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BRUSSELS/LONDON (Reuters) -The European Union on Friday lost its bid to speed up deliveries of AstraZeneca (NASDAQ:AZN)’s COVID-19 vaccines, the first of its legal challenges against the drugmaker that rocked the bloc as it scrambled to shore up supplies.
AstraZeneca said the EU had lost its legal case, but European Commission President Ursula von der Leyen said the court ruling supported its view that the Anglo-Swedish pharmaceutical giant had failed to honour its commitments.
The row plunged the EU into crisis earlier this year as states, under pressure to speed up vaccinations, scrambled for shots. Brussels has since largely cut ties with AstraZeneca, choosing not to buy any more of its vaccines for now.
The drugmaker had committed to do its best to deliver 300 million doses to the 27-nation bloc by the end of June, but production delays led it to revise this to 100 million vaccines.
This delayed the EU’s vaccination drive as the bloc had initially bet on AstraZeneca to deliver the largest volume, sparking a bitter row and EU legal action to get at least 120 million doses by the end of June.
However, the judge ruled that AstraZeneca must deliver only 80.2 million doses by a deadline of Sept. 27. The drugmaker said it would “substantially exceed” that by the end of June.
The court said in a statement that AstraZeneca must deliver 15 million doses by July 26, another 20 million by Aug. 23 and a further 15 million by Sept. 27, to reach a total of 50 million doses, which are in addition to 30 million that had been given to the EU when the legal case began.
Should it miss the deadlines in the ruling, AstraZeneca would face a penalty of “10 euros ($11.8) per dose not delivered”, the judge said, less than the 10 euros per dose per day fine the EU had sought in bringing its legal action.
AstraZeneca will remain bound to do its best to deliver 300 million doses to the EU, and a new hearing is to be held in September when compliance with the contract will be assessed again, the ruling said.
The EU had asked all 300 million doses to be delivered by the end of September, but the court did not set a deadline.
EU data shows the company has already shipped nearly 70 million doses, more than half of which were delivered after the start of the legal proceedings.
This brings AstraZeneca close to already meeting the court’s requirement of 80 million doses in total by Sept. 27.
SERIOUS BREACH
An EU lawyer also said the judgment meant that as a proof of best effort, AstraZeneca will have to deliver COVID-19 vaccines from a factory in Britain, if needed to meet its EU commitments.
The company had said it could not immediately deliver to the EU doses from an Oxford BioMedica factory because it had to supply Britain first.
The ruling said that AstraZeneca may have committed a serious breach of the contract by reserving Oxford BioMedica’s output for the British market. However a final decision on this will be made in a second legal case.
AstraZeneca said the court had found that the EU had no exclusivity or right of priority over other parties.
“The judgment also acknowledged that the difficulties experienced by AstraZeneca in this unprecedented situation had a substantial impact on the delay,” it said in a statement.
“AstraZeneca now looks forward to renewed collaboration with the European Commission to help combat the pandemic in Europe.”
The EU last month launched a second legal action against AstraZeneca over an alleged breach of the supply contract, which will continue after the summer. Friday’s ruling was over whether AstraZeneca must speed up vaccine deliveries.
