Dragging AstraZeneca to inevitable compromise in Covid-19 vaccine row

Export controls are a regrettable move by the European Union, smacking of the very protectionism the bloc purports to oppose. But they do need to be seen in the context of the ongoing battle of wills with British-based drug firm AstraZeneca over critical supplies of a now-approved Covid vaccine.

Publication of the disputed contract on Friday seems only to have weakened AstraZeneca's negotiating hand.

Whatever about the interpretation of "best reasonable effort" – where the European Commission might be reaching – the contract seems to make clear that plants in Britain as well as in Belgium and Germany were part of the supply chain for the EU's 300-400 million doses.

It also makes expressly clear, on AstraZeneca’s part, that it is not under any contractual obligation to any third party that conflicts with its agreement to supply the agreed vaccine doses to the EU.

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If AstraZeneca had a previously signed contract with the UK that gave the NHS priority from UK plants, it was simply not in a position to put its signature to that EU commitment. But it did. These things are not done lightly. Contracts take time, not least because they are parsed by lawyers.

Thus, in the same way that initial British supplies very reasonably came from Europe because of production glitches at the UK plants, the EU had every right to expect the same to happen in reverse should the need arise, as it has.

So, if we get to court, the EU seems certain to win. But that’s academic: if we get to court, everyone will have lost. Any hearing will be years hence and the vaccine is needed now.

A supply squeeze is inevitable. The EU priority now is to ensure that supply shortage is minimised. For all the attacks over alleged contract breaches and the introduction of export controls, the commission’s focus is not on court but on dragging AstraZeneca to a compromise with which both sides can live. And maybe give the drug company some cover as it explains its case to the UK authorities.