The European Commission has launched legal action against the coronavirus manufacturer AstraZeneca over an alleged breach of contract. The Commission’s spokesperson Stefan De Keersmaecker confirmed that it started legal proceedings against AstraZeneca on April 23, in a move that has been backed by all 27 member states. Mr De Keersmaecker said the legal action was launched last Friday “on the basis of breaches of the advance purchase agreement”.
He claimed “some terms of the contract have not been respected” and the company “has not been in a position to come up with a reliable strategy to ensure a timely delivery of doses”.
Under its contract with the European Commission, the Anglo-Swedish pharmaceutical company had committed to making “best reasonable efforts to supply 180 million doses of the COVID-19 to the EU in the second quarter of this year”.
However, in a statement last month AstraZeneca said it would aim to deliver only one-third of that by the end of June and EU officials have repeatedly accused the drugmaker of under-delivering, with EU Commission President Ursula von der Leyen threatening to halt vaccine exports in January.
Financial columnist and author Matthew Lynn has argued the action could easily rebound on Ms von der Leyen, though.
He wrote: “In reality, as any lawyer will tell you, a trial is an unpredictable event, and not something to be entered into lightly.
“To start with, there will certainly be a discovery process. A lot more information will be made public about the EU’s procurement process, so far largely shrouded in the secrecy that surrounds most of its decisions.
“How many doses were ordered and when? How much was paid for them? How much energy, and money, was put into ramping up production, and where was it meant to take place? Where was the original intellectual property created (here’s a clue: try heading west along the M40 out of London).
“What kind of profit margins was the company making, and would it sometimes be out of pocket?
“The support staff at AstraZeneca’s lawyers are probably drafting all the requests for information at this very moment.”
Moreover, senior officials, including Ms von der Leyen herself, may have to appear as witnesses in any trial, Mr Lynn noted.
They will presumably have to submit themselves to cross-examination and a forensic barrister may well be able to pick them apart piece by piece.
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Mr Lynn added in his report for The Spectator: “At the very least, the appearances will be cringe-makingly embarrassing.
“In truth, the EU would probably be better off letting the whole matter rest at this point. Its vaccination programmes are finally getting up to speed, and even though it is behind the UK and the US it will finally manage to make vaccines available to everyone.
“It has hardly covered itself in glory, and its attempt to grab control of health policy looks to have ended in failure (it seems very unlikely the Germans or French will want Brussels taking charge of the next crisis).
“Yet a trial is not going to fix that now. The damage has already been done.
“A legal action may well simply make the whole shameful episode much worse.”
So far, more than half of Britain’s adult population has had at least one dose.
The EU, which accounts for 27 nations, has vaccinated just over 20 percent.
This can arguably be attributed to Brussels’ slow decision-making and clunky contracting.
In an interview with AFP in November, Moderna CEO Stéphane Bancel shed light on the negotiations between the two sides.
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The Frenchman revealed how dealing with 27 member countries was slowing everything down.
By contrast, he claimed the American company had struck a deal with Canadian authorities two weeks after starting talks.
Mr Bancel said: “It is clear that with a delay this is not going to limit the total amount but it is going to slow down delivery.”
According to POLITICO, when Moderna reported efficacy rates higher than 90 percent on November 16, the UK managed to wrap a deal with the American company that same day.
The deal with the EU was close to completion, but the Commission failed to get everyone on board.
The bloc and Moderna only signed a contract nine days later, on November 25.