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EU Commission against AstraZeneca: Contract law expert explores possibilities for more vaccine production

2021-02-03T17:41:05.829Z

The Marburg contract law specialist Wolfgang Voit explains why AstraZeneca cannot so easily renounce its delivery obligations - and which options the EU Commission still has but is currently not using.



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Packaging of vials for the AstraZeneca corona vaccine (in September 2020 in Italy): "To do everything that can be expected given the special significance of the pandemic"

Photo: VINCENZO PINTO / AFP

SPIEGEL:

Professor Voit, AstraZeneca has announced that it will reduce the first delivery of its vaccine to the EU - instead of the planned 80 million doses, they only wanted to deliver 31 million, now it should be 40 million.

EU Commission chief Ursula von der Leyen already sells that as a success.

Wouldn't there have been more?

Voit:

It depends on how you understand the purchase agreements between the EU and AstraZeneca.

It should be stated in advance that the contract was concluded according to Belgian law and that I can only assess it from a German point of view.

As a starting point, it should be noted that AstraZeneca did not actually guarantee the delivery of a specific quantity at a specific time.

AstraZeneca is committed to "Best Reasonable Efforts" in this regard, and that is important.

To person

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Wolfgang Voit

, born in 1961, is spokesman for the research center for pharmaceutical law and professor for civil law, civil procedural law and commercial law at the Philipps University of Marburg.

There he leads, among other things, an extra-occupational master’s program in Phamarech Law.

SPIEGEL:

What does that mean?

Voit:

You could translate that as "all reasonable efforts", the contract also defines what is meant by it: There is explicit reference to the efforts that a comparable company would make, so AstraZeneca cannot rely on that special circumstances within the company.

In addition, AstraZeneca pledges to do whatever can be expected given the particular importance of the pandemic.

This reinforces the effort clause again;

The decisive factor is what efforts a comparable company can be expected to make in view of the particular importance of the pandemic - and that can be quite a lot if you keep the health and economic consequences of the pandemic in mind.

SPIEGEL:

AstraZeneca points to production problems in Belgium.

The plants in Great Britain, on the other hand, would have to serve the local market, there would be no obligation to deliver vaccines from there.

Would you agree with that?

Voit:

No.

There is a place where it says that the vaccines should be manufactured in the EU if possible.

The delivery obligation exists regardless of the place of manufacture.

And elsewhere, where this delivery obligation is specifically concerned, production in Great Britain is expressly equated with production in the EU.

SPIEGEL:

AstraZeneca boss Pascal Soriot said the British ordered first, so they had priority.

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AstraZeneca boss Soriot

Photo: FACUNDO ARRIZABALAGA / EPA-EFE / Shutterstock

Voit:

So far, I don't see any starting point for a reduction based on the argument of an earlier order.

With the aforementioned delivery obligation clause, the vaccine made in Great Britain is treated in the same way as the vaccine made in the EU.

In this respect, the treaty does not give the British priority for vaccines made in the UK.

SPIEGEL:

Isn't there another way of seeing it?

Voit:

The opposite view would argue that the clause only allows production in Great Britain, but without specifying the destination of these products for the EU market.

But if that had been wanted, AstraZeneca should have made an express reservation that the UK would receive priority.

SPIEGEL: But

the company doesn't.

Voit:

Exactly, that did not happen, and that is all the more remarkable since the procedure for a possible dispute over delivery quantities between EU member states is specifically regulated in the contract.

So you have seen the problem of conflicts.

AstraZeneca has not contractually clarified how a possible conflict between the UK and the EU is to be resolved.

Therefore, Europeans do not need to assume that Great Britain will have priority when it comes to the vaccination doses produced there.

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British Prime Minister Johnson (with bottle of Biontech vaccine)

Photo: Jon Super / dpa

SPIEGEL:

As it has since become clear, the British government under Prime Minister Boris Johnson stipulated in its contract with AstraZeneca that domestic production may initially only be used for the benefit of its own vaccination program.

How can this contradiction be resolved?

Voit:

AstraZeneca has contractually assured the EU that the fulfillment of the contract will not conflict with any third party rights.

An existing agreement that gives priority to the United Kingdom would probably not be compatible with this clause.

In my opinion, a priority agreement concluded at a later date would also be critical, because it would reduce AstraZeneca 's promised delivery capability.

In any case, this also makes it clear once again that according to the contract with the EU, other orders cannot restrict the best effort obligation.

"AstraZeneca has undertaken to have its vaccine produced by other manufacturers if there are production or delivery bottlenecks."

SPIEGEL: But

what if the British government simply bans the export of vaccines from British production facilities?

Voit: In

my opinion, that could not be at the expense of AstraZeneca.

This is also clear at one point in the contract with the EU, where it says that no party should be liable to the other side for delays and failures in performance caused by force majeure.

SPIEGEL:

So AstraZeneca would be fine?

Voit:

Then - but only then - it would not have to fall back on the production of the British plants.

But AstraZeneca would not be completely free of the delivery obligation.

SPIEGEL: In

what way?

Voit:

AstraZeneca has committed itself to having its vaccine produced by other manufacturers if there are production or delivery bottlenecks.

Such so-called contract manufacturing, with which the manufacturing capacity is expanded, would be a possibility of producing more vaccine as quickly as possible.

Accordingly, the EU Commission can propose other contract manufacturers in the event of such bottlenecks and AstraZeneca is obliged to do its best to conclude a contract with them.

If Britain were to impose an export ban, this clause would also apply.

And if AstraZeneca is responsible for the bottleneck, it will take action anyway.

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Partially blackened contract between the EU and AstraZeneca

Photo: Dirk Waem / dpa

SPIEGEL:

What does that mean?

Voit: In

my opinion, that would now be the decisive lever for further negotiations with AstraZeneca.

At least according to the German understanding, the manufacturer would find it difficult to oppose such demands.

SPIEGEL:

And if it does?

Voit:

If AstraZeneca refused to negotiate as best they could with a contract manufacturer proposed by the EU, that would be a clear breach of the contract.

The EU would then have to give in to the question of whether it can issue compulsory licenses to other manufacturers so that they can produce the vaccine.

This could be avoided by using contract manufacturing.

SPIEGEL:

The vaccine to be delivered now should have been produced in advance.

According to the contract, AstraZeneca should have informed the EU at an early stage if it became apparent that this would become problematic.

Apparently that did not happen.

Does that have any consequences?

more on the subject

  • Corona news on Tuesday: Merkel defends the vaccination procedure

  • Icon: Spiegel PlusEurope in the vaccine crisis: The anger bureaucrats of BrusselsA column by Michael Sauga

  • Announcement by the EU Commission: AstraZeneca now wants to deliver more vaccine

  • Corona pandemic: What's behind the AstraZeneca vaccine? By Julia Merlot

  • European lawyer on vaccine shortages: "The EU has suffered a loss of power, and it is now feeling that" An interview by Dietmar Hipp

  • Legal assessment of the dispute with AstraZeneca: The EU Commission is probably in the right - it just doesn't help by Markus Becker and Dietmar Hipp

Voit:

Not immediately;

One could of course think of a termination, but that does not eliminate the supply bottleneck.

But of course it is also clear: if this had become known earlier, the EU could have pushed for contract manufacturing from other producers earlier.

SPIEGEL:

Couldn't the EU just sue AstraZeneca for contract performance?

Voit:

If the manufacturer simply cannot deliver because he has not pre-produced enough or has otherwise delivered what was pre-produced, that does not help.

At best, in a few months or years, the EU would be entitled to a vaccine that hopefully nobody would need anymore.

But even a claim for damages would not help much.

The EU doesn't really want money in a few years' time, but vaccines now.

So you have to find a solution as quickly as possible.

SPIEGEL:

At the moment, von der Leyen doesn't seem to want to promote the dispute with AstraZeneca any further and is content with the 40 million cans.

Are you amazed?

Voit:

That is a political decision that can make sense if the quantities are increased in the second quarter.

But the treaty is actually designed to ensure in any case that the EU member states receive the ordered cans as quickly as possible and do not have to accept priority from other states.

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Source: spiegel

All news articles on 2021-02-03

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