AstraZeneca with an Edge in First EU Lawsuit

21.06.2021 - The European Commission’s attempt to hold AstraZeneca (AZ) responsible for the delayed and truncated supply of its Covid-19 vaccine appears to have not produced the desired result, at least not in the first lawsuit to be heard.

A court in Brussels on Jun. 18 dismissed allegations that the Anglo-Swedish drugmaker had failed to comply with an advance purchase agreement and that its delivery plan was “unreliable.”

While many saw the EU as having lost the battle, Commission president Ursula von der Leyen interpreted the court’s move to order AstraZeneca to ship 80.2 million doses by Sept. 27 – a target the company said it will substantially exceed – as acknowledging that it had failed to meet its commitment. Deliberations will continue on other points.

From the outset, Brussels has maintained that the advance purchase contract’s language, in which AstraZeneca agreed to supply “to the best of its ability,” meant the commitment was binding. The judge’s view was that it wasn’t necessarily, but the court was also concerned about the reasons why the drugmaker couldn’t deliver.

The agreement between AstraZeneca and the Commission called for delivery of 90 million doses of the vaccine, now called Vaxzevria, in the first quarter of 2021 and 300 million by the end of June. After missing the mark initially, citing supply chain issues, AZ cut its projection by two-thirds. Its latest target is to deliver 100 million doses by the end of June.

Breaking down the more than 80 million dose third-quarter delivery obligation, the court said the company must supply 15 million doses by Jul. 26, another 20 million by Aug. 23 and a further 15 million by Sept. 27. This would translate into an additional 50 million doses on top of the 30 million AZ had already supplied when the lawsuit was filed.

If the drugmaker fails to meet the 80 million dose deadline – which seems unlikely as it is only 10 million away from that total as the end of June approaches – it will face a penalty of €10 per dose not delivered. The EU had asked for a penalty of €10 per dose per day. Up to now, the company has shipped nearly 70 million doses to the bloc, compared with 233 million doses provided by Pfizer/BioNTech.

The court said AstraZeneca must “do its best” to fulfill its obligation for 300 million vaccine doses. A new hearing on the speed of delivery is to be held in September, when compliance will be assessed again. The EU had asked for all this obligation to be met by the end of September, but the court did not set a deadline.

Second lawsuit deals with priority of supply

A second EU lawsuit to occupy the court’s attention in early autumn will examine whether AstraZeneca committed a serious breach of contract – not by delaying delivery but by reserving output for the British market.

From AZ’s perspective, the company was excused from reneging on its EU deliveries because of a prior commitment to deliver the output of an Oxford BioMedica factory in the UK to the home market first. It interpreted the court’s opinion that one government cannot be given priority over another as meaning the EU had no exclusivity or right of priority, while EU lawyers argue that it means the UK could likewise not be prioritized.

Between supply setbacks and blood clotting issues, the Commission meanwhile has decided not to exercise its options to buy more doses than its original orders for the viral vector vaccines of AstraZeneca and Johnson & Johnson.

Announcing that decision several weeks ago, von der Leyen said the EU is placing its bets on the RNA vaccines. At the time, the Commission president had the CVnCov shot of Germany’s CureVac on her “wish list” alongside those of Pfizer/BioNTech and Moderna. In view of the Tübingen-based biotech’s acknowledgement last week that its shot may be only 47% effective, this may have been “wishful thinking.” The final word on the CureVac candidate’s efficacy is unlikely to be spoken before late July, if then.