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#CoronavirusGlobalResponse - EU Humanitarian Air Bridge to Peru and €30.5 million for Latin America and the Caribbean

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As part of the EU's global coronavirus response, an EU Humanitarian Air Bridge operation consisting of three flights to Lima, Peru this week is delivering a total of more than four tonnes of life-saving materials to humanitarian organizations active in the country. At the same time, the EU has announced €30.5 million in humanitarian assistance to support the most vulnerable in Latin America and the Caribbean in 2020.

"At this critical time, the EU continues to support those in need in Peru and in the whole of Latin America. The coronavirus pandemic places huge logistical pressure on the humanitarian community, while the needs remain high in critical areas. Thanks to the collaborative efforts of the EU, Spain and the Peruvian authorities, vital assistance was delivered to help the people of Peru tackle this pandemic,” said Crisis Management Commissioner Janez Lenarčič.

Of the funding announced today, €15.5m are for disaster preparedness of vulnerable communities across Latin America and the Caribbean and to ensure they are ready to face the multiple natural hazards hitting the region. The remaining €15m will continue supporting humanitarian projects in Central and South America and in the Caribbean. The full press release is available online.

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EAPM and ESMO bring innovations to health policymakers

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For the eighth year in succession, the European Alliance for Personalised Medicine (EAPM) has held a high-level conference series alongside the annual ESMO Congress, writes EAPM Executive Director Denis Horgan.

The EAPM conference was opened with the announcement that the following article was published and contributed to by more than 40 experts across the EU on how to bring Greater Accuracy to Europe’s Healthcare Systems: The Unexploited Potential of Biomarker Testing in Oncology.  Please click here to have access.

Sessions include: Session I: Tumor Agnostic, Session II: Biomarkers and Molecular Diagnostics, and Session III: Utilising Real-World Evidence in a health-care setting.  The conference runs from 08.00 – 16.00. Here is the link to the agenda. The conference aims to bring  key recommendations to the EU level, so as to shape the EU Beating Cancer Plan, EU health Data Space, the updating EU Pharmaceutical Strategy as well as the EU Health Union. 

The conference is held following the first State of the Union address by European Commission President Ursula von der Leyen on Wednesday (16 September) – in her first annual address, von der Leyen said the coronavirus pandemic had underlined the need for closer cooperation, stressing that people were “still suffering”.

For me, it is crystal clear – we need to build a stronger European Health Union,” she said. “And we need to strengthen our crisis preparedness and management of cross-border health threats.” Von der Leyen said her commission would try to reinforce the European Medicines Agency and European Centre for Disease Prevention and Control.

And she also raised the importance of the European Beating Cancer Plan as well as European Health Data Space. “This will show Europeans that our Union is there to protect all,” she said.

Fabrice Barlesi, medical director of Gustave Roussy, said: “RCTs are no longer the way to go. A way ahead could be EU support for trialing a new drug and delivering data to a centralised registry, which could give good consolidated data from across Europe.”

Divided into three sessions, the EAPM conference at the ESMO Congress, as mentioned,  dealt with such diverse issues as tumour agnostics, biomarkers and molecular diagnostics and real-world evidence in a health-care setting. Concerning cancer, specifically tumours, the congress stated that  tissue-agnostic cancer drugs are antineoplastic medicines that treat cancers based on the mutations that they display, instead of the tissue type in which they appear.

These drugs include, for example, Entrectinib, Pembrolizumab and Larotrectinib. Former Spanish health minister and MEP Dolors Moseratt highlighted her support for the work of EAPM and looks forward to getting the recommendations of the outcomes from the conference.  “The European added value of health is obvious. It would avoid duplication and enable a better allocation of resources. And it will minimize the risk of fragmented access to therapy across member states.”

And the EAPM conference is at pains to seek the best ways forward for the implementation of Real-World Evidence (RWE) into health care in Europe – looking to find consensus with key decision makers, including at member state level, not least with representatives in the European Parliament, on how to proceed in this area. RWE for health care is a simple concept – harnessing various health data in real time to help make faster and better medical decisions.

Real-World Evidence is an umbrella term for different types of health-care data that are not collected in conventional randomised controlled trials, including patient data, data from clinicians, hospital data, data from payers and social data.

Rosa Giuliani, consultant in medical oncology at the Clatterbridge Cancer Center, said: “Key elements to advance the use of TACs is to conduct dialogue that transcends silos, and to explore re-engineering of the development pathway.” And, as far as biomarkers and molecular diagnostics are concerned, a lot has been said about testing, and often the lack of it, in terms of the COVID-19 outbreak, with different countries adopting different strategies and, also, having different resources when it comes to acquiring necessary kits.

The key focus in the ESMO session was on better and more equitable access to biomarkers and molecular diagnostics across Europe.  This is a must, but, as the attendees acknowledged, we’re a long way short of it. Access to personalised medicine and new diagnostic technologies can help resolve many inefficiencies, such as trial-and-error dosing, the potential for increased hospitalisation time due to adverse drug reactions and the problem of late diagnoses. It may also enhance the effectiveness of therapies through better tailored treatment administration.

In conclusion for the morning session, Giuseppe Curigliano, associate professor of Medical Oncology at the University of Milano, and head of the division of Early Drug Development, at the European Institute of Oncology said: “A real challenge to overcome is the different endpoints between investigators and payers. Policy frameworks and co-operation is essential.” The session in the afternoon will focus on utilizing real-world evidence in a health-care setting.

A report will be available next week. 

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Commission approves €1.46 billion UK scheme to distribute free medical grade personal protective equipment in the context of coronavirus outbreak

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The European Commission has approved under EU State aid rules a £1.3 billion (approximately €1.46bn) UK scheme to distribute free medical grade personal protective equipment (PPE) to health and social care services, community pharmacies and public sector organisations in the context of coronavirus outbreak. The public support will take the form of free medical grade PPE and will be accessible to eligible health and social care providers, community pharmacies and public sector organizations.

The purpose of the measure is to ensure that beneficiaries continue to provide their services, while limiting the spread of the coronavirus through preventing cross-infection and other forms of contamination. The Commission assessed the measure under Article 107(3)(c), which enables member states to facilitate the development of certain economic activities, subject to certain conditions.

The Commission concluded that the measure is necessary, appropriate and proportionate to fight the health crisis, in line with Article 107(3)(c) TFEU. On this basis, the Commission approved the measure under EU state aid rules. The non-confidential version of the decision will be made available under the case number SA.58477 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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Commission approves €44 billion Italian recapitalization scheme to support large companies affected by #Coronavirus outbreak

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The European Commission has approved an Italian scheme, with an overall budget of €44 billion, to support large enterprises affected by the coronavirus outbreak. The scheme consist of four measures that were approved under the state aid Temporary Framework.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “This Italian recapitalization scheme will support large companies affected by the coronavirus outbreak by strengthening their capital base and facilitating their access to finance in these difficult times. Together with other previously approved measures, the scheme will ultimately be instrumental in supporting the Italian economy and labour market. We continue to work in close co-operation with member states to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

The Italian support measures

Italy notified to the Commission, under the Temporary Framework, a scheme consisting of four complementary measures to support large companies particularly affected by the coronavirus outbreak, through recapitalisation instruments, in particular equity, and hybrid capital instruments (convertible bonds and subordinated debt). Together with the Italian scheme intended for small and medium-sized enterprises, approved by the Commission on 31 July 2020, the Italian measures aim to support the solvency of a large spectrum of companies that have suffered from the coronavirus outbreak, thus helping them to ensure the continuation of their activities and supporting employment.

The scheme targets large companies that have faced a severe reduction of revenues in 2020. To be eligible, among other criteria, the companies should be considered strategic for the economy and for the labour markets.

The measures under the scheme consists of:

(1)  Equity injections;

(2)  mandatory convertible bonds;

(3)  convertible bonds, upon request of either the beneficiary or the bondholder, and;

(4)  subordinated debt.

The four measures are administrated by an ad-hoc special purpose vehicle, Patrimonio Rilancio.

The Commission found that the scheme notified by Italy is in line with the conditions set out in the Temporary Framework. In particular, with respect to recapitalisation measures, (i) the support is available to companies if it is needed to maintain operations, no other appropriate solution is available, and it is in the common interest to intervene; (ii) support is limited to the amount necessary to ensure the viability of beneficiaries and does not go beyond restoring their capital structure before the coronavirus outbreak; (iii) the scheme provides an adequate remuneration for the state; (iv) the conditions of the measures incentivise beneficiaries and/or their owners to repay the support as early as possible (inter alia through progressive increases in remuneration, a dividend ban as well as a cap on the remuneration of and a ban of bonus payments to management); (v) safeguards are in place to make sure that beneficiaries do not unduly benefit from the recapitalisation aid by the state to the detriment of fair competition in the internal markets, such as an acquisition ban to avoid aggressive commercial expansion; and (vi) aid to a company above the threshold of €250m has to be notified separately for individual assessment.

With respect to aid in the form of subordinated debt instruments, (i) aid will not exceed the relevant limits on turnover and wage bill of the beneficiaries set out in the Temporary Framework and (ii) support can only be granted until the end of 2020.

Finally, only companies that were not considered to be in difficulty already on 31 December 2019 are eligible for aid under this scheme.

The Commission concluded that the scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

On this basis, the Commission approved the measure under EU state aid rules.

Background

In case of particularly severe economic situations, such as the one currently faced by all Member States and the UK due the coronavirus outbreak, EU State aid rules allow Member States to grant support to remedy a serious disturbance to their economy. This is foreseen by Article 107(3)(b) TFEU of the Treaty on the Functioning of the European Union.

On 19 March 2020, the Commission has adopted a state aid Temporary Framework to enable member states to use the full flexibility foreseen under state aid rules to support the economy in the context of the coronavirus outbreak. The Temporary Framework, as amended on 3 April 2020 and 8 May and 29 June 2020, provides for the following types of aid, which can be granted by Member States:

(i)          Direct grants, equity injections, selective tax advantages and advance payments of up to €100,000 to a company active in the primary agricultural sector, €120,000 to a company active in the fishery and aquaculture sector and €800,000 to a company active in all other sectors to address its urgent liquidity needs. Member States can also give, up to the nominal value of €800,000 per company zero-interest loans or guarantees on loans covering 100% of the risk, except in the primary agriculture sector and in the fishery and aquaculture sector, where the limits of €100,000 and €120,000 per company respectively, apply.

(ii)         State guarantees for loans taken by companies to ensure banks keep providing loans to the customers who need them. These state guarantees can cover up to 90% of risk on loans to help businesses cover immediate working capital and investment needs.

(iii)        Subsidised public loans to companies (senior and subordinated debt) with favourable interest rates to companies. These loans can help businesses cover immediate working capital and investment needs.

(iv)        Safeguards for banks that channel State aid to the real economy that such aid is considered as direct aid to the banks' customers, not to the banks themselves, and gives guidance on how to ensure minimal distortion of competition between banks.

(v)         Public short-term export credit insurance for all countries, without the need for the Member State in question to demonstrate that the respective country is temporarily “non-marketable”.

(vi)        Support for coronavirus related research and development (R&D) to address the current health crisis in the form of direct grants, repayable advances or tax advantages. A bonus may be granted for cross-border cooperation projects between Member States.

(vii)       Support for the construction and upscaling of testing facilities to develop and test products (including vaccines, ventilators and protective clothing) useful to tackle the coronavirus outbreak, up to first industrial deployment. This can take the form of direct grants, tax advantages, repayable advances and no-loss guarantees. Companies may benefit from a bonus when their investment is supported by more than one member state and when the investment is concluded within two months after the granting of the aid.

(viii)     Support for the production of products relevant to tackle the coronavirus outbreak in the form of direct grants, tax advantages, repayable advances and no-loss guarantees. Companies may benefit from a bonus when their investment is supported by more than one member state and when the investment is concluded within two months after the granting of the aid.

(ix)        Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions for those sectors, regions or for types of companies that are hit the hardest by the outbreak.

(x)         Targeted support in the form of wage subsidies for employees for those companies in sectors or regions that have suffered most from the coronavirus outbreak, and would otherwise have had to lay off personnel.

(xi)        Targeted recapitalization aid to non-financial companies, if no other appropriate solution is available. Safeguards are in place to avoid undue distortions of competition in the Single Market: conditions on the necessity, appropriateness and size of intervention; conditions on the State's entry in the capital of companies and remuneration; conditions regarding the exit of the State from the capital of the companies concerned; conditions regarding governance including dividend ban and remuneration caps for senior management; prohibition of cross-subsidisation and acquisition ban and additional measures to limit competition distortions; transparency and reporting requirements.

The Temporary Framework enables member states to combine all support measures with each other, except for loans and guarantees for the same loan and exceeding the thresholds foreseen by the Temporary Framework. It also enables Member States to combine all support measures granted under the Temporary Framework with existing possibilities to grant de minimis to a company of up to €25,000 over three fiscal years for companies active in the primary agricultural sector, €30,000 over three fiscal years for companies active in the fishery and aquaculture sector and €200,000 over three fiscal years for companies active in all other sectors. At the same time, member states have to commit to avoid undue cumulation of support measures for the same companies to limit support to meet their actual needs.

Furthermore, the Temporary Framework complements the many other possibilities already available to member states to mitigate the socio-economic impact of the coronavirus outbreak, in line with EU State aid rules. On 13 March 2020, the Commission adopted a Communication on a Coordinated economic response to the COVID-19 outbreak setting out these possibilities.

For example, member states can make generally applicable changes in favour of businesses (e.g. deferring taxes, or subsidising short-time work across all sectors), which fall outside state aid rules. They can also grant compensation to companies for damage suffered due to and directly caused by the coronavirus outbreak.

The Temporary Framework will be in place until the end of December 2020. As solvency issues may materialise only at a later stage as this crisis evolves, for recapitalization measures only the Commission has extended this period until the end of June 2021. With a view to ensuring legal certainty, the Commission will assess before those dates if it needs to be extended.

The non-confidential version of the decision will be made available under the case number SA.57612 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

More information on the Temporary Framework and other action the Commission has taken to address the economic impact of the coronavirus pandemic can be found here.

 

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