MAGGIE PAGANO: Shame of the Brussels bullies

You couldn’t be more European than Astrazeneca. Pascal Soriot, the chief executive, is French, Leif Johansson, the chairman, is Swedish, Marc Dunoyer, the finance director, is also French while its management team and top scientists include people from Spain, Italy, Holland and Britain, to name just a few countries.

Its corporate HQ and global research centre is in Cambridge but there are also research centres in Gothenburg and Warsaw. More than a third of its 70,000 workforce work across the continent.

The pharma giant’s shares are listed on the London Stock Exchange along with the US and Indian stock markets.

The notion that AstraZeneca failed to honour its commitments to vaccine supplies because of British vaccine nationalism is not only ludicrous but out of order

Its biggest shareholders include all the usual big US and UK fund managers and European funds from Norges Bank to Sweden’s Investor AB.

As well as being one of Europe’s biggest companies, the Anglo-Swedish giant, valued at £100billion, is one of the world’s top five pharma groups.

Astra depends on global markets – and global flows of capital – for its main businesses and of course for its reputation.

So the notion floating around Brussels and other continental capitals that it failed to honour its commitments to vaccine supplies because of British vaccine nationalism, or that it is treating the EU unfairly, is not only ludicrous but out of order.

And its latest demand that Astra divert 75m doses from the UK to the EU is even more so.

If this wasn’t so serious, the EU’s position would be laughable. This is not a time to gloat about any problems to do with vaccine supplies but the extraordinary row blowing up between Astra and the EU smacks of classic Brussels bullying.

You might even suggest there is a whiff of protectionism emerging from the Berlaymont, which houses the headquarters of the European Commission, if not a predictable misunderstanding of how commercial agreements are struck. 

Ursula von der Leyen, European Commission president, and her officials, under pressure from a restless public in the 27 member states, appear to be using Astra as a scapegoat for their own mistake in taking so long to secure vaccine orders.

What easier bogeyman to pick on than big nasty pharma, out to rip everybody off?

But Pascal Soriot is not playing their game. Unusually for a chief executive, Soriot has taken centre stage in trying to damp down the bust-up. 

In an explosive interview with Italian paper La Repubblica, Soriot explains his company cannot meet the figures in its contract with the EU because of problems in rapidly expanding production capacity.

He points out that the EU is being ’emotional’ about the shortfall, and claims Europe is being fairly treated, and ‘getting 17 per cent of its global supply for a month, for 5 per cent of the world population’.

He dismisses the idea as nonsense that Astra is taking vaccines away from Europeans to sell it somewhere else at a profit as it is manufacturing the vaccine at cost – at zero profit.

However, Soriot also claims that Astra is hoping to be up to scale within the next few months, so that it can honour the bulk of its orders to the EU. 

But the pharma giant can only use the UK’s manufacturing plants for EU – and other orders – once it has fulfilled its agreement for a 100m doses to the UK.

Now we cut to the chase. Astra’s agreement with the EU was made last autumn, some three months after it signed a separate deal with the UK, which means the supplies coming out of the UK supply chain must go to the UK first.

Soriot also explains in the interview that the contract with the EU very clearly sets out the commitment is ‘our best effort’.

The term ‘best effort’ is a well-known piece of legal language, which is used when writing up contracts in exceptional circumstances such as the pandemic. 

It’s there precisely to cover emergency situations when products are still in development and allows for unforeseen problems with manufacturing or distribution to crop up.

You can be sure Astra’s lawyers will have anticipated such hiccups, and that similar clauses will be in all their vaccine contracts. 

Some EU officials are demanding that Soriot publishes the contract. If Astra does not, the EU could sue the company.

Hopefully, it won’t come to that – I doubt Brussels would be so daft. But you never know. Yet how sad that heroic efforts to get this vaccine from lab to jab, in under a year, should fall prey to such petty politicking.