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EU's legal action against AstraZeneca: Why now? How will it play out? When will there be a ruling?

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AstraZeneca has failed to deliver vaccine doses in time to the EU.
AstraZeneca has failed to deliver vaccine doses in time to the EU.   -   Copyright  Kirsty Wigglesworth/AP2009
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The European Commission has launched legal action against AstraZeneca for what it considers a failure to "ensure a timely delivery" of coronavirus vaccine doses.

The drastic move follows weeks of tension, criticism and accusations between Brussels and the Anglo-Swedish company, much of which has played out in the public eye.

Euronews explains how the European Union and AstraZeneca reached such a low point in their relationship.

What are the original terms of the contract?

The European Commission reached an agreement with AstraZeneca in August last year for the purchase of 300 million doses of its coronavirus vaccine. The agreement was signed on behalf of the 27 member states and included an option to buy an extra 100 million doses. The 300 million doses were expected to be delivered throughout 2021.

AstraZeneca had developed the vaccine in partnership with the University of Oxford using viral vector technology. This technique uses a modified version of a different virus (the vector) to deliver important instructions to the human cells with the aim of stimulating immunity.

The Anglo-Swedish company introduced its jab as an affordable and easy-to-handle alternative to the ones manufactured by Pfizer-BioNTech and Moderna, which rely on complex mRNA technology and require ultra-cold storage. By contrast, the AstraZeneca jab can be stored inside normal refrigerators at temperatures between 2 to 8 degrees Celsius.

According to a table leaked last year by a Belgian official, the European Commission was supposed to pay €1.78 per AstraZeneca dose, an important difference compared to the €12 price tag negotiated with Pfizer-BioNTech. This made the vaccine an attractive option for budget-conscious EU countries, like Bulgaria, Croatia and the Netherlands.

What happened with the deliveries?

The EU began its vaccine roll-out at the end of December, on what European Commission President Ursula von der Leyen called 'V-Day'. But, from very early on, it became clear that AstraZeneca was struggling to meet its promised schedule of deliveries for the first quarter of 2021, which totalled 90 million doses. The company made several announcements in January cutting its targets all the way down to 30 million doses.

The news infuriated the European Commission and caused dismay among national governments, who had planned the first phase of their inoculation campaign around the AstraZeneca and Pfizer vaccines. Soon, officials were publicly accusing the company of sending doses produced in EU-based plants to the United Kingdom, to the detriment of the European Union.

Barely a month after 'V-Day', the European Commission introduced an exports control mechanism to heighten scrutiny over vaccine production inside the bloc, a move that was widely seen as a forceful attempt to redirect AstraZeneca doses towards EU countries. Weeks later, Italy blocked a shipment of 250,000 doses destined for Australia.

The AstraZeneca distribution suffered another setback when many European countries decided to stop using the vaccine in order to investigate very rare cases of blood clots. The European Medicines Agency later found a "possible link" between the AstraZeneca product and the medical condition but insisted that benefits from using the vaccine continue to outweigh risks. Inoculation with AstraZeneca resumed in most EU countries, albeit with limitations.

Why has the European Commission taken legal action now?

According to the latest numbers of the European Centre for Disease Prevention and Control (ECDC), AstraZeneca has so far delivered 31.33 million doses to the European Union.

The figure not only represents a substantial cutback from the 90 million doses originally predicted for the first quarter but casts serious doubt over the company's ability to satisfy the 180 million goal for the second quarter.

The European Commission estimates that, in a best-case scenario, the company will provide the bloc with 70 million doses between early April and the end of June.

But progress seems to be lacking. The gap between expectation and reality has become untenable for Brussels, forcing the executive to sue the company in a last-resort bid to make it compliant.

The case was filed in a Brussels court and will be decided according to Belgian law. The decision to move forward with the legal action was taken by consensus with all 27 member states.

What do we know about the case?

A European Commission spokesperson confirmed to Euronews that the case has been introduced as an interlocutory application. This term describes proceedings that provide a temporary or provisional decision on a contentious issue.

The spokesperson said the European Commission's objective is to convince the judge that AstraZeneca has failed to fulfil its contractual obligations. The executive is confident that a judgement will compel the company to accelerate production and guarantee, at least, 70 million doses for the second quarter, a number it considers the bare minimum.

"What matters most now is that the company ensures the delivery of a sufficient number of doses," the spokesperson explained.

Geert Van Calster, a Belgian lawyer and legal scholar at KU Leuven, told Euronews that interlocutory proceedings for deals on the purchase of good and services are "clearly unusual".

"I suspect what [the Commission] is hoping for is two things. Firstly, that a judge will rule officially that AstraZeneca have not committed by what they were contractually bound by," Van Calster said.

"And secondly, that the Commission and the member states will try and secure perhaps one or two very specific measures in a very short period. Specifically, I suspect that what the Commission will try [to] convince the judge that under the contract there [are] a number of vaccines that should have been delivered to the European Union and that have not been, and that, as a consequence, those vaccines which are available, particularly in factories outside of the European Union, still have to be delivered by AstraZeneca to EU member states."

How has AstraZeneca defended itself?

The company "regrets" the European Commission's decision and believes "any litigation is without merit" but nevertheless welcomes the "opportunity to resolve this dispute as soon as possible".

In a statement, AstraZeneca argued that it has in fact complied with the contract and will deliver "almost 50 million doses to European countries by the end of April".

"Vaccines are difficult to manufacture, as evidenced by the supply challenges several companies are facing in Europe and around the world. We are making progress addressing the technical challenges and our output is improving, but the production cycle of a vaccine is very long which means these improvements take time to result in increased finished vaccine doses," the company said, echoing a line of defence used by its CEO, Pascal Soriot, during a hearing before Members of the European Parliament.

When can we expect a resolution to the case?

By opting for an interlocutory proceeding, the European Commission hopes for a swift resolution.

The spokesperson told Euronews that the executive expects the judge to issue a judgement "within three to seven weeks from the filing of the claim", a timeline that Van Calster also considers feasible provided the judge believes there is merit in the case.

"The idea is to go in [for] a quick procedure for measures that can be quickly delivered because there is also a possibility of a long-term procedure which will rule on the whole contract," the scholar said, noting that Belgian courts tend to be slow when it comes to in-depth examinations.

"That's precisely why the Commission [has] gone for the interlocutory proceeding. The downside of such an interim proceeding is that you cannot ask a judge to go through the onset of the contract. You're going to have to ask the judge to only come to conclusions that are clearly easy to make on the basis of provisions which you would argue are without any doubt."

The Commission believes it has enough good arguments to make the judge rule in its favour. Meanwhile, AstraZeneca has said it will "strongly defend itself in court".

The first hearing on the case will take place on May 26. The Commission will employ an external law firm to plead its case.

Will the European Commission keep doing business with AstraZeneca?

As things stand now, it seems highly unlikely.

The Commission chose not to activate the provision to order an extra 100 million doses from AstraZeneca, a decision that cannot be reversed since the deadline has already passed. Brussels is now focused on making sure the original 300 million doses are actually delivered in the following months.

Brussels has been able to partially compensate the AstraZeneca shortages by relying more heavily on Pfizer and BioNTech, whose EU-based production plants have progressively increased capacity thanks to a joint public-private effort.

The positive results from the partnerships have led the Commission to put even more money on the table for mRNA vaccines. The executive has entered negotiations with Pfizer and BioNTech to secure up to 1.8 billion doses over the period of 2021 to 2023. The deal is intended to provide boosters and vaccine adapted to new variants.