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Generic-Drug Makers Get EU Approval for Virus Cooperation (1)

April 8, 2020, 3:46 PM

Generic-drug makers from Mylan NV to Teva Pharmaceutical Industries Ltd. won European Union antitrust clearance to cooperate on supplies of critical hospital medicines amid the Covid-19 pandemic.

The European Commission sent the Medicines for Europe group of generic pharmaceutical companies a so-called comfort letter to assure them they could join forces without the risk of heavy cartel fines.

“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,” Margrethe Vestager, the EU’s antitrust chief, said in the statement.

“We will urgently provide businesses with sufficient guidance and comfort to facilitate cooperation initiatives boosting the production of products in high demand,” she said.

The EU’s tough enforcement of rules that prevent companies swapping commercially sensitive information have been blamed for chilling industry efforts to join forces on some research projects. Regulators have previously avoided issuing such comfort letters, arguing that antitrust compliance was something companies should police themselves.

Export Bans

In a separate move, the commission also urged governments to ensure medicines could get to where they are needed. It asked countries to lift export bans and restrictions, consider a temporary curb on online sales of essential drugs and fight misinformation that could lead to people panic buying certain drugs. Drug companies should be encouraged to increase and reorganize production of key medicines -- if necessary with government support or tenders.

Medicines could also be used more carefully by looking at how they may be currently overused. That could include extending expiry dates, the EU guidelines say.

The Medicines for Europe project will see companies assess demand spikes across the region for intensive care medicines used for patients on ventilators, such as sedatives, muscle relaxants, analgesics and antibiotics, the group said in an emailed statement. These are mostly off-patent drugs. All companies with a marketing approval or license for injectable forms of these medicines are welcome to join the project, the group said.

The EU’s U-turn comes during an unprecedented economic crisis and will see regulators tell companies how they should work together to address urgent problems during the pandemic.

EU Tells Firms How to Avoid Cartel Fines in Joint Virus Response

EU officials have been engaging with companies and trade associations to help them assess whether their plans to cooperate are legal and to design safeguards against longer-term anticompetitive effects, the commission said.

While most guidance from the EU comes from informal talks, the authority will provide a comfort letter for specific cooperation projects that need to move fast if there is uncertainty about whether it complies with the law.

(Updates with details on industry project in fourth paragraph.)

To contact the reporter on this story:
Aoife White in Brussels at awhite62@bloomberg.net

To contact the editors responsible for this story:
Anthony Aarons at aaarons@bloomberg.net

Peter Chapman

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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