The European Parliament and Council are currently negotiating the wording of a new Regulation establishing a Single Market emergency instrument (“SMEI”). This new measure builds on the experience gained from the COVID-19 crisis and gives new powers to the Commission, in close cooperation with the Member States. This blog briefly discusses the expected impact on medical devices.
Based on the experience with the past pandemic, the Commission published a proposal for a Regulation establishing the SMEI in September 2022. The Council published its views in June 2023 and the Parliament adopted its first reading in July 2023. Both propose many amendments and are now trying to reach a consensus. The final version of the SMEI is thus still uncertain but this blog post seeks to summarize its expected scope and objectives, and to describe its possible impact on medical devices.
- Key aspects of the SMEI
The main objective of the SMEI is to preserve the free movement of goods, services, and persons, and to ensure availability of essential and crisis-relevant goods and services in times of crisis. The SMEI mechanism is based on three levels of need (contingency planning, vigilance, and emergency) and provides for procurement of goods and services:
- Contingency planning is based on collaboration between Member States and the European Commission, and on consultation of economic sectors. The aim is to prepare actions to mitigate supply chain disruption and monitoring incidents.
- When a significant disruption of the supply of goods and services of strategic importance is feared, a vigilance mode can be activated. This allows for specific measures, such as: (i) Mapping and monitoring specific supply chains and production capacity. This can include collecting information that contains business secrets; (ii) The creation of national strategic reserves of “goods of strategic importance”, in coordination with the Commission and other Member States.
- Finally, the emergency mode can be activated In case of severe disruption of the functioning of the single market. It triggers specific provisions and allows for specific measures: (i) A general requirement for Member States to ensure the legality, proportionality, and transparency of measures that restrict free movement; (ii) A prohibition to ban exports to other EU Member States (or to adopt measures of equivalent effect) for listed products and on discrimination of citizens based on nationality; (iii) The European Commission can order business operators to provide information on crisis-relevant goods (and components thereof), stocks, production capacity, facilities located in third countries, etc.; (iv) The Commission can order economic operators to prioritize certain orders for the production or supply of crisis-relevant goods; (v) The Commission can issue recommendations to Member States on how to re-organize certain supply chains and production lines, and on using existing stocks to ensure the availability and supply of crisis-relevant goods and services.
- Under the vigilance and emergency modes, the Commission can also arrange for public procurement of goods and services of strategic importance. This can be done on behalf of, or jointly with, the Member States.
- Impact on Medical Devices
The direct impact of the new SMEI on medical devices will remain limited. The Proposal provides that the SMEI shall in general not apply to medical devices, as defined in the Medical Devices Regulation and the In Vitro Medical Devices Regulation, including accessories. That is because there is a separate crisis regime for medicines and medical devices.
Some provisions, however, will apply to medical devices. They include:
- The general requirement for Member States to ensure the legality, proportionality, and transparency of measures that restrict free movement.
- The prohibition to ban exports to other EU Member States (or to adopt measures of equivalent effect) for listed products.
The provisions that will apply to medical devices are subject to various amendments by the Council and the European Parliament. The former in general seeks to limit the restrictions on Member State actions, while the latter suggests more restrictions. One of the proposals of the Parliament is to establish “fast lanes” aimed at facilitating free movement for goods and services. The fast lanes would provide for accelerated procedures for declaration, registration, or authorisation of cross-border activities, “in particular for professional services in the [area] of healthcare.”
Potential indirect impact – compulsory patent license
The indirect impact of the SMEI on medical devices could be more significant. The activation of the single market emergency mode, especially when it specifically refers to medical devices, might trigger the application of the planned EU compulsory licensing regime.
That regime was proposed in April 2023 and is currently also being reviewed by the European Parliament and the Council. It would give powers to the Commission to grant compulsory licenses in case of specific types of crises. For health products, the crisis can be a public health emergency at EU level (formally recognized by the Commission), or the activation of the single market emergency mode. The latter can occur for other reasons than health, for instance in case of terrorism, war, serious political tensions, economic instability, or natural disasters.
A compulsory licensing regime may be easier to implement for medical devices than for medicines. In certain cases, components and raw materials may be more easily available. In addition, the possibilities for exemption from the standard conformity assessment procedures under the MDR and IVDR allow for quick regulatory approvals where needed.
Still, as mentioned, there is a separate crisis regime for medicines and medical devices. On that basis, medical devices are only subject to some of the provisions in the proposed SMEI Regulation. It would then also be logical not to apply the new compulsory licensing regime to medical devices (or medicines) based on a single market emergency.
The new SMEI will allow for specific measures to address crises that affect the operation of the single market in goods and services. This can be triggered by a new pandemic or another serious health risk, but also by significant political, economic, or environmental instability.
The direct impact on the medical devices industry will most likely be limited. Where the SMEI applies, in general the measures will also support the industry as they are aimed at safeguarding the single market. The indirect impact, however, by potentially triggering the EU compulsory licensing regime for patents, might be more significant. The draft SMEI Regulation and the draft Regulation on Compulsory Licensing are currently going through the EU legislative procedure. This allows for significant amendments by the Parliament and the Council. The exact impact of the measures will thus only be clear once the texts are finalized.
 European Commission, COM(2022) 459 final, 19 September 2022, available here: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52022PC0459.
 Article 1(1) of the Proposal.
 Regulation (EU) 2022/123 on a reinforced role for the European Medicines Agency in crisis preparedness and management for medicinal products and medical devices, Regulation (EU) 2022/2371 on serious cross-border threats to health, and Council Regulation (EU) 2022/2372 on a framework of measures for ensuring the supply of crisis-relevant medical countermeasures in the event of a public health emergency at Union level.
 European Commission, COM(2023) 224 final, 27 April 2023, available here: https://single-market-economy.ec.europa.eu/publications/com2023224-proposal-regulation-compulsory-licensing-crisis-management_en.