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The Role of the Joint Procurement Agreement during the COVID-19 Pandemic: Assessing Its Usefulness and Discussing Its Potential to Support a European Health Union

Published online by Cambridge University Press:  26 October 2020

Emma MCEVOY
Affiliation:
Post-doctoral researcher at Maynooth University Department of Law – ALL Institute, Dublin, Ireland; email: emma.mcevoy@mu.ie.
Delia FERRI
Affiliation:
Professor of Law, Maynooth University Department of Law – ALL Institute, Dublin, Ireland.

Abstract

In 2014, the European Joint Procurement Agreement (JPA) was introduced as an innovative instrument to organise the procurement of vaccines and medications in preparation for pandemics. An overriding purpose of the JPA is to secure equitable and cost-effective access to medical supplies for participating EU Member States during serious health crises. This article aims to understand the current use of the JPA in response to the COVID-19 pandemic. Post-analysis of the recent use of the JPA, the article will discuss how the regional procurement mechanism can be strengthened to support the development of a European Health Union. In particular, the article will firstly question whether the four recent JPA procurement actions facilitated equitable access to medical supplies and services. Secondly, it will ask whether the centralised procurement actions preserved the integrity of the Internal Market. The importance and originality of this study are that it addresses an instrument, the JPA, which has been largely overlooked by legal scholars, and it explores how the provisions for the joint procurement of medical countermeasures as included in Article 5 of Decision 1082/2013/EU on serious cross-border threats to health could be extended to support the functioning of a European Health Union.

Type
Articles
Copyright
© The Author(s), 2020. Published by Cambridge University Press

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Footnotes

This article has been written within the remit of the SHAPES – Smart and Healthy Ageing through People Engaging in Supportive Systems project. SHAPES is funded by the Horizon 2020 Framework Programme of the European Union for Research Innovation. Grant agreement number: 857159 – SHAPES – H2020 – SC1-FA-DTS – 2018–2020.

The authors would like to thank the external reviewers for their insightful comments. This article discusses the legal developments up until 10 September 2020.

References

1 World Health Organization, Rational Use of Personal Protective Equipment (PPE) for Coronavirus Disease (COVID-19): Interim Guidance, 19 March 2020, No. WHO/2019-nCoV/IPC PPE_use/2020.2.

2 E Kursumovic, S Lennane and TM Cook, “Deaths in healthcare workers due to COVID-19: the need for robust data and analysis” (2020) 75(8) Anaesthesia 989. See also C Balmer and E Pollina, “Italy’s Lombardy asks retired health workers to join coronavirus fight” (2020) World Economic Forum (Reuters) <https://www.weforum.org/agenda/2020/03/italys-lombardy-etired-health-workers-coronavirus-covid19-pandemic/ > (last accessed 7 July 2020).

3 European Commission, “Guidance on using the public procurement framework in the emergency situation related to the COVID-19 crisis” [2020] OJ C108I/1. On the Guidance, see R Baratta, “EU Soft Law Instruments as a Tool to Tackle the COVID-19 Crisis: Looking at the ‘Guidance’ on Public Procurement through the Prism of Solidarity” (2020) 5(1) European Papers, European Forum 365–73.

4 Council Directive 2014/24/EU of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (Public Sector Directive) OJ 2014 No. L94/65; Council Directive 2014/25/EU of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC OJ 2014 No. L94/243.

5 Commission, “Guidance on using the public procurement framework in the emergency situation related to the COVID-19 crisis”, supra, note 3, 1.

6 ibid, 1.

7 In cases of extreme urgency, contracting authorities may use the negotiated procedure without prior publication. However, this procedure must only be used in circumstances where the contracting authority cannot comply with the time limits specified for the standard open, restricted or competitive procedures with negotiation.

8 Joint Communication to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Communication on the Global EU response to COVID-18 [2020] JOIN/2020/11 final.

9 Press Release (EC), “COVID-19: Commission creates first ever rescEU stockpile of medical equipment” (19 March 2020) <https://ec.europa.eu/commission/presscorner/detail/en/ip_20_476> (last accessed 18 July 2020).

10 The European Civil Protection Mechanism aims to strengthen cooperation between the EU Member States and participating States in the field of civil protection, with a view to improving the prevention, preparedness and response to disasters. See European Commission, “Strengthening EU Disaster Management: rescEU Solidarity with Responsibility” COM (2017) 773 final.

11 See European Commission, “Explanatory Note on the Joint Procurement Mechanism” (December 2015) <https://ec.europa.eu/health/sites/health/files/preparedness_response/docs/jpa_explanatory_en.pdf> (last accessed 3 July 2020). Other joint purchasing experiences were attempted before. One of those is the Healthy Aging Public Procurement of Innovations (HAPPI) project, which set out one of the first joint and cross-border contracting experiences for the purchase of innovative solutions aimed at promoting active and good ageing. See the report at <https://ec.europa.eu/docsroom/documents/22102/attachments/1/translations/en/renditions/native> (last accessed 18 July 2020).

12 Art 168(5) TFEU allows for the adoption of “incentive measures designed to protect and improve human health and in particular to combat the major cross-border health scourges, measures concerning monitoring, early warning of and combating serious cross-border threats to health …”.

13 Decision 1082/2013/EU OJ 2013 L 293/1.

14 N Azzopardi-Muscat, P Schroder-Bäck and H Brand, “The European Union Joint Procurement Agreement for cross-border health threats: what is the potential for this new mechanism of health system collaboration?” (2017) 12(1) Health Economics, Policy and Law 43.

15 E McLaughlin and C Colvin, “How to measure the demographic impact of a pandemic” (RTE Brainstorm, 22 June 2020) <https://www.rte.ie/brainstorm/2020/0619/1148467-spanish-flu-ireland-1918-deaths-demographic-statistics/> (last accessed 7 October 2020).

16 Art 5 provides for participating Member States to engage in a joint procurement procedure conducted pursuant to the third subparagraph of Art 104(1) of Regulation (EU, Euratom) No 966/2012 on the financial rules applicable to the general budget of the Union and pursuant to Art 133 of Commission Delegated Regulation (EU) No 1268/2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 on the financial rules applicable to the general budget of the Union, with a view to the advance purchase of medical countermeasures for serious cross-border threats to health.

17 S Elbe, A Roemer-Mahler and C Long, “Medical countermeasures for national security: A new government role in the pharmaceuticalization of society” (2015) 131 Social Science & Medicine 263.

18 See Commission, “Explanatory Note on the Joint Procurement Mechanism”, supra, note 11, 1.

19 Joint Procurement Agreement, Arts 5 and 6.

20 ibid.

21 Art 2 of the JPA provides that medical countermeasures are any medicines, medical devices, other goods or services that are aimed at combating serious cross-border threats to health, as referred to in Decision 1082/2013/EU.

22 A Sánchez-Graells, “Procurement in the time of COVID-19” (2020) 71(1) Northern Ireland Legal Quarterly 81.

23 T Hervey and A de Ruijter, “The Dynamic Potential of European Union Health Law” (2020) European Journal of Risk Regulation 10.1017/err.2020.70.

24 KP Purnhagen, A de Ruijter, ML Flear, TK Hervey and A Herwig, “More Competences than You Knew? The Web of Health Competence for European Union Action in Response to the COVID-19 Outbreak” (2020) 11(2) European Journal of Risk Regulation 297.

25 It should be noted that the Public Sector Directive (Art 39) explicitly provides for contracting authorities from different Member States to collaborate in the awarding of public contracts. In circumstances where the procurement is centralised through one national procurement body, the purchasing activities are governed by the national rules of the Member State where the central purchasing body is located. Certain Member States have relied on that Directive to conduct joint procurements for medicines and medical devices. One of the most notable examples of cross-border collaborative actions is the acquisition of a bacillus Calmette–Guérin (BCG) vaccine undertaken by Latvia, Estonia and Lithuania under the Baltic Partnership Agreement. Since 2012, other collaborative activities for innovative medicines and medical devices have been conducted, including; the BeNeLuxA Agreement between Belgium, The Netherlands, Luxembourg and Austria; the Nordic Pharmaceuticals Forum between Denmark, Iceland, Norway and Sweden; the Southern European initiative between Greece, Bulgaria, Spain, Cyprus, Malta, Italy and Portugal; and the Central Eastern European and South Eastern European Countries Initiative between Romania, Bulgaria, Croatia, Latvia, Poland, Serbia, Slovakia, Slovenia, Republic of Moldova and FYR Macedonia.

26 See Commission, “Signing ceremonies for Joint Procurement Agreement” <https://ec.europa.eu/health/preparedness_response/joint_procurement/jpa_signature_en> (last accessed 1 July 2020). On the UK position, see M Flear, “EU joint procurement – UK’s delayed participation undermines the NHS and risks lives” <https://ukandeu.ac.uk/eu-joint-procurement-uks-delayed-participation-undermines-the-nhs-and-risks-lives/> (last accessed 13 July 2020).

27 WHO Regional Office for Europe, “How can voluntary cross-border collaboration in public procurement improve access to health technologies in Europe?” (2016) Copenhagen, WHO Regional Office for Europe Publications <https://www.euro.who.int/__data/assets/pdf_file/0009/331992/PB21.pdf> (last accessed 15 July 2020).

28 It has been argued that the use of multilateral and bilateral trade deals that removed tariff barriers provided companies with the opportunity to develop confidential price agreements and MEAs. See Gesundheit Österreich Forschung- und Planungs GmbH, “Study on enhanced cross-country coordination in the area of pharmaceutical product pricing” (European Commission, DG Health and Food Safety, 2015) <http://ec.europa.eu/health/systems_performance_assessment/docs/pharmaproductpricing_frep_en.pdf> (last accessed 15 July 2020). See also WHO Regional Office for Europe, supra, note 27, 10.

29 ML Johnson, J Belin, F Dorandeu and M Guille, “Strengthening the cost effectiveness of medical countermeasure development against rare biological threats: The Ebola outbreak” (2017) 31(6) Pharmaceutical Medicine 423.

30 S Ponzio, “Joint Procurement and Innovation in the new EU Directive and in some EU-funded projects” (2014) Ius Publicum Network Review <https://iris.unito.it/retrieve/handle/2318/157791/134084/Ponzio_IusPub_JointProc_def.pdf> (last accessed 15 July 2020).

31 Sánchez-Graells, supra, note 22, 85.

32 See Commission, “Explanatory Note on the Joint Procurement Mechanism”, supra, note 11, 24.

33 WHO Regional Office for Europe, supra, note 27, 15.

34 For example, if a Member State is participating in a centralised contract for PPE, the State retains the autonomy to conduct a separate national competition for the provision of PPE. Smaller companies who do not have the capacity or capability to compete for the centralised contract may find it easier to meet the decreased demands of the national contract. By engaging in more than one procurement competition, Member States may secure greater access to in-demand products from numerous suppliers.

35 GL Albano and M Sparro, “Flexible Strategies for Centralized Public Procurement” (2010) 1(2) Review of Economics and Institutions 4; G Spagnolo and C Yukins, “Lots – The Economic and Legal challenges of centralised procurement”, in G Piga and T Tátrai, Public Procurement Policy (London, Routledge 2015) p 61.

36 G Seidman and R Atun, “Do changes to supply chains and procurement processes yield cost savings and improve availability of pharmaceuticals, vaccines or health products? A systematic review of evidence from low-income and middle-income countries” (2017) 2 BMJ Global Health 2.

37 Azzopardi-Muscat et al, supra, note 14, 51.

38 C Bovis, Research Handbook on EU Public Procurement Law (Cheltenham, Edward Elgar Publishing 2016) p xv.

39 S Baldi and D Vannon, “The impact of centralization, corruption and institutional quality on procurement prices: an application to pharmaceutical purchasing in Italy” (2014) 379 Carlo Alberto Notebooks.

40 A Flynn and P Davis, “The policy–practice divide and SME-friendly public procurement” (2016) 34(3) Environment and Planning C: Government and Policy 559. See also Commission Implementing Decision C(2016) 63 final of 18.01.16 on the adoption of the work programme for 2016 and the financing for the implementation of the Programme for the Competitiveness of Enterprises and small and medium-sized enterprises.

41 F Mennini, N Dimitri, L Gitto, F Lichere and G Piga, “Joint procurement and the EU perspective”, in G Piga and T Tátrai, Law and Economics of Public Procurement Reforms (London, Routledge 2017).

42 WHO Regional Office for Europe, supra, note 27, 7.

43 The first procurement competition conducted under the JPA in 2016 was for the provision of botulinum antitoxin. In 2019, framework contracts were concluded for the production and supply of pandemic influenza vaccines. Fifteen signatories purchased from the concluded contract.

44 Commission, “Overview of the Commission’s response” (7 July 2020) <https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/overview-commissions-response_en> (last accessed 15 July 2020).

45 See Contract Award Notice 2020/S 051-119976 of 12 March 2020.

46 Commission, “Covid-19 Response – Public Health” <https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/public-health_en> (last accessed 17 July 2020).

47 Contracts were awarded to Medicom Healthcare B.V. and GYZ GmbH. See Contract Award Notice 2020/S 100-238632.

48 Commission, “Covid-19 Response – Public Health”, supra, note 46.

49 ibid.

50 Council, “EU Budget for 2020” (25 June 2020) <https://www.consilium.europa.eu/en/policies/the-eu-budget/eu-annual-budget/2020-budget/> (last accessed 14 July 2020).

51 WHO Regional Office for Europe, supra, note 27, 7.

52 See Commission, “Signing ceremonies for Joint Procurement Agreement” <https://ec.europa.eu/health/preparedness_response/joint_procurement/jpa_signature_en> (last accessed 1 July 2020).

53 Aggrieved unsuccessful bidders or interested economic operators or individuals can take an action against the CJEU. See Joint Procurement Agreement, Art 41.

54 The Public Sector Directive similarly requires contracting authorities to comply with the TFEU principles of transparency, equal treatment, non-discrimination and proportionality. See Case C-324/98 Telaustria Verlags GmbH and Telefonadress GmbH v Telekom Austria AG [2000] ECR I-10745; Case C-6/05 Medipac-Kazantzidis AE v. Venizelio-Pananio [2007] ECR I-4557.

55 Joint Procurement Agreement, Art 19.

56 Joint Procurement Agreement, Art 18.

57 ibid.

58 G Sdanganelli, “Il modello europeo degli acquisti congiunti nella gestione degli eventi rischiosi per la salute pubblica”, DPCE Online 2344 <http://www.dpceonline.it/index.php/dpceonline/article/view/1005/979> (last accessed 14 September 2020).

59 The permissible competitive procedures set out in the JPA are loosely based on the procedures set out in the Public Sector Directive and are underpinned by the principles of transparency and non-discrimination, and by a general duty of sincere cooperation.

60 Sdanganelli, supra, note 58.

61 OECD, “Stocktaking report on the immediate public procurement and infrastructure responses to Covid-19” (June 2020) OECD Policy Response to Coronavirus (Covid-19) <http://www.oecd.org/coronavirus/policy-responses/stocktaking-report-on-immediate-public-procurement-and-infrastructure-responses-to-covid-19-248d0646/> (last accessed 14 September 2020).

62 Commission, “Coronavirus: European Solidarity in action” (2020) <https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response-0/coronavirus-european-solidarity-action_en#snapshots-of-european-solidarity> (last accessed 14 September 2020).

63 J Frederic, “Economic Resilience, Globalization and Market Governance: Facing the COVID-19 Test” (2020) OECD Competition Committee. See also K Frauscher, H Hussain and S Brown, “5 procurement strategies for navigating the COVID-19 crisis from around the world” (Open Contracting Partnership, 2020) <https://www.open-contracting.org/2020/04/08/5-procurement-strategies-for-navigating-the-covid-19-crisis-from-around-the-world> (last accessed 15 September 2020).

64 The Irish Times, “World takes stock of Covid-19 drug after US snaps up supplies” (1 July 2020) <https://www.irishtimes.com/news/world/us/world-takes-stock-of-covid-19-drug-after-us-snaps-up-supplies-1.4293396> (last accessed 15 September 2020).

65 US Department of Health and Human Services, “Trump Administration Secures New Supplies of Remdesivir for the United States” (29 June 2020) <https://www.hhs.gov/about/news/2020/06/29/trump-administration-secures-new-supplies-remdesivir-united-states.html> (last accessed 15 September 2020).

66 CL Atkinson, C McCue, E Prier and AM Atkinson, “Supply Chain Manipulation, Misrepresentation, and Magical Thinking during the COVID-19 Pandemic” (2020) (50) American Review of Public Administration 6.

67 Commission, “European Commission secures EU access to Remdesivir for treatment of COVID-19” (29 July 2020) <https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1416> (last accessed 15 September 2020).

68 Most notably, the USA is not participating in the COVID-19 Vaccines Global Access (COVAX) Facility.

69 Atkinson et al, supra, note 66, 6.

70 World Health Organisation, “COVID-19 Supply Chain System: Requesting and Receiving Supplies” (2020) <https://www.who.int/publications/m/item/covid-19-supply-chain-system-requesting-and-receiving-supplies> (last accessed 15 September 2020). In May 2020, the European Commission also announced a contribution of €400 million in guarantees to support the COVAX Facility. The Facility is co-led by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO, and it is driven by the goal “to accelerate the development and manufacture of COVID-19 vaccines and to guarantee fair and equitable access for every country in the world”. Commission, “Coronavirus Global Response: Commission joins the COVID-19 Vaccine Global Access Facility (COVAX)” (31 August 2020) <https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1540> (last accessed 15 September 2020).

71 The latter refers to the “application of organised knowledge and skills in the form of devices, medicines, vaccines, procedures, and systems developed to solve a health problem and improve quality of life”. World Health Organisation Regional Office for Europe, Access to New Medicines in Europe: Technical Review of Policy Initiatives and Opportunities for Collaboration and Research Copenhagen: World Health Organisation 2015).

72 Azzopardi-Muscat et al, supra, note 14, 51.

73 European Parliament, “Time for a European Health Union” (The Parliament Magazine, 5 May 2020) <https://www.theparliamentmagazine.eu/news/article/time-for-a-european-health-union> (last accessed 10 July 2020).

74 J Edler and J Yeow, “Connecting demand and supply: The role of intermediation in public procurement of innovation” (2016) 45(2) Research Policy 412.

75 J Doyle et al, “Designing a Proactive, Person-Centred Digital Integrated Care System” (2017) 17(5) International Journal of Integrated Care 211. See also M MacLachlan et al, “Assistive technology policy: a position paper from the first global research, innovation, and education on assistive technology” (2018) 13(5) Disability and Rehabilitation: Assistive Technology 454.

76 Joint procurement is not entirely new. Member States have previously participated in the Directorate-General for Climate Action framework of the “Joint Procurement Agreement of common auction platforms” dealing with the organisation of the auctioning of CO2 certificates in each Member State.

77 See Council Directive 2014/24/EU, Art 31.

78 For low-value contracts, the mechanism could follow a Pre-commercial Procurement Procedure. See Commission, “Pre-commercial Procurement: driving innovation to ensure sustainable high-quality public services in Europe” (Communication) COM (2007) 0799 final.

79 E Iossa, F Biagi and P Valbonesi, Pre-commercial procurement, procurement of innovative solutions and innovation partnerships in the EU: rationale and strategy” (2018) 27(8) Economics of Innovation and New Technology 730.

80 M Andhov, Innovation Partnership in the New Public Procurement Regime – A Shift of Focus from Procedural to Contractual Issues?” (2015) 2 Public Procurement Law Review 48.

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