Pharmaceutical and healthcare industry: the impact of the COVID-19 measures

In Royal Decree 463/2020, of March 14, 2020, the Spanish government, acting under article 116.2 of the Spanish Constitution and article four, letters b) and d) of Organic Law 4/1981, of June 1, 1981, declared the state of emergency throughout Spain, originally for a 15 day period, to confront the public health emergency caused by COVID-19 which, according to the World Health Organization, on March 11, 2020, reached the point where it could be classed as an international pandemic.

The main measures affecting the pharmaceutical and healthcare industry in this context are described below.

Supply difficulties for medicinal products or medical devices

• Under the amendment introduced by Royal Decree-Law 6/2020 to Organic Law 3/1986, where a medicinal product, a medical device or any product necessary for the protection of health is affected by exceptional supply difficulties, the government may temporarily establish centralized supply or condition the prescription of those products on identification of high risk groups, performance of analytical and diagnostic testing, fulfillment of protocols, sending of information to the health authorities on the progress of treatments or on other similar details.

Temporary government control allowed over prices of non-prescription medical devices

• Following amendment of article 94.3 of the revised Law on the Safeguards for and the Rational Use of Medicinal Products and Medical Devices, introduced by Royal Decree-Law 7/2020, the government is authorized to determine the price-setting mechanism for non-prescription medicinal products and medical devices, and of other products necessary for the protection of health, under an objective and transparent general regime. Where there is an exceptional health situation, the Inter-Ministerial Committee on Medicinal Product Pricing is allowed to set the maximum public retail price for those medicinal products and medical devices, while that exceptional situation lasts.

Measures to reinforce the National Health System

• Article 12 of Royal Decree 463/2020 contains measures to reinforce the National Health System, in particular, the following:

• In this respect, implementing the provisions of RD 463/2020, the following ministerial orders have been approved by the Health and Consumer Affairs Ministry, adopting the described measures to reinforce the National Health System:

• Moreover, Royal Decree 463/2020 allows the Health Ministry to apply the following measures to ensure supplies of goods and services necessary for the protection of public health:

General extraordinary measures in relation to private law legal entities

Lastly, due their relevance at this time for the pharmaceutical and healthcare industry, highlighted below are certain extraordinary measures adopted generally for private law legal entities:

• The three-month period following the fiscal year-end for the preparation of individual or consolidated financial statements by legal entities required to do so is suspended during the state of emergency, and will resume for another three months from when the state of emergency ends.
• In the case of financial statements that had already been prepared on the date of declaration of the state of emergency, the period for their verification by auditors, where they are subject to statutory audit, is extended until two months after the end of the state of emergency.
• During the state of emergency period, companies, associations or foundations of all types are allowed to hold meetings of their governing bodies by video or audio conference call, subject to certain requirements, even if their bylaws do not specifically allow that form of holding meetings.