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Covid-19: Publication of the European Commission's comfort letter allowing a cooperation between pharmaceutical manufacturers to tackle medication shortages
Article | 05/05/20 | 4 min. |
On 8 April 2020, the European Commission (hereinafter the « Commission ») published a Temporary Framework Communication for the assessment of antitrust questions linked to cooperation between companies responding to the health emergency crisis of Covid-19 (hereinafter the « Communication »)[1]. The Communication provides that in certain cases, companies may contact the Commission to validate, with written comfort letter, cooperations they intend to implement.
The first comfort letter was delivered on 8 April 2020 to Medicines for Europe (association of generic manufacturers). It concerns a voluntary cooperation project among pharmaceutical manufacturers that targets the risk of shortages of critical hospital medicines for the treatment of Covid-19 patients.
The content of this letter was made public by the Commission on 28 April 2020[2].
It states that the request for the comfort letter was made on 6 April 2020 in the name of Medicines for Europe, its members and also other pharmaceutical manufacturers who are or could be involved in the cooperation.
Before authorizing such cooperation, the Commission has consulted numerous authorities on technical and competition law aspects: the European Medicines Agency (EMA), national competition authorities, European Commissioners Stella Kyriakides and Thierry Breton, the Commissioner for Health and Food Safety and DG Health were directly or indirectly involved in the analysis of the cooperation project.
The aim of this cooperation is to improve the offer and increase production as quickly and efficiently as possible, and eventually also to improve distribution.
The current health crisis and the impossibility of predicting its end have led to a very significant increase in demand for certain pharmaceutical products. This includes deep sedation, neuromuscular blockers, strong analgesics, vasopressors, antibiotics and adjuvants, which are particularly needed by COVID-19 intensive care patients.
Between real needs and preventive orders, the Commission indicates that it understands that all these elements may aggravate shortages within the European Union. The situation would be further aggravated by the exponential growth in demand for COVID-19 medications worldwide.
The foreseen cooperation provides with in a first step to identify existing production capacity and existing stocks, to adapt or reallocate production and stocks and to eventually deal with the distribution of COVID-19 medications.
It will also be necessary to coordinate production capacities throughout Europe and to optimise the use of available resources (cross-supply of active pharmaceutical ingredients, transfer of production, etc.).
The Commission considers that, in the current exceptional circumstances, the envisaged cooperation is necessary to achieve the increase of the production and the improvement of the supply of COVID-19 medicines throughout the European Union, which is urgently needed.
Nonetheless, the Commission sets strict conditions to its comfort letter :
- the cooperation will be open to any pharmaceutical manufacturer willing to participate;
- minutes of all meetings will be established and kept, and copies of any agreement entered into between undertakings in the context of this cooperation will be shared with the Commission.
- the exchange of confidential business information among manufacturers will be limited to what is strictly necessary for effectively achieving the aims set out above. The Commission will make available to the undertakings a controlled forum for exchanging sensitive information to the extent that its discussion is necessary to achieve these aims. The Commission will also provide input, with, whether necessary, the involvement of the European Medicines Agency. Information from undertakings will either be gathered by Medicines for Europe or by an external third party appointed by the Commission and be made available to the participating undertakings in aggregated form only.
- the cooperation will be limited in time until the risk of shortages, including in a possible second wave of the COVID-19 epidemic, is overcome. The Commission will decide when cooperation should cease.
- minutes of all meetings will be established and kept, and copies of any agreement entered into between undertakings in the context of this cooperation will be shared with the Commission.
- the exchange of confidential business information among manufacturers will be limited to what is strictly necessary for effectively achieving the aims set out above. The Commission will make available to the undertakings a controlled forum for exchanging sensitive information to the extent that its discussion is necessary to achieve these aims. The Commission will also provide input, with, whether necessary, the involvement of the European Medicines Agency. Information from undertakings will either be gathered by Medicines for Europe or by an external third party appointed by the Commission and be made available to the participating undertakings in aggregated form only.
- the cooperation will be limited in time until the risk of shortages, including in a possible second wave of the COVID-19 epidemic, is overcome. The Commission will decide when cooperation should cease.
For the Commission, the envisaged cooperation will not be the open door to any abuses. This comfort letter does not obviously cover any discussion on prices or any other possible coordination on issues which are not strictly necessary for effectively achieving the aims set out above and which are therefore likely to be pursued if they are implemented. It cannot be any further price increases beyond what is justified.
In other words, the Commission will not tolerate any behaviour which aims at opportunistically exploiting the crisis in order to conceal non-essential collusion or other anti-competitive behaviour.