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The European Commission and AstraZeneca published Friday a heavily redacted version of their contract for up to 400 million doses of coronavirus vaccine, in a best — if not entirely successful — effort by each side to claim victory in an angry fight over exactly what the deal required.
In the end, with many contract provisions blackened out, neither side conclusively won the day. And legalisms aside, it was clear that the biggest losers were millions of EU residents who will get vaccinated later than expected.
But the partial text did clear up some issues.
It confirmed, for instance, that the EU has some justification for insisting that production wasn’t contractually limited to a factory in Belgium where AstraZeneca claims to have suffered difficulties. It also clarifies that Brussels could rightly expect some deliveries would come from plants in the U.K., and confirms that the EU agreed to a prepayment of up to €336 million for the manufacture of doses to be ready the moment the jab was granted regulatory approval.
Many other points of contention, however, remain unresolved.
On one main dispute, the contract refers repeatedly to a requirement that AstraZeneca make its “best reasonable effort” to manufacture and deliver vaccine doses. That provides at least narrow justification for assertions by CEO Pascal Soriot, who earlier this week invoked the best-effort phrase in defending the drugmaker against the Commission’s criticisms.
But the Commission’s interpretation of the clause hangs on whether the vaccine, in the end, is authorized for use. AstraZeneca, which was not immediately available for comment, took a more “subjective” approach, according to an EU official: If they “feel as a company” that they did everything they could to supply the doses, ”then there is no way anybody can question that.”
“Best reasonable effort is indeed an object of the gold standard,” the official said. “It’s typically used in agreements of this kind when you are purchasing something that doesn’t exist.”
“It’s complicated in the sense that there are some elements that are not in the power of the company,” the official added. “Scaling up their manufacturing capacities is totally in their power; obtaining marketing authorization is not in their power.”
The U.K. authorized the AstraZeneca jab in late December, while the green light from the European Medicines Agency came later on Friday.
The Commission has insisted that the phrase is relevant only to the initial effort to develop an effective vaccine, and that AstraZeneca in any event was obligated to meet specific production targets, by specific deadlines.
UK sites included
Commission President Ursula von der Leyen reiterated that point in a radio interview on Friday morning.
In apparent support of her assertion, the contract contains a provision that appears to lay out specific targets for what is referred to as “initial Europe doses” — the first tranches of vaccine deliveries that the bloc purchased on behalf of the 27 EU member countries. The provision, however, is heavily redacted, and no specific numbers are shown.
An EU official on Friday lamented that fact, at times struggling to answer questions because of the blackouts. The official insisted that AstraZeneca had demanded most of the redactions, about “95 percent,” and that the EU’s case was further supported by the hidden text.
The Commission had requested the redaction of just two items to safeguard two other ongoing contract negotiations, with Novavax and Valneva, the official noted.
“We did not want to prolong access to this contract by having a very, very difficult discussion with them as to whether or not something is genuinely confidential or not,” he added.
Overall, the Commission seemed to have the upper hand in its insistence that AstraZeneca should be using additional manufacturing sites to fulfill the EU’s orders. The contract explicitly states in one section (5.4) that the it envisions the use of two factories located in the U.K.
An EU official also pointed to another section (13.1 E) that says when the contract was signed in August, AstraZeneca didn’t have any other contractual obligations that “would impede the complete fulfillment of its obligations” under the EU agreement. That goes against Soriot’s insistence that the U.K. has priority for vaccine deliveries because it finalized its contract before the EU did.
Even without knowing the terms of AstraZeneca’s contract with the U.K., it was clear that the company’s obligations to Britain should not affect its deal with the bloc, the EU official said.
“I don’t think you need to be a lawyer,” the official said. “The wording of 13.1 E speaks for itself.”
Head-scratching
Some reporters questioned a provision stating that “AstraZeneca shall use its Best Reasonable Efforts to manufacture the Initial Europe Doses within the EU for distribution” as potentially confirming Soriot’s claim that only best effort was required. But the EU official pushed back.
“This would then mean that you have two manufacturing processes going on under the same contract,” the official said. “I’d be very happy to take that one before a court.”
At the same time, the official conceded that the purchase agreement didn’t explicitly state that AstraZeneca needed to manufacture “at risk” — meaning with no guarantee its vaccine would be approved for use. However, the official said, there’s little question that the contract required production of doses prior to approval.
“It is pretty obvious in a context of this kind that you don’t start kind of scratching your head early somewhere towards December as to what you want to do,” the official said.
The second page of the contract states the company “has accelerated its manufacturing scale-up concurrently with its conduct of global clinical trials to ensure the broadest possible availability of the vaccine, as quickly as possible,” the official noted.
Many references in the contract to specific prices per dose were redacted. But the published text confirms a total pre-payment by the Commission of €336 million, with two-thirds due within five days after signing the contract.
As for potential redress for contract violations, the EU official said measures such as litigation wouldn’t make a difference given the Commission’s main priority of obtaining vaccine.
“Going to court for breach of contract doesn’t necessarily bring you the vaccine doses, which is obviously the absolute priority here,” the official said.
Simon Van Dorpe, Giorgio Leali and Paola Tamma contributed reporting.
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