On July 19, 2022, the European Commission introduced a proposal for a regulation focusing on the quality and safety standards of substances of human origin intended for human use (SoHO Proposal). This initiative draws insights from experiences, notably the recent Covid-19 pandemic, and aims to mitigate the risk of disease transmission through blood, tissues, and cells while ensuring an adequate supply.
The Council established its negotiating mandate on October 25, 2023. Negotiations with the European Parliament commenced on November 6, 2023, and reached a provisional agreement on December 14, 2023. On this date, negotiators from the European Parliament and the Council of the EU informally agreed on the text of SoHO Proposal. Although the provisionally agreed text is not yet publicly accessible, the Council’s press release provides relevant details.
The Commission has expressed approval of the provisionally agreed text, which will undergo formal adoption by the Council and the Parliament to become EU law. This process is anticipated to conclude before the European Parliament elections in June 2024.
SoHO establishment authorisation
SoHO entities, defined in article 3 (24) as organisations legally established in the EU which carry out SoHO activities as set out in the updated article 2 (1 c) (emphasis added to reflect the Council’s amendments of the 7th of November 2023), while a SoHO establishment is a sub-set of SoHO entities that carries out both processing and storage of SoHOs. The Council’s most recent amendments of the 7th of November, article 3, point (40), defining SoHO establishments, goes substantially further, including not only SoHO entities that carry out processing and storage, but also release, import, and/or export.
The fourth chapter of the SoHO proposal sets out the obligations for SoHO entities such as for example the obligation to obtain an authorisation SoHO preparations. Recital 32 adds in this regard that national competent authorities are required to revise the entities registered in their respective territory and if they carry out both the acts of processing and storing (or release, or import, or export – as included by the Council’s amendments of the 7th of November 2023, article 3 (40)) of SoHOs, it should be verified whether they possess the required SoHO establishment authorisation before starting those activities. Moreover, the recital states that ‘a SoHO establishment authorisation should refer to the legal entity, even when one SOHO establishment has many physical sites’.
Point 5 of Article 25 creates a SoHO establishment authorisation system which grants validity throughout the entire European Union (‘shall be valid throughout the Union…’). This results in a SoHO establishment being authorised in one Member State, to be able to have sub-branches or distribute SoHOs in another Member State without the obligation to obtain a new national SoHO establishment authorisation. The initially obtained authorisation is valid throughout the Union. The only exception to this automatic recognition of validity throughout the European Union is formulated as follows: ‘Where a Member State has adopted a more stringent measure, in accordance with Article 4, which relates to a specific SoHO establishment authorisation, that Member State may decline to recognize the validity of the SoHO establishment authorisation of another Member State until it has verified compliance with the more stringent measure’ (emphasis added to reflect the Council’s amendments of the 7th of November 2023).
This means logically that only when a Member State appears to have more stringent rules, then the national competent authorities of that Member State are allowed to prohibit the SoHO establishment from operating on its territory or from distributing SoHOs in its country. Nevertheless, the rejection of recognizing the validity of the SoHO establishment authorisation remains applicable only until the competent authority verifies compliance with the stricter national measures. The Council’s inclusion aims to restrict the discretion of the competent authority in this matter.
A more restrictive (and less convincing) interpretation would, on the other hand, just allow a Member State (A) to refuse to recognize a SoHO establishment of another Member State (B) in its relation to a SoHO establishment of Member State (A) for operations performed in Member State (B). A typical example would be that the sourcing of SoHO coming from a SoHO establishment of Member State (B) would be refused by Member State (A). The exception grants these Member States the competence and the discretion to verify the activity of the SoHO establishment on conformity with their national more stringent rules. Whether this is a significant breakthrough in terms of legal harmonization from a European perspective can seriously be brought into question. However, the Council’s addition does mitigate the concerns in this regard.
The Council’s amendment offers additional guidance by clearly defining boundaries to the national discretion in refusing recognition of the validity of an establishment authorisation. Once the Member State has verified that the requesting SoHO establishment has complied with the more stringent measures as set by that Member State, then it can no longer refuse the recognition of validity for that SoHO establishment. While this amendment reflects a step towards EU harmonization, it is still crucial to provide further clarification on the nature of these ‘more stringent measures’. Article 4 of the SoHO proposal, defining more stringent national measures, merely stipulates that Member States have the power to introduce more stringent measures than the ones provided for in the SoHO Proposal. The above-mentioned article 25 point (5) lacks any further detailed explication as to the actual meaning of ‘more stringent national measures’ within the context of the refusing the recognition of the validity of SoHO establishment authorisations. Please read our article (Lexxion: First Assessment of the SoHO Proposal for a New Legislation on Blood, Tissues and Cells (The SoHO Regulation) to delve into our detailed analysis of the connection between article 25 point (5) and article 4 of the SoHO proposal.
This could potentially create legal uncertainty and confusion amongst Member States concerning their competences of authorisation verification and the exact boundaries of the exception to the automatic recognition of validity. National legislators, national competent authorities, and companies active in the SoHO industry could benefit significantly from more guidance in this regard.
This includes a significant change compared to the situation as currently regulated by the BTC regime, where tissue establishments and procurement organisations were subject to essentially national accreditations systems. The impact of a system that grants validity of the SoHO establishment authorisation throughout the entire European Union cannot be neglected and legal uncertainty in this regard should as much as possible be avoided.
If you are interested in learning more about this topic, you can find the link to our detailed article in the European Health & Pharmaceutical Law Review. Read the full article here.