A Belgian court has ordered pharmaceutical company AstraZeneca to deliver vaccines to the European Union according to a set schedule, by tapping a British factory for supply if necessary, and face fines if it does not.
It found the company “deliberately violated” its contract with the EU and was at “serious fault”.
“AstraZeneca did not make its ‘best reasonable efforts’ to manufacture and deliver part of the 300 million doses promised within the expected timeframe,” the court judgment read.
The ruling ordered AstraZeneca to deliver 50 million doses on a timetable between July and September, or face a penalty of €10 per missed dose.
Most of these doses have already been delivered by the company, however, and the court found the deliveries to the EU did not have priority over the company’s other contracts, leading AstraZeneca to welcome the ruling.
But it was claimed as a victory by the European Union as well, with officials saying the finding that the company must use British factory Oxford Biomedica to meet contractual obligations would accelerate deliveries of a further outstanding 220 million doses.
"This decision confirms the position of the commission: AstraZeneca did not live up to the commitments it made in the contract. It is good to see that an independent judge confirms this," European Commission chief Ursula von der Leyen said in a statement.
AstraZeneca general counsel Jeffrey Pott said the company was "pleased" by the ruling.
“AstraZeneca has fully complied with its agreement with the European Commission and we will continue to focus on the urgent task of supplying an effective vaccine,” he said in a statement.
Costs
The court ordered AstraZeneca to pay 70 per cent of costs and the EU 30 per cent, ruling that “each of the parties is partially unsuccessful in their respective claims”.
The case arose when the European Commission sued the British-Swedish multinational over steep shortfalls in vaccine deliveries, after AstraZeneca revealed at short notice that it could deliver only 30 million doses instead of an expected 100 million in the first three months of 2021.
The issue sparked a tense standoff between the EU and United Kingdom over vaccine deliveries, with the commission coming close to triggering the contentious Article 16 of the Northern Ireland protocol in a bid to control exports.
During the dispute, AstraZeneca chief executive Pascal Soriot said in a media interview that supply from British factories was reserved to meet the contract with the UK government, even though a British factory had been named as a source of supply in the EU's contract.
The Belgian court found that AstraZeneca’s refusal to use the British factory to supply the EU, particularly as it was its most productive manufacturing site, was made “for the benefit of third parties, in disregard of its contractual obligations” and had “predictable” and “significant damaging repercussions”.
For this reason, the ruling found the company to be at “faute lourde” or “serious fault”, and said it should use the Oxford Biomedica factory to meet its contractual obligations.
“A very important foundation base is laid here,” an EU official said. “AstraZeneca can no longer hide behind the claim that plants cannot be used.”
The EU expects the company to fulfil its outstanding deliveries of roughly 220 million doses by the end of this year.
However, the AstraZeneca vaccine is being phased out in much of the EU due to a combination of delivery delays, rare side effects in younger people, a more lengthy dose interval and possible lower protection against new Covid-19 variants.
The union has agreed with Pfizer to buy up to 1.8 billion vaccines in 2021-2023 for booster shots, to vaccinate younger groups, and to guard against variants. Member states can choose to sell or donate any excess vaccines, the European Commission has said.
