European Commission President Ursula von der Leyen has reignited demands for Oxford-produced coronavirus vaccines to be diverted from the UK to member states to make up for production shortfalls. It comes after the bloc sparked fury over threats to implement checks on the Northern Ireland border to prevent vaccines produced in the EU from reaching the UK – one of the main stipulations of the Brexit deal. Brussels has questioned whether AstraZeneca had previously shipped European-made doses to fulfill Britain’s order earlier this year and is now calling for their factories in the UK to work overtime to meet the bloc’s demands – but it is not the first time the pharmaceutical company has faced the possibility of being ordered around by the EU.
Its recent vaccine success comes seven years after AstraZeneca rejected a £65billion takeover bid from Pfizer.
It was an opportunistic approach from a company with an aggressive track record of growth through acquisition and the takeover was met with ardent resistance in the UK from politicians and the public alike.
There were fears over potential job losses in the event that Pfizer moved its research and manufacturing to the US.
Then Prime Minister David Cameron initially indicated that he would not interfere in the bid.
However, he later U-turned and declared he wanted further commitments from Pfizer before giving his blessing to any takeover of Britain’s second-largest drugmaker at the time.
He also did not rule out the possibility that the takeover would be subject to a “public interest test” – one of the few occasions when ministers can intervene.
That plan, however, reportedly had the potential to be undermined by the European Commission, who could overrule EU nations – which the UK was at the time.
Anthony Woolich, a competition partner at international commerce law firm, Holman Fenwick Willan LLP, said that it would be “very hard for the Government to intervene”.
He added: “The whole point about the European Commission is that where you have big mergers they should be regulated centrally and individual member states should not be able to intervene except on exceptional grounds.”
Pfizer, which would have reportedly saved billions in taxes by shifting its domicile to Britain, had pledged to complete a new UK research centre, retain a factory and put a fifth of its research staff in the country if the deal went ahead.
Britain has been open to foreign investment since Prime Minister Margaret Thatcher liberated markets in the Eighties, but Westminster had become increasingly wary of British jobs being lost by takeovers.
But under EU law at the time, takeovers were examined purely for the impact they would have on competition in the sector, and not on jobs.
Member states could intervene in takeovers of defence companies that affect national security as well as deals that reduced the number of media owners and those that could destabilise the financial system.
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Experts at the time said the Government would have to create a new category if it were to invoke the public interest test in any AstraZeneca takeover, aiming to impose legally binding terms on jobs and facilities.
They said that while this could be done easily in Westminster, the Commission would have been unlikely to accept it.
Becket McGrath, a competition partner at Edwards Wildman Palmer, added in 2014: “The EU merger regulation enables, for example, intervention in media cases but it’s not a carte blanche to bring in any kind of public interest.”
In the end, however, AstraZeneca Chief Executive Pascal Soriot and his colleagues managed to deflect the £65billion bid, arguing it “fell short” of the company’s value.
Mr Soriot was fiercely quizzed by investors on whether he should have accepted the Pfizer deal.
But Emily Field, head of European pharmaceutical research at Barclays, recently told the Telegraph that it paid off.
She said: “Certainly judging from 2014 up to today, you can really point to AstraZeneca as far and away one of the great success stories within the pharmaceutical industry.
“It was a company that was perhaps vulnerable in that it was going through patent expiries, but has done an amazing job moving up the innovation curve, particularly with oncology and collaborations with other players, the earnings have been totally transformed.”
AstraZeneca’s share price has more than doubled since 2014, while Pfizer’s has risen 27 percent over the same period.
Many of their most important, and lucrative, treatments are in the field of cancer.
But AstraZeneca is now in the spotlight for its collaboration with the University of Oxford to develop a COVID-19 vaccine.