EU asks for big penalties against AstraZeneca over dose delays

FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, February 19, 2020. REUTERS/Yves Herman/File Photo

BRUSSELS, Belgium — The European Union on Wednesday asked a Belgian court to impose penalties running to millions of euros per day on AstraZeneca for Covid-19 vaccine doses it has failed to deliver to the bloc.

The request came as EU countries and their executive, the European Commission, began legal action against the Anglo-Swedish pharmaceutical company for “flagrant violation” of its contract with Brussels.

The EU is suing AstraZeneca to force it to deliver 90 million more doses of its coronavirus vaccine before July, arguing that it failed in its contractual duty by handing over only a quarter of the shots it promised for the first three months of 2021.

The deadline for the contract is set for mid-June, according to the Commission, and the EU says the company should face financial penalties if it does not meet this deadline.

Its legal team demanded an upfront fine of 10 million euros ($12 million) plus “10 euros per dose and per day of delay” in that event.

AstraZeneca delivered only 30 million doses in the first quarter, out of the 120 million it was contracted to supply. For the current quarter which runs until June 30, it plans to deliver only 70 million of the 180 million doses initially promised.

A Commission official close to the case told AFP this month that AstraZeneca was currently delivering doses at a rate of only 10 million per month, well below the planned pace.

The company’s defence — articulated ahead of the court case in a series of media interviews by AstraZeneca’s French-Australian boss Pascal Soriot — relies on a part of the contract that speaks of “best reasonable efforts” by AstraZeneca and declarations that production was hit by unavoidable delays.

But the lawyer for the EU, Rafael Jeffareli, argued in court that the firm had prioritised supplies to Britain and beyond, while failing to make the best effort to step up production at its EU site in the Netherlands, operated by sub-contractor Halix.

Jeffareli alleged that for several weeks after the EU signed its contract with the firm in September last year, the Dutch plant had continued to supply markets other than the EU.

“Best effort means flexibility. Why did the switchover of the Halix site (to EU supply) only start on October 13?” he demanded.

The Halix plant in Leiden, the Netherlands, had sent supplies to Japan at the end of last year, he said. In total, “50 million doses were diverted to third countries in flagrant violation of the contract”.

‘Unfounded’

AstraZeneca, which worked with Britain’s Oxford University in the development of its vaccine, denies having failed in its obligations. At the end of April it described the lawsuit as “unfounded”.

One lawyer for AstraZeneca has claimed the EU was warned “as early as February” of the delays and expressed surprise that the bloc waited at least two months to take the matter to court.

But the European Commission says the contract proves that AstraZeneca is legally responsible, and EU diplomats and lawmakers have pointed out that the company has largely delivered promised doses to Britain, where it is headquartered.

The commission, which has procured vaccines on behalf of the whole of the EU, initially intended the AstraZeneca jab as the main workhorse in the bloc’s inoculation drive.

It has now switched to the more expensive Pfizer/BioNTech vaccine as its mainstay.

The row has eroded public confidence in the AstraZeneca jab, which is also suffering from a negative perception in some countries because of worries over links to very rare fatal blood clots that can prove fatal.

Denmark stopped using AstraZeneca in its vaccination campaign as early as April, followed later by Norway and Austria.

Most other countries have restricted its use to older adults. This is the case in France, for instance, where it is reserved for those aged 55 and over.