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Why would this involve negotiation with the UK? They would just renege on that contract and deliver less than agreed. AZ seems to be reneging on its contract wi

Why would this involve negotiation with the UK? They would just renege on that contract and deliver less than agreed. AZ seems to be reneging on its contract with the EU already (at least if agree with the argument that AZ can't just put their UK production outside the EU calculations).

s1artibartfast 6y ago
As I understand it, AZ is not reneging on any contracts. AstraZeneca contract make its "Best Reasonable Effort" to meet EU demand, without compelling the company to stick to a specific timetable. The hangups seems to be if "Best Reasonable Effort" means includes invalidating contracts with other countries. I think this is a hard case to make. If EU manufactured vaccines are going to UK in substantial volume, I would say they are reneging by going above and beyond contractual obligations to UK, to the detriment of the EU. It makes absolute sense for EU to request this info. >at least if agree with the argument that AZ can't just put their UK production outside the EU calculations I'm not sure what you meant by calculations, but took my best guess above. Another factor is that the EU doesn't want to anger the UK by forcing AZ to break UK contract now, because in the long run, they want exports of UK production.
- CogitoCogito 6y ago
  Well sure AZ can claim they're not reneging on contracts, but it sure seems the EU disagrees. If AZ felt reasonably sure they would lose that dispute (i.e. that it were found that they were reneging on contracts), then they might as well decide to renege equally. Regardless, AZ is making a _choice_ to interpret this as not reneging and they might very well be legally found to be in the wrong. They could just as well make the choice to admit they are reneging and do the same on other contracts out of fairness and equality (as well as political expedience). > The hangups seems to be if "Best Reasonable Effort" means includes invalidating contracts with other countries. Honestly I don't understand how it possibly couldn't. At least not unless EU negotiators screwed up the contract. Otherwise AZ could simply just over-promise and then leave the EU high and dry. I mean that's basically what the EU is arguing is happening here. Of course the contract might not have been worded that way (e.g. in the case where it was determined that AZ were meeting its obligations), but I'm sure if this came up at any time during contract negotiations, then I'm sure the EU would have said that of course other contracts can't be given precedence over theirs. Also given that the contract seemed to treat the UK production as part of the EU for this very reason, it really really seems the EU would have meant for this interpretation.
  - s1artibartfast 6y ago
    >Honestly I don't understand how it possibly couldn't. At least not unless EU negotiators screwed up the contract. Otherwise AZ could simply just over-promise and then leave the EU high and dry. I mean, it is a pretty clear omission in the agreement given that this was probably the #1 question from the EU going in. These agreements are specifically structured so that there is no down side for underperforming on delivery, because it is a high risk activity and no company would agree to harsh penalties. The agreement is very clear about what happens if the EU commission enters contracts that limit capacity but silent on AZ agreements. Section 6.2 Capacity limitations: >In the event AZ's ability to fulfil obligations under this agreement is impeded by a competing agreement entered into by or or on behalf of the commision, AZ shall promptly inform the commission. While AZ shall continue to use Best Reasonable Efforts to engage with its own CMOs and supplies to utilize the capacity and/or components, the commision will assist in finding a mutually acceptable solution for the agreement and the competing agreement. To the extent AstraZeneca's performance under this agreement is impeded by any such competing agreements, AstraZeneca shall not be deemed in breach of this agreement as a result if any such delay due to the aforementioned competing agreement(s) Similarly, "Best Reasonable Effort" is clearly defined in Section 1.9 as industry standard for vaccine delivery: (1) in the case of AZ, the activity as and degree of effort that a company of similar size with a similarly sized infrastructure and similar resources as AZ 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 the global pandemic... This is really more about dedicating the appropriate resources to the task opposed to allocation. IF someone wanted to stretch it to make it about contract priority, I don't think voiding contracts and shipping supply based on population is industry standard. [1] https://ec.europa.eu/commission/presscorner/detail/en/ip_21_302 https://ec.europa.eu/commission/presscorner/detail/en/ip_21_...

s1artibartfast 6y ago

As I understand it, AZ is not reneging on any contracts. AstraZeneca contract make its "Best Reasonable Effort" to meet EU demand, without compelling the company to stick to a specific timetable. The hangups seems to be if "Best Reasonable Effort" means includes invalidating contracts with other countries. I think this is a hard case to make. If EU manufactured vaccines are going to UK in substantial volume, I would say they are reneging by going above and beyond contractual obligations to UK, to the detriment of the EU. It makes absolute sense for EU to request this info. >at least if agree with the argument that AZ can't just put their UK production outside the EU calculations I'm not sure what you meant by calculations, but took my best guess above. Another factor is that the EU doesn't want to anger the UK by forcing AZ to break UK contract now, because in the long run, they want exports of UK production.

CogitoCogito 6y ago
Well sure AZ can claim they're not reneging on contracts, but it sure seems the EU disagrees. If AZ felt reasonably sure they would lose that dispute (i.e. that it were found that they were reneging on contracts), then they might as well decide to renege equally. Regardless, AZ is making a _choice_ to interpret this as not reneging and they might very well be legally found to be in the wrong. They could just as well make the choice to admit they are reneging and do the same on other contracts out of fairness and equality (as well as political expedience). > The hangups seems to be if "Best Reasonable Effort" means includes invalidating contracts with other countries. Honestly I don't understand how it possibly couldn't. At least not unless EU negotiators screwed up the contract. Otherwise AZ could simply just over-promise and then leave the EU high and dry. I mean that's basically what the EU is arguing is happening here. Of course the contract might not have been worded that way (e.g. in the case where it was determined that AZ were meeting its obligations), but I'm sure if this came up at any time during contract negotiations, then I'm sure the EU would have said that of course other contracts can't be given precedence over theirs. Also given that the contract seemed to treat the UK production as part of the EU for this very reason, it really really seems the EU would have meant for this interpretation.
- s1artibartfast 6y ago
  >Honestly I don't understand how it possibly couldn't. At least not unless EU negotiators screwed up the contract. Otherwise AZ could simply just over-promise and then leave the EU high and dry. I mean, it is a pretty clear omission in the agreement given that this was probably the #1 question from the EU going in. These agreements are specifically structured so that there is no down side for underperforming on delivery, because it is a high risk activity and no company would agree to harsh penalties. The agreement is very clear about what happens if the EU commission enters contracts that limit capacity but silent on AZ agreements. Section 6.2 Capacity limitations: >In the event AZ's ability to fulfil obligations under this agreement is impeded by a competing agreement entered into by or or on behalf of the commision, AZ shall promptly inform the commission. While AZ shall continue to use Best Reasonable Efforts to engage with its own CMOs and supplies to utilize the capacity and/or components, the commision will assist in finding a mutually acceptable solution for the agreement and the competing agreement. To the extent AstraZeneca's performance under this agreement is impeded by any such competing agreements, AstraZeneca shall not be deemed in breach of this agreement as a result if any such delay due to the aforementioned competing agreement(s) Similarly, "Best Reasonable Effort" is clearly defined in Section 1.9 as industry standard for vaccine delivery: (1) in the case of AZ, the activity as and degree of effort that a company of similar size with a similarly sized infrastructure and similar resources as AZ 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 the global pandemic... This is really more about dedicating the appropriate resources to the task opposed to allocation. IF someone wanted to stretch it to make it about contract priority, I don't think voiding contracts and shipping supply based on population is industry standard. [1] https://ec.europa.eu/commission/presscorner/detail/en/ip_21_302 https://ec.europa.eu/commission/presscorner/detail/en/ip_21_...