The impact of Coronavirus (COVID-19) on pharmaceutical and medical device companies has been unique as, not only have these businesses had to set up emergency management systems practically overnight in order to maintain normal their business operations, the population also expects the sector to make significant contributions to the fight against COVID-19.
The current crisis mode raises a variety of legal and commercial questions. This article addresses a number of key issues that specifically affect the pharmaceutical and medical device industry in Germany.
BfArM and EMA Instructions for Ongoing Clinical Trials
COVID-19 is already causing considerable delays to many clinical studies, which may in certain cases lead to deviations from the study plan.
The competent authorities, including the German Federal Institute for Drugs and Medical De-vices (BfArM), the Paul-Ehrlich-Institut (PEI) and the European Medicines Agency (EMA), are currently prioritising the processing of amendment notifications required by COVID-19. BfArM has summarised the relevant guidance on its website. For inquiries about clinical trials in connection with COVID-19, BfArM has set up a dedicated email address: CT-COVID@bfarm.de.
EMA, together with the European Commission and the Heads of Medicines Agencies (HMA), on 20 March 2020 published Guidance on the Management of Clinical Trials during the COVID-19 pandemic. The document was last updated on 27 March 2020. In the guidance, EMA advises sponsors to carefully and critically question whether they need to start a new clinical study or include new study participants in an ongoing study. With regard to on-going studies, sponsors should in particular consider whether and to what extent they may temporarily suspend the study in certain facilities and/or extend the intended overall duration of the study. In the interest of study participants’ health, it may also make sense to modify the conduct of a study in certain cases, e.g., by transferring study participants to another institution or replacing visits with video or telephone conferences. Audits should generally not be conducted at the moment. The most recent version of the guidance also provides information on how to deal with safety reporting and communication with national supervisory authorities and ethics committees.
In parallel, on 25 March 2020, EMA published the first draft of a guidance document on the COVID-19 pandemic’s impact on methodological aspects of ongoing clinical trials. The draft is subject to a four-week public consultation. Comments can be submitted until 25 April 2020.
On 26 March 2020, BfArM published supplementary recommendations to EMA’s guidelines for clinical trials in Germany. The recommendations apply to the remote monitoring of clinical studies and the shipment of investigational drugs to study participants in accordance with national clinical trial regulations and data protection law. BfArM points out that the recommendations may be subject to changes on short notice at any time, in view of the dynamics of the COVID-19 pandemic.
Pharmaceutical and medical device companies should review the effects of COVID-19 on their upcoming and ongoing clinical trials, revise their existing study concepts and, if neces-sary, contact BfArM or EMA at an early stage in order to submit any amendment notifications or clarify uncertainties.
Market Entry Facilitation for PPE And Selected Medical Devices
The spread of COVID-19 has led to an extraordinarily high and further increasing demand for protective goggles and visors, mouth-nose protection equipment, and protective clothing and gloves. These products qualify as personal protective equipment (PPE) or medical devices whose market entry usually requires a (sometimes lengthy) conformity assessment procedure and Conformité Européene (CE) marking.
In order to adapt the supply of these products to the increasing demand as quickly as possible, the European Commission seeks to simplify, to a considerable extent, the market entry for PPE and medical devices with its Recommendation (EU) 2020/403 of 13 March 2020.
In the Recommendation, the Commission requests the competent market surveillance authori-ties and notified bodies to take all available measures to provide immediate access to PPE and medical devices for healthcare professionals for the duration of the current health threat. Ac-cordingly, PPE and medical devices may be placed on the market temporarily and, in certain circumstances, without CE marking.
The Commission recently published several guidelines to assist companies in the legal and regulatory assessment of PPE, hand sanitisers, 3D printers and products made by 3D printers. In Germany, several testing companies offer accelerated testing procedures. In this context, the European Committee for Standardization and the European Committee for Electrotechnical Standardization have provided a large number of relevant standards free of charge. These are available on the websites of the respective member associations at the Member State level. For Germany, this is DIN, and the standards can be downloaded here. Further information, which is updated on a regular basis, can be found on the website of the Zentralstelle der Länder für Sicherheitstechnik.
Medical device companies should carefully consider, and coordinate with the competent su-pervisory authorities and notified bodies to determine, whether their products are eligible for market access facilitation in line with the Commission Recommendation.
Export of PPE and Selected Medical Devices Subject to Authorisation
In order to continue to meet the high demand for PPE and selected medical devices in the European Union in the future, the Commission temporarily made the export of certain products subject to authorisation in Implementing Regulation (EU) 2020/402 of 14 March 2020. On 19 March 2020, this Regulation was replaced by the Implementing Regulation (EU) 2020/426. The Commission has issued related guidelines, which contain a sample application for an export licence.
These new export restrictions are problematic for companies whose products fall within the scope of the Regulation and which are contractually obliged to supply these products to third countries. In these cases, the companies will have to assess whether an export license can be considered and, if not, what legal and other options exist to deal with the export ban in the context of the business relationships concerned.
New Timeline for the Medical Devices Regulation Expected
The leading associations in the medical device industry have long called for a moratorium on the conversion to the Medical Devices Directive (MDR). In the light of the COVID-19 crisis, it is now likely that they will be heard. The Commission announced on 25 March 2020 that it is preparing a proposal to the European Council and Parliament to postpone the final entry into force of the MDR by one year.
The envisaged new timeline raises several substantive questions, such as how transition peri-ods and sales periods will be amended. It is also still unclear how notified bodies will deal with a new timeline, and whether CE certificates in accordance with the Medical Devices Di-rective (MDD) can be applied for and issued again in the meantime (which was de facto no longer possible in recent months). The German Medical Technology Association (BVMed) welcomed the Commission’s announcement and has submitted further proposals. In particular, BVMed advises that no specific application date should be set for the MDR at this point, and that there should instead be a further transitional period of six months after the end of the COVID-19 crisis before the MDR comes into force.
Tighter Scrutiny of Foreign Investment in the EU Health Market
On 25 March 2020, the Commission published new guidelines for the review of investments from third countries, in particular for investments that concern the European health market. According to the Commission, in the context of the COVID 19 pandemic, there is an in-creased risk that foreign investors will focus on health infrastructures that are essential for public order or security, such as plants manufacturing medical protective equipment or re-search institutes specialising in vaccine research. Germany, like other EU Member States, is therefore called upon to take a particularly critical look at such planned acquisitions and to preserve assets in the European Union that are essential for the Community. The Commission’s guidelines are likely to cloud the otherwise investment-friendly climate in the European health market for the duration of the crisis.
Impending Supply Bottlenecks
The increasing spread of COVID-19 poses a medium- and long-term risk to the supply of drugs. In India, many contract manufacturers have restricted or completely stopped production, which is why the Indian government has recently limited the export of 26 pharmaceutical ingredients to Germany. For several weeks now, attention has also been turning anxiously to China, where the majority of all generic drugs for the German market are produced.
Pharmaceutical companies should keep an eye on the production networks and supply chains relevant to them and, where possible, ensure that they do not depend exclusively on individual suppliers. If there is a risk of a supply bottleneck in a specific case (e.g., owing to a contract manufacturer having to reduce or discontinue its activities) pharmaceutical companies should review their rights under the respective contracts in order to at least limit adverse commercial effects.
BfArM Allocation Order
On 20 March 2020, BfArM published an allocation order on the storage and demand-driven supply of human drugs. The allocation order requests that pharmaceutical companies and wholesalers not supply drugs beyond the usual demand.
The purpose of the order is to counteract the typical trend during crises of stockpiling by individual market participants, which leads to an unequal distribution of drugs in the market. BfArM is making use of its (only recently extended) powers to take vigorous action against drug supply bottlenecks.
The order applies to “supply-relevant drugs”, which include prescription drugs with an active ingredient that is particularly relevant to public health. Pharmaceutical companies should ex-amine to what extent their drugs are affected by the allocation order. The current list of sup-ply-relevant active substances is available on the BfArM website.
Expedited Digital Transformation
Pharmaceutical and medical device companies are required to carry out a digital transfor-mation in the shortest possible time, at least in certain areas.
For example, the sales force is no longer able to carry out consulting and advertising activities at doctors’ premises, but it is unclear whether and how the sales force can “work from home” instead. Internal and external trainings must be cancelled and, as far as possible, converted to digital platforms such as video conferences and webinars. In the context of cooperation with other players in the health system, including healthcare professionals, communication channels may also have to be changed.
The new primarily digital approach to work raises particular data protection issues in individu-al cases. To the extent that these new digital approaches relate to cooperation with healthcare professionals, they must also be checked for compliance with existing applicable drug adver-tising, social, criminal and professional laws and regulations.
Accelerated Market Access for Drugs to Treat COVID-19
Legislation relating to the pharmaceutical sector provides for several procedures to ensure rap-id market access for drugs in particularly sensitive cases.
At the EU level, these procedures include, in particular, the Priority Medicine (PRIME) system, which enables accelerated assessment and granting of conditional approval for priority medicines. The EMA currently offers free scientific advice for the benefit of companies de-veloping vaccines or therapeutics for COVID-19. These companies are invited to contact EMA at email@example.com.
BfArM and PEI, which is responsible for the marketing authorisation of vaccines in Germany, currently give priority to projects that relate to the diagnosis and/or treatment of COVID-19. This concerns in particular applications for scientific advisory procedures and applications for authorisation of clinical trials, in relation to both drugs and medical devices. BfArM and PEI currently accept successive submission of marketing authorisation application documents in order to speed up the review of the application. The consultation fee in relation to COVID-19 treatment can be reduced to a quarter of the statutory fees.
Pharmaceutical companies that possess a potential active substance against COVID-19 should immediately contact the competent national drug authority (BfArM or PEI) and/or the EMA in order to speed up the market entry procedures for these substance as much as possible. Without an authorisation for the treatment of COVID-19, the pharmaceutical company must carefully examine whether and to what extent it may use the active substance outside clinical studies, for example in Compassionate Use Programs. Drugs that already have a marketing authorisation outside the European Union may in certain circumstances be imported to Ger-many on an individual basis.
Restricted Applicability of Rebate Contracts
After many statutory health insurance companies had already suspended the application of their rebate contracts, the German Pharmacists’ Association (DAV) and the National Associa-tion of Statutory Health Insurers (GKV-Spitzenverband) reached an agreement to this effect, which will initially be valid until the end of April 2020. Pharmacists are entitled to deliver a drug that is not covered by the respective rebate agreement to insured persons instead of a discounted drug that is not in stock. This will facilitate patient care in the event of delivery shortages caused by COVID-19. In the interest of planning security for pharmaceutical com-panies, the German Pharmaceutical Industry Association (BPI) has dictated that the agree-ment should be maintained at least until the end of June 2020. The BPI press release can be found here.