What next for AstraZeneca vs the EU?

It may be part Swedish and led by a Frenchman, but AstraZeneca has become an issue of division between the UK and EU that is nearly as bitter as Brexit.

The UK-based pharma group is lionised at home for bringing Oxford university’s Covid-19 vaccine to the world at no profit and for helping the country achieve one of the fastest rollouts. It is demonised in the EU as an untrustworthy supplier of a vaccine that has been rubbished or banned in certain member states due to doubts over efficacy and safety.

In this atmosphere, last week’s decision by a Brussels court was a shock for its subtlety. The main result was clear enough: after a number of hold-ups in its vaccine deliveries, the European Commission had demanded AstraZeneca meet an accelerated schedule or pay punitive fines. The court awarded neither.

What the court did find, however, was that AstraZeneca had committed a “gross breach” of contract and had violated its commitment to making its “best reasonable efforts” to supply 300m doses to the EU, notably because it had not sent any doses from UK manufacturing sites. The judge also ordered the company to pay 70 per cent of the modest court costs bill.

It looks a lot like the EU won in theory and AstraZeneca in practice. But the commission disputes this: “The practical impact is that they will have to deliver the doses from the UK,” said a commission lawyer. AstraZeneca continues to contest this.

Neither is this the end of the legal battles. A hearing in September will reconsider the question of whether AstraZeneca should have used its UK plant to supply the EU. The company has shown it informed the commission that this would happen only after the UK’s order was complete. The Brussels court decided that was irrelevant since the caveat was not included in the final contract. The decision may be different next time. 

The commission is also suing for access to a wealth of information on which doses are manufactured in which sites and where they are sent. The aim is to gather more evidence that AstraZeneca unfairly disadvantaged the EU.

There is also a separate claim for damages from the commission to be heard next year. How to quantify those? When it signed its contract last year, AstraZeneca said it would deliver 300m doses by the end of this month. It looks like it will provide only a quarter of that. The shortfall equates to months of delay, deaths and economic damage. Instead, it prioritised the UK. It is hardly surprising that EU officials are angry. And it seems fair to think any damages could be astronomically high.

Interestingly, the commission is not rushing to turn up the temperature in this case. “It would be premature to quantify the claim on the merits at this stage. We do not want to issue numbers that could be damaging to AstraZeneca,” said a second lawyer representing the commission.

For its part, AstraZeneca will argue that quantifying the damages is not just premature but impossible and that anyone who tries would have to focus solely on the small slice of UK production that the court found should have gone to the EU.

A more decisive victory for either side is still possible. The fact is, though, that the EU’s legal position is very different from the situation on the ground. In court, the commission claims it desperately needs the AstraZeneca vaccine. But in reality member states are banning it, citizens are shunning it, unwanted doses are piling up. The bloc’s top leader and honorary chief scientist Angela Merkel this week received her second shot — her first was AstraZeneca, the latest was not.