The full publication of the European Union’s contract with AstraZeneca reveals that the Commission and EU countries waived the right to sue the drugmaker over any delays in coronavirus vaccine deliveries — a provision that takes any bite out of threats to file a lawsuit against the company over its failure to deliver to the Continent.
This issue was one of the key unanswered questions following a spat in January between the Commission and the Anglo-Swedish drugmaker over supply issues, after the company said its deliveries would fall short by at least 75 million doses by the end of the first quarter. The Commission then released a version of the contract, but with key portions redacted.
An investigative team at Italian broadcaster RAI has now published the full contract, shedding light on what AstraZeneca promised the EU. Most of the contract is good for the EU, including language that commits the company to supply 300 million doses by the end of June 2021 and clarifies that British plants are supposed to be part of the EU supply chain post-Brexit. It also shows the EU effectively paid €2.90 per dose, although each member state has paid less so far.
Here’s what we know.
Right to legal action
The contract makes clear the Commission and EU countries can’t sue the drugmaker for a host of issues, most notably if there are “delays in delivery of the Vaccine under this Agreement.”
The EU contract also says the Commission can’t sue if there are any unforeseen issues with the safety or efficacy of the vaccine, or if there are problems with the storage, transport or administration of the vaccine.
The only exception is if AstraZeneca fails to meet “Good Manufacturing Practices,” or if a claim “arises from AstraZeneca’s wilful misconduct or failure to comply with EU regulatory requirement.”
Delivery promises
While the contract doesn’t give the Commission much cover on lawsuits, it does confirm that AstraZeneca grossly overpromised how many doses it could supply to the EU.
The company said it could supply between 30 million and 40 million doses to the EU at the end of 2020, 80 million to 100 million doses by the end of the first quarter of 2021, and the total 300 million doses by the end of June.
The order form — which each EU country filled out — offered a month-to-month breakdown of those doses: 30 million by the end of 2020; 40 million in January 2021; 30 million in February; 20 million in March; 80 million in April; 40 million in May; and 60 million in June.
The company committed to making its “best reasonable efforts” to ramp up manufacturing to supply those 300 million doses, but the contract also says the delivery schedule is the “earliest possible” estimates of deliveries: “Final delivery subject to agreement of delivery schedule and regulatory approval.”
The company now claims it can only provide 41 million doses by the end of March — at least 20 million fewer than what was promised by the end of January.
The contract allows EU countries to order an additional 100 million doses, but it acknowledges “it may not be possible” to make the additional 100 million doses before the end of the second half of 2021.
Cost and price
The contract confirms previous reporting on the vaccine’s price, and how much AstraZeneca said it would cost to produce vaccines for the EU.
AstraZeneca estimated it would cost €870 million to manufacture the vaccines for the EU — €336 million to cover the up-front costs in the second and third quarters of 2020, and another €534 million to do the fill, finish and packaging of the vaccines between the third quarter of 2020 and second quarter of 2021.
The Commission said it would pay the initial €336 million to ramp up the manufacturing of the drug substance, to be paid in three installments. The Commission has paid two-thirds of that so far.
The Commission needs to pay the additional one-third (approximately €112 million) 20 days after countries receive doses.
However, if there’s not enough evidence that the company is making progress toward manufacturing more doses, “the Commission will have no obligation to pay the second Installment and may seek to recover the first Installment or a portion of it,” the contract states.
The Commission’s initial down payment helped reduce the cost of the 300 million doses EU countries paid. The full price per dose is €2.90, but that effectively dropped to €1.12 per dose following the down payment. This left EU countries to pay €1.78 per dose, as was disclosed in December in a leaked price table.
However, if the EU opted to purchase an additional 100 million doses, as its contract allowed, EU countries would pay the full €2.90 per dose.
The contract also said the company would produce the vaccine at no profit or loss, assuming the €2.90 price held, until the end of the pandemic, which could be as early as July 2021. If AstraZeneca determines “in good faith” that the pandemic is not over by then, the company would provide doses at-cost until it has.
Furthermore, the company is allowed to submit a request for more money if the costs of the vaccine ended up higher than projected, by up to 20 percent. Beyond 20 percent, the Commission and AstraZeneca may discuss whether countries would pay more per dose or order fewer doses.
Supply chain
The full contract also clearly lays out that British plants and other subcontractors are part of the EU’s supply chain — even if they haven’t all been used in practice.
The order form said that four plants would provide drug substance, including the Oxford Biomedica and Cobra Biologics based in the U.K., Halix in the Netherlands, and Novasep (now Thermo Fisher Scientific) in Belgium.
The company was also apparently in talks with Advent in Italy to produce drug substance, while another plant run by Catalent in the U.S. “may serve as a back-up supply site and may be used as needed,” the contract said. Additionally, three plants would do the fill, finish and packaging: IDT Biologika in Germany, Catalent in Italy and Wockhardt in Wales.
Despite the fact that all three British sites, as well as the Dutch and German subcontractors, are clearly included in the supply chain, it’s not certain they all have been used for the EU, according to the company’s submission to European regulators and officials familiar with AstraZeneca’s supply chain.
Only three — Novasep (originally listed by its original company Henogen), Oxford and Catalent — are licensed to produce drug substance in the EU, according to the company’s conditional marketing authorization application to the European Medicines Agency.
Both Halix and IDT Biologika were originally intended only to be used in the U.K. supply chain, and it’s not clear if they have begun production for the EU yet, according to those officials.
IDT Biologika in Germany confirmed it has only done the fill-finish for doses in the U.K. It is unclear whether Halix has produced any doses or if they have been sent to the U.K.
IDT Biologika signed a new deal this year with AstraZeneca to make drug substance for the EU in January, while a Spanish supplier signed a deal to do the fill-finish.
This article is part of POLITICO’s premium policy service: Pro Health Care. From drug pricing, EMA, vaccines, pharma and more, our specialized journalists keep you on top of the topics driving the health care policy agenda. Email [email protected] for a complimentary trial.
