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EU moves legally against AstraZeneca, seeking huge fine for breaching vaccine contract

DUBLIN: The European Union is taking on vaccine manufacturer AstraZeneca in a Brussels court for failing to deliver vaccine within the promised time period. The European Union is demanding a hefty fine for breach of contract. The dispute between the two groups has gained media attention as a result of production and delivery delays, which are delaying the EU’s vaccination program. The court will issue a verdict in this regard later.

The EU has accused the Anglo-Swedish company, alleging that it promised to deliver vaccine doses to 27 member states but did not do so on time. It also says that EU delivery has been delayed for the UK and other countries.

The EU has demanded a fine of €10 million per infraction, as well as €10 per dose for each day of delay, as compensation for breaching the EU contract.

The European Commission has signed an agreement with AstraZeneca worth €870 million on behalf of Member States. Accordingly, 300 million doses have been requested in advance for distribution in all 27 countries. An additional 100 million doses were also requested. The company says it will deliver the total number of doses by the end of December. But EU lawyer Rafael Jafferali told the court that “with a six-month delay, it’s obviously a failure”.

The European Union said that it has invested €2.7 billion, including €336 million, to finance the production of AstraZeneca’s serum at four factories as part of an advanced purchase agreement with vaccine companies.

European Commission’s objections

Full doses were expected to be delivered in 2021, but only 30 million doses were received in the first quarter of this year. The commission said the company delivered only 70 million doses in the second quarter. But EU lawyer Rafael Jafferali told the court that the company had promised 180 million doses.

There was a condition that production sites in the block and the UK should be used for EU supplies. Fifty million doses of vaccine to be given to the European Union went to other countries in violation of the agreement. Production at the Oxford site was reserved by AstraZeneca for the UK.

“This is utterly serious. AstraZeneca did not use all the means at its disposal. There is a double standard in the way it treats the UK and member states,” Charles-Edouard Lambert, another lawyer on the EU team, said.

Misleading the Commission

The lawyers also allege that the company misled the European Commission by providing vague data on delivery delays. “The information provided by AstraZeneca did not allow us to fully understand the situation before mid-March 2021,” EU lawyer Jafferali said. He said the complaints were only about deliveries and there were no issues with the safety or quality of vaccination.

Embarrassment for EU

While the UK is making rapid progress in its vaccination campaign, the European Union is lagging behind. This has led to embarrassing complaints and criticism of the European Union.

The AstraZeneca vaccine, developed by Oxford University, is cheaper and easier to use than the Pfizer-BioNTech jab. AstraZeneca was a major hope of the European Union’s vaccine rollout. But the EU’s relationship with the company deteriorated amid accusations it favoured its relationship with Britain.

Concerns over the pace of vaccine rollout across the EU intensified after AstraZeneca said that it will be unable to deliver EU members with the originally proposed doses due to production capacity limits.

No more deals with AstraZeneca

The European Commission has secured more than 2.5 billion of vaccine doses with various manufacturers. But now the Commission is not interested in further orders with AstraZeneca. It also recently placed another major order with Pfizer and BioNTech for an additional 1.8 billion doses of their vaccine to distribute across EU countries.

AstraZeneca says there is no breach of contract

AstraZeneca says it has fully complied with the agreement. The company stated that vaccinations are tough to produce and that it did its best to deliver them on time. Lawyers for the company will address the court later.

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