EU to sue AstraZeneca over vaccine supply shortfall

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  EU to sue AstraZeneca over vaccine supply shortfall

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1. Battle over vaccines: EU (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”.
2. Why the battle: The European Commission announced 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.
3. Company defends itself: 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. The production cycle of a vaccine is very long, which means these improvements take time to result in increased finished vaccine doses.
4. Details: 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 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. The EU and AstraZeneca have been locked in acrimony since the company revealed in late January 2021 that it would deliver only a quarter of the up to 120m doses it was originally scheduled to deliver by the end of March 2021. 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.  

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