EU presses AstraZeneca over delayed vaccines, reveals particulars of contract

The President of the European Commission, Ursula von der Leyen, will give a lecture at the end of a video conference of the members of the European Council that dealt with the Covid 19 pandemic in Brussels on January 21, 2021.

OLIVIER HOSLET | AFP | Getty Images

LONDON – The European Union released an edited version of the contract it signed with AstraZeneca on Friday as the bloc put pressure on the drug maker to deliver the promised Covid vaccine shipments.

The EU, which has been criticized for its slow adoption of vaccinations, was hit with a blow by AstraZeneca last week when the company said it could only deliver a fraction of the shots it agreed to for the first quarter.

AstraZeneca has denied it failed to deliver on its commitments, stating that shipments to the 27-nation bloc were targets rather than promises. The company also cited production problems at its European plants for the delays.

The European Commission, the EU’s executive branch, welcomed AstraZeneca’s commitment to greater transparency after the company agreed that details of the deal could be made public. AstraZeneca was not immediately available to leave comments when CNBC contacted them.

The contract, which was signed on August 27, provides for AstraZeneca to undertake to the best of its ability to build capacity to produce 300 million doses of vaccine, with the Commission having the option to order an additional 100 million doses.

In the case of AstraZeneca, the agreement defines “best effort” as the activities a company with similar resources would undertake in the development and manufacture of its vaccine.

This includes “bearing in mind the urgent need for a vaccine to end a global pandemic that is creating serious public health problems, restrictions on personal freedoms and economic impacts around the world, but considering its effectiveness and safety”.

The contract states that AstraZeneca will use its “best possible efforts” to manufacture the vaccine at manufacturing facilities in the EU. The deal also provides for this to include plants based in the UK, although the country left the bloc last year.

AstraZeneca has been told to send some of the UK-made cans to the block, but the company said a separate deal with the UK prevented that.

The European Medicines Agency is expected to make a decision on Friday on whether the AstraZeneca vaccine will actually be approved for use.

International Competition Concerns

The President of the European Commission, Ursula von der Leyen, said on Friday morning on German radio: “There are binding orders and the contract is crystal clear.”

“AstraZeneca also explicitly assured us in this contract that no other obligations would prevent the fulfillment of the contract,” she said, according to Reuters.

Von der Leyen claimed the agreement included clear delivery amounts for December and the first three quarters of 2021.

Earlier this week, Pascal Soriot, CEO of AstraZeneca, said that the EU contract was based on a so-called best effort clause and did not officially require the drug manufacturer to have a specific delivery schedule.

Von der Leyen rejected that proposal on Friday, adding that the clause would only apply if it was unclear whether AstraZeneca could develop a safe and effective vaccine. She also claimed that the contract specifically mentioned four manufacturing facilities that would supply the vaccine to Europe, two of which are in the UK.

A look at the headquarters of the British-Swedish multinational pharmaceutical and biopharmaceutical company AstraZeneca as a Covid-19 vaccine developed by AstraZeneca and inspected in Brussels, Belgium on January 28, 2021.

Dursun Aydemir | Anadolu Agency | Getty Images

EU officials have indicated that deliveries from the UK to Europe could be rerouted if delays in European production persist.

UK Prime Minister Boris Johnson said he remained confident in delivering the AstraZeneca vaccine, which was developed in partnership with Oxford University. Johnson added that he was “very pleased” that the country was among the fastest in Europe to introduce the vaccine.

The UK has the second highest number of confirmed Covid cases in Europe after Russia, recording the highest number of coronavirus-related deaths of any European nation and the fifth highest worldwide.

The EU of around 450 million people is struggling to get its vaccinations up and running as it is insufficiently supplied and is currently lagging far behind countries like Israel and the UK in delivering vaccines to its citizens.

Vaccine maker Pfizer-BioNTech initially delivered a blow, announcing it would temporarily cut production to improve its production capacity in Belgium. This was followed by AstraZeneca last Friday, which reduced its delivery estimates for the region.

An unnamed senior EU official told Reuters that the bloc had expected around 80 million doses by March but had been told it would only receive 31 million doses. The company has not confirmed the quantities concerned.

A deepening dispute between the EU and AstraZeneca has raised concerns about international competition for limited vaccine supplies.

– CNBC’s Holly Ellyatt contributed to this report.

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