The COVID-19 pandemic has focused attention on the need for resilient supply chains, including perhaps most importantly, the critical need for sustainable supplies of healthy food. In line with this, the European Commission (the “Commission) has published a Communication on a Farm to Fork Strategy (the “Strategy”) where it announces a series of legislative and policy initiatives intended to place sustainability at the center of EU food law and policy by ensuring fair, healthy and environmentally-friendly food systems. The Strategy is one of the main pillars of the European Green Deal that, in December 2019, the European Commission announced as its policy flagship for the next five years.
Commission Publishes Further Guidance on Clinical Trial Conduct During COVID-19 Pandemic
On 28 April 2020, the European Commission published further Guidance on the Management of Clinical Trials during the COVID-19 (Coronavirus) Pandemic (the “Guidance”), supported by the European Medicines Agency (EMA) and the national Heads of Medicines Agency (HMA). The Guidance is an update to the previous version published in late March (see InsideEULifeSciences blog post here).
As outlined in the Commission’s press release, the Guidance’s objective is to mitigate clinical trial disruption in Europe during the COVID-19 pandemic. The Guidance introduces pragmatic and harmonizing measures that facilitate changes to trials
“…to ensure the necessary flexibility and procedural simplifications needed to maintain the integrity of the trials, to ensure the rights, safety and wellbeing of trial participants and the safety of clinical trial staff…”
As clinical trials in the EU are authorized at the national level, the Guidance encourages Member States to implement its recommendations “to the maximum possible extent” and to add to the Guidance where clarity on national legislation and derogations is needed. The Guidance does not supersede any current national legislation and derogations and the measures introduced will be revoked once the COVID-19 pandemic has passed.
The Guidance’s recommended measures include, amongst others, the following:
- Initiating new trials: Sponsors must assess the “feasibility and immediate necessity” of starting a new clinical trial. Sponsors should submit any large, multinational trial protocols for the investigation of new treatments for COVID-19 via the accelerated ‘Voluntary Harmonisation Procedure’. Further, developers of medicines or vaccines against COVID-19 are invited to e-mail the EMA via 2019-ncov@ema.europa.eu.
- Changes to ongoing trials: The Guidance recommends possible changes to restrict site visits to those “strictly necessary”, e.g., temporarily halting trials or closing trial sites, slowing down the recruitment of new trial participants, converting physical site visits into phone or video visits, or even, in exceptional cases, running routine diagnostic tests at a relevant local, authorized clinical facility rather than the trial site itself.
- Changes to safety reporting: Investigators may collect adverse events from the trial participant through alternative means, e.g., by phone calls or telemedicine visits, as appropriate.
- Changes to informed consent: Where written consent by the trial participant is not possible, consent mat be given orally by the trial participant in the presence of an impartial witness. The witness must sign and date the informed consent form. Further, where re-consent for changes to trial conduct is necessary, a site visit should be replaced with oral consent, where possible.
- Changes in the distribution of the investigational medicinal products (“IMP”): The Guidance recommends measures to limit site visits and pre-empt possible supply chain failures, e.g., by storing larger amounts of IMP at the site, making larger amounts of IMP available to trial participants, delivering IMP to trial participants’ homes directly, and even, in exceptional cases, permitting distributors to deliver to trial participants directly in order to alleviate the sponsors’ increased burden of IMP shipments.
- Changes in the distribution of in vitro diagnostic and medical devices: The Guidance recommends measures to pre-empt possible supply chain failures, e.g., by maintaining appropriate stock of devices. Any such stockpiling must not pose a risk to the treatment of patients outside the trial.
- Changes to monitoring: There should be a risk-based approach to any changes to monitoring. The Guidance recommends measures to replace or reduce on-site monitoring where it cannot be cancelled or postponed by conducting monitoring by, e.g., phone calls, video visits, and centralized monitoring of data acquired by electronic data capture systems, or, in exceptional cases and bearing in mind trial participants’ data protection rights, remote Source Data Verification (“SDV”) of medical records. Annex I of the Guidance outlines certain controls to protect trial participants’ rights during remote SDV.
In relation to communication with authorities, the Guidance emphasizes that the relevant competent authorities and ethics committees must be informed of:
- substantial amendments;
- urgent safety actions; and
- other COVID-19 related changes not related to participants safety and that do not seriously affect the benefit-risk balance for the participants and the scientific value of the trial.
Sponsors should mark all such communications with COVID-19 in the subject field. The Guidance also provides a non-exhaustive list for the classification of mitigation measures such as: (i) substantial amendments; (ii) urgent safety actions; or (iii) other measures.
Going forward, Health and Food Safety Commissioner, Stella Kyriakides, emphasized that “…it is absolutely crucial that we show flexibility in our rules to maintain research on critical treatments…” Due to the rapidly evolving situation, the Commission has advised sponsors and investigators that further updates to the Guidance are possible and likely.
German Government Adopts FDI Emergency Measures with Focus on Healthcare Sector
On 28 April 2020, the German government published a ministerial draft for an amendment of the Foreign Trade and Payments Ordinance (“Draft Ordinance”). The amendment supplements the existing Foreign Direct Investment (“FDI”) regime in order to tighten it with respect to acquisitions of critical companies in the healthcare sector by purchasers from third countries. The Draft Ordinance comes shortly after the German government proposed a new draft bill on 31 March 2020 reforming the current Foreign Trade Act (the “Draft Bill”). For more information on the Draft Bill please see our previous blogpost.
Peter Altmaier, the German minister for economic affairs stated that the competent authorities must learn about such critical acquisitions in the healthcare sector early enough to be able to examine them and that the new rules are intended to allow the authorities to prevent a flowing abroad of “medical know-how and production capacity, which are essential for the health care of the population”.
The Draft Ordinance is a direct reaction to the current Covid-19 crisis and will come into force ahead of other, broader amendments to the Foreign Trade and Payments Ordinance that were previously planned in connection with the Draft Bill. These broader amendments to the Foreign Trade and Payments Ordinance can still be expected later this year.
Draft Ordinance Expands the List of Sectors Requiring Mandatory Filing
Under the current FDI regime, the German authorities can investigate acquisitions in any industry sector where an acquisition by a foreign investor poses a threat to public order or security. However, mandatory filing of transactions is only necessary for certain key listed sectors.
The new Draft Ordinance extends the list of those sectors that require a mandatory filing. It further lowers the acquisition threshold from 25% to 10% for transactions within those sectors.
The new sectors include the development, manufacture or distribution of:
- services necessary to ensure the functioning of the German public safety digital radio network;
- personal protective equipment (or “PPE”), and including the materials and components required to manufacture PPE – inter alia protective masks (e.g. FFP2 and FFP3 masks), protective gloves or protective suits which ensure the protection of the health and safety of users;
- pharmaceuticals that are essential to guarantee the provision of health care of the population, and including the active ingredients for such pharmaceuticals;
- medical devices intended for the diagnosis, prevention, monitoring, prediction, prognosis, treatment or alleviation of life-threatening and highly contagious infectious diseases – inter alia surgical masks and respirators; and
- in vitro diagnostic medical devices used to provide information on physiological or pathological processes or conditions or to establish or monitor therapeutic measures in relation to life-threatening and highly contagious infectious diseases – inter alia diagnostic tests for the detection of an infectious agent.
Additional Clarifications
The Draft Ordinance further clarifies some existing FDI rules, including the following:
- Regarding the application of FDI screening to asset deals, the Draft Ordinance clarifies that FDI screening also applies to asset deals, in particular, where the acquisition includes (i) separable business units or (ii) essential business resources, which are required to maintain the operation of the undertaking or a separable part of it.
- In examining whether an acquisition by a foreign investor poses a threat to public order or security, the Draft Ordinance introduces a new provision (similar to Article 4(2) EU FDI Screening Regulation), allowing the German regulator to take into account the specific characteristics of the investor. This may include, for instance, whether the foreign investor is directly or indirectly controlled by the government, including state bodies or armed forces, of a third country.
No Expiry Date
Even though the draft ordinance arose in the light of the COVID-19 crisis, it will not have an expiry date. As the Draft Ordinance explicitly states, the new rules also address future crisis situations and aim to maintain the functioning of the public health care sector within Germany at all times.
Observations
The Draft Ordinance introduces new sector categories for which an FDI filing will be mandatory. It should be noted that the Draft Bill amending the Foreign Trade Act proposes to introduce a gun-jumping provision, i.e. a prohibition on implementing transactions prior to receiving a clearance decision, applicable to all transactions for which a filing is required. This gun-jumping provision will also apply to the above-mentioned new categories covered by the Draft Ordinance. As a consequence, acquisitions in the categories listed above will fall under the scope of the gun-jumping prohibition and under the new rules of the Draft Bill, a breach may ultimately result in criminal sanctions.
With the introduction of these new emergency measures, the German government joins a number of other EU countries reacting to concerns relating to takeovers by foreign investors of “critical” companies. While Italy and Spain have adopted emergency matters for a broad range of industry sectors, the German proposal has a clear focus on the health care sector and reserves additional FDI rules covering other sectors for the already expected forthcoming revision of the Foreign Trade and Payments Ordinance.
Effective date of EU Medical Device Regulation now officially delayed by 1 year
On 23 April 2020, the European Parliament and Council approved the European Commission’s proposal to delay the application date of the Medical Device Regulation 2017/745 (the “MDR”) by one year (from 26 May 2020 to 26 May 2021) by adopting New Regulation (EU) 2020/561 (the “New Regulation“).
Unusually, the New Regulation took effect on the date of its publication in the Official Journal of the European Union, i.e., on 24 April 2020. Typically, regulations come into effect the day after publication. However, an accelerated postponement of the MDR was deemed necessary in light of the current pressure on the medical device industry caused by the COVID-19 pandemic. This is expressly recognized in the recitals of the New Regulation:
“The COVID-19 outbreak and the associated public health crisis presents an unprecedented challenge to Member States and constitutes an immense burden for national authorities, health institutions, Union citizens, and economic operators… Medical devices, such as medical gloves, surgical masks, equipment for intensive care and other medical equipment, play a crucial role in the context of the COVID-19 outbreak and the associated public health crisis to ensure the health and safety of Union citizens and to enable Member States to give necessary medical treatment to patients who are urgently in need of such treatment.
…Given the unprecedented magnitude of the current challenges, and taking into account the complexity of [the MDR], it is very likely that Member States, health institutions, economic operators and other relevant parties will not be in a position to ensure the proper implementation and application of that Regulation from 26 May 2020 as laid down therein.” (Emphasis added.)
The New Regulation also amends Article 59 of the MDR, which allows (i) EU Member State authorities to grant national derogations for placing on the market or putting into service specific medical devices that are not yet CE-marked if “in the interest of public health or patient safety or health”; and (ii) in certain instances, the Commission to extend such derogations to the whole of the EU. The original version of Article 59 was limited to national derogations obtained under the MDR. However, the New Regulation extends the scope of the Article to include national derogations granted under the currently applicable Medical Devices Directives 93/42/EEC and 90/385/EEC. This provides flexibility for the Commission to extend a national derogation granted by a Member State under the existing medical devices rules to the entire EU territory. This essentially means that Article 59 of the MDR has immediate effect, which will be particularly useful as companies quickly try to bring products to the market to combat the COVID-19 pandemic.
As discussed in our previous InsideEULifeSciences blog post, the delay to the MDR will be welcome news to all manufacturers of medical devices intended for the EU market, as well as other economic operators in the supply chain. The postponement of the implementation date will allow companies to deploy resources to address the current pandemic and will give them extra time to become MDR-compliant.
Finally, it is worth noting that the new application date (i.e., 26 May 2021) means that the full applicability of the MDR will fall now outside of the transition period agreed between the UK and the EU. The UK Medicines and Healthcare products Regulatory Agency (the “MHRA”) has confirmed that it is “taking steps to plan for after the end of the transition period” and that “it will provide guidance on this in due course in light of Government decisions required on the future of UK regulation.” The MHRA also confirmed that elements of the MDR have in any event applied directly in UK law since May 2017, meaning medical devices can now be legally placed on the UK market if they are in conformity with the MDR, invoking all relevant requirements.
Ireland’s HPRA to fast-track review of Covid-19 related Clinical Trials and Clinical Investigations
The Irish Health Products Regulatory Authority (HPRA) today announced the introduction of an expedited review process for human health research related to COVID-19.
The Irish Minister for Health also announced the setting up of a dedicated COVID-19 National Research Ethics Committee (NREC-COVID-19).
Applications for clinical trials of human medicines or clinical investigations of medical devices will be given priority and an expedited review by HPRA. The NREC-COVID-19 will review applications concurrently with the regulatory review processes and will endeavour to facilitate an expedited ethical review (see: COVID-19 Related Human Research – Expedited Regulatory and Ethical Review).
This fast-track process is likely to be of interest to the very many global pharma, biotech and device manufacturers already based in Ireland but it will also make Ireland a more favourable jurisdiction in the EU for COVID-19 related human health research.
Belgium replaces COVID-19 medicines export ban to non-EEA countries with system of export control
As previously reported on this blog, on 1 April 2020 Belgium adopted a complete ban on exports of certain medicines and raw materials to non-EEA countries to avoid shortages during the COVID-19 outbreak. On 8 April 2020, Belgium reversed this ban, and instead installed a system of export controls. Coincidentally or not, the same day the European Commission also issued guidelines to the member states on the rational supply of medicines.
Below I discuss the new approach to exports within and outside the EEA from Belgium.
1. Total export ban under the Decision of 1 April 2020
Article 3 of the Decision of the Federal Agency for Medicines and Health Products (“FAHMP”) of 1 April 2020 (“old Decision”) was drafted as a total export ban within and outside the EEA. By way of exception, EEA exports were lawful subject to prior notification to the authority. It did not provide for an exception for exports outside the EEA. It was the news article on the FAHMP website of 2 April 2020 that stated that exceptions could be requested for exports outside the EEA. This approach was highly questionable under EU law.
Article 3 of the FAHMP Decision of 8 April 2020 (“new Decision”) has essentially reversed the total export ban.
2. Non-EEA exports under the Decision of 8 April 2020
Pursuant to article 3(1), exports outside the EEA are now in principle permitted, subject to prior notification and insofar the Minister or the FAHMP have not opposed the export within three working days “after” the notification. The opposition will be communicated by email to the notifying wholesaler. The language of this provision suggests that if a company has not heard of the FAHMP within that period, the non-EEA export can go ahead.
The Decision states that the export outside the EEA can be refused if there is an “acute or imminent shortage of the relevant medicines or raw materials, insofar the available volumes are insufficient to fulfill the needs of patients in Belgium during the upcoming four weeks. The availability of an alternative, therapeutic equivalent alternative is taken into account, as well as the needs for the treatment of COVID-19 patients, on the basis of current epidemiological models and taking into account standard dosages.”
This new approach is likely compliant with EU law. Exports are in principle allowed, and the authority gives clear public health criteria that could be a ground for refusal. In general terms, three working days also appears a reasonable time-period, unless the planned export is itself particularly urgent given the global health emergency.
3. Exports within the EEA under the Decision of 8 April 2020
Article 3(2) has been redrafted to reflect that exports to the EEA are in principle permitted. Other than that, the requirements are identical as under the old Decision: prior notification is required, and the medicine or raw material must be destined for supply or administration in the EEA member state of destination.
European Commission Publishes Exceptional Antitrust Guidance for Undertakings Collaborating to Address the Shortage of Essential Products and Services during COVID-19
On 8 April 2020, the European Commission published its Communication on the “Temporary Framework for assessing antitrust issues related to business cooperation in response to situations of urgency stemming from the current COVID-19 outbreak” (the “Framework“).
The Commission recognizes that supply chains have been severely disrupted due to COVID-19, combined with “an asymmetric demand shock caused by either an abrupt decline in consumer demand for certain products and services or a steep rise in demand for other products and services”, notably in the health sector. The duration and intensity of the shock is unknown.
These exceptional circumstances “may trigger the need for undertakings to cooperate with each other in order to overcome or at least mitigate the effects of the crisis to the ultimate benefit of citizens” (para 3).
The purpose of the Framework is to:
(i) explain the main criteria that the Commission will follow when assessing possible cooperation projects between undertakings aimed at addressing the shortage of essential products and services during the COVID-19 outbreak;
(ii) describe the exceptional procedure that the Commission has set up to provide, where appropriate, ad hoc ‘comfort letters’ to undertakings in relation to specific cooperation projects.
The Framework applies to forms of cooperation between undertakings aimed at ensuring the supply and adequate distribution of essential scarce medicinal products and medical equipment (presumably not only medical devices but also personal protective equipment), as well as related services, during the pandemic. Undertakings currently active in the health sector can benefit from it, but so can those active in other sectors that are retooling to focus on scare products. The Framework may be amended or supplemented to cover other forms of cooperation.
Main criteria for the competition assessment of cooperation projects
The Framework reiterates that certain practices do not raise competition concerns in any circumstances, provided that they are subject to sufficient safeguards. For example, a trade association may share aggregated supply gap information with its members, and it may request its members, on an individual basis and without sharing that information with competitors, to indicate whether they can fill the supply gap to meet demand (either through existing stocks or increase of production).
However, the adaptation of production, stock management, and distribution may require exchanges of commercially sensitive information and certain coordination (e.g., who produces which medicines to help ensure an adequate supply of all necessary medicines). Such coordination between undertakings is in normal circumstances problematic under the competition rules. Nevertheless, in the current exceptional circumstances, such measures would “not be problematic” under the competition rules or – in view of the emergency situation and temporary nature – they would “not give rise to an enforcement priority” (para 15) for the Commission, to the extent that they are:
(i) designed and objectively necessary to actually increase output in the most efficient way to address or avoid a shortage of supply of essential products or services, such as those that are used to treat COVID-19 patients;
(ii) temporary in nature, meaning that they last only as long there is a risk of shortage or in any event are limited to the duration of the COVID-19 outbreak; and
(iii) not exceeding what is strictly necessary to achieve the objective of addressing or avoiding the shortage of supply.
The Framework also provides that “undertakings should document all exchanges, and agreements between them and make them available to the Commission on request” (para 15). Further, the Framework indicates that the fact that a cooperation is encouraged and/or coordinated by a public authority (or carried out within a framework set up by the latter) is also a relevant factor to be taken into account when determining whether or not such cooperation would be problematic under the competition rules or would be an enforcement priority for the Commission.
Finally, the Framework provides that “in the context of an imperative request from public authorities” (para 16) undertakings are allowed to temporarily cooperate in response to urgency situations related to the COVID-19 outbreak.
Exceptional procedure to obtain ad hoc guidance on specific cooperation projects
The Commission has already been providing oral guidance to undertakings during the last weeks with respect to the legality of specific cooperation initiatives. The Framework explains that the Commission is now also ready, exceptionally and at its own discretion, to provide undertakings with a comfort letter concerning specific cooperation projects that need to be swiftly implemented in order to effectively tackle the COVID-19 outbreak. Undertakings should write to a dedicated mailbox COMP-COVID-ANTITRUST@ec.europa.eu to seek informal guidance on specific initiatives.
On 8 April 2020, the Commission already issued a first comfort letter to “Medicines for Europe”, a trade association representing the European generic, biosimilar and value added pharmaceutical industries. The comfort letter addresses a specific voluntary cooperation project among pharmaceutical producers – both members and non-members of the association – aimed at avoiding shortages of critical hospital medicines for the treatment of COVID-19 patients.
The Framework will apply as of 8 April 2020 and remain applicable until withdrawn by the Commission once the underlying exceptional circumstances are no longer present.
European Commission issues Guidelines on the rational supply of medicines to avoid shortages during the COVID-19 crisis, calls for lifting export bans within the EU
As reported previously on this blog, several member states have imposed bans, requisitioned stock and applied various other control measures on medicines and protective equipment (e.g., Belgium, Bulgaria, the Czech Republic, France, the Netherlands, and Poland). On 8 April 2020, the European Commission (“Commission”) issued Guidelines on the optimal and rational supply of medicines to avoid shortages during the COVID-19 outbreak (“Guidelines”). The Guidelines, which are not formally binding, request the Member States to lift any export ban for medicines within the EU internal market during the COVID-19 crisis. The Commission suggests a number of alternative measures, such as requesting joint industry efforts to meet demand.
- Promotion of solidarity within the EU
The Commission calls on the EU Member States to cease or avoid protectionist measures that may harm the internal market and negatively impact public health. In particular, the Commission requests that Member States (i) lift export bans for medicines within the EU; (ii) avoid national stockpiling by wholesalers or pharmacies (including hospital pharmacies); and (iii) avoid misinformation that leads to consumer stockpiling and improper use of medicines.
In the Guidelines, the Commission refers solely to export bans “within the internal market”, which “are detrimental to the availability of medicines for European patients even when they are legally justifiable” (emphasis added). Interestingly, the Guidelines are entirely silent on Member States’ export bans to third countries. In principle, such export bans ordinarily cannot be adopted by the Member States, and national export bans driven by shortage concerns are subject to a specific consultation procedures under Regulation 2015/479 to seek to ensure that an export ban is only adopted at EU-wide level. As we reported in a recent client alert, in mid-March, the Commission adopted such measures for protective equipment.
- Measures to ensure national supply
As an alternative to export bans, the Guidelines offer a set of recommended actions that Member States may implement to guarantee adequate supply of medicines (including raw materials, intermediates, APIs, substances of human origin such as plasma, and related materials) during the outbreak, namely:
- Increasing and reorganising production;
- Ensuring manufacturing continues at full capacity;
- Implementing regulatory flexibility;
- Monitoring available stocks at national level;
- Ensuring necessary support to the wholesale sector;
- Fully enforcing border “green lanes”;
- Facilitating air freight and other forms of transport; and
- Ensuring fair distribution of supply.
These measures have a direct impact on the pharmaceutical industry. For instance, to guarantee manufacturing is not interrupted, the Guidelines recommend that pharmaceutical manufacturing be designated an “essential activity”, allowing its employees (including cross-border workers) to continue traveling to their place of work. Member States should also grant “regulatory flexibility” to the industry. This “flexibility” should take the form of accelerated administrative procedures, such as those for variations to marketing authorisations, procedures for changes in suppliers of APIs, designation of new manufacturing sites, or the extension of expiry dates.
Further, the Guidelines recommend that the Member States, “with the support of the Commission and the European Medicines Agency”, continue to (i) request that actors in the supply chain monitor their stocks and production capacity and share information with authorities (e.g., shortages or disruptions); (ii) request, facilitate and coordinate joint industry efforts to reduce shortages and meet demand; and (iii) implement demand support and procurement initiatives to encourage appropriate supply to patients (e.g., through the EU joint procurement agreement).
Importantly, to allow joint industry cooperation that may otherwise be problematic under EU competition law, the Commission has issued guidance on antitrust issues relating to forms of cooperation aimed at ensuring the supply and adequate distribution of essential scarce products and services during the COVID-19 outbreak.
The Guidelines also recommend that Member States share stock information, such as epidemiological forecasts, with pharmaceutical companies. This is aimed to help them better plan for increased demand and respond to that Member State’s needs. At this moment, some countries require that pharmaceutical companies provide them with stock and manufacturing information (e.g., Spain), but it is unclear whether they share their information with them.
- Optimisation of medicines use in hospitals
The Guidelines suggest a number of measures to ensure the optimal use of medicines, most of them relying on alternative routes of supply. For instance, the Guidelines recommend inviting marketing authorisation holders to request the extension of the expiry dates of essential medicines where possible.
The Guidelines also recommend that hospitals adapt their protocols to identify alternative medicines that may be relied on in case of shortages of first-line treatments. In such cases, marketing authorisation holders and wholesalers of alternative products should be informed. Further, Member States should consider using magistral preparations or equivalent veterinary medicines to replace first-line treatments.
In the case of off label use to treat COVID-19 under national early access programmes or in clinical trials, the Guidelines recommend assessing first the needs of patients using these medicines on-label, so as to avoid shortages for that population. The Guidelines state that large, European clinical trials should be given priority over national trials.
- Optimisation of sales in community pharmacies
The Guidelines also provide some recommendations for Member States to ensure that patients do not hoard medicines. These include introducing restrictions on sales in community pharmacies and online sales for medicines at risk of shortages or subject to increase demand. For instance, Member States may restrict dispensing to a one-month supply of prescription medicines, or a maximum of one package per customer of non-prescription medicines.
Belgium adopts export ban on certain medicines to non-EEA countries and other measures to avoid COVID-19 shortages
1. Summary
On 1 April 2020, the Belgian Federal Authority for Health and Medicinal Products (“FAMPH”) adopted a Decision to avoid shortages of medicines and raw materials used in the treatment of COVID-19. It applies for one month from 1 April, renewable. On 2 April 2020, the authority provided further details in a news post on its website. The decision implies:
- An export ban to countries outside the European Economic Area (EEA). Exceptions must be expressly requested from the FAMPH.
- Exports to EEA countries are prohibited unless notified beforehand to the FAMPH.
- Sales quota for wholesalers.
- Notification and possible reallocation of large stocks.
We briefly explain these measures, and review their lawfulness under EU law.
2. Medicines and raw materials covered
The Decision applies to medicines and raw materials mentioned in the Annexes. Here are some examples:
- Annex I: medicines with a single active substance (e.g. intravenous diazepam and lorazepam, fentanyl, epinefrin…);
- Annex II: medicines with more than one active substance (e.g. lidocainehydrochloride – methylprednisolon…);
- Annex III: raw materials (e.g. amoxicillin, chloroquine, morfinehydrochloride…);
- Annex IV lists medicines with a single active substance for non-intravenous use that are excluded (e.g. diazepam…).
3. Export notification to EEA countries
Article 3 (1st and 2nd indent) of the FAMHP Decision states that it is prohibited to supply medicines to anyone other than wholesalers established in Belgium, entities established in Belgium authorized to distribute medicines, or hospitals established in Belgium. Similarly, raw materials may only be supplied to wholesalers established in Belgium and entities established in Belgium authorized to distribute medicines.
As an exception to this general principle, supplies to another EEA member state are permitted if (1) the medicine or raw material are intended to be supplied in that member state, and (2) if a notification is sent beforehand to the FAHMP at coronashortages@fagg-afmps.be . The subject line should read: “Notification export EEA – Name of MA holder – Name of the medicine.” Under article 126 of the EU-UK withdrawal agreement, for the purposes of the FAMHP Decision, “EEA” should include the UK until 31 December 2020.
Under the current circumstances, the Belgian notification requirement likely complies with EU law given that it allows the FAHMP to monitor product flows. In this regard, Commission Guidelines of 16 March 2020 on COVID-19 and border management measures state at point 6 that: “Member States should preserve the free circulation of all goods. In particular, they should guarantee the supply chain of essential products such as medicines, medical equipment, essential and perishable food products and livestock. No restriction should be imposed on the circulation of goods in the Single Market, especially (but not limited to) essential, health-related and perishable goods, notably foodstuffs, unless duly justified….”
Close follow-up is required so that the Belgian notification requirement should not – in practice – amount to an intra-EEA export ban.
4. Export ban to non-EEA countries
As mentioned above, the FAMHP contains a general export ban. For non-EEA countries, the Decision did not provide for a specific procedure to request an exception. The news post on the FAMHP website of 2 April clarifies this. It states that an exception can be requested via email to coronashortages@fagg.be. The subject line should read: “Request Export outside the EEA – Name of MA holder – Name of the medicine.” The country of destination and the quantities should be mentioned.
The export ban is in a tense relationship with EU law. Article 1 of Regulation 2015/479 states that “[t]he exportation of products from the Union to third countries shall be free, that is to say, they shall not be subject to any quantitative restriction, with the exception of those restrictions which are applied in conformity with this Regulation.” Therefore, in principle, a Member State should request the European Commission to impose an export authorization at EU-level in order to prevent a shortage of essential products. In March, the Commission adopted such measures for protective equipment (see our alert here). When a member state makes such a request, the Commission should decide within 5 working days. It is unclear whether Belgium has consulted with the European Commission. Regulation 2015/479 and Belgium’s duty of loyalty to the EU interest (article 4(3) TEU) seem to require this kind of (prior?) consultation.
Article 10 of Regulation 2015/479 does permit Belgium to adopt quantitative restrictions on exports if these are justified on grounds of public health. Presumably this requires that due to urgency, it is not possible for member state to consult with the European Commission. Moreover, the export ban requires compliance with the principle of proportionality. Thus, when a company’s request for non-EEA export is refused, EU law no doubt requires that this is specifically motivated in light of shortages for exactly that product. A general reference to public health risk is not likely sufficient.
5. Supply quota
Pursuant to article 2 of the FAMHP Decision, manufacturers, wholesalers, wholesalers-distributors must limit sales of medicines and raw materials to an amount equal to the sales of the previous year for that period, increased with a coefficient of maximum 50%. Larger quantities may be supplied on prior notification to the FAHMP. Wholesalers may receive specific instructions for deliveries from the FAHMP. These measures too, must be checked for compliance with EU free movement principles on a case-by-case basis.
6. Re-allocation of large quantities of stock
Hospitals and entities authorized to distribute medicines that hold stocks of more than one month of sales volume (or raw materials for the preparation of sales volume of officinal or magistral preparations) must notify this stock to the FAHMP with the goal of possible reallocation. The sales volume is calculated based on sales of last year for the same period, increased with a coefficient of 50%.
European Commission publishes proposal to postpone the application date of the Medical Device Regulations in response to COVID-19
The European Commission published today its proposal for the European Parliament and the Council to postpone the application date of the Medical Devices Regulation 2017/745 (“MDR”) by one year. This publication comes only 9 days after the Commission announced its plans to postpone the MDR (see the InsideEULifeSciences blog post here). The European Parliament and the Council will have to approve the proposal before the MDR’s current implementation date of 26 May 2020.
The Commission’s legal basis for the postponement are Articles 114 and 168(4)(c) of the Treaty on the Functioning of the European Union (“TFEU”). This gives the European Parliament and Council the authority to adopt measures that ensure the establishment and functioning of the internal market, and, in particular, set high standards of quality and safety for medicinal products and medical devices. The Commission also cites the principles of subsidiarity and proportionality, arguing that the measure will ensure a high level of protection of health for patients and users, the smooth functioning of the internal market and avoid potential market disruption:
“This Union action is necessary to achieve the objective of the proper implementation and application of [the MDR] by all involved parties, taking into account the magnitude of the current COVID-19 outbreak and the associated public health crisis. The proposed amendment aims to ensure that the intended purpose of [the MDR], that is, to establish a robust, transparent, predictable and sustainable regulatory framework for medical devices, which guarantees a high level of protection of public health and patient safety and the smooth functioning of the internal market for such devices, can be attained.”
The Commission confirmed that its proposal does not alter the MDR substantively and does not impose any new obligations on manufacturers or other concerned parties. InsideEULifeSciences will continue to monitor developments and publish updates as they come in.
