EU Fails to Sway AstraZeneca to Tap U.K. Supply for Vaccines

The European Union remains at loggerheads with AstraZeneca Plc after the Anglo-Swedish drugmaker rejected demands that it take Covid-19 vaccine supplies from its U.K. factories to increase doses going to the bloc.

The origin of the dispute is Astra’s decision to prioritize Britain over the EU following a Belgian production glitch, in what Brussels claims to be a breach of contract. The two sides spoke Wednesday evening and held their ground, with another meeting expected.

“We regret the continued lack of clarity on the delivery schedule and request a clear plan from AstraZeneca for the fast delivery of the quantity of vaccines that we reserved for the first quarter,” EU health chief Stella Kyriakides said after a virtual meeting with Astra’s chief executive.

EU Fails to Sway AstraZeneca to Tap U.K. Supply for Vaccines

The face-off could mean further delays to the bloc’s sluggish inoculation campaign. It also thrusts the maker of the life-saving shots into a political fight with 27 governments and their restive voters, desperate to pull their economies out of the steepest recession in living memory.

Having delivered just 2.3 Covid-19 shots for every 100 people, the EU lags way behind both the U.S. and the U.K., which have reached 7.8 and 11.4 respectively. The bloc is several months away from immunizing a sufficient number of people to have a tangible impact on the virus.

The battle is another thorn in the tense post-Brexit ties between Britain and the EU. The U.K., which put in an order with Astra three months before the EU, is trying to steer clear of the controversy while also keen to showcase the benefits of going it alone.

Prime Minister Boris Johnson said that shortages in the EU “are really a matter for our EU friends and the companies concerned’ and that “we’re very confident of our contracts, we’re very confident of our supply.”

The bloc accuses Astra of using European funding intended for the development of manufacturing capacity to ramp up production in its U.K. plants. Astra CEO Pascal Soriot said in an interview with European newspapers that the company has a so-called best-effort agreement. That position hasn’t changed.

Member states are furious with the company, according to diplomats familiar with a meeting of government envoys in Brussels. Speaking privately, an EU official said that while the bloc did not want an escalation in the tensions, much work was still needed to break the impasse.

Kyriakides and a spokesman for the company both described Wednesday’s talks as “constructive.”

EU Fails to Sway AstraZeneca to Tap U.K. Supply for Vaccines

The bloc has vowed to establish a mechanism that could potentially impose hurdles on exports of the life-saving shots from European production facilities.

The proposal, expected later this week, risks triggering a wave of protectionist measures that could disrupt supply chains with billions of people still waiting for the shots that could allow the global economy to return to some kind of normality.

The European Commission last year signed an advance purchase agreement with Astra for as many as 400 million Covid-19 vaccine doses -- part of a total 2.3 billion doses secured so far for the EU. The Astra jab may get the EU regulatory green light by the end of this week following the bloc’s approval of Pfizer Inc.-BioNTech SE and Moderna Inc. vaccines.

The dispute could also reverberate across the world, as governments race to stop the spread of the pandemic, before a multiplying number of mutations renders vaccines less effective against Covid-19.

“Contractual obligations must be met, vaccines must be delivered to EU citizens,” Kyriakides said.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.