Supply Law to be Applied for “Critical Products” to Prevent Spread of Coronavirus

Due to the lack of supply and shortage of critical sanitary goods used to prevent the spread of the coronavirus COVID-19, the Ministry of Health and the Ministry of Productive Development issued Joint Resolution No. 1/2020, which set the following measures with the aim of reversing such situation:

• Defined as critical sanitary products necessary for the prevention of the spread of the virus COVID-19 and for its therapeutic and healing treatment the products included on its Annex (Section 1). These products can be increased or substituted when supervening circumstances request so.

• Categorized the critical products in the following groups: “equipment” (e.g., ventilators for adults, hospital beds, oxygen tubes ), “production items” (e.g., face masks, 250/300 ml hand sanitizer with dosing pump, spray repellent), and “medicines” (e.g., amoxicillin, azithromycin and cephalexin) (Annex).

• Ordered production, distribution and commercialization companies involved in the supply chain of the critical products to increase their production, distribution and commercialization to their full capacity and provide the proper measures to guarantee their supply to consumers and health entities (Section 2).

• Ordered commercialization and distribution companies of the critical products to grant priority to health entities in their acquisition (Section 3).

• Ordered production companies of the critical products to report to the Sanitary Authority and the Secretariat of Local Commerce (i) their production plan for the upcoming 3 months; and (ii) the amount of goods produced, the amount of goods commercialized and the recipients of those sales every 5 days (Section 4).

• Determined that breaches to its provisions will be verified and sanctioned under the Supply Act (Section 5).

Measures adopted under Joint Resolution No. 1/2020 will be valid for a 90-day period to be counted as from March 22, 2020 and may be extended after the analysis of the sanitary emergency and the shortage of critical products situation (Section 6).

Unlike previous measures adopted within the sanitary emergency to guarantee the supply of products, which were justified under Section 2 of the Supply Act, Joint Resolution No. 1/2020 was also justified under Section 27. This provision authorizes the Argentine Government to order the sale, production, distribution and provision of products necessaire for the general well-being of people in case of shortage or lack of supply of those products and for the time requested for its remediation. Those measures should be reasonable considering the severity of the situation.

These measures were enhanced for invasive mechanical ventilators through Resolution No. 695/2020 of the Ministry of Health. Considering its global shortage situation, this regulation now requests manufacturers, distributors and sellers to obtain an express authorization from the Ministry of Health before delivering them. In order to grant such authorization, the Ministry of Health will evaluate its distribution across the country, the evolution of COVID-19 and the infrastructure available within the different health facilities.

It is expected that the Argentine Government will enforce the necessary controls to verify the compliance with Joint Resolution No. 1/2020 and, in the event that the lack of supply cannot be reverted, include other products within the list of “critical products” and further obligations on companies involved in their supply chain. For this reason, it is necessary to evaluate the situation of companies under the obligations set by such regulation and to verify the measures that the Argentine Government will adopt in the future for this purpose.