Antitrust: Impact of COVID-19 on life sciences
We look at the likely impact of the COVID-19 pandemic on competition law in the life sciences sector.
Key points to take away from this briefing:
- The European Commission (“Commission”) and Competition & Markets Authority (“CMA”) recognise that the COVID-19 crisis requires a relaxation of the usually strict competition law rules to allow pharmaceutical and medical devices companies to collaborate closely in order to help the fight against the COVID-19 pandemic (e.g. by ensuring the continued supply of key medical provisions and joint R&D projects to find a vaccine).
- The Commission has issued a new communication setting out a temporary framework for companies, in particular life sciences businesses, clarifying what sorts of collaborative activities may be permissible between businesses during this pandemic. The Commission has also indicated its willingness to issue bespoke comfort letters to businesses seeking guidance on specific projects, a practice which was abolished in 2003. These comfort letters will not be legally binding but will provide a degree of certainty to businesses. The Commission has also set up a dedicated email address and website for informal guidance.
- The UK government has passed a new healthcare order which allows the NHS to engage with independent healthcare providers in order to provide extra capacity for the treatment of patients during the COVID-19 pandemic. This will likely involve the exchange of commercially sensitive information between the NHS and independent providers, and amongst independent providers themselves. The CMA has also launched a COVID-19 taskforce to closely monitor companies’ behaviours and has issued an open letter to the pharmaceutical sector reminding them of the risks in engaging in anti-competitive practices.
- However, despite this easing of competition law both the Commission and the CMA have made it very clear that the present situation must not be exploited by companies for their own benefit by, for instance, cartelising and/or excessively fixing the price or supply of essential medicines and medical devices. The key message therefore is to consult the present guidance carefully, especially before entering into any new collaboration or agreement with a competitor or customer.