By Foo Yun Chee

BRUSSELS (Reuters) – Generic drugmakers will be allowed to cooperate to supply hospital medicines for COVID-19 patients without fear of breaching the bloc’s competition rules, EU antitrust regulators said on Wednesday.

The step is the latest loosening of the bloc’s strict antitrust rules to help tackle the novel coronavirus pandemic.

The European Commission, the EU executive, has allowed EU governments to hand out subsidised loans, grants and defer tax payments to thousands of companies.

Regulators said waiving antitrust rules for generic drugmakers, which produce the largest part of critical hospital medicines, will help to avoid shortages.

“In the current circumstances, this temporary cooperation appears indeed justifiable under EU antitrust law, in view of its objective and the safeguards put in place to avoid anticompetitive concerns,” the EU executive said in a statement.

It will provide a business document, known as a comfort letter, to industry body Medicines for Europe, giving guidance on what will be allowed.

Specifically, it will address a voluntary cooperation project among pharmaceutical producers, both members and non-members of the generic drugmakers’ association.

Enforcers will monitor the market to ensure that companies do not fix prices or abuse their market power, the Commission said.

(Reporting by Foo Yun Chee; editing by Barbara Lewis)