For at least the last 15 years, co-promotion and co-marketing agreements between pharmaceutical companies have been valuable instruments for cost-effective marketing of pharmaceutical products. Both types of agreement are used both locally and globally to effectively allocate the skills and expertise of marketing teams based on product type, therapeutic category, and product maturity.
The main difference between the two is that co-marketing agreements include the sale of a product by the Marketing Authorization Holder (or owner of the right to sell the product, or its local representative) to the cooperating pharmaceutical company, while in co-promotion agreements the MAH is the seller and the cooperating company is limited to promotional activities.
In Greek practice, co-marketing agreements are generally concluded for pharmaceutical products that have been marketed for years and are close to losing or have lost market exclusivity (or patent protection, as the case may be). These agreements enable a pharmaceutical company with a mature product to disengage staff from an activity which is usually not similar to its main activities and to assign that activity to a company with experience in marketing mature or generic products. Co-marketing agreements are regulated by Joint Ministerial Decision DYG3(a)/50510/2014. Article 3 of this Ministerial Decision provides that co-marketing agreements are subject to the approval of the Greek National Organization for Medicines (the EOF). The EOF’s control is preemptive, since before making any sale of a product under a co-marketing agreement the MAH has to submit a statement which contains the essential elements set out in Article 3. This legal provision requires that the contracting parties clarify that the pharmacovigilance and medical information responsibilities as well as liability from the product remain with the MAH. Also, they need to include provisions on allocating responsibility for promotional materials and medical information and a statement that the sale price to hospitals and wholesalers will be in accordance with the current legislation regulating such prices. Finally, they are supposed to include a provision on the sale price from one company to another (although this obligation, in our opinion, may not be followed, as information about inter-company pricing is confidential business information, falling outside the regulatory scope of the provision).
Co-promotion agreements, on the other hand, allow a pharmaceutical company to outsource its promotional activities to another company, either at an earlier or later stage of a product cycle. These common agreements are regulated by Joint Ministerial Decision DYG3(a)/32221/2013, which transposed EU Directive 2001/83 into Greek legislation. The Directive leaves Member States the leeway to regulate co-promotion by providing adequate and effective monitoring, which may be based on a system of prior vetting. Unfortunately, paragraph 3 of Article 130 of the Ministerial Decision is ambiguous in its wording, although the interpretation by the EOF is clear. The legislative provision requires that co-promotion agreements be notified to the EOF along with the contract, and states that the notification “may be accepted.” In essence this is not a notification, but a petition, which may be accepted by the EOF. In actuality, the EOF provides written approval of the notification and only rarely asks for amendments. Contracting parties are also required to include provisions in their agreements clarifying that pharmacovigilance and medical information responsibilities as well as liability from the product remain with the MAH.
From a practical perspective, pharmaceutical companies considering co-promotion or co-marketing agreements need to review the relevant provisions of law and ensure that their agreements align with the requirements, which are not extremely burdensome, although it is worth noting that the EOF examines such agreements carefully. Another practical aspect is that a redacted version of either type of agreement, not containing the commercial terms of the business deal, may be filed with the EOF. Finally, the party assuming the marketing and/or promotional responsibility from the MAH needs to be aware that under both legal provisions it is considered jointly and severally responsible with the MAH for breaches of any relevant provisions of the pharmaceutical legislation.
By Ioannis Manousakis, Managing Partner, and Maritina Michailidou, Junior Associate, ALG Manousakis
This Article was originally published in Issue 8.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.