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EU vs AstraZeneca: Is Legal Action the Right Choice? - Zahra Lahrie

AstraZeneca is placed at the centre of the EU’s immunisation plan. However, the company was only able to provide 30 million doses in the first three months of the year; only a quarter of the 120 million doses they were expected to deliver. The European Commission has even forecasted that AstraZeneca will only deliver 70 million vaccines in the second half of 2021, rather than the 180 million doses that were agreed upon.

AstraZeneca has attributed the initial delivery shortfalls to production problems in the Belgium plant. A technical issue at this major plant resulted in a low yield from the division of cells in the bioreactor. Regardless, these delivery shortfalls have meant that the EU has been forced to rely upon the more expensive Pfizer-BioNTech vaccine and have “painfully, of course, reduced the speed of the vaccination campaign,” as noted by Ursula von der Leyen (President of the European Commission).

In response to AstraZeneca’s performance, the European Commission announced on Monday 19th April, that it would be taking legal action against the company, with the support of all 27 member states. The EU has argued that AstraZeneca has failed to abide by its contractual arrangement. Whilst a spokesperson for the EU commission stated that “some terms of the contract have not been respected and the company has not been in the position to come up with a reliable strategy to ensure timely delivery of doses”, AstraZeneca has maintained that they have “fully complied with the advance purchase agreement with the European commission”. The two parties fundamentally disagree and the initiation of legal action indicates an escalation in the long-standing dispute between both parties, with Ursula Von der Leyen having previously threatened to halt exports of the AstraZeneca vaccine. Thus, it appears that this dispute has the potential to be drawn out and difficult to resolve, despite the EU’s express desire to quickly roll out their vaccination plan.

The particular breach has arisen from AstraZeneca’s refusal to utilise vaccines in two factories in Britain, whichwere outlined amongst two other vaccine-making plants in the contract. AstraZeneca utilised plants in the Netherlands and Belgium to supply vaccines to the EU. However, no vaccines were shipped from the U.K plants to the EU, despite the company’s delivery shortfalls. Rafeael Jafferali, the EU’s lawyer, told the judge in the first hearing, that “the contract listed a series of plants that had to be used by AstraZeneca and that still today, in breach of the contract, AstraZeneca is not using”. On the other hand, AstraZeneca has not treated this aspect of the agreement as binding, the company’s lawyer, Hakim Boularbah, replying that “There is no obligation to use the factories”. Instead, Pascal Soriot (Chief Executive of AstraZeneca) has claimed that he was contractually obliged to supply doses made in the U.K to U.K residents in the first instance. The issues surrounding the arrangement between the EU and AstraZeneca are only further complicated by the existence of AstraZeneca’s contracts with third parties. It is clear that AstraZeneca has overstretched itself and is struggling to satisfy competing obligations. Meanwhile, each nation is closely monitoring the enforcement of their own contracts to ensure their own vaccination plan is fulfilled, fostering a hostile atmosphere between countries.

From the first session of this legal action, the two parties agreed to attend two hearings on May 26, in hopes of quickly resolving the dispute and ensuring the delivery of the outstanding doses. These legal proceedings reveal the uniquely time-sensitive nature of this dispute. This is not simply a civil case between two private parties: the focus of these proceedings concerns the health and welfare of all EU citizens. Especially with the emerging news about the dire Covid-19 situation in India, quickly securing and administering vaccines is a necessity. As Stella Kyriakos, the EU Health Commissioner tweeted, “Every vaccine dose counts. Every vaccine dose saves lives

Therefore, the whole notion of legal proceeding seems to be an innately dubious course of action. If, as one EU official told Reuters, the purpose of the legal action is to “send a message” to AstraZeneca, the EU seems to be wasting time rather than saving lives.

Firstly, the robustness of the EU’s legal action is uncertain, especially considering the fact that Belgian officials were cautioned about the contract in question. According to an opinion by Deloitte, the contract between AstraZeneca and the EU “does not provide for sanctions when the delivery dates and quantities are not respected”. Deloitte even foreshadowed the possibility of AstraZeneca having competing contracts with third parties, which may hinder the company’s ability to meet its delivery schedule. This contractual arrangement emerged from a preliminary agreement between AstraZeneca and a small alliance between EU countries (France, Germany and Italy). Therefore, the deficiencies in the EU’s contract root their initial inflexible negotiating position, with an EU Official commenting that when the bloc “received the mandate from all member states ... a number of things were already fixed.” Though this does hint towards the EU’s naiveté in the contracting process, it also suggests that the current legal action may be without merit, especially since Astra-Zeneca has proclaimed that it “will strongly defend itself in court”.

Secondly, tackling the global pandemic requires cooperation, not the type of antagonism created by the EU’s legal action. The world can only return to normal once the Covid-19 situation has been fixed in each individual nation. This is a massive task that requires a globally cooperative approach and trust in the science behind vaccines. However, this legal action is representative of an apparent hostility between nations, refusing to share vaccines. The EU has blocked extra-doses of vaccines being sent from Haliix, AstraZeneca’s sub-contractor, to the U.K and the U.S has ensured that few vaccines have left the nation, by utilising the Defense Production Act to ensure private companies fulfil US contracts on vaccines first. While it is important to acknowledge each nation’s right to ensure the safety of its citizens, this attitude has the potential to jeopardise a sooner Covid-free future.

Moreover, the AstraZeneca vaccine has recently received negative press after early data revealed that those who received the AstraZeneca vaccine are at an increased risk of blood clots. The alarming nature of this news has only been intensified by the legal action initiated against the company by the family of Augusta Turiaco, who had died 19 days after her vaccination due to a suspected blood clot in her brain. Despite this controversy, Stella Kyriakides has affirmed that “the overall benefits of the AstraZeneca vaccine in preventing Covid-19 outweigh the risks of very rare and unusual side effects”. Although the EU took the correct decision by co-operating and buying vaccines as a bloc, thereby increasing the EU’s purchasing power, the subsequent choice to initiate legal action when confronted with shortages, sends a contradictory message to EU citizens. Trust in the safety of the vaccine is wearing thin, with countries like Denmark refusing to use the AstraZeneca Jab. The controversy surrounding AstraZeneca has increased wariness about the vaccine’s safety, and the EU’s legal action may exacerbate this concern within the bloc by contributing to the negative press shrouding the company and diminishing public confidence in the vaccine.

Beyond the matter of whether the EU even has a robust case based on their specific contractual arrangement with AstraZeneca, it seems that in attempting to offset accountability for the vaccine shortages, the EU has failed to recognise the broader social implications of initiating legal action. Ultimately, the impact of the EU’s decision to take legal action will not only be witnessed in the outcome of the legal proceedings, but in the long-term global approach to dealing with the pandemic.

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