covid-19

[RandBlade]

https://ec.europa.eu/commission/pres...l/en/ip_21_302

WHEREAS, as part of that scale-up, AstraZeneca has committed to use its Best
Reasonable Efforts (as defined below) to build capacity to manufacture 300 million Doses of
the Vaccine, at no profit and no loss to AstraZeneca, at the total cost currently estimated to be
Euros for distribution within the EU (the “Initial
Europe Doses”), with an option for the Commission, acting on behalf of the Participating
Member States, to order an additional 100 million Doses (the “Optional Doses”).
WHEREAS, AstraZeneca will supply the Initial Europe Doses to the Participating
Member States according to the terms of this Agreement.

1.9. “Best Reasonable Efforts” means

(a) in the case of AstraZeneca, the activities and degree of effort that a company
of similar size with a similarly-sized infrastructure and similar resources as
AstraZeneca would undertake or use in the development and manufacture of a
Vaccine at the relevant stage of development or commercialization having regard
to the urgent need for a Vaccine to end a global pandemic which is resulting in
serious public health issues, restrictions on personal freedoms and economic
impact, across the world but taking into account efficacy and safety; and

(b) in the case of the Commission and the Participating Member States, the
activities and degree of effort that governments would undertake or use in
supporting their contractor in the development of the Vaccine having regard to the
urgent need for a Vaccine to end a global pandemic which is resulting in serious
public health issue.

[RandBlade]

It gets worse and worse. The contract explicitly states that the EU's initial doses will be coming from within the EU only and not the UK. It explicitly says that!

See clause 5.1 and 5.4

5.1 says the initial doses will come from the EU.
5.4 says that only for the purposes of 5.4 (so does not apply to 5.1) then doses may come from the UK. So doses can come from the UK once AZN has spare UK capacity, but the EU has no right to them for initial doses under 5.1 (or indeed any other part of the contract apart from 5.4) which explicitly does not include the UK.

From an extremely Europhile anti-Brexit lawyer I know.

Twitter Link

Twitter Link

This is embarrassing for VDL. Just embarrassing. Did she think somehow best reasonable efforts meant more than best efforts, it means less that's what the law means (under best efforts you're expected to do even efforts that may be considered unreasonable).

[RandBlade]

Even David three names tearing the Commissioners to shreds. WTF is she playing at lying to the media, then releasing the contract to reveal her lies?

Twitter Link

[Aimless]

Even David three names tearing the Commissioners to shreds. WTF is she playing at lying to the media, then releasing the contract to reveal her lies?

[ tweet ]1355120434358984705[/ tweet ]

One of you is misreading her statement. It describes a view of what "best efforts" (or "best reasonable efforts") clauses mean for the company's obligations to deliver on the contract. Having read the contract, AZN's efforts seem to have fallen short of "best reasonable efforts" wrt. developing/securing production capacity in the EU, and they would seem to have fallen short of their contractual obligation to keep the EU apprised of the difficulties that resulted in this shortfall. Wrt other issues in dispute, it might be helpful to see "schedule A". I can understand why this delay resulted in such acrimony while eg. Pfizer's did not.

The apparent conflict between 5.1 and 5.4 is not real. 5.4 includes the use of UK production capacity in "best reasonable efforts" for the purposes of supplying initial European doses:

If AstraZeneca is unable to deliver on its intention to manufacture the Initial Europe
Doses and/or Optional Doses under this Agreement in the EU, the Commission or the
Participating Member States may present to AstraZeneca, CMOs within the EU capable
of manufacturing the Vaccine Doses, and AstraZeneca shall use its Best Reasonable
Efforts to contract with such proposed CMOs to increase the available manufacturing
capacity within the EU. The manufacturing site planning is set out in Schedule A

This could be clarified by looking at manufacturing site planning set out in schedule A, but, taken as a whole, it means that AZN should strive to produce initial doses in EU 27, but, if it needs to, it can use UK production capacity. In 13.1, AZN assures the EU there are no impediments to this, which calls into question the CEO's claim re. the UK contract getting in the way of supplying initial doses to the EU. I don't think this is as clear-cut as some have made it out to be.

[RandBlade]

One of you is misreading her statement. It describes a view of what "best efforts" (or "best reasonable efforts") clauses mean for the company's obligations to deliver on the contract. Having read the contract, AZN's efforts seem to have fallen short of "best reasonable efforts" wrt. developing/securing production capacity in the EU, and they would seem to have fallen short of their contractual obligation to keep the EU apprised of the difficulties that resulted in this shortfall. Wrt other issues in dispute, it might be helpful to see "schedule A". I can understand why this delay resulted in such acrimony while eg. Pfizer's did not.

No they haven't. They've created the facilities in the EU for the initial doses as they promised to. The EU's facilities are having yield problems, which is a reasonable problem to have covered by the "reasonable efforts" clause. Once the yield problems are fixed then the EU will have the doses pledged - and AZN are pledged to using its "best reasonable efforts" to fix those yield issues.

The apparent conflict between 5.1 and 5.4 is not real. 5.4 includes the use of UK production capacity in "best reasonable efforts" for the purposes of supplying initial European doses:

This could be clarified by looking at manufacturing site planning set out in schedule A, but, taken as a whole, it means that AZN should strive to produce initial doses in EU 27, but, if it needs to, it can use UK production capacity. In 13.1, AZN assures the EU there are no impediments to this, which calls into question the CEO's claim re. the UK contract getting in the way of supplying initial doses to the EU. I don't think this is as clear-cut as some have made it out to be.

You're mixing up different issues. 5.4 explicitly means they can use UK capacity if they choose to do so, but since it explicitly applies to 5.4 alone it is only that they can. They're under no obligations to do so as their obligations under 5.1 and elsewhere explicity do not include the UK.

This phrase means that the EU won't refuse UK manufactured doses if they're offered, but AZN aren't obligated to offer them.

13.1 is met, the UK contract doesn't get in the way of supplying initial doses to the EU since the initial doses to the EU are scheduled to come from the EU as defined in 5.1 - the only reason the initial doses aren't available yet is the yield problem in their European facilities. The UK's contract with AZN has absolutely nothing to do with the EU facilities yield issues, so that is not a breach of 13.1

The EU have asked for the UK's doses to be diverted as a patch for the EU's doses yield issues - if you have a "reasonable" yield problem in a contract then the counterparty demanding that the signatory breaks their prior contract with someone else does not fall within the meaning of the phrase "reasonable efforts". Since the initial doses were never meant to come from the UK, AZN breaching their agreement with the UK would be unreasonable.

[Aimless]

No they haven't. They've created the facilities in the EU for the initial doses as they promised to. The EU's facilities are having yield problems, which is a reasonable problem to have covered by the "reasonable efforts" clause. Once the yield problems are fixed then the EU will have the doses pledged - and AZN are pledged to using its "best reasonable efforts" to fix those yield issues.

That is not correct. For the production difficulties to result in such a massive shortfall, they must have been aware of them long ago—and obliged to not only notify the EU but also to request assistance with finding ways to compensate, eg. by securing capacity at other facilities. There are many facilities in the EU. See for example Sanofi facilities being used to make up for Pfizer's shortfall.

You're mixing up different issues. 5.4 explicitly means they can use UK capacity if they choose to do so, but since it explicitly applies to 5.4 alone it is only that they can. They're under no obligations to do so as their obligations under 5.1 and elsewhere explicity do not include the UK.

This phrase means that the EU won't refuse UK manufactured doses if they're offered, but AZN aren't obligated to offer them.

No. Here is what 5.4 actually says, when you consider the provision about the UK:

AstraZeneca shall use its best reasonable efforts to manufacture the vaccine at
manufacturing sites located within the EU (including the UK). If AstraZeneca is unable to
deliver on its intention to manufacture the Initial Europe Doses and/or Optional Doses
under this Agreement in the EU (including the UK), the Commission or the
Participating Member States may present to AstraZeneca, CMOs within the EU capable
of manufacturing the Vaccine Doses, and AstraZeneca shall use its Best Reasonable
Efforts to contract with such proposed CMOs to increase the available manufacturing
capacity within the EU. The manufacturing site planning is set out in Schedule A.

A screenshot of the redacted schedule A:



Note one particular country code in the section about sites for manufacturing initial European doses.

13.1 is met, the UK contract doesn't get in the way of supplying initial doses to the EU since the initial doses to the EU are scheduled to come from the EU as defined in 5.1 - the only reason the initial doses aren't available yet is the yield problem in their European facilities. The UK's contract with AZN has absolutely nothing to do with the EU facilities yield issues, so that is not a breach of 13.1

5.4 and schedule A appear to include UK manufacturing sites in the company's "best efforts". If the UK contract is such that UK facilities cannot be used to supply the initial European doses, then AZN should not have included them and then assured the commission there was no conflict.

[RandBlade]

That is not correct. For the production difficulties to result in such a massive shortfall, they must have been aware of them long ago—and obliged to not only notify the EU but also to request assistance with finding ways to compensate, eg. by securing capacity at other facilities. There are many facilities in the EU. See for example Sanofi facilities being used to make up for Pfizer's shortfall.

That is not correct. The yield is too low, for the production difficulties to result in such a massive shortfall they must be aware of them when they bcome aware of them. You're acting as if these things are made linearly. If the yield turns out to be too low then it is too low and at that point they're obliged to report to the EU - which they have done.

No. Here is what 5.4 actually says, when you consider the provision about the UK:

A screenshot of the redacted schedule A:



Note one particular country code in the section about sites for manufacturing initial European doses.

5.4 and schedule A appear to include UK manufacturing sites in the company's "best efforts". If the UK contract is such that UK facilities cannot be used to supply the initial European doses, then AZN should not have included them and then assured the commission there was no conflict.

No that's incorrect. Its entirely possible they're planning to use the EU facilities (FR/BE, I/IL, ITL and DE) but they've included UK facilities too so that they're able to use the UK surplus, if and when one arrives, to supplement the EU facilities.

That doesn't given the EU the right to pinch stocks bought and paid for by someone else three months earlier.

[gogobongopop]

Be interesting to see the UK agreement to compare.

[RandBlade]

Be interesting to see the UK agreement to compare.

It would indeed, though confidentiality still applies and the UK government seems keen to keep its confidentiality too so I wouldn't hold my breath.

It seems clear though that the UK Government (and Israeli and even US Governments) went into this with one set of negotiating objectives, the EU went in with a very different set of negotiating objectives. All parties appear to have achieved their objectives - Israel, the UK and even the US ensuring quick, early delivery of the vaccines at any cost and waiving liabilities.

The EU getting liability protection and haggling over the cost of a not-for-profit vaccine like they're at a Turkish Bazaar.

Glad you're feeling a bit better now gogo. Horrible thing to go through from the sound of it, but better than the damned bug.

[gogobongopop]

Thanks.

I think this issue is fascinating. Again, glad we did what we did. But can't imagine the shit show if every nation in the EU did the same.

[RandBlade]

Who is it who has (or had?) a signature along the lines of "when in a hole, stop digging"? It seems the EU have gotten themselves into a hole and then decided to go fetch a JCB to keep digging faster.

The EU are still in negotiations with the likes of Novavax for their vaccines, so not only will they be potentially behind the 1.3 billion doses of Novavax already ordered if they now pull their fingers out and get on with it - but after their bad faith actions with Astrazeneca this week surely any other Pharma company is going to now either charge a risk premium or have to ensure all the i's and t's are dotted and crossed to prevent future bad faith EU actions against them too.

If the EU wants to get some vaccines soon they should bloody get their money on the table and offer whatever it takes to get it done, or wait their turn for those who have paid up, not threaten absurd legal actions like this.

[gogobongopop]

Unless there's localised or full collaboration, somebody had to be first. If that somebody ordered a lot, without specifically allowing delivery to decrease or increase based on other orders (some kind of humanitarian clause), then others will suffer, because we're not starting in a position of having a trillion doses available.

Those with the most money and quickest government's win. Everyone else loses.

I imagine if the EU got in before us we'd be having the same difficulty as well.

The only alternative to this is to cease sharing entirely and have a nationalist approach to medicine and vaccines. You develop it and roll it out yourself.

Simplifying things is fun. Am I wrong?

[Timbuk2]

More good news.

Johnson & Johnson one-dose Covid vaccine shown to work

UK has bought 30m doses of product that could transform world’s immunisation programmes

A fifth vaccine, made by the US company Johnson & Johnson, has shown efficacy against the coronavirus and could transform prospects for protecting both the UK and the rest of the world, because it needs only a single dose.

The vaccine, made by the US giant’s subsidiary Janssen, based in the Netherlands, was trialled in 44,000 people in the US, South Africa and Brazil. The US has ordered 100m doses with an option for more. Further trials involving a second dose are taking place in the UK – and the British government has bought 30m doses. The EU has ordered 400m doses.

The company said it had 72% efficacy in preventing Covid in the US but a lower rate of 66% was observed globally in the large trial conducted across three continents and against multiple variants. It gave people 85% protection against severe illness, even in South Africa which is struggling with a problematic variant of the virus. Nobody who was given the vaccine died.

The results of the trials have been much anticipated, because the Janssen vaccine can be given as a single injection. That means stocks will go further, and particularly in lower-income countries an immunisation programme will be easier as there is no need for a recall after three or 12 weeks.

[wiggin]

More good news.

I was hoping their efficacy might be a bit higher on the single dose, but it's a good solution for mass vaccination of people who aren't at high risk, especially outside of sophisticated healthcare systems. Should be interesting to see what their 2 dose trial shows.

[RandBlade]

Interesting that they show protection continues to increase for 49 days.

Matches the expectations from the AZN vaccine which is quite a similar design I believe.

[wiggin]

Interesting that they show protection continues to increase for 49 days.

Matches the expectations from the AZN vaccine which is quite a similar design I believe.

Yes, I am very pleased that JNJ chose to get actual data to recommend a single dosing strategy with a known efficacy; I look forward to the continued data from their trial giving longer term estimates of efficacy.

[Aimless]

That is not correct. The yield is too low, for the production difficulties to result in such a massive shortfall they must be aware of them when they bcome aware of them. You're acting as if these things are made linearly. If the yield turns out to be too low then it is too low and at that point they're obliged to report to the EU - which they have done.

Do you believe AZN expected to be able to make and test 80 million doses overnight at the end of last week? In order to ensure that a sufficiently large stock of vaccine is ready to ship, they have to produce and test large quantities of drug substance over a long time, and begin finishing the final product well ahead of the scheduled delivery.

No that's incorrect. Its entirely possible they're planning to use the EU facilities (FR/BE, I/IL, ITL and DE) but they've included UK facilities too so that they're able to use the UK surplus, if and when one arrives, to supplement the EU facilities.

If it is only restricted to surplus, it is an impediment to fulfilling the EU order. AZN should therefore not have assured the EU that there were no such impediments. It seems very strange to include two facilities in the list of primary production facilities for the initial EU doses if you only expect to be able to use surplus capacity.

That doesn't given the EU the right to pinch stocks bought and paid for by someone else three months earlier.

The fault lies with AZN; how they rectify the situation without stiffing the UK is really their business.

Oh the EU's AZN vaccine contract is even with a different company than the UK's too.

EU have signed with AZN AB, the UK have signed with AZN plc. Same family of companies but they're separate companies.

This isn't all that relevant, so long as AZN AB has the authority to make assurances about production capacity at the facilities in question.

[RandBlade]

Do you believe AZN expected to be able to make and test 80 million doses overnight at the end of last week? In order to ensure that a sufficiently large stock of vaccine is ready to ship, they have to produce and test large quantities of drug substance over a long time, and begin finishing the final product well ahead of the scheduled delivery.

No, since 80 million doses weren't scheduled to be ready to ship this week anyway.

Do I believe they expected to be able to make and test 80 million doses over the next three months by the end of the first quarter? Yes, quite possibly. These things scale quite rapidly - its like exponential growth in cases, a small variant unchecked can cause dramatic changes over time.

They're warning now that they don't think they can fulfill expected quotas for March - in January. That's giving a couple of months notice, not a week.

If it is only restricted to surplus, it is an impediment to fulfilling the EU order. AZN should therefore not have assured the EU that there were no such impediments. It seems very strange to include two facilities in the list of primary production facilities for the initial EU doses if you only expect to be able to use surplus capacity.

Not true, since the scheduled amounts were fulfillable had the yield not been down.

The fault lies with AZN; how they rectify the situation without stiffing the UK is really their business.

How they rectify the situation is to use best reasonable efforts to fix the yield issues. Same as Pfizer, Moderna and any other business. All of that happens.

This isn't all that relevant, so long as AZN AB has the authority to make assurances about production capacity at the facilities in question.

Absolutely and they have the authority to tell you that there is a problem with the yield that they are using best reasonable efforts to fix but until then there's a reduction in capacity as was explicitly planned to be possible in the contract.

[RandBlade]

Oh the EU's AZN vaccine contract is even with a different company than the UK's too.

EU have signed with AZN AB, the UK have signed with AZN plc. Same family of companies but they're separate companies.

The idea the EU can just nick doses made for the UK contract signed months earlier to make up for their own shortfall is absolutely crass and absurd.

[Hazir]

Oh the EU's AZN vaccine contract is even with a different company than the UK's too.

EU have signed with AZN AB, the UK have signed with AZN plc. Same family of companies but they're separate companies.

The idea the EU can just nick doses made for the UK contract signed months earlier to make up for their own shortfall is absolutely crass and absurd.

We will see. Usually the winner in these matters is the one with the bigger stick. AZN shouldn't have picked this fight.

I'm not going to read the contract, but what I read about it seems to indicate that the best effort clause has lost most of its relevance at this point. IF Belgian law applies AZN then things would look very bleak if the shortfall is caused by exports.

From the latest reports it seems that AZN has already started folding.

[RandBlade]

AZN is the one with the bigger stick.

They have the vaccine 6 billion people around the globe want.

The shortfall is caused by reduced yields - not by pre-existing prior contracts that took precedence.

[Hazir]

AZN is the one with the bigger stick.

They have the vaccine 6 billion people around the globe want.

The shortfall is caused by reduced yields - not by pre-existing prior contracts that took precedence.

Haha, so please explain why AZN is folding.

[RandBlade]

Haha, so please explain why AZN is folding.

How are they folding?

Or are they doing what they always said they were going to do and using their reasonable best efforts to fix the problems?

Twitter Link

[gogobongopop]

Is this big news in EU countries like it is in the UK?

[Aimless]

Is this big news in EU countries like it is in the UK?

Big in some places, and growing bigger. Obv not in Sweden because no-one here g a f about anything UK media jumped the shark a little, aided by AZN's strategic redactions; cooler heads are speaking up now.

[Hazir]

Is this big news in EU countries like it is in the UK?

I don't know how big it is in the UK, but it seems to be mostly in the German media. Media in NL are preoccupied with the mess that's made of what should have been a vaccination drive. The interesting thing is that you can almost see how the conversation went while they were planning this mess. It's a special Dutch gift: literally plan something to death. In retrospect we'll see that all protocols were followed in the pursuit of failure.

[RandBlade]

Hospitalisations of over 80s coming down faster than other age groups and accelerating. Lockdown and vaccine rollout combining, fingers crossed.

[Timbuk2]

Its still a bit crap for a business to not meet their commitments.

In the vendors I use in my work I'd not be renewing a contract with AZN with their failure to deliver.

[Hazir]

Its still a bit crap for a business to not meet their commitments.

In the vendors I use in my work I'd not be renewing a contract with AZN with their failure to deliver.

Indeed, but the bigger risk is having to pay back or even damages. Because unlike RandBlade I think it would be unwise for AZN to test the "best efforts" argument in court. Their lawyers seem to agree.

[RandBlade]

Its still a bit crap for a business to not meet their commitments.

In the vendors I use in my work I'd not be renewing a contract with AZN with their failure to deliver.

There isn't a vendor on the planet that's delivered their most optimistic projections. Pfizer, Moderna, all of them have cut back delivery targets.

The EU are farcically creating a stink with AZN to distract from their own failings. The only reason there's a delay is the EU delayed signing the contracts for three months. Actions have consequences.