EU piles stress on AstraZeneca over delayed vaccines, reveals particulars of contract

European Commission President Ursula von der Leyen gives a presser at the end of a video conference meeting of the members of the European Council focused on the Covid-19 pandemic, in Brussels, on January 21, 2021.

OLIVIER HOSLET | AFP | Getty Images

LONDON — The European Union on Friday published a redacted version of the contract signed with AstraZeneca, as the bloc piles pressure on the drugmaker to deliver the Covid vaccine supplies it promised.

The EU, which has been criticized for its slow rollout of inoculations, was delivered a blow by AstraZeneca last week when the company said it would only be able to deliver a fraction of the shots agreed upon for the first quarter.

AstraZeneca has denied that it has failed to honor its commitments, saying delivery figures 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 arm, said it welcomed AstraZeneca’s commitment toward more transparency after the company agreed for details of the agreement to be released. AstraZeneca was not immediately available to comment when contacted by CNBC.

The contract, which was entered into as of Aug. 27, stipulates that AstraZeneca had committed to using its “best reasonable efforts” to build capacity to manufacture 300 million doses of vaccine, with an option for the Commission to order an additional 100 million doses.

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

This includes “having regard to the urgent need for a Vaccine to end a global pandemic which is resulting in serious public health issues, restrictions on personal freedoms and economic impact, across the world but taking into account efficacy and safety.”

The contract says AstraZeneca will use its “best reasonable efforts” to manufacture the vaccine at manufacturing sites located within the EU. The agreement also stipulates that this includes plants based in the U.K., despite the country’s departure from the bloc last year.

AstraZeneca has been urged to send some of the doses manufactured in the U.K. to the bloc, but the company said a separate contract with the U.K. prevents them doing so.

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

International competition concerns

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

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

The EU’s von der Leyen claimed the agreement contained clear delivery amounts for December and the first three quarters of 2021.

Earlier in the week, AstraZeneca CEO Pascal Soriot reportedly said the EU contract was based on a so-called “best-effort” clause and did not formally commit the drugmaker to a specific timetable for deliveries.

The EU’s von der Leyen rejected this suggestion on Friday, adding that the clause was only valid if it was unclear whether AstraZeneca could develop a safe and effective vaccine. She also claimed that the contract specifically mentioned four production sites that would supply the vaccine to Europe, two of which are in Britain.

A view of central office of British-Swedish multinational pharmaceutical and biopharmaceutical company AstraZeneca as Covid-19 vaccine developed by AstraZeneca inspected in Brussels, Belgium on January 28, 2021.

Dursun Aydemir | Anadolu Agency | Getty Images

EU officials have indicated that supplies could be diverted from the U.K. to Europe if the delays in European production persist.

U.K. Prime Minister Boris Johnson has said he remains “confident” in supplies of the AstraZeneca vaccine, developed in partnership with the University of Oxford. Johnson added he was “very pleased” the country was among the fastest in Europe to rollout the vaccine.

Second only to Russia for the highest number of confirmed Covid cases in Europe, the U.K. has recorded the most coronavirus-related deaths of any European nation and the fifth-highest worldwide.

The EU, with a population of roughly 450 million people, is struggling to get its vaccination drive into gear as it lacks supplies and currently lags far behind countries like Israel and the U.K. in delivering vaccines to its citizens.

It was first dealt a blow by vaccine maker Pfizer-BioNTech, which announced that it had to temporarily lower production in order to upgrade its manufacturing capacity in Belgium. This was then followed by AstraZeneca last Friday reducing its delivery estimates for the region.

One unnamed senior EU official told Reuters that the bloc expected about 80 million doses by March, but had been told it would receive only 31 million doses instead. The company has not confirmed the quantities involved.

A deepening dispute between the EU and AstraZeneca has raised concerns about international competition for limited vaccine supplies. It is hoped the inoculations could help to bring an end to the coronavirus pandemic.

— CNBC’s Holly Ellyatt contributed to this report.

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