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Commission, AstraZeneca fire shots in court

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How did it end up like this?

Wednesday saw the first public airing of bitter dispute between AstraZeneca and the European Commission — backed by the 27 EU member states. The fight began back in January when the drugmaker announced its first delivery delays and resulted essentially in a divorce between the two once-optimistic partners months later.

The EU’s lawyers argued that the company didn’t try hard enough to supply the EU and now needed a judge to get the company to hurry up. 

“Millions of Europeans will be deprived of the vaccine, can contract the virus and fall ill or even die — this is where the urgency lies,” said EU lawyer Fanny Laune. “Fundamental rights are at stake.”

AstraZeneca’s lawyers countered that both parties were well aware that they were signing a contract for a brand new coronavirus vaccine that would be difficult to produce on a global scale, let alone gain approval from regulators. 

“I … got the impression that we were speaking about a contract for the delivery of shoes, T-shirts or books,” said Hakim Boularbah, one of AstraZeneca’s lawyers, of the Commission. “This was a completely new vaccine … to treat a virus that exists little over a year now.”

Often, the hearing descended into a back-and-forth spat over whether the Anglo-Swedish company betrayed its EU contract by giving more doses to the U.K. Under gilded paintings that depicted one man sitting on a throne and stabbing another man in the back, a rotating group of EU lawyers argued the EU’s case prioritized the U.K., viewed by the EU as a betrayal of its contract.

They pointed to how AstraZeneca delivered 37 percent of the doses it promised to the U.K. but only 18 percent of the EU’s contract.

“It is in a perfectly deliberate manner that AstraZeneca has chosen to favor the United Kingdom and therefore to completely freeze its production units [there],” said Paul Alain Foriers, the most senior lawyer representing the EU.

Still, it was unclear what all the fighting in a courtroom will achieve. The Commission argues its case is to secure more doses as soon as possible, but its lawyers also included financial penalties — €10 per dose per day each vaccine is delayed — if a court rules in favor of the EU but AstraZeneca is unable to stick to a three-month postponed schedule. 

And AstraZeneca, which has tried to be the main producer of vaccines for the world rather than the world’s wealthiest, questioned why the bloc needed so many vaccines immediately.

In the court of public opinion, the Oxford/AstraZeneca vaccine has often been written off in favor of mRNA shots: Citizens are rejecting vaccination appointments to receive the viral vector vaccine, and governments have limited the use of the vaccine to older populations, citing safety concerns over very rare side effects. 

EU officials have publicly said the bloc is better off anyway without the Oxford/AstraZeneca jab in its future vaccine portfolio, the drugmaker’s lawyers pointed out. 

As Boularbah put it, it’s “shocking that some members are asking for doses of a vaccine they have said they will no longer use.”

One shot 

The EU lawyers’ chief aim was to convince the court it needs to intervene to make the vaccine producer supply the 300 million doses to the bloc by the end of September. This would be a three-month delay of the company’s original delivery schedule. The company, however, has said it would supply the entire 300 million doses by the end of December — six months behind. 

If AstraZeneca cannot adhere to a schedule three months behind, the EU wants the firm to pay €10 per dose per day each vaccine is delayed. Considering the company is projected to deliver 100 million doses out of the 120 million asked by the EU by the end of June, the company stands to pay €200 million a day starting July 1. Commission spokesperson Stefan De Keersmaecker later clarified that penalties are standard in procedural law.

“We are not interested in the penalties, as such, we are interested in obtaining the doses,” De Keersmaecker said. “The penalties are there to help ensure the company respects the delivery of doses.”

The EU’s case centered on convincing a judge that the bloc needs these doses immediately, arguing that those countries that had earlier supplies of vaccines were able to curb the virus and drive down mortality rates.

At issue, the EU lawyers said, was that the company did not do everything it could under its “best reasonable efforts” to supply the bloc. Two U.K. sites that make vaccine drug substance are clearly included in the EU’s advanced purchasing agreement and should have been used to supply the bloc, the EU’s lawyers repeated throughout the morning. When the first problems with a Belgian site were noticed, AstraZeneca diverted the output of Dutch production facility Halix to the EU as well. But that was not enough for the EU.

“If two sites are not enough to execute the contract, AstraZeneca needs to look for a third site, and so on,” EU lawyer Rafaël Jafferali said.

Not so fast 

In making AstraZeneca’s case, Boularbah said he was surprised that the Commission’s lawyers did not once mention that AstraZeneca sold its vaccine at production cost, rather than for profit.

“This is an essential element to interpret the contract,” he said.

He noted that AstraZeneca’s lawyers told the Commission as early as July 24, 2020 that it would initially only have two producers of drug substance, or the vaccine liquid. One would be in the EU and the other would be in the U.S. (A point that raises questions, as the EU’s contract said the U.S. would only serve as a backup plant.) It would start using the two British drug substance producers after they supplied 100 million doses to the U.K., which had negotiated a priority for the doses coming from the sites located there. 

The pharma company’s lawyers concluded that the EU was now trying to essentially rewrite the contract by asking the court to impose new, strict delivery deadlines and penalties. 

The next key date is June 4, when the lawyers will return to answer any questions from the judge. 

The judge will make a decision within the month but is expected to do so sooner. The Commission is also pursuing another case against AstraZeneca, which will assess the merits of the underlying complaint. 

Regardless of who prevails in this round, the two parties will meet again in September for the next round of the divorce. 

This article is part of POLITICO’s premium policy service: Pro Health Care. From drug pricing, EMA, vaccines, pharma and more, our specialized journalists keep you on top of the topics driving the health care policy agenda. Email [email protected] for a complimentary trial.

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