20th June 2017

SECTION ONE

Definition,
fundamental
associational democracy

principles

andArticle 1
Definition

Farmindustria is an association representing
pharmaceutical companies operating in Italy.
The Association is non-political and pursues non-profit
making objectives.
The Association adheres to Confindustria and adopts
its logo and other distinguishing signs thereby
accepting the role of national trade member of thesystem representing Italian industry, as defined in the
Articles of Association of the Confederation.
Farmindustria consequently acquires the rights andduties for itself and for its own members flowing fromits participation in Confindustria.
The Association's registered office is in Rome and its
administrative offices are in Rome and Milan and
Bruxelles.
The Board of Management may set up administrativeor representative offices in other places, in and outside
Italy, as well as bodies for the study of special sector
problems, the performance of services, or reach
operating agreements with organisations pursuingsuch objectives.

Article 2
Primary interests

Farmindustria represents all companies operating in
the field of pharmaceuticals.
Farmindustria attributes a central and preeminent
importance to medicinal products in all its activities.
The scientific and industrial development of medicinal
products and the ethical values they constitute shallrepresent primary interests.

Article 3
Fundamental
principles

Farmindustria safeguards the legitimate interests of its
members.
It recognizes the value of the person and solidarity
with civil society, the scientific community, the worldof work and the health sector as a whole.
It pursues the development of the industry byaddressing its scientific, ethical and economic
problems and promotes the value of pharmaceuticals
in therapeutic, industrial, economic and social terms.
It considers the development of scientific knowledge afundamental resource for all operators in the world ofindustry and health working to help improve care forthe sick in a context of prevention, treatment andrehabilitation.
It promotes, within the framework of the principles of
the European Union, trade policies that further thegrowth and competitiveness of the industry incompliance with the dictates of the Constitution of the
Republic and the laws that govern it.
The Association pursues, in compliance with national
and EU law, especially the laws safeguarding themarket and competition:a) the promotion of scientific research at all levels
within the pharmaceutical industry;b) the promotion, reinforcement and legislative
protection of scientific research and technologies
correlated to the new economy within thepharmaceutical industry;c) the implementation of a market based uponprinciples of free competition and the fullrecognition of the economic purpose served bypatents for the development of research, especiallythrough the introduction of appropriate pricepolicies and the recognition of the value ofinnovation;2d) the reciprocal respect of intellectual property as
well as the full recognition that the enhancement ofintellectual
property
protectionplays
afundamental role in the growth of scientificresearch;e) the abidance by its members of the regulations set
forth in its code of conduct and the full acceptanceof the duties laid down by professional ethics andlaw;f) the cooperation with the competent authorities on
the study, drafting and executive implementationof regulations of interest to the industry so that it
can contribute towards constant improvements inthe production and efficient control of medicines aswell as towards the legislative recognition of ethicalstandards vital for the industry;g) the stipulation of contracts or agreements withother trade associations, whether entrepreneurial
or industrial, as also with associations of organised
labour or other bodies involved in the problems of
the pharmaceutical sector.
These agreements or contracts shall refer to theregulation of labour relations and relations among
sector representative bodies designed to guarantee
the rights and duties of companies with respect tofree-market principles and fair competition,
especially as regards the provisions of law
287/1990 and successive amendments andadditions.
The Association pursues the aforementioned objectives
and performs all associated functions in conformity to
the confederation's regulatory provisions on the
distribution of roles and activities among the membersof the system.
Without prejudice to its non-profit character, in orderto achieve the aforementioned objectives, theAssociation may establish, participate in or contributetowards foundations, specialised institutions or the3

promotion of auxiliary activities.
Farmindustria adopts the Code of Ethics of theConfederation and the declaration of associational
values, and both inspire its organisational conduct.

Article 4
Communicationand information

For purposes of imparting information on the policy,
projects and activities of the Association to the generalpublic, the authorities, sundry business and labour
organisations, other associations and various
institutions, communication and media activities are
deemed of fundamental importance.

Article 5
Farmindustria's
founding values

Farmindustria reputes autonomy, independence andproactive capacity to be primary values.
Such autonomy and independence are expressed in its
relations with various political and social institutions.
The Association has the function of formulating policy
guidelines and deems the unity of its members afounding value.
In addition, it considers the unity among its member
companies a determining value for reinforcing the
Association's negotiation powers in its relations with
its institutional and political counterparts.

Article 6
Representationof members

4

The Association represents its own members indealings with the institutions, national andinternational public administrations, economic,
political and labour organisations, as well as withprofessional health and other pertinent socialorganisations.
It promotes its own internal organisational
representativeness as well as the inclusion of its
representatives
inentities,
administrations,institutions, commissions and organisations howeverconcerned with pharmaceutical questions.
Article 7
Activities of the
Association

The activities of Farmindustria hinge upon:a) the guarantee that member companies will fully
participate in the deliberations of the Association;b) the adoption of rules for reaching decisions by the
Association;c) preliminary mediation among the interests of thedifferent members, or, more generally, the need torepresent all associational interests;d) the definition of rules for choosing representatives
in the national and international groups, replacing
incumbents in executive offices, and constituting
its own working groups, especially with respect tothe principles of the laws governing market
protection and fair competition.

SECTION TWO

Participation in the Association
Association's governing bodies

and

the

Article 8
Joining the
Association

5

Pharmaceutical companies, however incorporated, andholders of marketing authorisations for medicines
and/or medicine manufacturing authorisations in Italy
and/or outside Italy whose operations fully conform tohealthcare laws and Good Manufacturing Practices,shall be free to join the Association.

Member companies that operate in homogeneous
sectors of activity shall be allowed to constitute specificgroups in order to guarantee the protection of special
and/or additional interests, on condition that they
continue to abide by the Association’s guidelines andresolutions.
The criteria for admission to the groups in the
aforementioned paragraph are drawn up in apposite
regulations, submitted to and approved by the Board ofManagement.
The relations between the aforementioned groups andthe Association shall be regulated by specificagreements submitted for approval to the Board ofManagement.
In conclusion, the Association shall have the power toaccept other entrepreneurial groupings as associate
members on condition that they meet the requisites ofaffinity, complementarity and/or have economic links
with regular members of Farmindustria based on
specific arrangements laid down by the Board ofManagement.
Affiliate members shall not cover roles of direct, and/or political representation and are admitted solely tothe passive electorate only as far as the Board ofManagement is concerned.
In the case the Association decides to reject theadmission of a company, they may present an appeal to
the President. The President’s office may reply within
30 days, after which the appeal is considered declined.
The appeal does not suspend the effects of nonadmission.
In case of subsidiary or associate companies of an
operating parent company, confederal directives
require that such companies shall become members ofFarmindustria together with the parent company.
All the aforementioned members shall be entered on
the register of companies held by Confindustria, which,for all organisational effects, shall officially certify thecompany’s membership of the system.

6

Art 9These Rules of Association shall be supplemented by:a) resolutions containing the principles of the Code of
Conduct of the pharmaceutical industries adopted
by the international associations to which
Farmindustria belongs, subject to approval by the
Board of Management;b) the Code of Conduct approved by the Board ofManagement;c) the regulations for the operation and activities of
the Small and Medium-Sized Company (SME)Group Committee;d) the regulations of the Designation Committee;e) theE.F.P.I.A.
(European
Federation
Pharmaceutical Industries’ Associations) Code;off) the I.F.P.M.A. (International Federation of
Pharmaceutical Manufacturers and Associations)
Code.

Art 10Membership andmembership fees

7

Applications to join to the Association, signed by thelegal representative of the company and supplemented
by documents attesting that the company meets all therequisites of Rule 8, as well as the integral acceptanceof the present Rules of Association, the contents ofprinciples of the Code of Conduct under subparagraphs a), b), e), and f) of the preceding Article 9,
shall be submitted to the Board of Management unlessthe provisions of paragraph two of Article 8 apply. The
application for admission shall commit the member fora two-year period. Membership shall be tacitly
extended unless notice of termination is given in themanner set forth in this Article.
Membership entitles members to avail themselves ofthe benefits that arise from its membership of theconfederal system.
Membership shall require members to observe theresolutions passed by the Governing Bodies even if
introduced prior to their membership, and abstain
from initiatives contrary to such resolutions. However,these resolutions shall not apply to the management ofmember companies' own commercial operations.
Furthermore, members shall observe forms of conduct
befitting membership of the confederal system.
In particular, companies represented in the
Presidential Committee pursuant to the following Rule26, shall, at the same time, join other bodies of thesystem with specific territorial jurisdiction.
Membership shall be annulled in the event of:a) resignations, which shall be presented byregistered letter with at least 12 months’ notice;otherwise membership shall extend for anothertwo-year period;b) exclusion from the association decided upon by theInternal Arbitrators, for failing to observe theduties required of a member. The Internal
Arbitrators shall state the reasons for theirresolutions, which shall be passed pursuant to
Article 29 of the present Rules of Association,c)the loss of any one of the requirements formembership, as ascertained by the Board ofManagement;d) exclusion from the association, ordered by the
Board of Management, pursuant to Rule 12, for
failure to pay association fees or for other serious
breaches of the Statute;e) the winding-up of the company;

8f) the declaration of bankruptcy;g) exclusion from the association, ordered by the
Board of Management, for the non-observation of
the regulations set forth under sub-paragraph 1.13of the general principles of the Code of Conduct.
The termination of membership for the non-paymentof association fees, as set forth in the following Rule,
shall take effect:-

at the conclusion of the two-year period for which
the member has subscribed, pursuant to the firstparagraph of this Article, if the circumstances
stated under sub-paragraphs a), d), and g) apply;-

at the end of the year in which the rescission of themembership relationship was decided for thecircumstances under sub-paragraphs b), c), and e);-

from the date of the declaration as in the caseunder sub-paragraph f).

Article 11
Members’ Fees

The membership fees due to the Association shallcomprise:a) a "one-off" membership fee;b) a variable annual fee;c) any extraordinary fees.
The sums of the one-off and variable annual fees are
decided every year by the General Meeting on the
proposal of the Board of Management, according tobudgetary needs.
Any extraordinary fees as proposed by the Board ofManagement shall be decided by the General Meeting
indicating for each such fee, the total amount and basis
for determining the individual fees due.
In conformity to the Association's mission specific9considerations accruing against the sale of goods or the
performance of services for members, or for otherassociations conducting the same activities and whichby law, regulation or bye-laws belong to a single local
or national organisation and their respective members,
shall represent other sources of revenue for the
Association. Other sources of revenue may also be
obtained from sales to third parties of the Association's
own publications, which are mainly sold to members.
A treasury function set up in the Association, or set up
as a consortium with other confederal associations,shall make provision to ascertain, collect and distributethe contributions due to the Association and to othercomponents of the system to which members belong.

Article 12
The variable annual fee shall be calculated on the basisof a member company's annual turnover as measured
by market statistics approved by the Board ofManagement.
The basis for determining the variable annual fee
referring to companies under paragraph two of Article
8 shall be decided by the General Meeting, upon the
proposal of the Board of Management.
The aforementioned basis for levying fees shall include
the company's annual sales inclusive of sales tohospitals, as attested to by a certificate of full
disclosure pursuant to the following paragraph four.
For purposes of determining the aforementioned
turnover, companies shall submit a certificate of full
disclosure on their turnover by 31 March of the year
successive to that to which the assessment refers.
In order to permit checks on the foregoing certificate ofdisclosure, member companies shall be required toallow sample controls to be carried out by leading
auditing companies.
Payment of the variable annual fee shall be made in themanner and for the amount fixed by the Board ofManagement.
Payment of extraordinary fees decided by the General
Meeting shall be made in the manner and by the terms

10fixed by the Board of Management.
Failure to pay the fees within the terms indicated in theforegoing paragraphs shall entail suspension from the
Association for a maximum period of six months andthe member's expulsion at the conclusion of this period
if the fees due have not been paid.
Measures of suspension and expulsion for theforegoing reasons shall be the competence of the Boardof Management.
In addition, the Board of Management shall determine,
whenever it deems opportune, once annually thedefault interest payable by companies for the latepayment of fees, without prejudice to their application
when notice of default is communicated.
No profits, if any, or surplus income, as also no funds,
reserves or capital may be distributed to members
during the life of the Association either directly or
indirectly.

Article 13
Governing Bodies

The Governing Bodies of the Association are made up
as follows:

Decision-making bodies
1) General Meeting of members;2) Board of Management;

Executive bodies
3) The Committee of the Presidency;
4) President and Vice Presidents;

Supervisory bodies:115) Board of Auditors;
6) Internal Arbitrators.

AArticle 14
Company
Representatives

The representatives of companies belonging to the
Association shall mean the owner, the legal
representative as entered in the Register of Companies
held by Confindustria, its delegate formally designatedand chosen from amongst the agents with general
power of attorney or attorneys-in-fact who sit on the
Board of Directors or General Managers. Directors,
managers or executive officers of companies, holding aformal and expressed power of attorney, shall likewise
also be considered company representatives.
The office of President shall not be held together withany other office of the Association. The office ofInternal Arbitrator and that of Auditor shall beincompatible with any other office of the Association.
The offices are reserved to representatives of themembers, with the exception of those offices referredto under articles 29 and 31 of these Articles of
Association.
No remuneration shall be due to incumbents of the
Association’s elective offices.
In conformity to the regulations drawn up within theconfederal framework concerning the executive officesof the system, membership of the executive offices of
the Presidency and the Presidency Committee shall be
conditional upon the regular registration of thecompany represented and the observance of theprovisions specifically laid down by confederal
resolutions on questions of incompatibility between
political and Association positions.
The incumbency of elective offices detained for aperiod in excess of one half of the term of office shallbe understood as remaining in force for the entire termof office.
Association offices shall be non-remunerative and only
entrusted to entrepreneurs or to persons vested with12

real corporate responsibilities.

Article 15
General Meeting

The General Meeting shall comprise the legal
representatives of member companies, or theirdelegates with written proxies whose membership fees
are fully paid up.
Every year the Ordinary General Meeting shall be
convened by 30 June to approve the budget andfinancial statements and the President's report on the
Association's activities. The General Meeting shall also
be convened whenever the Board of Management, or
the President deem it opportune, or wheneverrequested by a number of members holding at least
one tenth of the total votes or by the Board of Auditors,
but in this case only for matters pertaining to its remit.
The requests referred to in the preceding paragraph,shall be written submissions to the President, and shallstate the reasons for the convocation.
The convocation shall take place within 30 days fromthe receipt of the request.
The General Meeting shall be convened by registeredletter, signed by the President, and sent to members atleast 15 days prior to the designated date, stating theplace, day and time of the meeting and the items on theagenda, for both the first and the second call.
In the event of special urgency, the General Meetingshall be convened by email or any other suitablemeans, at least two days prior to the date fixed.
In any case, no member shall be able to hold a proxyfor more than one other member, with the exception ofproxies that refer to members of the same corporategroup.

Article 16
The General Meeting shall be validly constituted at
first call when at least one half of the votes held by the
total number of members entitled to participate
13pursuant to the first paragraph of the previous article
are present.
At second call, the General Meeting shall be validly
constituted regardless of the number of persons
attending.
The General Meeting shall be chaired by the President
or by whoever acts in his or her stead. Resolutions
shall be passed by a majority vote of the members
participating or represented in the General Meeting,with no account taken of abstentions or blank ballot
papers.
The votes for each member are fractioned with the aimof not allowing the identification of voters.
Voting that does not refer to the election of the
Association's Governing Bodies shall be held by secretballot when requested by at least one fifth of thepersons present.
Resolutions passed in a valid manner by a legal
quorum shall be binding upon all members including
dissident and absent members and must be attested toby minutes signed by the President or the Secretary,
appointed by the General Meeting, who need not be amember of the Association.

Article 17
The Ordinary General Meeting is responsible for:a) electing the Board of Management;b) electing the President and Vice Presidents, incompliance with the criteria of representativenessas referred to the following Article 27, with the
exception of the Vice President appointed by the
SME Group Committee;c) electing the Board of Auditors;d) electing the Internal Arbitrators;e) approving the budget and financial statements andrelated reports on the Association and determining
membership fees as per Rule 11;

14f) determining the general directives for theoperation, attaining the objectives of the
Association, and passing resolutions on questions
submitted to it by the Board of Management;g) appointing an honorary President, chosen among
the legal representatives of the member companies
that have acquired special merits in Association
activities so as to attribute them the functions ofguarantor of the Association's activities inconformity to the Rules of Association.

Article 18
The Extraordinary
General Meeting

The Extraordinary General Meeting is responsible for:a) amending the Articles of Association;b) dissolving theliquidators.

Association

andappointing

In the event of dissolution any residual assets shall
only be devolved to organisations having similar or
non-profit purposes, after consulting the Supervisory
Bodies in accordance with law.

Article 19
Assigning Votes

The overall number of votes attributed to member
companies shall be 20,000, distributed proportionallyby 5 equally-weighted parameters, each of whichassigning 20% (4,000) of the total votes.
The parameters shall be as follows:a) turnover;b) number of employees, with different qualifications
determining different weightings: a value of 1 forrepresentative employees; 3 for R&D employees; 215for the rest;c) investments in Production and Research &Development: a weighting of 1 for investments in
Production and a weighting of 1.5 for investments
in Research & Development;d) consolidated export sales recorded in Italy;e) income tax paid in Italy.
As concerns the parameters indicated under subparagraphs a), b), c), and d) these shall refer to theyear prior to that in which the calculation is made,while as regards the parameter under sub-paragraphe), this shall refer to the previous year's tax return.
In any case, at least 34% (6,800) of the total votes
assigned shall be reserved to national companies as awhole.
All members, irrespective of the foregoing parameters,
shall be guaranteed at least one vote.
For the purposes of identifying the value of theparameters under sub-paragraphs b), c), d) and e),companies - without prejudice to Rule 12 of theseRules of Association - shall furnish certificates of
disclosure according to the procedures defined by the
Association.
In order to permit checks on the foregoing certificate ofdisclosure, member companies shall be required toallow leading auditing companies to conduct sample
controls.

Article 20
National SME
Committee

16

In conformity to paragraph one of Article 12, therepresentatives of member companies whose turnoveraccounts for the last 20% ranking of total sales, andwhose share capital is primarily Italian-owned, shall,in compliance with the indications of the Board ofManagement, constitute the National SME Group

Committee.
If a company contributes to the last 20% of turnover as
indicated in the foregoing paragraph by virtue of only apart of its overall turnover, it shall only be included in
the National SME Group Committee if this share isgreater than 50%.
Without prejudice to the foregoing provisions, in theevent that a company requests to be excluded from or
included in the National SME Group Committee, theBoard of Management shall be able to approve, upon
the latter's request, and independently of theprovisions of the preceding paragraph, the company’s
inclusion in or exclusion from the National SME Group
Committee, on condition that, as between inclusions
and exclusions, the final turnover represented by the
National SME Group Committee is no less than 18%
and no more than 22% of the turnover represented bycompanies whose share capital is prevalently Italianowned.
In the event that the total of the requests submitted isincompatible with the foregoing limits, the Board ofManagement shall decide which of the requests
submitted can be accommodated within the
aforementioned limits.
The reason for such a request on the part of a company
and the approval or denial by the Board ofManagement shall refer to the fact that themembership or non-membership of the National SME
Group Committee, on the mere basis of turnover, may
be an anomaly in consideration of a company's history
or may be deemed an anomaly for the future.
Furthermore, subject to request and determination by
the Board of Management, a company whose turnoverplaces it in the National SME Group Committee, shallalso be able to be included in the Association's large
and medium-sized national company group, if thecompany is part of a group belonging to this body.
In the event that a company requests, for the reasonsstated earlier, to be excluded from the National SME
Group Committee, the Board of Management shall beable to allow the request if also proposed by the body
representing the National Large and Medium-sizedCompanies.

17

Likewise, in the case that a company applies, on the
aforementioned grounds, for admission to the National
SME Group Committee, the Board of Management
shall be able to allow the request if proposed by thecommittee itself.
The aforementioned requests shall be formallytransmitted by interested companies to the Presidencyof the Association by 30 May of the year in which therecomposition of the companies constituting the
National SME Group Committee takes place.
The recomposition, within the framework of mainly
Italian owned Industry, of companies comprising the
National SME Group Committee, shall take place every
two years on the occasion of the election of themembers of the Board of Management. The
reorganisation shall be based upon the preceding
year’s turnover, and no further change shall be made to
the resulting composition prior the next election of its
members.
The National Small Industry Committee shall be
convened and chaired by the President of theCommittee.
The Committee shall be responsible for:18-

electing its President, from its own members, whoshall be a member of the Committee of Presidency
and of the Board of Management, in conformity to
the rules of this statute;-electing, from its own members, a Member of theCommittee of the Presidency in representation of
the National SME Group Committee;-

electing, by its own committee members, the Vice
President of Farmindustria representing the
National SME Group Committee, identifying
him/her between the two components of theCommittee of the Presidency reserved to thecompanies
In the case the President of Farmindustria is partof the National SME Group Committee, the Vice
President of competence of the companies shall be-a representative from the National Large andMedium-sized Company Group. The compositionof the Committee of Presidency, that in any casehas two representatives from the National SME
Group Committee, remains unchanged.
electing, from its own members, 8 ex officio
representatives to sit on the Board of Managementof the Association as referred to in the following
Article 21.

The election shall consist in assigning preferences tono more than 6 candidates and shall take place bysecret ballot.
The candidates with the highest number of votes shallbe elected.
The President of the Committee and its 9
representatives on the Board of Management shallconstitute the Central Council.
The President of the Committee shall convene theCommittee whenever he or she deems it appropriate,
but at least once a year in coincidence with theOrdinary General Meeting of the Association.
The Central Council shall be convened by the
President, who shall chair it, at least seven times a year
and in extraordinary session at the request of three ofits members.
The Committee shall be responsible for determining
the general guidelines for the activities of its Central
Council. The latter shall remain in office for the sametwo-year period as the Board of Management.
The operations of the Committee and the Central
Council shall be governed by apposite regulations,similar to these Articles of Association that,
respectively, govern the Association’s General Meeting
and Board of Management.

Article 21
Board ofManagement

19

The Board of Management shall be the decisionmaking body of Farmindustria operating within theframework of the guidelines approved by the General
Meeting.
Its work shall be to guide and evaluate initiatives of ageneral nature, control the Association's activities, andensure that companies participate in the Association in
coherence with free-market principles.
At intervals of no more than two years, the Board ofManagement shall, within the meaning of theprovisions of the last paragraph of the following Rule26, approve the Association’s strategic guidelines by
the end of May.
The guidelines shall be drafted on the basis of
documents drawn up and approved by the Committeeof the Presidency, and submitted to members of theBoard of Management within the same time limits
applying to the convocation of the Association's
governing bodies.
The Board of Management shall be made up of the
President, who shall take the chair, five VicePresidents, six members of the Committee of the
Presidency, of whom five appointed by the Board ofManagement and one by National Small Industry
Committee, and 58 additional members, of whom:-

50 elected in odd years by the General Meetingfrom representatives of the Association’s
companies on the basis of the procedures laid downin the following Articles 22 and 23, and 8
designated by Small Industry Committee inconformity to Rule 20.

For the purposes of optimising the Association’s
operation, the following figures may participate inwork of the Board of Management in a non-voting
capacity: the Honorary President, the last incumbent
of the office of President of the Association, themembers of the Board of Auditors, the members of theCommittee of Control of the Code of Conduct, one
representative for each of the product groups indicatedin Article 8, paragraph two, the Director General, theVice Director General and the Association’s managers
may be invited.

20

The non-voting participants shall not be included in
the calculation for the distribution of the seats among
the Association's members.
The national and multinational members shall,
however,alsobeguaranteed
representation(respectively, 31 and 39 members) as stated under Rule
5 of the Regulation of the Designation Commission.
The Board of Management shall be convened inordinary session at least seven times a year or, at therequest of at least one fifth of its members, pursuant to
the procedures indicated under paragraph three andthe following paragraphs of Article 15.
The convening, of an ordinary nature, shall be made byletter through electronic mail or other similar means,sent at least fifteen days before the meeting, and, in theevent of urgency, always through electronic mail orsimilar means, at least two days before the meeting.
The Board of Management shall be validly constituted
when a majority of its members are present.
In any moment, any member of the Board ofManagemt may request the validation of theconstitutional quorum.
Every member has the right to one vote. Resolutions
shall be passed by a majority vote of the personspresent, excluding abstentions and blank votes. In caseof a Tied vote, the President’s vote prevales and, in any
case, it can be referred to an appositely convened
General Meeting for decision.
Voting not referring to the election of the Association's
Governing Bodies shall be held by secret ballot whenrequested by at least one fifth of the persons present.
Resolutions shall be attested to by minutes signed by
the President and the Secretary appointed by the
Board of Management, who can be chosen outside the
Association.
The Board of Management shall:a) appoint a Treasurer in odd years from its own

21members;b) elect the Designation Committee as per Article 22
at least two months before the Association’s offices
come up for re-election.
c) propose, in even years, the name of a candidate for
President to the General Meeting, and the four Vice
Presidents proposed by the President, inconformity to the criteria of representativenessreferred to under the following Article 27;d) elect, in even years, five member of the Committeeof the Presidency from its own members inconformity to the criteria referred to under Rule26;e) pass resolutions on initiatives and actions to be
performed in conformity to the general directives
issued by the General Meeting;f) pass resolutions on agreements binding upon
members pursuant to Article 3 with a favourable
vote of three quarters of its members;g) pass resolutions on the decisions of theInternational Associations as concerns the
behaviour of pharmaceutical industries, as well ason the Code of Conduct referred to in the
aforementioned Article 9;h) pass resolutions on the adoption and modificationsof the Code of Conduct and the ratification of the
E.F.P.I.A. and I.F.P.M.A. codes;i) pass resolution on applications for membership,
express its own opinion on membership pursuant
to Article 8, and order the expulsion of member
companies pursuant to Article 10;l) notify the Internal Arbitrators of violations andbreaches as per Article 10;22m) promote and implement whatever is deemed
conducive to the promotion of the Association's
objectives;n) express its opinion on the budget, financial
statements and related reports to be submitted to
the General Meeting;o) appoint and dismiss the Director General.

Article 22
Designation
Committee

23

The Board of Management, by secret vote and in
conformity to the criteria of representativeness, shallappoint a Designation Committee made up of fivemembers that shall appoint a President from their own
members.
In even years, the aforementioned Committee shallsubmit to the Board of Management one or moreindications for the designation of the President and on
this basis the Board of Management shall, by secret
vote, decide upon a candidate for submission to theGeneral Meeting.
The Committee, moreover, in odd years, shall submit
two lists of candidates for the Board of Management to
the General Meeting. The number of such candidates
shall be greater than the seats to be elected from therepresentatives of, respectively, multinational member
companies and large and medium-sized Italiancompanies, in conformity to the criteria of consultation
and representation laid down in the regulations of theCommittee and attached to these Articles of
Association.
The Committee shall also be allowed to submit otherlists of candidates to the General Meeting.
Every list shall be presented to the Committee by agroup of members representing at least 15% of theoverall votes of the Association, with the exclusion of
the votes of members belonging to the National SME
Group Committee.

Article 23
Election to Boardof Management
The election of members to the Board of Management
shall proceed according to the following criteria.
-

Voting shall take place on the basis of two lists ofcandidates, one for large and medium-sizednational companies and one for multinational
companies.

-

Voting for each list shall consist in the expressionof preferences among candidates whose number
cannot exceed 2/3 of the elective seats, and shalltake place by secret ballot.

-

The candidates with the highest number of votes
shall be elected.

-

The representatives of member companies shallparticipate in the voting pursuant to Article 15,
with the exclusion of those belonging to the
National SME Group Committee.

Article 24
Duration of OfficeMembers of the Board of Management shall hold officefor two years and may be re-elected. Any member
unjustifiably absent from three meetings in the twoyear period shall forfeit his or her office.
Any member who has forfeit-ed his of her office shallnot be re-elected in the following 2-year period of
office.
Whenever in the course of the two-year period, theBoard of Management loses one or more of its
members, the Council shall immediately replace themby cooption.

Article 25
Regulations

24

The operations and functioning of the Board ofManagement and the National SME Group Committee

shall be governed by regulations approved by thebodies to which they refer.

Article 26
The President andthe Committeeof Presidency

The election of the President shall always require themajority vote of at least two thirds of the valid votes ofmembers participating in or represented at the General
Meeting, with no account taken of abstentions or blankballot papers.
The Chairman shall hold office for a two-year period
and can be re-elected for a consecutive term of office.
A third term of office shall also be allowed, but for nolonger then a two-year period of office.
The President shall hold all powers of ordinary andextraordinary administration, with the exception of
those powers that, by law or the Aticles of Association,
are reserved to other bodies of the Association.
The President shall, for all intents and purposes, be thelegal representative of the Association before third
parties and courts of law. In addition to the provisionsof other articles, the President shall:--

represent and interpret the image of the
Association according to the principles that the
Association itself has established;make provision to implement the resolutions of theGeneral Meeting, the Board of Management,
coordinate the Association's activities andsupervise the work of its Officers;-

convene and chair the Board of Management;-

hire and dismiss Executives and Managers of the
Association after consultation with the General
Director.

In the event of his or her temporary absence or
impediment, the President’s functions shall be
performed by the most senior Vice-President.
The signature of at least three Vice-Presidents shallcommit the Association in event of the absence or
impediment of the President. If the absence or25

impediment becomes definitive, the Vice-Presidents
shall be required to convene the Board of Management
within 15 days in order to appoint the Designation
Committee and within the following thirty days
convene the General Meeting to elect the new
President.
The Committee of the Presidency shall be the body that
implements the decisions of the Board of Management.
The Committee of the Presidency shall meet whenconvened by the President or at the request of two of
its members.
Each Vice-President, on the basis of the duties
delegated to him or her by the President, shall answer
to the Committee for his or her actions.
Subject to consultation with the Committee of the
Presidency, the President shall, by stating his/herreasons, be able to revoke the foregoing delegatedduties.
The Board of Management shall be informed of duties
delegated to or revoked from a Vice-President.
The Committee of the Presidency shall endow itself
with its own regulations.
The Committee of the Presidency shall pass resolutions
on all matters of urgency with the exception of thoseexpressly reserved by the Articles of Association, theGeneral Meeting, and the Board of Management.
The deliberations of the Committee of the Presidency
are taken with the utmost scrutiny and an absolutemajority.
In case of a request for a secret ballot from one of theMembers of the Committee of Presidency, account will
be taken of abstentions or blank ballot papers as votes
against.
The Committee of the Presidency shall preparecomprehensive projects, identify the resources
necessary for implementing them and entrust thecoordination to one or more appositely appointed
members of the Board of Management.
The Committee of the Presidency shall comprise:26a) the President;b) five Vice-Presidents, of whom four elected by theGeneral Meeting according to the criteria ofrepresentativeness stated in the following Article
27, and one ex-officio Vice-President, holding theoffice of President of the National SME Group
Committee.
In the case that the President of Farmindustria isalso the representative of the National SME Group
Committee, the General Meeting will elect 5 VicePresidents, 2 representing Large and Mediumsized National Companies and 3 representing
multinationals;c) six members, of whom five elected by secret ballot
by the Board of Management of whom three shallbe representatives from companies whose sharecapital is mainly foreign-owned and two
representatives from large and medium-sizednational companies, and one elected by the
National SME Group Committee.
In addition, the Committee shall be able to invite thefollowing non-voting members: the previous President,
the Honorary President and, for consultative purposes
concerning specific questions, and on a nonpermanent basis, members of the Board ofManagement.
The President shall convene the Committee of the
Presidency whenever he or she deems it appropriate
and, in any case, at least once a month.
At the expiration of the committee's mandate, non reelected members of the Committee of the Presidency
shall retain their offices until the subsequent
expiration of the Board of Management's term ofoffice. In the event that their inclusion in the
aforementioned bodies alters the equilibrium in termsof equal representation as stated in the Articles of
Association, non re-elected and non-coopted membersof the aforementioned bodies, shall participate in themeetings of the Committee of Presidency and other27

bodies without voting rights.
The Vice-Presidents shall cooperate with the President
in carrying out the programme of activities andrunning the organisation, and in so doing the President
shall act as representative of the Association in all its
external and internal relations.
In this framework the President shall, as required, be
able to delegate the responsibilities connected to theexercise of his or ther office to the Vice-Presidents inthe form of an express assignment.
For this purpose each Vice-President shall receive an
explicit power of attorney by the President, who shallsimultaneously inform the Board of Management andspecify the contents of such power of attorney and thesectors in which the power will operate.
The President shall, furthermore, be able to conferdelegated powers to other members of the Committeeof the Presidency, after consulting the Vice Presidents.
The coordination of each delegated power as indicatedabove, shall be the responsibility of the President andthe Vice President responsible for the area by virtue of
his or her specific delegated power.
For the purpose of performing their functions, the Vice
Presidents shall remain in constant contact with the
President, who shall guarantee uniformity in the
Association's policy and operating procedures.
For this purpose the President shall undertake, withprior coordination by the Vice-Presidents responsible,
all the initiatives that he deems appropriate for the
implementation of the resolutions of the Association's
Governing Bodies.
The Vice-Presidents and the members of theCommittee of the Presidency shall remain in office fortwo years. The expiration of the term of office shallcoincide with that of the President.
In the event of vacancies in the aforementioned offices
during the two-year period of office, the Board ofManagement shall, on the proposal of the President,
make the appointments necessary and the newincumbents shall remain in office until the end of the
President's mandate.
The Committee of the Presidency shall appoint to the28Committee any member who has distinguished him or
herself in activities performed in favour of the
Association.
The Committee of the Presidency, in accordance withthe provisions of paragraph three of Article 21, shallprepare one or more short- or medium-term strategic
proposals for the Association and submit them to theBoard of Management for discussion by the end of
March. The Board of Management shall agree thestrategic policy to submit to the General Meeting for
approval by the end of the following month of May.

Article 27
Vice Presidents

29

In the implementation of the two-year programme ofactivities, as also in the running and representation of
the Association, the President shall be assisted by fiveVice-Presidents, of whom four Vice-Presidents electedby the General Meeting in conformity of the criteria ofrepresentativeness of the Association’s sections andone elected according to the guidlines laid down in thepreceeding Article 20.
For this purpose the President, as soon as he or she isdesignated, shall submit to the Board of Management
the general policy guidelines of his or her mandate,along with his or her programme of activities andsubmit the names of the four Vice-Presidents to beelected, chosen in compliance with the principle ofequal representativeness of the different sections of the
Association in relation to the President and VicePresidents.
The President together with the Vice-Presidents shall,
therefore, be an effective representation of the breadthof the Association’s membership, and be reflected in
the three representatives of foreign multinational
companies the three representatives of Italiancompanies, bearing in mind that the President of the
National SME Group Committee, appointed according
to the guidleines laid down in Article 20 and also as inrespect of the same Article 20, in the event that the
President of the Association is also part of the National
Small Industry Committee.

Article 28
Regional Delegates

The Board of Management upon the proposal of the
President, shall appoint the Regional Delegates who, infull conformity to the general policies and guidelines of
the Association and Confindustria, shall represent
Farmindustria in relations with competent local andregional institutions.

Article 29
Internal
Arbitrators

Every four years the General Meeting shall elect fiveInternal Arbitrators by secret ballot in a year when the
President is not elected, who shall remain in office forfour years and shall be eligible for re-election as manytimes as the General Meeting may decide.
Each member shall be able to cast a vote for a
maximum number of three candidates drawn from alist comprising a number of candidates higher than thenumber of seats to be elected.
For this reason, in convening the General Meeting forthe purpose of the elections, the President shall request
members to nominate candidates in writing and earlyenough to allow them to be included in the voting.
Candidates for the office of Internal Arbitrator shallalso include persons who have never directly held apost of corporate responsibility.
The office of Internal Arbitrator shall be incompatible
with the office of President or the office of internal
arbitrator for another confederate organisation ofConfindustria, or with any other office within theassociation of which he or she is a member.
The Internal Arbitrators, at the request of only one ofthe parties, shall be required to settle any controversy
arising within the Association that cannot be settled
amicably.
For this purpose, each of the interested parties shallappoint a fiduciary Internal Arbitrator from the fiveInternal Arbitrators elected by the General Meeting so30

that an arbitration panel may be set up to settle thecontroversy.
The President of the aforementioned panel is chosenfrom the five Internal Arbitrators in agreement withthe two Internal Arbitrators chosen by the parties. In
the event of dissent the appointment shall, at therequest of the two Internal Arbitrators alreadyappointed, be made by the Presiding Judge of the
Court of Rome from the five Internal Arbitrators
elected by the General Meeting.
The President of the arbitration panel and the single
Internal Arbitrators shall be required to make a written
attestation that none of the circumstances ofincompatibility applies to them as detailed in articles
51 and 52 of the Code of Civil Procedure, in the Code ofProfessional Conduct of the Association andConfindustria and in the Declaration of Associational
Values of Confindustria.
The arbitration panel shall lay down, on a case-by-casebasis, the investigatory procedures to be adopted inorder to settle a controversy before it, taking due
account of the procedural criteria fixed in theregulations of Confindustria.
The arbitration panel shall pass judgment on the basisof fairness and its decision-making procedures shall be
informal.
An arbitral award shall be decided by a majority votewithin sixty days from the date on which the panel isconstituted and the examination of the controversy
commences. This term may be extended for a
maximum of a further thirty days.
The arbitral award shall be notified to the interested
parties and to the President of the Association within
five days from the date of the judgement. The arbitralaward cannot be appealed, apart from an appeal to theInternal Arbitrators of Confindustria.
In any case, once instituted the arbitration panel shallnotify Confindustria’s internal arbitrators of the31controversy referred to them. The Panel of Internal
Arbitrators of Confindustria, on its own initiative or at
the request of the arbitration panel, may suggest
guidelines for settling controversies.
The interpretation of these Articles of Association, as
well as every other Association regulation shall remain
the exclusive competence of the Internal Arbitrators.
Without prejudice to the provisions of Article 30 on thematter of sanctions, forfeiture of office can be ordered,
not only by the governing bodies that made thedesignations and the appointments, but also by theInternal Arbitrators for reasons serious enough tomake continuing tenure of office by the incumbent
incompatible with respect to the Association’s
objectives and regulations.
Save for matters of controversy in the previous
paragraphs, at the commencement of each solar year
the five Internal Arbitrators elected by the Association
shall, by majority agreement, designate two Internal
Arbitrators with delegated powers to perform
interpretative and/or disciplinary functions.
In conclusion, the Internal Arbitrators in all cases
provided for under these Articles of Association, shallpass judgement according to the arrangements andwith the effects established for this purpose.

Article 30

Sanctions

32

Members who fail to comply with the obligations ofthese Rules of Association shall be liable to thefollowing sanctions:a) written censure;b) temporary suspension;c) exclusion.
The Internal Arbitrators may apply these sanctions
alternatively or cumulatively.
In any case, the possibility of proposing an appeal
against the Internal Arbitrators is admitted within
fifteen days from the date on which the measure wasmade known.
Sanctions may not be suspended pending appeal.

Article 31

The Board ofAuditors

The Board of Auditors shall be made up of a President,
two regular and two alternate auditors.
The President and the other members of the board areelected by the General Meeting, and may include
persons from outside the Association.
At least one Auditor must be a Chartered Internal
Auditor.
For purposes of electing Auditors, the Association, inconvening the General Meeting, shall invite member
companies to submit candidatures in good time and inwriting so that members can cast a vote for them.
Each member shall cast a vote for no more than threecandidates.
The five candidates with the highest number of votes
shall be elected.
The Auditors shall annually report to the Board ofManagement and to the General Meeting with a reporton the financial statements.
They shall remain in office for two years, may not holdother Association offices and may be re-elected.
The Board of Auditors shall participate in meetings ofthe Board of Management without voting rights.
The office of Auditor is not compatible with the officeof President or Auditor of a confederation organisationor any other office within Confindustria.

Article 32
Treasurer

33

The Treasurer, together with the President and in
conformity to the budget, shall oversee the financial
and accounts management as well as all the financial
and economic operations of the Association and reportto the Board of Management.
The Treasurer shall remain in office for two years andshall be eligible for re-election.

Article 33
Director General

The Director General, in implementing the directivesof the President and the Vice Presidents, shallsupervise all the activities approved by the governing
bodies and ensure their coordination throughmanagers hierarchically subordinate to him or her. Heor she shall be able to delegate part of his or her
activities to a Vice Director General after consulting
the Committee of the Presidency.
On the basis of powers delegated to him or her by the
President, the General Manager shall hire and dismiss
personnel, except for Senior Officers and Managers,
and propose to the President the recruitment,
appointment or dismissal of Managers. He or she shallprovide a mandatory but not binding opinion on thepossible appointment or dismissal of a Vice Director
General and Managers.
He or she shall participate, without the right to vote, inthe work of the General Meeting, the Board ofManagement, the Committee of the Presidency as also
in the work of the Committees and Commissions.
The Director General shall be able to confer delegatedpowers for managing projects, to the Vice Director
General, where appointed, as also to Managers.

Article 34
The incumbents of the governing bodies shall remain
in office for two-years and shall be eligible for reelection. The election of the President and theCommittee of the Presidency shall take place inalternate years with respect to the election of the Boardof Management, the Internal Arbitrators and the Board
of Auditors.
Election shall be by secret ballot.

Article 35
Common fund,dissolution and

34

The common fund of the Association shall comprise:amendment to the
Articles of
Associationa) the membership fees and contributions referred tounder Artcile 11;b) any surpluses from annual operations.
The common fund shall be used to defray the
Association’s running costs and all the necessities andcommitments occasioned by the performance of the
Association's activities.
Members who, for whatever reason, leave the
Association may not make any claims upon thecommon fund.
The fiscal year shall commence on 1 January and end
on 31 December.
Audited financial statements shall be submitted to
Confindustria pursuant to the provisions of apposite
Confederation Regulations.
Article 36
Dissolution

The dissolution of the Association shall be resolved by
an Extraordinary General Meeting with the favourable
vote of three quarters of the votes of members present
or represented at the General Meeting, taking noaccount of abstentions or blank ballots, that represent
at least one half of the total votes. The General Meetingshall appoint a panel of three receivers, who may bechosen from outside the Association, and determine
their powers as well as deciding upon the assignmentof any residual assets.

Artcile 37
Modifications to
the Articles of
Association

35

Amendments to the Articles of Association shall bedecided by an Extraordinary General Meeting with afavourable vote of a majority of at least two thirds ofthe valid votes of the members or representaives
present at the General Meeting, taking no account of
abstentions or blank ballots, and that represent at least
two fifths of the total votes.

Article 38
Modifications to
Codes of Practice

Any amendments and supplements to the EFPIA and
I.F.P.M.A. codes and Farmindustria's own Code ofProfessional Conduct - which constitute an integral
part of the Association’s Articles of Association – shallbe approved by the Board of Management upon a
proposal of the Committee of Control, after consulting
the Committee of the Presidency.

Article 39
As regards anything not mentioned or referred to inthese Arrticles of Association, application shall bemade of Title II, Heading II of Book I of the Civil Code,and reference shall be made to the deliberations andrules of Confindustria.

36Article 1
Bye-laws of
the Designation
Committee

Under paragraph one of Article 22 of the Artciles of
Association, the Board of Management shall, by secretballot, appoint a Designation Committee made up of 5
members representing the Association’s various
sections.
The Committee shall elect its own President.

Article 2
Convening
Committee

the

The Committee shall be convened by the President
who shall also fix the calendar of the meetings.

Article 3
Consultations

The Committee shall conduct consultations inconformity
tothecriterionofmaximum
representativeness in terms of the dual aspects ofcompany size and territorial distribution, in order tocomprehensively reflect the position of Association
members.

Article 4
Consultations andsingle companies

The Committee in its consultation procedures shalllisten to single companies and evaluate the written
proposals submitted to it.

Article 5
Designations

The designations made by the Committee on the basisof the deliberations made shall be formulated in such a
way that, taking account of ex-officio members, theBoard of Management shall comprise:-37

39 seats assigned to foreign multinationals;

Bye-laws of the
National SME
Group Committee
andCentral Council

31 seats assigned to Italian companies.

Article 1 - The National SME Group Committee andCentral Council, in the framework of Rule 20 of theRules of Association, shall pursue the objective of
safeguarding small and medium-sized companies, as adirect expression of free enterprise and promote its
development in harmony with the economic and social
development of the country.
For this purpose, the governing bodies of the National
SME Group in the spirit and letter of the Statute shallperform the following activities in conformity to
Farmindustria's general guidelines:a) participating with its own representatives in themaking and management of the Association's
general policy;b) examining the problems of small and medium sizedcompanies, by availing itself of appositely set up
study groups;c) preparing suitable solutions to these problems andpromoting their execution;d) programming and implementing initiatives that
constantly target public opinion and public powers
for the purpose of drawing attention to the
problems, objectives and role of small and medium-sized companies;e) intervening with its own representatives in andoutside Italy, in events and initiatives of interest to
small industry.

Article 2 - The members of the National SME Group
Committee shall be active representatives of small andmedium-sized companies, namely owners of one-man
companies, partners in partnerships, or shareholders
and/or legal representatives of limited companies, who
occupy positions of responsibility in the managementof such companies.

38

Article 3 - The National SME Group Committee,
according to the provisions of paragraph five of Article
20 of this Statute, shall set up the Central Council for
National Small and Medium-sized Enterprises (SMEs).
The Central Council for SMEs shall comprise nine
members chosen from companies holding proprietaryand prescription drug registrations, as well as the
President of the National SME Group Committee.
Article 4 – The votes assigned to the companies forthe election to the National Committee of Small
Industry are determined as follows:--

25% according to the criterion laid down in
Article 19 of the Articles of Association of
Farmindustria;
75% proportionally to the fees paid to
Farmindustria.

Article 5 – The National SME Group Committee has a
two-year term of office that shall expire inconcomitance with that of Farmindustria's Board ofManagement.
The expiry of the term of office of the Central Council
for SMEs shall coincide with that of the National
Committee.
In event that vacancies occur on the Central Council
during the two-year term of office, the Central Council
shall appoint new members chosen from the membersof the National Committee.
The new appointments made by the Central Council
for SMEs shall be submitted to the first meeting of the
National SME Committee for approval.
Members of the Central Council unjustifiably absent
from three meetings shall forfeit their seats.

Article 6 - The National Small Industry Committee
39

shall be convened by its President whenever he or she
deems it necessary and, in any case, three times a yearof which one meeting shall coincide with the
Association's Ordinary General Meeting.
The Central Council shall be convened by the Presidentof the Committee at least once every two months incoincidence with the meeting of the Board ofManagement of Farmindustria and in extraordinary
session when requested by at least three members.

Article 7 - The meetings of the National Committee,
shall be governed by the provisions of Articles 15, 16
and 19 of the Articles of Association, regarding theGeneral Meetings of Farmindustria, and the provisionsof Articles 26, paragraphs 1 and 2, of the Articles of
Association, governing the duration and election of the
President of Farmindustria shall also apply.
Members of the National Committee shall be able tovote by proxy. However, no member shall be allowed toexercise a proxy vote for more than one other member,save for a plurality of proxies referring to members of
the same corporate group.
The meetings of the Central Council for SMEs shall bedeemed valid when at least half of the incumbent
members are present, and resolutions shall be passed
by a majority of valid votes, with no account taken of
abstentions and blank ballots. Every member has theright to one vote. In event of a tied vote, the vote of thepresiding chairman shall prevail.
The voting systems shall be decided by the President
but voting on appointments and resolutions referring
to persons shall be conducted by secret ballot, unlessthe Committee and the Council unanimously decide
otherwise.

Article 8 - The loss of membership of the Central
Council for SMEs shall automatically entail theforfeiture of membership of other bodies of40

Farmindustria, whenever the appointments to suchother bodies are made by the Central Council for Small
Industry or directly by the Board of Management.
Outgoing members shall remain in office in the Boardof Management until replacements for them areappointed.

Article 9 - The Central Council shall appoint upon
the proposal of the President of the SME Group a VicePresident of the SME Group.
The President of SMEs shall, after informing theCentral Council, confer specific delegated powers upon
the Vice-President for the sectors where Italian SMEs
performs its activities.

41