'Our contract is not a contractual commitment': Tensions rise as AstraZeneca, EU talk COVID-19 vaccine delivery
Published Wednesday, January 27, 2021 7:29AM EST Last Updated Wednesday, January 27, 2021 6:06PM EST
BRUSSELS -- The European Union and drugmaker AstraZeneca sparred Wednesday over a delay in coronavirus vaccine deliveries amid a deepening dispute that raises concerns about international competition for limited supplies of the shots needed to end the pandemic.
AstraZeneca Chief Executive Pascal Soriot addressed the dispute for the first time, rejecting the EU's assertion that the company was failing to honour its commitments. Soriot said vaccine delivery figures in AstraZeneca's contract with the 27-nation bloc were targets, not firm commitments, and the company was unable to meet them because of problems in rapidly expanding production capacity.
"Our contract is not a contractual commitment, it's a best effort," Soriot said in an interview with the Italian newspaper La Repubblica. "Basically, we said we're going to try our best, but we can't guarantee we're going to succeed. In fact, getting there, we are a little bit delayed."
AstraZeneca said last week that it planned to cut initial deliveries in the EU to 31 million doses from 80 million due to reduced yields from its manufacturing plants in Europe. The EU claimed Wednesday that it will receive even less than that -- just one quarter of the doses that member states were supposed to get during January-March 2021.
The EU says it expects the company to deliver the full amount on time, and on Monday threatened to put export controls on all vaccines made in its territory.
Stella Kyriakides, the European Commissioner for health and food safety, rejected Soriot's explanation for the delays, saying that "not being able to ensure manufacturing capacity is against the letter and spirit of our agreement."
Kyriakides said AstraZeneca should provide vaccines from its UK facilities if it it is unable to meet commitments from factories in the EU. The comments are certain to create tension in the UK, which completed its exit from the bloc less than a month ago.
"I call on AstraZeneca to engage fully to rebuild trust, to provide complete information and to live up to its contractual, societal and moral obligations," Kyriakides said at a media briefing in Brussels.
The EU's contract with AstraZeneca is confidential and can't be released without the agreement of both sides. The EU has asked AstraZeneca for permission to release the contract, Kyriakides said.
After a third round of talks aimed at resolving the dispute on Wednesday evening, Kyriakides regretted the "continued lack of clarity on the delivery schedule" and urged AstraZeneca to come up with a clear plan for a quick delivery of the doses reserved by the EU for the first quarter. In a message posted on Twitter, Kyriakides however noted "a constructive tone" in the discussions with Soriot.
A spokesman for AstraZeneca said after the meeting that the company has "committed to even closer co-ordination to jointly chart a path for the delivery of our vaccine over the coming months as we continue our efforts to bring this vaccine to millions of Europeans at no profit during the pandemic."
The dispute comes as the EU, which has 450 million citizens and the economic clout of the world's biggest trading bloc, lags far behind countries like Israel and Britain in delivering coronavirus vaccines to its people.
The EU has signed deals for six different vaccines, but so far regulators have only authorized the use of two, one made by Pfizer and another by Moderna. The EU's drug regulator will consider the AstraZeneca vaccine on Friday.
Robert Yates, director of the global health program at the Chatham House think-tank in London, said the EU-AstraZeneca dispute highlights the danger of "vaccine nationalism" as countries compete for limited supplies.
"For politicians, this is red hot. And, you know, unfortunately, what we're seeing as well is that Brexit politics is playing into this," he said.
"This is this is really, really bad news -- not only bad news for the European countries involved," he said. "I think what's much worse is that these squabbles between rich countries potentially deny vaccines to people in the rest of the world."
AstraZeneca is setting up more than a dozen regional supply chains worldwide to meet regional demand for its vaccine. Overall, AstraZeneca plans to deliver up to 3 billion doses to countries around the world by the end of 2021.
However, establishing each facility is a complicated process that involves training people and ensuring each batch of vaccine is safe and effective. Sometimes this goes smoothly, but in other cases there are problems, Soriot said.
"We train them on how to manufacture," he said. "And then, you know, some people are new to this process ... They don't know how to make the vaccine and they're not as efficient as others.?
There are two basic steps in producing the vaccine. The first is a biological process that involves growing cells, which are injected with a virus, Soriot said. The second involves turning this "drug substance" into the final product, filling vials and testing each batch of vaccine.
Soriot said AstraZeneca had to reduce deliveries to the EU because plants in Europe had lower than expected yields from the biological process used to produce the vaccine. This has also happened in other regions as AstraZeneca sought to rapidly expand production capacity to meet demands from countries battling the pandemic.
"We've also had teething issues like this in the U.K. supply chain," Soriot said. "But the U.K. contract was signed three months before the European vaccine deal, so with the U.K. we have had an extra three months to fix all the glitches we experienced. As for Europe, we are three months behind in fixing those glitches."
An official from the European Commission, the EU's executive, said the bloc has agreed to give 336 million euros ($407 million) to AstraZeneca to develop its vaccine and deliver doses. The official, who wasn't authorized to speak publicly, said the commission would be entitled to recover part of the money if the company fails to live up to the terms of this advance purchase agreement.
"We reject the logic of first come, first served," Kyriakides said. "That may work at the neighbourhood butchers, but not in contracts and not in our advance purchase agreements. There's no priority clause in the advanced purchase agreement."
The shortfall in planned deliveries of the AstraZeneca vaccine is coming at the same time as a slowdown in the distribution of Pfizer-BioNTech shots as Pfizer upgrades production facilities at a plant in Belgium.
"There are a lot of emotions running in this process right now, and I can understand it: people want vaccine," Soriot said. "I want the vaccine too, I want it today. But, at the end of the day, it's a complicated process.?
Danica Kirka reported from London.