We will see. Usually the winner in these matters is the one with the bigger stick. AZN shouldn't have picked this fight.Originally Posted by RandBlade
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.
Last edited by Hazir; 01-29-2021 at 04:54 PM.
Congratulations America
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.
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.
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.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.
The fault lies with AZN; how they rectify the situation without stiffing the UK is really their business.That doesn't given the EU the right to pinch stocks bought and paid for by someone else three months earlier.
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.
"One day, we shall die. All the other days, we shall live."
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 anythingUK media jumped the shark a little, aided by AZN's strategic redactions; cooler heads are speaking up now.
"One day, we shall die. All the other days, we shall live."
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.
Not true, since the scheduled amounts were fulfillable had the yield not been down.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.
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.The fault lies with AZN; how they rectify the situation without stiffing the UK is really their business.
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.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.
Hospitalisations of over 80s coming down faster than other age groups and accelerating. Lockdown and vaccine rollout combining, fingers crossed.
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.
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.
Congratulations America
Haha, so please explain why AZN is folding.
Congratulations America
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.
Congratulations America
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.
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?
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Pharma companies don't operate under normal rules, Tim. The reality is that most pharma companies (outside of generics houses) aren't selling interchangeable commodities, but each have unique and critical offerings that cannot be easily replaced. And furthermore, shortages of various drugs and devices have become a fact of life nowadays, victims of consolidation, regulation, and a lack of stockpiling. If anything goes wrong in a production process - and they do, from raw material shortages to microbial contamination to safety incidents to FDA letters - you might experience a global shortfall with little to no notice. And rarely will you have serious consequences for the company in question, outside of the occasional acquisition (as in the case of Sanofi acquiring Genzyme when they had serious production issues that made them a target).
The real consequences, of course, are to their bottom line - drugs and devices are high margin businesses, but also capital intensive. You lose vast sums of money when production is delayed, so they have every incentive to keep things going. For a low margin corner of the business like the vaccine world (especially for something that is ostensibly being sold at cost), those incentives become lower while the scale of capital necessary remains very high.
In normal ramp-up of production, you wouldn't go from zero to a billion doses in less than a year. That's crazy fast and will undoubtedly come with bottlenecks and setbacks. The timelines promised by these companies have generally been predicated on the assumption that everything goes right, an assumption we know will be violated.
The issue here probably has less to do with AZN's production failings or fail to deliver exactly what was promised. Their problem was probably a failure in managing expectations appropriately, including timely and transparent updates to the key stakeholders. This is a basic rule of sales and marketing and I suspect they did a bad job.
"When I meet God, I am going to ask him two questions: Why relativity? And why turbulence? I really believe he will have an answer for the first." - Werner Heisenberg (maybe)
Think failure to deliver is not the real problem—after all, other manufacturers have done so too without there being nearly as much of a fuss. I suspect they notified the EU and tried to work with the Commission to find ways to address the problems—in accordance with their contracts, if those contracts are even remotely similar to the one with AZN. Had AZN notified the commission in a timely manner, I suspect all of this could have been avoided.
"One day, we shall die. All the other days, we shall live."
They notified them 2.5 months before the deadline for the doses to be sent. How much more timely should it have been?
So the EU have torn up the Good Friday Agreement and are putting export controls on Northern Ireland . . . in an effort to get goods exported from the UK to the EU
The UK should respond with magnamity and generosity. Offer to Ireland we will help vaccinate them as soon as we can.
First of all, Q2 ends in 2 months. Secondly, they must have known weeks ago they would not meet the target in the time available, and that is when they should've notified the EU.
"One day, we shall die. All the other days, we shall live."
Q1 ends a bit over 2 months from now and this drama has been running for days, and they were informed before this blew up. So yes close to 2.5 months.
Why would they have known weeks ago what yield they'd have in the future for months from then.
Wow. Neither Ireland or NI seem happy with that. Not surprisingly.So the EU have torn up the Good Friday Agreement and are putting export controls on Northern Ireland . . . in an effort to get goods exported from the UK to the EU
The UK should respond with magnamity and generosity. Offer to Ireland we will help vaccinate them as soon as we can.
Who going to police it?
Agree the UK should offer to help once our most vulnerable groups have had both doses.
Absolutely. We should help our own vulnerable, then Ireland, then via Covax start helping the third world poor.
I'd rather help countries with a higher propensity to travel here. A quick search shows that's mainly counties from Europe. That seems to be more aligned with our nation interest, plus it improves relations with some key allies.
No, our "allies" are rich enough to help themselves. If they stop dealing with this with austerity.
We need the globe to eliminate the virus as much as possible so that it stops mutating. We've had dangerous mutations now come out of Brazil and South Africa and it doesn't matter they're not close to us - this bugger gets around the planet in no time.
Hence why Covax. Help nations that aren't rich enough to help themselves - to help them but to also help ourselves by stomping out this virus so it stops mutating, because a mutation anywhere on the planet will spread all over it. Our "allies" should be doing the same.
The UK has donated more than half a billion pounds to Covax. Joe Biden has donated $4 billion to Covax. The entire EU combined . . . about €500 mn. The EU have not just spent 1/7th on vaccine development than the UK and USA per capita; the entire EU combined have donated less to Covax than the UK alone has done. They're closer to Donald Trump than to Biden and Boris.
I thought Trump was out of office but the Commission are rapidly turning into MAGA Trumpites.
Seems others are seeing the connection too.
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Does anyone here think the EU did the right thing by invoking this article 16 thing?
It's gone like a lead balloon here. Everywhere.
Can anyone defend it?
It was a major mistake to try to hide behind the best efforts argument. That and the arrogant behavior of their CEO made this problem into an outright disaster.
Congratulations America
You expected anything else than the EU coming hard down after AZN's CEO implied he'd hoodwinked the Commission?
You should understand that public opinion in the UK does not matter at all on this side of the channel. As has been pointed out before, this is in the news in Germany mostly. For the rest the news doesn't register very much. There is no criticism of the way the Commission is reacting to the failure of AZN to deliver.
Congratulations America
They broke the treaty in doing so - they failed to inform the UK before doing so, they just announced it at a press conference. So they're in breach of international law.
They broke the spirit of the treaty in doing so too - they did so without consulting with Ireland first.
Unprecedented full house now: The UK Tory Government, the Irish Coalition Government, the Labour opposition, the DUP, Sinn Fein, Alliance and the SDLP have all unanimously come out against this.
The EU have united Northern Ireland, Ireland and Britain. Incredible.
Where did these numbers come from?
According to this: https://www.gavi.org/investing-gavi/...donor-profiles
EU Commission: 330 million
Germany: 780 million
France: 620 million
Italy: 500 million
Holland: 300 million
Spain: 30 million
Sweden: 200 million
UK: 2.6 billion (wow!)
USA: 1.4 billion
Ireland: 17 million
China: 5 million (the fuck...)
Out of interest - why would you help Ireland first?
Well given that we voted to break international law WRT to a UK/EU treaty (and it was only the House of Lords, thank the Lord, that blocked it), I suppose the precedent has been set.
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