Export bans for medicinal products

16 March 2020 | newsletters

On 1 April 2020, the Ordinance on Ensuring the Supply of Medicinal Products (Verordnung über die Sicherstellung der Arzneimittelversorgung, "AMVS-VO" or the "Ordinance") will enter into force. Although COVID-19 was not the reason for issuing the Ordinance, the effects of the coronavirus pandemic could quickly become the first major case of application of the AMVS-VO.

Background

In recent years, health care institutions and social insurance carriers in Austria have repeatedly complained about the shortage of certain urgently needed medicinal products. These often had to be purchased expensively from abroad in order to guarantee the necessary success of treatment. The causes are manifold.

Large price differences between medicinal products in the EU Member States, for example, favour parallel trade (which is permitted). This means larger quantities of medicinal products provided by the industry in Austria can be exported to Germany to take advantage of these price differences, resulting in more limited domestic supply.

In addition, there are "classical" supply shortages caused by production stoppages or restrictions. This can also be because active ingredients or auxiliary materials are not available or sufficiently available. Such a situation may soon arise due to COVID-19 and the export stop/restrictions imposed on active ingredients such as those from India and China. The AMVS-VO is intended to remedy this situation.

What does the AMSV-VO regulate?

The AMVS-VO stipulates that in the event of a restriction of the availability of a prescription-only medicinal product in Austria, the product in question must be reported to the Federal Office for Safety in Health Care ("BASG").

The BASG shall include the product concerned in a publicly accessible list, which shall be available on the website of the BASG (the "Register"). The proprietary medicinal products listed in the Register may not (even) be exported to the EEA States for reasons of public health protection.

When is there a restriction on the ability to distribute?

By definition, a restriction of marketability of a prescription-only medicinal product is defined as

(a) an unavailability for a time likely longer than two weeks; or

(b) insufficient availability to meet the needs of patients in Austria of the prescription-only medicinal product for a time likely longer than four weeks.

Who must report?

The AMVS-VO explicitly requires only the marketing authorisation holder to report supply shortages.

Often, however, the drugs are not distributed directly by the authorisation holder but by an authorised (group) company/wholesaler. These players, who are equally obliged to ensure supply, have no reporting obligations and no right to a say under the AMVS Regulation. The reporting obligation may therefore be delegated from the marketing authorisation holder to another actor only in the internal relationship between them.

Action right of the BASG

If the authorisation holder violates its obligation to notify and the BASG becomes aware of this, the BASG must on its own initiative include the prescription-only medicinal product in question in the Register.

The BASG has the same obligation if it learns that patients' demand for a prescription-only medicinal product is not covered in Germany, even though, according to the marketing authorisation holder, there is no restriction on its marketability; in other words, if there is a clear indication of parallel trade.

Export ban and official notice

By including an unavailable / insufficiently available prescription-only medicinal product in the Register, this product becomes subject to an export ban, although it explicitly applies only to the EEA states. Export to non-EEA states (third countries) remains permissible even if the distribution capability of the proprietary medicinal product is limited.

Upon application by the authorisation holder, the BASG must issue a decision on the export ban. An appeal against this decision may be lodged with the Federal Administrative Court.

Penalties

If the authorisation holder fails to notify a restriction on the ability to distribute a prescription-only medicinal product or exports a medicinal product listed in the Register, the authorisation holder may face an administrative fine of up to EUR 25,000 or, in the event of recurrence, up to EUR 50,000.

Concluding remarks

The brief regulation is too imprecise in some respects. For example, it is unclear which parameters and data can / should be used to assess the "restriction". There is in fact no obligation to report which / how many medicinal products are distributed and where.

Before listing a medicinal product in the Register, the BASG must also check whether the prerequisites for inclusion are met. Only transparent, non-discriminatory and verifiable criteria are suitable to make the export restriction scheme legally tenable. Nevertheless, the regulation does not specify how this examination is to take place and which criteria are to be used as a benchmark.

The "practicability" of the regulation could soon become apparent.

This article is authored by Iliyana Sirakova. It is also available in German

This article is part of our coronavirus-focused legal updates – visit our coronavirus info corner to get more info!