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8th May 2021

EU takes AstraZeneca to court for 'breaching contract'

  • Responding to the EU’s lawsuit, AstraZeneca said it will 'strongly defend itself in court,' arguing that 'any litigation is without merit' (Photo: Tim Reckmann)

The European Union has launched legal action against the pharmaceutical multinational AstraZeneca for failing to meet its contractual obligations for the supply of Covid-19 vaccines, and for lacking a "reliable strategy" to ensure timely deliveries.

"The European Commission started last Friday legal action against the company AstraZeneca on the basis of breach of the advanced purchase agreement," a commission spokesperson said on Monday (26 April), adding that all 27 EU member states have backed this move.

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"This action is due to the continuous breach of the terms of the contract and to the lack of a reliable strategy by the company to ensure the timely supply of vaccines in the current circumstances," he added.

"We want to make sure that there is 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," he also said.

Under the EU Commission's contract with AstraZeneca, the British-Swedish pharmaceutical giant was supposed to deliver a total of 300 million doses to EU member states for the period between December and the end of June.

After the vaccine was approved by the EU drug regulator in January, the company was expected to deliver 90 million doses by the end of March. But this figure was cut to 40 million, and then reduced to 30 million shortly after.

On top of that, AstraZeneca announced it will now only be able to deliver some 70 million doses by the end of the second quarter, instead of the 180 million contracted.

Shortly after, Brussels sent a legal letter to the company last month, starting a dispute-resolution process - the first step before launching any potential court proceeding.

Early in March, the row with AstraZeneca made Italy block the export of 250,000 doses to Australia.

Legal battle starts Wednesday

Back then, EU Commission president Ursula von der Leyen accused AstraZeneca of having "under-delivered," arguing that the vaccines shortfalls had "painfully" reduced the speed of the vaccination campaign in Europe.

The EU executive, which is responsible for purchasing vaccines on behalf of all member states, informed EU ambassadors last week about its plans to sue the company over delivery shortfalls - seeking support from EU capitals.

AstraZeneca said previously that the company's contract with the EU is only based on a so-called "best reasonable efforts" clause.

However, for EU officials, this clause is "an objective legal standard" that can be measured by any judge, if necessary.

Responding to the EU's lawsuit, AstraZeneca said that it "will strongly defend itself in court," arguing that "any litigation is without merit".

"We welcome this opportunity to resolve this dispute as soon as possible," the company said in a statement.

Under the contract, Belgian courts are in charge of settling unresolved disputes.

The first hearing before the Brussels court of first instance will take place on Wednesday (28 April).

Age coordination?

Meanwhile, EU commissioner for health Stella Kyriakides last Friday called on EU health ministers to coordinate their approaches regarding the use of the AstraZeneca vaccine, for example, when setting age limits.

The renewed call comes as a jumble of measures emerged from EU governments, in response to concerns over rare blood clots.

"Trust requires science, clarity and coherence - let's ensure that we provide this to our citizens," she said.

As of Monday, 24.2 percent of the adult EU population is vaccinated with one dose and 8.1 percent fully vaccinated, according to the European Centre for Disease Prevention and Control.

Over the past week, the EU has seen on average 2.5 million vaccinations per day across the EU, Kyriakides said.

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