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 The deals reflect different strategies by two of the world's top
drugmakers for protecting themselves as a debate rages about
liabilities for vaccines aimed at ending the pandemic.
AstraZeneca <AZN.L> has secured the European Union's backing in a
confidential agreement which reflects the lower price sought by the
British drugmaker, the official said.
"If a company asks for a higher price we don't give the same
conditions," said the official, who was involved in the talks but
declined to be identified as the contracts are confidential.
Unexpected side-effects after a drug has regulatory approval are
rare, but the speed at which a COVID-19 vaccine is being pursued
increases the risks of unforeseen conditions.
The deal with AstraZeneca, which shifts some of the risks involved
in the roll-out of a vaccine to taxpayers, was struck in August and
its liability clauses have not previously been reported.
Under the deal, AstraZeneca would only pay legal costs up to a
certain threshold, the official said, declining to elaborate on how
the costs would be shared with individual European governments or
the cap.
The financial shield would cover both legal costs and potential
compensation, which is rarer but potentially a much bigger outlay in
the event of something going wrong.
In return for the higher price paid for its vaccine, French
drugmaker Sanofi <SASY.PA>, which is working with GlaxoSmithKline as
a partner, did not get any liability waiver.
Spokespeople for AstraZeneca, Sanofi and the European Commission
declined to comment on the specifics of the deals.
When asked about AstraZeneca's relatively low price, a spokesman
reiterated the company's pledge to share the vaccine widely and not
to turn a profit from it during the pandemic.
Under the AstraZeneca deal, EU countries have agreed to pay 2.5
euros ($2.92) per dose, while Sanofi has negotiated a price at
around 10 euros, the official said.
SIDE-EFFECTS
As part of the supply deals, the only two sealed so far by Brussels,
the EU has also made a non-refundable downpayment of 336 million
euros to AstraZeneca to secure 400 million doses, proportionately
lower than the 324 million euros it paid to Sanofi to secure 300
million doses.
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The EU official told Reuters that the contract with AstraZeneca included a
narrow definition of side-effects that could limit the possibility of claiming
compensation although the company remains liable for its vaccine.
The deal with AstraZeneca was negotiated before it paused late-stage trials of
its vaccine candidate this month after a British volunteer developed
neurological symptoms. Trials have resumed in Britain but not in the United
States.
EU governments would share compensation costs only if unexpected side-effects
emerged after the AstraZeneca vaccine was approved.
Liability has been a key stumbling block in talks with other COVID-19 vaccine
makers, EU officials have said, as companies fear they risk larger legal costs
than they usually face when vaccines are developed in much longer trials.
A European Commission spokesman said advance purchase deals "provide for member
states to indemnify the manufacturer for certain liabilities incurred under
specific and strict conditions", but "liability still remains with the
companies".
This means it would be the firm's responsibility to defend its shot in the
courts.
Drugmakers have called on EU regulators to set up a Europe-wide compensation
scheme, while patients' organisations are calling for an EU-wide fund financed
by pharmaceutical firms that would compensate for unexpected side-effects.
The EU legal regime is among the least favourable to drugmakers on compensation
claims, although plaintiffs have rarely managed to win as the law requires them
to prove the link between an illness and a vaccine that may have caused it.
The United States has granted immunity from liability for COVID-19 vaccines that
receive regulatory approval.
Meanwhile, Russia has said it would shoulder some of the legal liability should
anything go wrong with the vaccine developed by Moscow's Gamaleya Institute.
(Reporting by Francesco Guarascio @fraguarascio; Additional reporting by Ludwig
Burger in Frankfurt, Matthias Blamont in Paris and Tom Hals in New York; Editing
by Josephine Mason and Alexander Smith)
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