* EU says company has no reliable plan to ensure timely
deliveries
* AstraZeneca says it complies with contract based on best
effort
* Astra aims to supply 100mln doses by end of Q2 instead of
300mln
(adds EU source on details of legal case in penultimate
paragraph)
By Francesco Guarascio
BRUSSELS, April 26 (Reuters) - The European Commission said
on Monday it had launched legal action against AstraZeneca
for not respecting its contract for the supply of
COVID-19 vaccines and for not having a "reliable" plan to ensure
timely deliveries.
AstraZeneca said in response that the legal action
by the EU was without merit and pledged to defend itself
strongly in court.
Under the contract, the Anglo-Swedish company had committed
to making its "best reasonable efforts" to deliver 180 million
vaccine doses to the EU in the second quarter of this year, for
a total of 300 million in the period from December to June.
But AstraZeneca said in a statement on March 12 it would aim
to deliver only one-third of that by the end of June, of which
about 70 million would be in the second quarter. A week after
that, the Commission sent a legal letter to the company in the
first step of a formal procedure to resolve disputes.
AstraZeneca's delays have contributed towards hampering the
bloc's vaccination drive, as the vaccine developed by Oxford
University was initially supposed to be the main one in an EU
rollout in the first half of this year. After repeated cuts in
supplies, the bloc changed its plans and now relies mostly on
the Pfizer-BioNTech vaccine.
"The Commission has started last Friday a legal action
against AstraZeneca," the EU spokesman told a news conference,
noting all 27 EU states backed the move.
"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 timely delivery of doses," the spokesman
said, explaining what triggered the move.
"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," AstraZeneca said.
Under the contract, the case will need to be resolved by
Belgian courts.
"We want to make sure there is a speedy delivery of a
sufficient number of doses that European citizens are entitled
to and which have been promised on the basis of the contract,"
the spokesman said.
'WE HAD TO SEND A MESSAGE'
EU officials confirmed the purpose of the legal action was
to ensure more supplies than what the company has said it would
aim to deliver.
The move follows months of rows with the company over supply
issues and amid concerns over the efficacy and safety of the
vaccine. Still, while the shot has been linked to very rare
cases of blood clots, the EU drugs regulator has recommended its
use to contain the spread of COVID-19.
"We had to send a message to (Pascal) Soriot," an EU
official said, referring to AstraZeneca's chief executive.
Germany, France and Hungary were among EU states that were
initially reticent to sue the company, mostly on the grounds
that the move might not speed up deliveries, diplomats said, but
eventually they supported it.
After the announcement of the legal action, AstraZeneca said
it was in the process of delivering nearly 50 million doses by
the end of April, a goal which is in line with the revised-down
target of supplying only 100 million shots by the end of the
quarter.
The EU wants AstraZeneca to deliver as many as possible of
the promised 300 million doses, but would settle for 130 million
shots by the end of June, one EU source familiar with the
discussions told Reuters, adding the EU had launched an urgent
legal procedure and was invoking financial penalties in case of
non-compliance.
In a further sign of its irritation towards the company, it
has already forgone another 100 million shots that it had an
option to buy under the contract signed in August.
The spat with AstraZeneca has also stoked a dispute over
supplies with former EU member Britain. AstraZeneca said it was
prevented from exporting doses from UK factories to make up for
some of the shortfalls in the EU, EU officials have said. Now
the EU is opposing the export of AstraZeneca shots to Britain
from a factory in the Netherlands.
(Reporting by Francesco Guarascio; additional reporting by
Marine Strauss; Editing by Alex Richardson and Bernadette Baum)
Astrazeneca (AZN)
