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 Milestones

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

Syria’s groundbreaking constitutional talks: ‘a clear success of mediation’ says Guterres in Turkey

10 million Yemenis ‘one step away from famine’, UN food relief agency calls for ‘unhindered access’ to frontline regions

“911, What’s your emergency?”

Nearly a third of the globe is now on Facebook – chart of the day

Climate change is forcing 20 million people a year from their homes, Oxfam says

4 ways Africa can prepare its youth for the digital economy

Germany objects to EU Commission’s plan for a Eurozone bank deposits insurance scheme but Berlin could go along

Alcohol abuse kills three million people a year, most of them men – WHO report

2013, a Political Odyssey: What future for Italy?

This is why mental health should be a political priority

Commission welcomes European Parliament adoption of EU4Health programme

Commission welcomes agreement on the modernisation of EU export controls

7 ways to break the fast fashion habit – and save the planet

ECB again to subsidize euro area banks with more than one trillion euro

Thomas Cook bankruptcy: Better consumer and employee protection needed

MWC 2016 LIVE: Ingenu steps up efforts to build LPWA networks across the globe

Greener tourism: Greater collaboration needed to tackle rising emissions

How digital entrepreneurs will help shape the world after the COVID-19 pandemic

MEPs back plans to promote water reuse for agricultural irrigation

The ECB proposes a swift solution for SMEs’ financing

Working fewer hours makes you more efficient. Here’s the proof

COVID-19: A coordinated EU health strategy needed, say MEPs

‘BioSolar Leaves’ are better at cleaning the air than trees, say the technology’s developers

EU leaders agree to delay Brexit until 31 October

Yemen war ‘a test of our humanity’, and we’re ‘badly failing’ warns UN Children’s Fund chief

German Presidency outlines priorities to EP committees

The refugee crisis seen through the eyes of a young doctor from Turkey

EU, Latin America and the Caribbean: Partnering for prosperity, democracy, resilience and global governance

Collective action to enable sustainable growth will be critical to end tropical deforestation

Adoption of new rules to better protect children caught in cross-border parental disputes

Arrest of three Libyans wanted for grave crimes ‘would send strong and necessary message’ to victims, urges top Prosecutor

State aid: Commission approves around €36 million Romanian rescue aid to state-owned flag carrier TAROM

COVID-19: from the chaos of the pandemic to the difficulties in vaccination

Ecofin: ‘The Friday battle’ for the banking union

Haiti cholera outbreak ‘stopped in its tracks’

The UK option: An overarching alternative for the whole Brexit options

Security Council gravely concerned by Ebola outbreak in DR Congo, demands immediate end to violence hampering response

Here’s how to achieve growth in the Middle East and North Africa

Civil society groups matter for Cambodia’s sustainable development: UN expert

European Institute of Innovation and Technology: Commission welcomes political agreement on strategy for 2021-2027

The von der Leyen Commission: for a Union that strives for more

Number of MEPs to be reduced after EU elections in 2019

The challenge of palliative care in universal health coverage

The world needs carbon-neutral flying. Here’s how to bring it one step closer

Facts, not fear, will stop COVID-19 – so how should we talk about it?

Concorde is a reminder that the only way for innovation is up

Parlamentarians to “break up” with reality in the Google antitrust case

Implementation of tax transparency initiative delivering concrete and impressive results

The world has made spectacular progress in every measure of well-being. So why does almost no one know about it?

EU guidance on the handling of visa applications from residents of Ukraine’s Donetsk and Luhansk regions

MEPs to prioritise environment and climate action in next long-term budget

GDP growth slows in most G20 economies in third quarter of 2019

This is why retail is such a sore point in India-US trade relations

Khashoggi murder trials must public and meet international standards, UN expert urges

UN chief seeking ‘renewed commitment’ to global rules and values, as world leaders head to New York

Agriculture and Fisheries Council

A reality check on inclusive innovation

Austerity lovers to put a break on Renzi’s growth vision for Europe? the Sting reports live from World Economic Forum 2015 in Davos

This man is turning cities into giant sponges to save lives

4 key trends on how COVID has impacted women in business

More Stings?

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