The EU has demanded damages potentially amounting to billions of euros from AstraZeneca if the company fails to increase deliveries of its Covid-19 vaccine by next month.
The European Commission wants the company to pay penalties of €10 a dose a day if it does not supply 20m extra shots by the end of June, a lawyer for the European bloc told a court in Brussels on Wednesday.
The demand is part of a lawsuit launched by the European Commission in an effort to force AstraZeneca to deliver 90m doses in the second quarter of the year rather than the 70m currently scheduled. The legal action is an escalation of a battle between the EU and the company over longstanding delivery shortfalls on the 300m shot contract.
AstraZeneca said its lawyers would outline its case later on Wednesday.
Rafael Jafferali, a lawyer for the EU, told the court in the Belgian capital that the company “did not even try to respect the contract” with the EU.
AstraZeneca was originally expected to supply up to 300m doses to the EU in the first six months of this year but that forecast was cut to just 100m after production problems. The commission wants the court to order the company to raise that figure to 120m.
“The European Union does not accept the late delivery of the vaccines by AstraZeneca and considers that this is a violation of the contract,” the commission told the Financial Times. “AstraZeneca has to catch up with the agreed calendar as soon as possible.”
The EU contends that AstraZeneca should have made up the shortfall using 50m doses from other manufacturing sites named as possible sources of production in the contract between the two sides. Almost 40m of these shots were made in the UK and most of the remainder in the US.
AstraZeneca insists it has done everything it can to meet the huge challenge of scaling up the complex production of Covid-19 vaccines. The company has consistently argued that it made the contractually required “best reasonable efforts” to fulfil the EU delivery schedule.
In an interview with the Financial Times last week, chief executive Pascal Soriot said it had been “bad luck” that sites supplying the EU had struggled with production problems, while others, such as one in South Korea, had not.
The EU has been particularly riled that AstraZeneca has been more successful at fulfilling its UK contract. Soriot said the original contract between the UK government and Oxford university, before AstraZeneca became a partner, included priority access to vaccines produced at UK manufacturing sites.
AstraZeneca is arguing that it told the EU in its original tender on July 24 2020 that the UK manufacturing facilities would only produce doses for the EU once they had fulfilled UK orders.
AstraZeneca is still the second-largest supplier to the EU after BioNTech/Pfizer. Unlike many of its rivals, AstraZeneca is providing the vaccine on a non-profit basis for the duration of the pandemic.
The 20m extra doses the commission is seeking from the company would make little difference to the EU’s accelerating vaccine rollout. Some countries have restricted the use of AstraZeneca jabs because of rare but potentially fatal side-effects. Denmark has stopped using it altogether.
But more AstraZeneca shots would give the EU a bigger cushion as it vies to hit a target of fully vaccinating 70 per cent of its adult population, about 255m people, by July. The bloc currently estimates it will have received 519m doses of all vaccines by the end of June, including 55m single dose Johnson & Johnson shots.
EU officials have suggested extra AstraZeneca doses could come from the US, where the jab has still not been approved for use, or another international manufacturing site, such as China.
A verdict in the Belgian court case is expected next month. The commission has also launched a separate legal claim for damages for what its alleges is AstraZeneca’s overall failure to honour its contract. The company contests that claim.
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