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FACTBOX-How the EU and AstraZeneca ended up in court, and what next

Wed 28th April, 2021 11:44am
(updates after first hearing)
    BRUSSELS, April 28 (Reuters) - The European Commission has
launched legal proceedings against Anglo-Swedish drugmaker
AstraZeneca  AZN.L  for not respecting its contract for the
supply of COVID-19 vaccines, and for not having a "reliable"
plan to ensure timely deliveries.
    A first hearing in the case began at the Brussels Court of
First Instance on Wednesday. Another two hearings will be held
on May 26. 
    The proceedings are public and conducted under an emergency
procedure, which means they could be concluded in a matter of
weeks. The European Union's executive Commission is seeking a
verdict before the end of June.
    The EU's decision to sue AstraZeneca came after the company
repeatedly cut supplies to the 27-nation bloc, contributing to
major delays in Europe's vaccine rollout, which has lagged those
in Britain and the United States. 
    Under the contract, which was drawn up under Belgian law,
the company committed to making its "best reasonable efforts" to
deliver 300 million vaccine doses from December 2020 to June
2021, including 180 million in the current second quarter.
    However, the company said in a statement on March 12 that it
would aim to deliver only one-third of that 300 million total, 
of which about 70 million would be in the second quarter.
    A week later, Brussels sent a legal letter to AstraZeneca,
in the first step of potential court proceedings.
    AstraZeneca says the EU's legal action is without merit,
argues that it complied with the contract, and has pledged to 
defend itself robustly in court.
    EU officials say the aim of the lawsuit is to compel
AstraZeneca to deliver more vaccines than the number it has said
it would aim to deliver. 
    EU lawyers have also asked for an immediate delivery of
doses from factories producing the AstraZeneca vaccine in
Britain. UK plants run by Oxford Biomedica  OXB.L  and Cobra
Biologics are listed in the EU contract but have not delivered
doses to the EU. AstraZeneca says it has no obligation to ship
doses from those plants.
    The EU wants as many as possible of the promised 300 million
doses, but would settle for 130 million by the end of June, an
EU source familiar with the discussions told Reuters.
    If successful in court, the EU would send a warning to other
vaccine suppliers. Pharmaceutical Johnson & Johnson has warned
the EU it may not deliver the 55 million doses of its COVID-19
vaccine that it was contracted to supply in the second quarter.
    Some member states were initially reluctant to sue
AstraZeneca on the grounds that it would take too long and,
rather than speed up deliveries, only exacerbate tensions with a
company they are still counting on for their vaccine campaigns.
    If the EU loses its case in the Brussels court, it would be
a public relations blow on top of criticism over its handling of
vaccine purchase agreements and rollout of shots.
    The AstraZeneca shot developed by Oxford University was
supposed to be the main one in the EU vaccination campaign for
the first half of this year.
    However, the EU has now distanced itself from the company
due to the supply problems and concerns over the efficacy and
safety of the vaccine. 
    The bloc has forgone another 100 million AstraZeneca shots
that it had an option to buy under the contract signed last
August, and is now relying mostly on the Pfizer-BioNTech  PFE.N 
 22UAy.DE  vaccine to inoculate at least 70% of EU adults by the
end of July.
    Still, while the AstraZeneca shot has been linked to very
rare cases of blood clots, the EU drug regulator has recommended
its use to contain the spread of COVID-19.

 (Editing by Mark Heinrich and Mark Potter)
 ((john.chalmers@tr.com; +32 470 88 14 91;))
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