Yahoo Finance European Commission launches legal action against AstraZeneca over ‘failure to respect Covid-19 vaccine contract’
The European Commission has revealed it is taking legal action against AstraZeneca, accusing the firm of failing to respect its Covid-19 vaccine contract.
Announcing the move on Monday, spokesman Stefan De Keersmaecker said "the Commission has started last Friday legal action against the company AstraZeneca on the basis of breaches of the advance purchase agreement."
He said the reason for the legal action was that "some terms of the contract have not been respected" and that "the company has not been in a position to come up with a reliable strategy to ensure a timely delivery of doses."
AstraZeneca's contract with the European Union foresaw an initial 300 million doses for distribution among the 27 member countries, with an option for a further 100 million.
But only 30 million doses were delivered in the first quarter of 2021, and the company says it can only provide 70 million in the second quarter, rather than the 180 million it had promised.
AstraZeneca said in a statement that it "regrets" the commission's decision to take legal action and it 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," AstraZeneca said.
It said deliveries are improving "following an unprecedented year of scientific discovery, very complex negotiations and manufacturing challenges".
"We are making progress addressing the technical challenges and our output is improving, but the production cycle of a vaccine is very long, which means these improvements take time to result in increased finished vaccine doses," it said.
The company said it wants to continue "working constructively with the EU Commission to vaccinate as many people as possible. Many thousands of our employees working around the clock have been driven by a passion to help the world at no profit".
The AstraZeneca vaccine is cheaper and easier to use than rival jabs from Pfizer and Moderna and has been endorsed for use in more than 50 countries, including by the 27-nation EU and the World Health Organisation.
The commission has publicly criticised the company on several occasions, and last month it launched a dispute resolution mechanism aimed at amicably addressing the differences. Brussels said its focus is to ensure timely deliveries of vaccines.
It has since said that its option for extra AstraZeneca doses will not be taken up.
Last week, commission president Ursula von der Leyen announced that a new contract is set to be concluded with BioNTech-Pfizer for 1.8 billion doses for the 2021-23 period.
She said the deal will ensure doses for booster shots, vaccines adapted to new variants and potentially vaccines for children and teenagers.
Ms von der Leyen said the EU, home to around 450 million people, has "already passed 123 million vaccinations" and is on track to have vaccinated 70% of adults by July. Previously the target had been September.
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