome of the legal dispute is in favour of the EU, it could put further strain on AstraZeneca’s supply chain, as well as their finances.
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