Impact on the Pharmaceutical and Medical Devices Industries

On the 11th March 2020, the WHO declared the existence of a COVID-19 pandemic. The Minister of Health enacted Order no. 3219/2020 (the “Order”) on that same day, as a response to the anticipated public health emergency. The purpose of the Order is to ensure the conditions for the treatment of this disease in the National Health Service (the “NHS”). The Order was implemented and supplemented by several Infarmed Circular Letters.
The evolution and quick spread of the disease in Portugal led the Government to enact Decree-Law 10-A/2020, of 13 March 2020, (“Decree-Law 10-A/2020”). On the 18th March, the President of the Republic declared a State of Emergency, upon Parliament’s approval.
The acts are complex and scattered, and so we have compiled and provide an overview below of the measures which seem most relevant during this exceptional period.

 

The Order – NHS Hospitals’ stockpiling

The enactment of the Order entailed the immediate purchase, by all NHS Hospitals, of medicines, medical devices and personal protective equipment (“PPE”) related to the containment or treatment of COVID-19, to increase their stocks by 20% relative to the consumption of these materials recorded in 2019.
Further to this instruction, the Order compels the immediate purchase of the same medicines, medical devices and PPE by the remaining healthcare units of the NHS and the Ministry of Health, on the same terms and in the same proportion, provided that the use of these products is regular and necessary for each healthcare unit type.
The covered products are set out in Schedules I and II to the Order.

 

Infarmed’s Circular Letters

The Order gave rise to four Infarmed Information Circular Letters:

(i)  Information Circular Letter 062/CD/100.20.200: Update of the list of medicines covered by prior notice and reinforcement of the wholesalers’ and MAHs’ obligation to provide information

The list of medicines subject to prior notice in the case of foreign transactions has been updated through this Circular Letter in order to allow the implementation of the Order.
Infarmed’s powers were also strengthened as well as the wholesalers’ and MAHs’ obligations to provide information, which must report the available stock of medicines covered by the Order, as well as the weekly purchases and sales to Infarmed on a weekly basis.
You can see the Circular Letter and relevant schedules here.

(ii) Information Circular Letter 066/CD/100.20.200: New update of the list of medicines covered by prior notice 
The list of medicines subject to prior notice in case of foreign transactions was updated again. The Platform for reporting purposes was also updated. You can see the Circular Letter and relevant schedules at here.

(iii) Information Circular Letter 068/CD/100.20.200: Information and weekly reporting mechanism
Establishes the information and weekly reporting mechanism to which wholesalers and MAHs of certain medicines are subject to, in accordance with Information Circular Letter 062/CD/100.20.200, further updating the list of covered medicines. You can see the Circular Letter and relevant schedules here.

(iv) Information Circular Letter 073/CD/100.20.200: New update of the list of medicines covered by prior notice
The list of medicines subject to prior notice in case of foreign transactions was updated once again. The Platform for reporting purposes was also updated. You can see the Circular Letter and relevant schedules here.

 
Streamlined public procurement proceedings

The Order determines faster procurement procedures for the immediate purchase of health products by NHS hospitals – presumably, direct award. The acts enacted after the Order reinforce and extend this possibility of using swifter procurement procedures.

Decree-Law 10-A/2020, of 13 March 2020, established temporary exceptional rules for public procurement through direct award, notably for the lease and acquisition of assets in connection with COVID-19.
In practice, it enabled the contracts to be awarded by direct award on the grounds of pressing urgency, releasing them from the expenditure authorization requirement and broadening the scope of the simplified direct award proceedings. For a more in-depth analysis, please visit here.

Law 1-A/2020, of 19 March, determined that the contracts executed by direct award would not be subject to the prior approval of the Court of Auditors, without prejudice to the maintenance of the obligation to report to the Court. Note that the act is retroactively effective from 13 March. For a more in-depth analysis, please visit here.

As a result of these measures, pre-contractual award procedures for contracts in connection with the containment of COVID-19 will be swift and informal, and the companies marketing the relevant products must adjust their response mechanisms to invitations to bid. 
The course of events could extend these derogatory procurement mechanisms to other health products.

__________________________

This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.