LexisNexis

Covid-19: EU-AstraZeneca dispute highlights concerns over access to vaccines

Jennifer Venis, IBA Multimedia JournalistThursday 11 March 2021

In late January, the European Commission and individual European Union Member States threatened legal action over significant delays to Covid-19 vaccine dose deliveries from AstraZeneca.

The bloc almost triggered Article 16 of the Northern Ireland protocol, which enables controversial export controls along the politically fraught border between Ireland and Northern Ireland, but U-turned after broad condemnation.

Antoon Loomans, Senior Vice President and General Counsel for GlaxoSmithKline Vaccines, tells Global Insight the dispute is highly unusual: ‘I've never seen anything like this in in a public health crisis.’

‘The Commission clearly overreacted at some points and was going pretty far in terms of the action’, Loomans says, ‘but now it is calming down and I think they should look at supply constructively. Nobody benefits from legal action.’

The EU should look at supply constructively. Nobody benefits from legal action

Antoon Loomans
Senior Vice President and General Counsel for GlaxoSmithKline Vaccines

AstraZeneca had announced it would be delivering 60 per cent fewer of the 80 million doses promised to the EU by the end of March due to production issues at a manufacturing site. It argued that the company was obliged to use sites outside of the EU, which did not have manufacturing delays, to fulfil the order.

That AstraZeneca had promised the United Kingdom that none of its doses would be delayed was a particular point of concern for the EU, although the EU signed its contract with AstraZeneca much later than the UK, and approved the vaccine later. AstraZeneca’s Chief Executive Officer, Pascal Soriot, suggested in late January that the timeline meant production issues in the UK have already been dealt with.

An inspection at a Belgian production site confirmed AstraZeneca’s claims of production issues, but Belgium’s Prime Minister Alexander De Croo asked, ‘Is it a typical production problem caused by having to very greatly increase production in a short time or is the problem due to [other countries] having been given precedence?’

France’s Minister of State for European Affairs, Clément Beaune, said ‘if there is a problem and [AstraZeneca] have favoured other destinations, other countries – for example the UK over us – then we will defend our interests. Our contracts need to be respected. Respecting contracts are not moral commitments, they are legal commitments. Penalties or sanctions can be triggered in every contract.’

The legal threats have been quelled, particularly since an unredacted version of the EU-AstraZeneca agreement was published in mid-February by Italian public broadcaster Radiotelevisione Italiana (RAI).

Based on the full contract, it appears that the delivery dates were estimates of the earliest possible schedule, not binding deadlines. Further, under the contract the EU cannot sue AstraZeneca unless a claim arises from wilful misconduct, or if the pharmaceutical company fails to comply with EU regulatory requirements or good manufacturing practices.

The contract does allow the Commission to withhold payment instalments if AstraZeneca does not make sufficient progress on manufacturing doses.

Loomans believes the threat of legal action was a means to increase the pressure on AstraZeneca, and it seems to have worked.

Within a week, AstraZeneca had promised the EU nine million more doses by 31 March and sought to expand its production capabilities across Europe. Other pharmaceutical companies have pitched in, offering manufacturing sites to several vaccine suppliers hit by delays.

An AstraZeneca spokesperson pointed Global Insight to a statement Pascal Soriot provided at a European Parliament hearing in February. Soriot stated he was ‘disappointed that lower-than expected output in our dedicated European supply chain has affected our ability to deliver’, but ‘we are ramping up production and doing everything that we can to deliver 40 million doses in the first quarter of 2021, enabling the vaccination of over ten percent of the EU population.’

Only three of AstraZeneca’s production sites were originally approved by the European Medicines Agency. Only one was in the EU, while the others were in the UK and United States. The US site will be supplying some of the 40 million doses AstraZeneca has now promised.

Jordi Faus, Conference Coordinator of the IBA Healthcare and Life Sciences Committee and co-founder of Faus & Moliner in Spain, says the dispute will have a major impact on how the governments think about their industrial capabilities.

‘As Europeans, for instance, we need to ask ourselves: have we done things correctly in the recent past in allowing so many pharmaceutical and chemical companies to disappear from Europe, going to other countries to manufacture these ingredients? It’s going to be a question on the table’, he says.

Loomans notes that after the H1N1 pandemic in 2009, the US focused on pandemic preparedness and invested in localising production and procuring stockpiles of vaccine components, while ‘none of that happened really in Europe.’

Although the EU has climbed down from its legal threats, it has empowered its Member States to block exports of the vaccine under a ‘transparency’ mechanism, usable until the end of March.

The European Commission claims the mechanism was created to ‘ensure timely access to […] vaccines and tackle the current lack of transparency of vaccine exports outside the EU’. Suppliers must seek authorisation for exports and could be blocked if the timely delivery of doses to EU citizens are threatened.

After receiving widespread condemnation over its intention to trigger Article 16 of the Northern Ireland Protocol as part of the transparency mechanism, the Commission U-turned. In a statement, it promised the protocol would be ‘unaffected’, but did say, ‘should transits of vaccines and active substances toward third countries be abused to circumvent the authorisation system, the EU will consider using all the instruments at its disposal.’

John Doherty, former Chair of the IBA Product Law and Advertising Committee, says nearly triggering the mechanism ‘was clearly very politically dangerous because of the historic animosities in Northern Ireland.’

He highlights that tensions have already been raised along the Irish border, with news reports suggesting that some sections of the community, unhappy with the way obstacles are being created between Northern Ireland and the rest of the UK, have been at ports threatening customs officials.

And although the EU mechanism provides exemptions for exports for humanitarian use, including for the programmes trying to ensure low and middle-income countries can obtain vaccines, the World Health Organization (WHO) condemned the EU’s controls.

Dr Mariângela Simão, the WHO’s Assistant Director-General for Access to Medicines and Health Products, said, ‘It is not helpful to have any country at this stage putting export bans or barriers that will not allow for the free movement of the necessary ingredients that will make vaccines, diagnostics and other medicines available to all the world’.

Japan has suggested that the mechanism has disrupted its access to its Pfizer/BioNTech vaccine supplies, which are being produced in Belgium and Germany. Only the US is not drawing its doses from within the EU.

In early March, it emerged that Italy had blocked 250,000 doses of the AstraZeneca vaccine from being exported to Australia under the new mechanism. Australia has requested that the European Commission review the move.

The International Chamber of Commerce has warned that the global economy is at risk of losing $9.2tn if global access to Covid-19 vaccines is not ensured, but noted that ‘advanced economies have in recent months pursued a policy of securing the global supply of front-runner vaccines, as a result severely limiting their availability in emerging markets.’

Header pic: Shutterstock.com / Viacheslav Lopatin

Join the IBA

Expand your international network, gain new business and learn about the latest legal developments through IBA digital content and events, with IBA membership. Available for individuals, students, law firms, bar associations and corporations.

Find out more