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EU takes legal action against AstraZeneca over COVID vaccine contract

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Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
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Watch: EU sues AstraZeneca over delayed deliveries

The European Union has begun legal action against AstraZeneca (AZN.L), alleging the pharmaceuticals giant has failed to fulfil promises made in its contract to supply COVID-19 vaccines.

The EU's executive branch, the European Commission, confirmed on Monday it had launched legal action against AstraZeneca, alleging breach of contact. An initial hearing of the case will take place on Wednesday in Brussels.

"What matters to us in this case is that we want to make sure there is a speedy delivery of a sufficient number of doses that European citizens are entitled to," Stefan De Keersmaecker, the European Commission's spokesperson for health, food safety and transport, said at a press conference

De Keersmaecker said the deal between the EU and AstraZeneca had "not been respected" and accused the pharmaceuticals company of failing to "come up with a reliable strategy to ensure the timely delivery of doses."

Shares in AstraZeneca were down 0.6% after the announcement. The EU had been widely expected to launch legal action.

AstraZeneca shares dropped sharply on the news. Photo: Yahoo Finance UK
AstraZeneca shares dropped sharply on the news. Photo: Yahoo Finance UK

The EU has been furious at the low levels of COVID-19 vaccines delivered by AstraZeneca so far. AstraZeneca agreed to deliver around 100 million doses of its vaccine to the EU in the first quarter of 2021. However, the pharmaceuticals giant has only been able to deliver about a third of that number. 

The shortfall has contributed to the slow vaccination campaign across Europe, which has lagged both the UK and US.

"Every vaccine dose counts," Stella Kyriakides, the European Commissioner for Health and Food Safety, said in a tweet confirming the action. "Every vaccine dose saves lives."

The EU believes AstraZeneca has been unfairly and illegally routing jabs to the UK at the expense of Europe.

AstraZeneca has consistently denied breach of contract, saying it had only promised "best efforts" to deliver the advertised levels of vaccine.

A health worker prepares a dose of the Oxford-AstraZeneca vaccine. Photo: Bruna Prado/AP
A health worker prepares a dose of the Oxford-AstraZeneca vaccine. Photo: Bruna Prado/AP

In a statement on Monday, the company said it "regrets the European Commission’s decision to take legal action".

"Our company is about to deliver almost 50 million doses to European countries by the end of April, in line with our forecast," AstraZeneca said in a statement. 

"AstraZeneca has fully complied with the Advance Purchase Agreement with the European Commission and will strongly defend itself in court. We believe any litigation is without merit and we welcome this opportunity to resolve this dispute as soon as possible."

The company blamed technical challenges with manufacturing vaccines at scale for the delays to delivery.

Watch: Pfizer-BioNTech to supply 1.8 billion doses to EU