Newsletter
June 2020

After several difficult weeks, the month of June is marked by the deconfinement and gradual recovery of activities. Therefore, in this newsletter, the firm would like to share the work and reflections on the post-Covid-19 period that it has carried out during the period of containment .

 

SUMMARY

• ARTICLE: Pharmaceutical relocation in Europe, what are the legal issues? (by Nathalie CAZEAU)
• IN BRIEF: Work and involvement of the firm during the containment period

 

ARTICLE
Pharmaceutical relocation in Europe, what are the legal issues?
(by Nathalie CAZEAU)

The Coronavirus epidemic has made us aware of the threat to public health in France and Europe, since 80% of the active pharmaceutical ingredients used in Europe are manufactured outside the European Economic Area, a large part of which is in Asia.

The National Academy of Pharmacy has underlined the seriousness of this situation.

« Due to the multiplicity of links in the production chain, all it takes is a natural or health disaster, a geopolitical event or an industrial accident to cause supply disruptions that can lead to patients being deprived of their treatment,” the Academy states.

It is already several years since such alerts were issued, highlighting the fact that the control of the manufacture of raw materials for pharmaceutical use had become a national and European strategic issue.

Many people are therefore now considering how to create the conditions for relocating active ingredients and certain excipients essential to pharmaceutical formulation to Europe, in order to preserve independence at European level, particularly for certain medicines such as antibiotics and cancer drugs..

« It is vital to guarantee the independence of our health policy while promoting the maintenance of existing production capacities in France and Europe in order to better guarantee the availability of medicines for patients,” concludes the National Academy of Pharmacy.

An executive committee has just been set up in the European Union, bringing together the EMA, the European Commission and the competent authorities of each member country, to deal with drug shortages caused by major events.

Within the framework of Covid-19, this executive committee will identify and coordinate European actions put in place to protect patients in the event of a risk of shortage, caused, for example, by the temporary shutdown of factories in areas affected by the epidemic, or by transport restrictions impacting deliveries.

The European Parliament will issue a report on solutions to drug shortages. MEP Nathalie Colin-Oesterlé has been asked to be the rapporteur. She submitted her conclusions and proposals on 29 April.

In her report she calls for the creation of “one or more European non-profit pharmaceutical companies capable of producing certain medicines of strategic and health interest”.

In its report on the unavailability of medicines, published on 20 June 2018, the National Academy of Pharmacy stated the need to consider the pharmaceutical industry as a strategic industry:

« Faced with these observations, it is necessary for the public authorities to react and consider that the pharmaceutical industry is a strategic asset, a source of income and employment, but also that it is essential to ensure Europe’s independence in terms of essential medicines in the long term.

 It is essential to establish a precise inventory of European industrial sites capable of manufacturing injectable forms of medicines, and more particularly sites capable of preparing formulations containing highly sensitising substances or substances with high pharmacological or toxic activity, including anti-cancer and anti-infectious medicines, and to monitor this industrial sector, in order to be able to react if it is observed that production capacity is slowly eroding.. »

Relocation and, more generally, securing the production of medicines in Europe raises many questions. We will only deal here with some of the legal aspects of what is at stake in this relocation.

The legal issues – far from being the only ones, of course – are however very important, so as to contribute to the reflection of a relocation strategy that allows economic actors to secure their production.

Relocation must be considered at least at the European Union level.

Indeed, it seems quite clear that wanting to manufacture the entire pharmacopoeia in France is unimaginable.

If relocation is considered at the European level, this implies, at the legal level, working towards greater harmonization of the status of medicines in Europe, both at the regulatory and contractual levels.

Reflection on the legal aspects of relocation can be envisaged along two lines, that of the necessary regulatory harmonisation in Europe to encourage relocation, and that of convergence towards a single contract model at European level.

 

I. Harmonize and coordinate standards:

Regulatory constraints contribute to supply disruptions and tensions

An excessive regulatory framework does not allow for flexibility requirements to be met.

Industrial pharmaceutical sites manage multiple change plans with diverse origins on a daily basis .

More and more often, it is also a question of dealing with changes, either unforeseen or of which the MA holder and the manufacturing site are only informed shortly before their implementation. For example, a supplier of excipients, vials, closures, syringes, etc., may stop production or transfer production to a new site or change the specifications of its products.

In addition, the number of standards is constantly increasing, as is the number of updates. In total, each plant manages several hundred changes per year.

For any change, the regulations require specific steps to be followed: good manufacturing practices require, on the one hand, the holder to obtain authorization to modify its marketing authorization file (variation) and, on the other hand, the manufacturer to open a change plan that is part of a formalized change control system.

However, manufacturers are not in control of the time required to implement these changes because the vast majority of them must be approved by the health authorities that granted the marketing authorization (variation procedure) in each of the countries in which the drug concerned is registered before they can be implemented.

For medicines registered under the centralised procedure, for the European Union, the approval process is managed at the EMA level, but the problem remains because, in their case, the process changes concern countries outside Europe as well (USA, Canada, Brazil, China, Mexico, Japan, Korea, Russia, Gulf countries, etc.).

It is therefore easy to understand how regulatory constraints contribute to supply disruptions and tensions.

In addition, there are a large number of other HSE (Health, Safety and Environment) standards, which are different in each country and which are also a source of constraints.

The International Conference on Harmonisation of Criteria for Registration of Pharmaceuticals for Human Use (ICH) was established in 1990 by the pharmaceutical regulatory authorities and pharmaceutical companies of the European Union, Japan and the United States with the aim of defining and harmonising some of the standards to be applied in the development of new medicines.

The authorities of ICH54 adhering countries are aware of the problem that these delays can be an impediment to continuous improvement and the supply of medicines. They have initiated a reflection55 (public enquiry initiated by the EMA for the Union in December 2017 and until December 2018) which led to the publication for public enquiry of an ICH Q1256 guideline.

The current crisis, and the risk of shortages, is likely to lead to even more intense reflection on this necessary harmonisation, at the regulatory level, which must involve coordinating standards and structures.

This necessary coordination of standards and structures is also suggested by the National Academy of Pharmacy in its above-mentioned report:

“Insufficient coordination between the various structures, agencies and ministries concerned with medicines is undoubtedly the most important observation that the National Academy of Pharmacy was able to make during its various hearings. From this point of view, France should draw inspiration from the global strategic plan initiated by the Food and Drug Administration (FDA) in the United States..”

As we can see, progress must move towards a trend towards harmonisation, but also towards a principle of regulatory flexibility to deal with certain critical situations.

Harmonise, make more flexible and more responsive, but also strengthen international controls to protect laboratories against unfair competition from low-cost countries..

ANSM’s expertise should also be strengthened with a view to better harmonisation of practices at the global level and enable it to step up its international activities in the field of inspection.

The expected benefits would be beneficial both in terms of the competitiveness of producers for third parties in France (fight against “unfair” competition) and public health (better control of imported drugs).

In the same vein, a strict application of GMPs should be encouraged, particularly in the non-EU countries concerned; limiting the “unfair” competition suffered at this level by third party producers in France

 

II. Consider a European harmonisation of the commercial conditions of manufacturing contracts

Centralizing production in Europe means, for the organizer, the choice of the country where this relocation will be effective.

However, commercial rules related to contracts for the manufacture and production of pharmaceutical specialities should be harmonized in order to facilitate the choice of the place of manufacture and to avoid disparities in legislation between European countries.

On this point, the idea would be to consider, for contracts concerning the manufacture of pharmaceutical specialities and their necessary relocation, to work on drawing up a “sister” convention to the Vienna Convention on the International Sale of Goods, specially adapted to the requirements of pharmaceutical law.

The Vienna Convention (CISG) of 11 April 1980 governs both “the formation of the contract of sale and the rights and obligations that such a contract creates between the seller and the buyer” (art. 4). In France, it replaces articles 1582 et seq. of the Civil Code in the case of international sales of goods.

The CISG is currently in force in the eighty countries that have ratified it (including France, on 1 January 1988, after a decree no. 87-1034 of 22 Dec. 1987).

The list of countries for which the Convention has entered into force is indicative of its success. Mr. Witz rightly points out that, on the twenty-fiveth anniversary of the Convention, it governs two thirds of international trade. (Les vingt-cinq ans de la Convention des Nations Unies sur les contrats de vente internationale de marchandises, Bilan et perspectives, Claude Witz, JDI 2006, p. 5; this percentage reflects the share taken by the Contracting States in international trade).

These countries are both continental and common law countries such as the United States, Canada and Australia.

The CISG has thus become the sales law for the European Union.

When will there be a Pharmaceutical CISG for the European Union?

Therefore, why not imagine a “Pharmaceutical CISG” that could lead to this harmonised relocation of the manufacture of pharmaceutical specialities in Europe?

It should be remembered that the Convention is a supplementary and non-mandatory uniform law text (Article 6) and that it has influenced several national reforms of sales law, particularly in Finland, Sweden and Norway.

Consequently, the main protagonists, in negotiating their contracts, could also decide to opt out of it, but let us take the gamble that if such a convention existed, specifically adapted to the requirements of pharmaceutical law, it would be chosen by the parties.

It would therefore be perfectly conceivable to create a convention of the same type, adapted to the imperatives of pharmaceutical law and allowing the parties flexibility in negotiating and choosing the applicable provisions, along the lines of the Vienna Convention.

In this way, the Convention could provide a set of substantive provisions independent of any national legislation, which would apply only in the absence of provisions to the contrary.

This would save a great deal of time, negotiation, costs and implementation strategy.

 

IN BRIEF
Work and involvement of the firm during the containment period

 

• 🇫🇷 Speech by Nathalie CAZEAU on Thursday, May 14, 2020 at the « UIA Webinar: the legal challenges of health law during the Covid-19 crisis » =>Watch

 

• 🇫🇷 Organization and participation of Nathalie CAZEAU, Christel BRANJONNEAU and Christopher JACQUET-CORTÈS in the webinar « Deconfinement and then what? The legal stakes of the resumption of activity » => Watch

 

• 🇬🇧 Speech by Nathalie CAZEAU at the International Webinar of the Barcelona Bar Association (legal aspects of Covid-19) => Watch

 

• 🇪🇸 Collaborations with Francia Hoy:

– Video – What is the partial activity and how does it apply? (by Christopher JACQUET-CORTÈS) => Watch

– Article – How does the state help companies and the self-employed? => Read

– Article – Covid-19: Can I suspend the payment of my professional rent? => Read