Antitrust: Commission provides guidance on allowing limited cooperation among businesses, especially for critical hospital medicines during the coronavirus outbreak

hospitals

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has published a Temporary Framework Communication to provide antitrust guidance to companies cooperating in response to urgent situations related to the current coronavirus outbreak. In this context, the Commission is also issuing a “comfort letter” concerning a specific cooperation project aimed at avoiding situations of shortages of critical hospital medicines.

Executive Vice-President Margrethe Vestager in charge of competition policy said: “We need to make sure that there is sufficient supply of the critical hospital medicines used to treat coronavirus patients. To avoid the risk of shortages of essential and scarce products and services because of the unprecedented surge in demand due to the pandemic, we need businesses to cooperate and do it in line with European Competition rules. So to ensure supply we will urgently provide businesses with sufficient guidance and comfort to facilitate cooperation initiatives boosting the production of products in high demand. The temporary framework adopted today explains when and how firms can obtain guidance or written comfort in line with our competition rules.”

Today, Commissioner for Health and Food Safety, Stella Kyriakides is also putting forward Guidelines to optimise supply and availability of medicines during the coronavirus outbreak.

The Temporary Framework Communication

The coronavirus outbreak has given rise to a general supply shock resulting from the disruption of supply chains and a demand surge caused mainly by a steep rise in demand for certain products and services, notably in the health sector.

These circumstances risk leading to shortages in critical medical goods, which may worsen as the pandemic evolves. This concerns, in particular, medicines and medical equipment that are used to treat coronavirus patients. Supply emergencies resulting from the coronavirus outbreak can arise also for other essential goods and services outside the health sector.

Tackling these exceptional shocks and avoiding shortages in a timely manner may require the swift coordination of companies in order to overcome, or at least to mitigate, the effects of the crisis to the ultimate benefit of citizens. This might in turn require either switching or up-scaling production in the most efficient way. For example, companies may need to coordinate on production stock management and potentially distribution so that not all undertakings focus on one or a few medicines, while others remain in under-production. Such coordination would be contrary to antitrust rules in normal circumstances. But in the context of a pandemic like the coronavirus outbreak, such coordination can, with appropriate safeguards, bring important benefits to citizens.

The Temporary Framework is meant to provide antitrust guidance to companies willing to temporarily cooperate and coordinate their activities in order to increase production in the most effective way and optimise supply of, in particular, urgently needed hospital medicines.

In particular, the Temporary Framework Communication explains the main criteria that the Commission will follow in assessing these possible cooperation projects.

Companies are responsible for assessing themselves the legality of their agreements and practices. However, mindful of the exceptional situation, the Commission has been engaging with companies and trade associations to help them in assessing the legality of their cooperation plans and putting in place adequate safeguards against longer-term anticompetitive effects.

In most situations, the oral guidance that the Commission has been giving to companies during the last weeks is sufficient. However, the Commission is also ready to exceptionally provide companies with written comfort (comfort letter) concerning specific cooperation projects that need to be swiftly implemented in order to effectively tackle the coronavirus outbreak, especially where there is still uncertainty about whether such initiatives are compatible with EU competition law.

The comfort letter

The Commission is also using today the procedure described in the communication for the first time and is providing a comfort letter to “Medicines for Europe”, formerly the “European Generics Medicines Association” (EGA). The comfort letter addresses a specific voluntary cooperation project among pharmaceutical producers – both members and non-members of the association –that targets the risk of shortage of critical hospital medicines for the treatment of coronavirus patients. Generic pharmaceutical companies produce the largest part of the critical hospital medicines that are now urgently needed in large scale volumes to avoid shortages.

In the current circumstances, this temporary cooperation appears indeed justifiable under EU antitrust law, in view of its objective and the safeguards put in place to avoid anticompetitive concerns and as long as it remains within the scope communicated to the Commission.

No breaches of the competition rules on the back of the crisis

At the same time, the Commission underlines that under these exceptional circumstances, it is more important than ever that undertakings and consumers receive protection under competition law. It will therefore continue to closely and actively monitor relevant market developments to detect undertakings, which take advantage of the current situation to breach EU antitrust law, either by engaging in anti-competitive agreements or abusing their dominant position.

Background

The Commission will apply this Communication as of 8 April and until further notice.

For all current information regarding the application of antitrust rules during the time of the coronavirus pandemic, stakeholders can refer to DG COMP’s dedicated web page. The website also contains details on how to seek guidance from DG COMP as regards the compliance with EU competition law of specific cooperation initiatives envisaged by stakeholders.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Guterres holds ‘focused and frank’ informal discussions over future of Cyprus

Traditional knowledge at ‘core’ of indigenous heritage, and ‘must be protected’, says UN Forum

Europe and UN form bulwark against ‘might makes right’ worldview, EU foreign affairs chief tells Security Council

Can cybersecurity offer value for money?

Venezuela: MEPs call for free and fair elections in the crisis-torn country

Political solutions ‘prerequisite to sustainable peace’, Lacroix tells Security Council

These 11 EU states already meet their 2020 renewable energy targets

Global warming: our responsibility

Climate change: cutting the good by the root?

On youth unemployment: unemployment is even bleaker for youth with disabilities

Record-high number of civilian casualties in Afghanistan: UN Report

2020 Blue Economy Report: Blue sectors contribute to the recovery and pave way for EU Green Deal

Militias force nearly 2,000 to leave Libyan capital’s largest shelter for internally-displaced: UNHCR

Constitutional Committee breakthrough offers ‘sign of hope’ for long-suffering Syrians

This is what you need to know about the Iran nuclear deal

EU budget: Regional Development and Cohesion Policy beyond 2020

Me and China

What do refugees really need from those who want to help? A refugee explains

ECB tied in the anti-monetary German ideology

10 ways COVID-19 could reshape offices

This crisis cannot be confronted with statistics

Three ways to improve your corporate culture in the #MeToo era

Nepal faces a crisis as COVID-19 stems the flow of remittances

UN climate panel says ‘unprecedented changes’ needed to limit global warming to 1.5°C

Is Data Privacy really safe seen through Commissioner’s PRISM?

Does it pay for cities to be green?

Trade: EU and 16 WTO members agree to work together on an interim appeal arbitration arrangement

Reimagining the future for skills: What we learned from young people

Children are still dying in Yemen war, despite partial ceasefire, says UNICEF chief

British PM May’s Brexit proposal remains obscure while her government unravels

Brexit must not put UK university research at risk

Brazil identifies a clear pathway for aligning its transfer pricing framework with the OECD standard

Spirit unlimited

GSMA Announces First Keynote Speakers for 2019 “MWC Los Angeles, in Partnership with CTIA”

Why education and accountability are important for developing countries?

Assembly of European Regions @ European Business Summit 2014: The European regions on the path to recovery

Why it’s good to turn your colleagues into friends

TTIP’s 11th round starts in Miami but EU-US businesses see no sunny side

‘Don’t forget Madagascar’s children’, UN appeals for long-term help as emergency worsens

Could a Digital Silk Road solve the Belt and Road’s sustainability problem?

Which countries get the most sleep – and how much do we really need?

Yesterday’s “jokes” and sarcasm by Digital Single Market’s Vice President Ansip on EU member states’ right to protect their telco markets

The 5 biggest challenges cities will face in the future

From DIY editing to matchmaking by DNA: how human genomics is changing society

Mergers: Commission approves the acquisition of Flybe by Connect Airways, subject to conditions

Why forensic science is in crisis and how we can fix it

US and Mexico child deportations drive extreme violence and trauma: UNICEF

5 steps businesses can take to protect air quality after COVID-19

ILO’s Bureau for Employers´Activities to publish new study on women in business and management

DR Congo: Ebola claims over 1,000 lives, Guterres commits ‘whole’ UN system, to help ‘end the outbreak’

How can impact investors balance the green energy equation?

New UN initiative to support financial systems that ‘work better for everyone, everywhere’

Deal on faster exchange of non-EU nationals’ criminal records

How our global battle against coronavirus could help us fight climate change

5G will drive Industry 4.0 in the Middle East and Africa

Putting a price on carbon will help New York state achieve a clean energy future

The entire Australian state of New South Wales is in drought

How do you get people to trust self-driving vehicles? This company is giving them ‘virtual eyes’

Mali: Presidential elections critical to consolidate democracy, says UN peacekeeping chief

EP stands up for democracy in Hungary during COVID-19

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s