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The European Commission is out for more AstraZeneca vaccine doses — with a side of vengeance.
The fight escalated this week when the EU’s executive dragged AstraZeneca into court to demand the company send liquid vaccine, or “drug substance,” from two U.K. production sites in the EU’s contract. The real showdown will be May 26, during a full day hearing in Brussels.
Regardless of whether the court rules in the Commission’s favor, however, the EU’s lawsuit might be just as much about showing it won’t be pushed around by a drug company as it is about securing doses.
As for AstraZeneca, it could try to have the case thrown out on the grounds that its contract with the Commission explicitly says the EU won’t sue over delivery delays.
A provision in the contract states that the Commission and participating member states “waive and release any claim against AstraZeneca arising out of or relating to … delays in the delivery of the Vaccine under this Agreement.”
That the Commission has pressed ahead with the case shows just how enraged EU officials are over the company’s failure to deliver millions of doses — and how negotiations have deteriorated to the point they seem irreparable. There’s an added touch of irony that the Commission is essentially violating its contract with AstraZeneca to sue AstraZeneca for violating its contract.
“What the EU wants is more delivery of more doses as soon as possible, and litigation is probably not the ideal way to realize that,” said Carl Tobias, a law professor at the University of Richmond in Virginia, U.S. “But they’ve been disputing this for most of the year. So I assume that the EU is just desperate and wants to move as quickly as it can.”
But practically speaking, a lawsuit wouldn’t magically yield more doses. The EU could win the case, but AstraZeneca won’t have more doses to give.
And even under an expedited procedure, the court can’t make a decision until after the May 26 hearing. By that point, some EU countries might already have a surplus of doses, since many are restricting the jab to older populations due to potential rare blood-clot risks.
Finnish officials, for example, say they might need to cancel orders soon because they’re only using the vaccine in over 65s, most of whom have already been vaccinated. Denmark, meanwhile, has completely stopped using the jab and is sending at least some doses to its neighbors.
Sébastien De Rey, a researcher at KU Leuven, believes it’s probably true the Commission is genuinely trying to get more doses. But it’s also just as likely the EU wants to show AstraZeneca and other drugmakers that the Commission can’t be pushed around by sending the message: “We take things seriously.”
The Commission, for its part, insists its lawsuit against AstraZeneca is merely to get the promised doses.
“The purpose is to receive the doses we are entitled to,” Commission spokesperson Stefan De Keersmaecker said.
The Commission’s argument, laid out at the preliminary hearing this past Wednesday at the Belgian court of first instance by its lawyer Rafael Jafferali, is that the company was not using all the production sites included in its contract.
So far, only two drug substance sites in the EU and one backup plant in the U.S. have made substance for EU vaccine doses. Two other U.K. plants included in the EU’s contract haven’t made substance for the EU.
AstraZeneca’s attorney, Hakim Boularbah, countered that the company is under no obligation to use all of those plants. That sentiment was also underscored earlier in the week, when the Anglo-Swedish drugmaker said it has “fully complied” with the Commission’s advance purchasing agreement, adding that making vaccines is “difficult.”
That excuse hasn’t been good enough for the EU, which says AstraZeneca is now set to deliver just 70 million of 180 million doses promised in the second quarter of the year, on top of supplying only 30 million out of 120 million scheduled by the end of March.
The case will come down to what’s in the contract.
AstraZeneca was expected to invoke a provision (article 15.1.e) that the Commission and EU countries waived the right to sue the drugmaker over delivery delays, said Marcel Fontaine, a law professor at the University of Louvain. A judge could then agree that the EU cannot sue: “This could be the end of the claim,” he said.
In the hearing on Wednesday, AstraZeneca didn’t invoke this clause, even though it could do so later. “I find it surprising, but perhaps they have had advice that they had little chance with that provision,” Fontaine said.
This is because Belgian law says that such a waiver cannot allow a party to just ignore an essential part of a contract, which in this case is the delivery schedule. The Commission could have come back and argued that this clause did not mean that AstraZeneca could just completely tear up the delivery schedule the two signed.
Instead, the company has focused its argument on its “best efforts” to deliver vaccines, using the now-infamous phrase by AstraZeneca CEO Pascal Soriot earlier this year. The Commission will have to prove that the company didn’t make every effort to ensure punctual deliveries, Fontaine said.
A judge might look at this question by comparing how AstraZeneca performed with other vaccine producers. And there, the picture isn’t great for the Anglo-Swedish drugmaker: By the end of the first quarter, Moderna delivered the 10 million doses it promised. BioNTech/Pfizer delivered seven million more doses than planned in the same time frame, and will deliver 50 million more in the second quarter. It is still to be seen whether Johnson & Johnson delivers the full 55 million doses promised.
AstraZeneca, meanwhile, has delivered 34 million doses so far since the start of the year and plans to deliver only a third of the total 300 million doses it promised by the end of June in total.
Tobias calls such numbers “pretty striking,” especially compared with the EU’s vaccine poster child, BioNTech/Pfizer.
Even if the Commission has a strong legal case, it’s unclear what a win could truly yield.
When asked this week, De Keersmaecker wouldn’t speculate about what would happen if AstraZeneca simply doesn’t have any more doses to provide the EU.
For its part, the company claims it will supply nearly 50 million doses by this Friday, which is already down from its initial pledge to deliver 80 million in April. But earlier this week, a Commission official said the company delivered only 34 million doses.
“It is not impossible” that the company could meet this target, the official said. Neither the Commission nor AstraZeneca immediately responded about whether the company supplied enough to meet this target Friday.
Still, even if the company meets this April target, the Commission’s contract says the entire delivery of 300 million doses should be delivered by the end of June. It’s unlikely the company can deliver this many. If it fails again, the Commission doesn’t have many options. The EU could terminate the contract, but that would leave the EU with zero additional doses, De Rey points out.
Fontaine said it is unlikely the court would force AstraZeneca to redirect supplies from elsewhere, because that could cause the company to break other contracts.
Tobias saw another scenario: The EU could ask a judge for AstraZeneca to essentially pay whatever the breach of contract cost, for example, based on how much it cost to find replacements. “You could probably set an amount of what it would take to go into the market and buy from Pfizer, buy it from Moderna, and put a price tag on that,” he said.
Regardless, the legal process could take time.
“Litigation moves slowly,” Tobias said. “Even … if the EU were to win the litigation … you could appeal it. So even if [the Commission] wins, it wouldn’t happen very quickly.”
This article is part of POLITICO’s premium policy service: Pro Health Care. From drug pricing, EMA, vaccines, pharma and more, our specialized journalists keep you on top of the topics driving the health care policy agenda. Email [email protected] for a complimentary trial.