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Australia Relaxes Competition Rules To Facilitate Coronavirus Response

 

A “conditional interim authorization” to allow generic and brand industry associations in Australia to work together to share information on stock levels, inventory, manufacturing and the supply chain as part of efforts to address the coronavirus pandemic has been granted by the Australian Competition and Consumer Commission. However, discussions of tender pricing will not be included among the permitted conduct.

Australia’s originator body Medicines Australia had on 27 March applied to the ACCC seeking authorization for an initial six-month period for it and the Generic and Biosimilar Medicines Association “to implement a co-ordinated strategy in relation to the supply of essential medicines and related supplies in response to the current COVID-19 pandemic.” An “urgent interim authorization” was also requested in light of current demands on the healthcare system and to allow the industry associations immediately to assist government.

On 3 April, the ACCC granted an interim authorization, after having clarified the conduct that would be covered by the request – notably specifying that, while such collaboration may concern federal or state tenders, it would not include agreements or information-sharing around pricing aspects of tenders.

The conduct authorized for the Medicines Australia and GBMA joint working group covers critical medicines and devices, encompassing:

  • sharing information regarding available stock and inventory levels, likely quantities that can be obtained through existing supply channels, new sources of supply and potential quantities, and opportunities to increase domestic manufacturing;

  • co-ordinating and allocating the fulfilment of orders and supply requests between Medicines Australia and GBMA members;

  • prioritizing certain supply requests as nominated by the federal government, state and territory governments, and relevant health authorities; and

  • working together to respond to tenders or requests for supply, including sharing information or joint tenders.

Outlining the scope of its discretionary ability to relax competition rules, the regulator explained that “broadly, the ACCC may grant authorization if it is satisfied that the benefit to the public from the conduct outweighs any public detriment, including from a lessening of competition.” The authorization “provides protection from legal action for conduct that may otherwise breach the competition provisions of the Competition and Consumer Act 2010.”

The interim authorization was granted without a public consultation “due to the urgent need to ensure the continued supply of essential medicines and associated supplies, including those needed for the treatment of COVID-19 to Australians, and the compelling nature of the public benefits likely to result,” the ACCC said, insisting that it “recognizes the urgency of the request for interim authorization in light of the significant demands being placed on the Australian health system as a result of the COVID-19 pandemic.”

“It is unlikely that interim authorization will significantly weaken competition in any market in the long run,” the ACCC further observed.

“There are likely to be significant public benefits of permitting the Medicines Australia/GBMA working group to engage in the proposed conduct in the current unprecedented circumstances,” the ACCC elaborated, “including enabling MA/GBMA working group members to co-ordinate discussions within the medicines supply chain to develop and implement strategies to ensure the continued supply of essential medicines and supplies to Australians; provide more effective advice to governments and relevant health agencies regarding the supply of essential medicines and associated supplies including by identifying and addressing supply shortages and constraints; and maximizing the efficient use of supply channels in this time of peak demand.”

“The proposed conduct will be undertaken in the context of broader co-ordination and communication by the MA/GBMA working group with relevant government and regulatory bodies, including the Therapeutic Goods Administration.”

Public Consultation Will Follow

But having granted the urgent interim authorization, the ACCC said it would still be conducting a public consultation on the final authorization – which is being sought for an initial period of six months, which may need to be extended depending on the duration and extent of the COVID-19 pandemic – “to assist it to determine whether proposed conduct results in a net public benefit.”

This consultation “will further examine the public benefits and detriments likely to result from the proposed conduct during that process.”

Moreover, the ACCC noted that it “may review its decision to grant interim authorization at any time, including in response to feedback as the proposed conduct is rolled out.”

“If any persons, including relevant government and regulatory bodies, have concerns with the way the applicants are dealing with them during the period of interim authorization, they are encouraged to advise the ACCC,” the regulator recommended, adding that its decision to grant the interim authorization “should not be taken to be indicative of whether or not the final authorization will be granted.”

According to the ACCC’s letter to interested parties on the consultation – sent on 6 April – parties have until 27 April to register their submissions, with a date of 18 May set for the applicants to respond to any issues raised as part of the public consultation. A draft determination will be published in June or July, with a further public consultation on the draft determination taking place in July or August and a final determination made in September.

An ‘Important Step’ For Industry

Responding to the ACCC’s interim authorization, the GBMA said it represented “an important collaborative step”, reflecting “the critical need to stabilize and manage the supply of medicines which has seen unprecedented demand in recent weeks resulting from the COVID-19 pandemic.”

“Maintaining the supply of essential medicines to Australians who rely on them is the industry’s utmost priority as we face one of the biggest global health challenges of our time,” the off-patent industry body insisted.

GBMA chief executive Marnie Peterson said the body welcomed the authorization as it would “allow industry, extending to non-members of the associations, to work together now and facilitate the efficient and effective management of medicine supplies for Australian patients during this critical and challenging time.”

“Every measure we can put in place to assist in the treatment of COVID-19 while also supporting the ongoing supply of essential medicines to Australians must be implemented and we are extremely pleased the ACCC have approved our request,” Peterson commented.

Meanwhile, Medicines Australia CEO Elizabeth de Somer said the ACCC’s interim authorization “underscores the importance of an integrated supply chain for our medicines, and I thank the GBMA for working alongside us in addressing the challenges we are now facing as a result of COVID-19.” It was “essential that we pursue every possible strategy that supports the delivery of medicines into the hands of Australian patients,” de Somer maintained.

Medicines Australia chair Anna Lavelle underlined the “critical role” industry had to play in providing an “urgent response to this rapidly evolving health crisis.” But to succeed, she said, “requires the Australian healthcare delivery system to work together, including with government, in a highly collaborative and open manner.”

In early March, the GBMA said it was “urgently working with its members and the Australian government” to minimize disruption caused by the coronavirus outbreak, urging consumers not to 'panic purchase' and stockpile drugs amid reports of shortages and empty pharmacy shelves.  (Also see "Australia’s GBMA Working To Address Coronavirus Risks" - Generics Bulletin, 6 Mar, 2020.)

 

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