By Pushkala Aripaka and Ludwig Burger
(Reuters) -AstraZeneca and the European Commission have reached a settlement on the delivery of 200 million pending COVID-19 vaccine doses by the drugmaker, ending a row about shortages that had weighed on the company and the region's vaccination campaign.
The dispute plunged the European Union into crisis earlier this year as states, under pressure to speed up vaccinations, scrambled for shots. It also caused a public relations crisis for AstraZeneca (NASDAQ:AZN), which is led by Frenchman Pascal Soriot.
Having reduced its initial reliance on the Anglo-Swedish drugmaker, Brussels said parts of the volumes committed under the deal would be transferred outside the EU to ease global vaccine inequality. The bloc's vaccine supplies now come mainly from Pfizer/BioNTech.
As part of Friday's settlement https://www.astrazeneca.com/media-centre/press-releases/2021/astrazeneca-and-european-commission-reach-settlement-agreement-over-vaccine-supply-ending-litigation.html, AstraZeneca has committed to deliver 60 million doses of its vaccine, Vaxzevria, by the end of the third quarter this year, 75 million by the end of the fourth quarter and 65 million by the end of the first quarter of 2022.
When including deliveries already made, that schedule maps out the honouring of a 300 million dose bulk purchasing contract struck about a year ago between the company and the EU, after months of conflict over delays.
The European Commission launched legal action against AstraZeneca in April https://www.reuters.com/world/europe/eu-sues-astrazeneca-over-delayed-deliveries-covid-19-vaccine-2021-04-26 for not respecting that contract and for not having a "reliable" plan to ensure timely deliveries.
The EU's executive body said https://ec.europa.eu/commission/presscorner/detail/en/ip_21_4561 that under the new agreement, member states would be provided with regular delivery schedules and if there were any delayed doses, capped rebates would be applied. EU members with low inoculation rates would be prioritised, it added.
VACCINATION RATES
"There are significant differences in vaccination rates between our member states, and the continued availability of vaccines, including AstraZeneca's, remain crucial," said EU Health Commissioner Stella Kyriakides.
She also said some deliveries under the settlement would go to lower-income countries outside the EU.
"We will continue helping the rest of the world. Our aim is to share at least 200 million doses of vaccines through COVAX with low and middle-income countries until the end of this year," she said, referring to vaccine-sharing facility run by the GAVI Vaccine Alliance and the World Health Organization.The European Commission has caught up with its campaign schedule, saying this week that 70% of the European Union's adult population had been fully vaccinated, hitting a target set at the beginning of the year.
The settlement allows for distribution while the highly-contagious Delta variant of the coronavirus is causing a spike in cases and vaccines are being studied for longevity of protection.
The EU's vaccine needs have for the most part been served by Pfizer (NYSE:PFE) and BioNTech because the partners have managed to ramp up production for ample supplies. Concerns over very rare cases of serious blood clotting linked to the Astra shot, co-developed with Oxford University, have weighed on demand for it.
Use of the Astra shot in the region fell further when Germany decided in July that recipients of an initial Astra shot would complete their two-shot regimen with a dose of Pfizer or Moderna (NASDAQ:MRNA).
"I'm very pleased that we have been able to reach a common understanding which allows us to move forward and work in collaboration with the European Commission to help overcome the pandemic," said AstraZeneca senior executive Ruud Dobber.
About 92 million doses of AstraZeneca's vaccine have been distributed to EU member states so far, according to the European Centre for Disease Prevention and Control. That is far below the 437 million doses delivered by Pfizer/BioNTech but ahead of the 77 million Moderna vaccine doses delivered.
Astra said it had released more than 140 million doses to date at no profit to the EU, including doses that have yet to be delivered to member states and EU consignments to COVAX or to other non-EU states.