AstraZeneca contract includes UK as 'best effort' base for output to EU

BRUSSELS (Reuters) - The European Commission’s contract with AstraZeneca to supply COVID-19 vaccines includes Britain along with the EU as places where the Anglo-Swedish drugmaker should make its best efforts to manufacture vaccines for the EU.

The AstraZeneca logo is pictured outside the AstraZeneca office building in Brussels as part of the coronavirus disease (COVID-19) vaccination campaign, Belgium, January 28, 2021. REUTERS/Johanna Geron

The contract is at the heart of a dispute over access to vaccines, after AstraZeneca announced last week it would fall short of delivering promised vaccines to the EU by March because of production problems in Belgium.

Speaking after European medical regulators approved the vaccine, AstraZeneca Chief Executive Pascal Soriot said manufacturing glitches were inevitable and the company was focused on boosting supplies to the bloc after resolving most of the issues.

Seeking to defuse the row, Soriot said there were millions of doses ready to be shipped to EU countries. The company was working to increase capacity from the projected 31 million doses in the first quarter, using drug substance taken from other parts of the world, he added.

AstraZeneca and the EU had signed a deal for up to 400 million doses of the vaccine. Last week, the firm unexpectedly announced cuts of up to 60% in supplies to the bloc, citing production problems at a Belgian factory, triggering a furious response from the bloc.

The EU is now looking into a scheme to monitor and authorise export of vaccines, potentially blocking them if its own supply is not met.

The EU, whose member states are far behind Israel, Britain and the United States in rolling out vaccines, is standing its ground, pressing the Anglo-Swedish drugmaker to deliver the doses as promised in the contract.

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AstraZeneca has been making large quantities of its vaccine in Britain, but has said a contract it signed with the British government requires it to fulfil Britain’s order before it can send doses manufactured there abroad, including to the EU.

The company agreed on Friday to publication of its advance purchase agreement with the European Commission. The 41-page contract was published, although certain parts were redacted.

The contract says that AstraZeneca must uses its “Best Reasonable Efforts” to manufacture the EU doses, but the parties disagree on what this means.

AstraZeneca’s contention is that this is more of a subjective assessment, but a commission official said on Friday it was an objective legal standard.

The official pointed to a sentence in the contract by which AstraZeneca says it is not under any obligation to others that would impede complete fulfilment of the agreement’s requirements.

The commission also contends it does have the right to doses made in Britain and refers to a section at the end of the contract listing two British production sites.

“AstraZeneca shall use its Best Reasonable Efforts to manufacture the vaccine at manufacturing sites located within the EU (which for the purpose of this Section 5.4 only shall include the United Kingdom),” the contract says in a section on manufacturing sites.

The contract does not say whether AstraZeneca is obliged to send vaccines produced in Britain to the European Union.

Soriot stressed the progress AstraZeneca had made in producing a vaccine in less than a year.

“It is not simple, it is very complicated,” Soriot said. “We’ve had issues that led to us not producing (what) we were hoping to produce, but we’re trying to really catch up and you know there’s not much more we can do.”

Reporting by Philip Blenkinsop, John Chalmers and Francesco Guarascio in Brussels, Alistair Smout in London and Pushkala Aripaka in Bengaluru; Editing by John Chalmers Nick Macfie and Keith Weir