Brussels, 3 September 2021
How does the settlement agreement compare in terms of quantity of doses delivered and the timing for delivery with the initial Advanced Purchase Agreement (APA)? Is the commitment to deliver 65 million in 2022 in line with the contract?
The initial APA provided for the following estimated delivery schedule: (i) 30 million doses by the end of December 2020, (ii) 40 million doses by the end of January 2021, (iii) 30 million doses by the end of February 2021, (iv) 20 million doses by the end of March 2021, (v) 80 million doses by the end of April 2021, (vi) 40 million doses by the end of May 2021 and (vii) 60 million doses by the end of June 2021. By the end of June 2021, AstraZeneca had delivered 99.5 million doses.
This schedule has been replaced in the settlement agreement on the remaining 200 million doses by the following new schedule: (i) 60 million doses by the end of Q3 2021, (ii) 75 million doses by the end of Q4 2021 and (iii) 65 million doses by the end of Q1 2022.
Therefore, according to the settlement agreement, AstraZeneca will deliver the remainder of the doses scheduled under the contract within a newly negotiated timeframe.
Furthermore, in the event of any delay to the new delivery schedule, capped rebates on the cost of each delayed dose would apply as follows:
- 10% for one month of delay
- 25% for two months of delay
- 40% for three months of delay or more
The rebate will not be granted in the event that the delay in delivery is beyond the reasonable control of AstraZeneca., which will bear the burden of proof in this regard.
In what aspect does the settlement agreement change the existing situation?
The current agreement puts an end to the legal proceedings and is a mutually satisfactory solution in several respects:
- it includes a newly negotiated timeframe for the remainder of the doses
- it organises the delivery of the entirety of the doses purchased under the Advanced Purchase Agreement, and by doing so, it goes further than the judgment since the latter covered the delivery of 50 million doses
- Whereas the APA was organized around the notion of “best reasonable efforts” the settlement agreement foresees the delivery on the basis of a “firm commitment” from AstraZeneca associated with rebates on the cost of each delayed dose in the event of a supply delay.
The Court of First Instance of Brussels ordered AstraZeneca on 18 June to deliver 50 million doses by end of September, and penalties were foreseen. What happened with the penalties foreseen by the Court?
AstraZeneca has delivered the requested 50 million doses by the end of June and thus complied with the judgment of the Court of First Instance of Brussels. Therefore, no penalty is due from AstraZeneca.
How many doses have already been delivered by AstraZeneca?
By the end of August 2021, AstraZeneca has released for supply over 140 million doses of which 16 million are in the process of being delivered.
Does the settlement agreement change the initial contract between the EU and AstraZeneca?
The settlement agreement puts an end to the legal proceedings and introduces a new delivery schedule, different from the one set out in the contract. Otherwise, the initial contract remains unchanged and fully in force.
Is AstraZeneca in a position to deliver the doses using their current production sites?
The settlement agreement now refers to any production site in the world that has already been approved by the European Medicines Agency and additional production sites that would obtain approval from the European Medicines Agency.
What will ensure implementation of the settlement agreement?
The current agreement puts an end to the legal proceedings and is a mutually satisfactory solution.
- This time the parties were able to discuss, their exchanges were fruitful and have set a solid basis for the future.
- It organises the vaccine delivery on the basis of a “firm commitment” from AstraZeneca, with a newly negotiated timeframe for the remainder of the doses
- In the event of any delay to the new delivery schedule, capped rebates on the cost of each delayed dose would apply. AstraZeneca will provide Member States on a rolling basis with weekly and monthly delivery schedules.
- The doses can be supplied from any manufacturing site worldwide currently approved by the European Medicines Agency or approved in the future by the European Medicines Agency.
What will happen with the June Court decision?
The settlement puts an end to the current dispute.
Under which conditions could the commitments under the settlement agreement not be fulfilled?
The deliveries of doses are conditional upon certain assumptions, such as the lack of catastrophic events and the approval of two new AstraZeneca manufacturing sites by the European Medicines Agency by the end of October.