# EUR-Lex - 52013PC0495 - EN

*|*

# 52013PC0495

**Proposal for a COUNCIL REGULATION on the Innovative Medicines Initiative 2 Joint Undertaking /* COM/2013/0495 final - 2013/0240 (NLE) */**

			*

			*

EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

General context

In the context of the economic and
financial crisis Europe is taking steps to find a path to sustainable growth.
At the same time, Europe is faced with a series of important major challenges,
such as climate change, finding sources of clean energy and improving the
health and wellbeing of its citizens while containing the costs of healthcare.

One of the aims of Horizon 2020, Europe's flagship programme for research and innovation, is to strengthen European industry
by taking action to support research and innovation across a range of
industrial sectors. In particular, Horizon 2020 encourages public-private
partnerships in research and innovation to help tackle some of the key
challenges Europe faces, including in the public health sector.

The proposal for a public-private partnership builds on
the Innovative Medicines Initiative Joint Undertaking (IMI JU) established
under the 7th Research Framework Programme (‘FP7’) by Regulation
(EC) No 73/2008 of the Council of 20 December 2007. IMI JU is a public-private
partnership between the European Commission and the biopharmaceutical industry,
and its objective is to improve the drug development process by supporting more
efficient research and development cooperation among academia, small and medium enterprises (‘SMEs’) and
the biopharmaceutical industry, in order to deliver better and safer medicines
for patients.

This proposal is in line with the
Commission Communication Public-private partnerships, in Horizon 2020: a
powerful tool to deliver on innovation and growth in Europe '[1].

Reasons for and objectives of the proposed Innovative Medicines Joint
Undertaking

A Joint Undertaking in the area of innovative medicines is needed:

- Because the challenges it will tackle are vital for public health
in Europe and for its citizens: improving their health and wellbeing by
providing new and more effective diagnostics and treatments, while helping
safeguard the future international competitiveness of the European
biopharmaceutical and life-science industries such as diagnostics, vaccines,
biomedical imaging and medical information technologies;

- Because it will help tackle a series of obstacles to effective
research and innovation in this area: high risks of engaging in expensive and
complex development of diagnostics and treatments, decreasing productivity of
the drug and vaccine development processes and the lack of economic incentives
to develop such interventions; high risks of supporting shared databases and
networks that could speed up treatment development and help achieve lifelong
health and wellbeing for all, particulary important in the context of an ageing
population and the associated increase in chronic and degenerative diseases;
the emergence and potential re-emergence of infectious diseases (including the
increase in anti-microbial resistance); limited knowledge spill-overs due to a
lack of open-innovation eco-systems among the various actors from academia,
SMEs and industry; and the threat posed by zoonoses.

- Because industry on its own will not invest due to these
obstacles, and because public support from the Member States acting alone is
too fragmented and cannot achieve the coordinated, long-term, large-scale,
transnational, cross-sectorial effort required.

- Because a JU at EU level can help the life-science industries to
set a long-term research and innovation strategic agenda in a pan-European
structure, create the necessary critical mass, leverage private investment,
provide stable funding, facilitate knowledge sharing and reduce risk at lower
costs. A JU will help create networks for open innovation, which bring together
the main stakeholders along the entire drug development value chain.

- Because a JU can contribute to the EU's goal in other policy areas
such as the Commission Communication on Combatting Antimicrobial Resistance,
where the current IMI is one of the key implementation measures, the European
contribution to the Global One Health Initiative, the European Innovation
Partnership on Active and Healthy Ageing, the European Partnership for Action
Against Cancer, as well as the European Pact for Mental Health and action
related to the Commission Communication on Alzheimer's disease and other
dementias.

Therefore, the new proposal aims to address bottlenecks in areas of
public health interest, which are limiting the efficiency, effectiveness and
quality of the drug development activities needed to bring innovative medicines
to the market.

Building on past experience

The proposed JU builds upon the
achievements of the previous IMI JU set up under FP7.

IMI JU has mobilised resources by bringing together
partners from the pharmaceutical industry, academia, SMEs, patient
organisations and regulators in focused projects; it has stepped up cooperation
between stakeholders in the health research and innovation field by opening
access to other partners’ expertise and it has increase the collaboration
between the pharmaceutical industry and other stakeholders in Europe. It has
also fostered the development of comprehensive research agendas, and horizontal
policy coordination.

The interim evaluation of the IMI Joint Undertaking has
underlined that IMI enables mutual learning and has built understanding of
rationales and approaches among the different stakeholders. This has benefit to
all parties and has significantly contributed to the transition from a closed
to an open innovation model in biopharmaceutical research, supported by a fair
intellectual property regime. No other European programme has enabled
cross-company collaboration within the pharmaceutical sector on the scale that
has been achieved in IMI.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

Consultation of interested parties and use of expertise

Extensive consultations with stakeholders have been organised,
including Member States, SMEs in the life sciences, medical imaging and
information technology industries conducted through a series of dedicated
meetings (Impact Assessment, Annex 1). The impact assessment report also draws
on the results of the current JTI evaluation and the work of a group of
experts. A public consultation was held from 11 July to 4 October 2012[2]. In addition, an online
consultation for participants of on-going IMI projects was conducted[3].

Impact assessment

The proposed Regulation has been subject to
a Commission impact assessment, which is attached to the proposal.

3.           LEGAL ELEMENTS OF THE PROPOSAL

Summary of the proposed action

The proposal consists of a Council
Regulation on the Innovative Medicines 2 Joint Undertaking. The IMI Joint
Undertaking was initially established by Regulation (EC) No 73/2008 of the
Council of 20 December 2007, which is to be repealed.

Legal basis

The proposal is based on Article 187 of the
Treaty on the Functioning of the European Union.

The Rules for Participation and
Dissemination of Horizon 2020 will apply. However, given specific operational
needs of this initiative, derogations from these Rules are necessary.
Nevertheless, these specific derogations are not included in the present
proposal at this stage, in order not to prejudice the inter-institutional
discussions concerning the appropriate legal basis/procedural modalities for
their adoption, which are still pending in the context of the legislative works
concerning the Commission proposal for a Regulation of the European Parliament
and of the Council laying down the Rules for Participation and dissemination in
Horizon 2020 (COM(2011) 0810 - 2011/0399 (COD). The specific derogations will
be introduced at a later stage in view of the outcome of the abovementioned
discussions.

A first derogation will allow to limit the
eligibility for funding to entities such as SMEs, secondary and higher
education establishments, non-profit organizations, and companies encountering
difficulties to access finance, such as mid-caps or medium-sized companies.
Secondly, in order to facilitate and speed up the delivery of innovative
medicines to patients and to improve the drug research and development in
Europe, IMI2 Joint Undertaking requires derogations from the intellectual
property rules which concern relevant definitions, ownership, protection,
exploitation, dissemination, transfer and licensing of results and access
rights.

Subsidiarity and proportionality

The proposal is designed to maximise EU
added value and impact, focusing on objectives and activities that cannot be
sufficiently achieved by Member States acting alone. The industrial challenge
of bringing biomedical research and innovation to new products and thereby
impacting the health of EU citizens is so large and complex that Member States
acting alone do not have the necessary framework to set up transnational
collaborative platforms for strategic industrial research.

Public intervention at EU level is necessary
as only the EU is able to provide sustained, large-scale public sponsorship
able to facilitate the kind of cross-border, cross-sector, interdisciplinary
research and innovation consensus-building and implementation required.
Intervening at EU level by supporting transnational cooperation between firms
on long-term strategic research agendas produces the following added value over
and above what Member States acting alone can achieve. Joint undertakings are
the best set up to achieve the critical mass, in particular by implementation
of joint agenda setting, mobilising of additional funding and having a larger
leverage effect on industrial R&D investment.

In accordance with the principle of
proportionality, the provisions of this regulation do not go beyond what is
necessary to achieve its objectives.

4.           BUDGETARY IMPLICATION

The Legislative Financial Statement
presented with this regulation sets out the indicative budgetary implications. The
Union contribution shall be up to EUR 1 725 million[4] including EFTA contribution.
The envelope is in current prices. The Union contribution shall be made from
the ‘Health, demographic change and wellbeing’ challenge, DG Research &
Innovation envelope, as part of the implementation of Horizon 2020 – The
Framework Programme for Research and Innovation. The maximum amount of Union
contribution for administrative costs shall be EUR 44,85 million.

2013/0240 (NLE)

Proposal for a

COUNCIL REGULATION

on the Innovative Medicines Initiative 2
Joint Undertaking

(Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 187 and the first
paragraph of Article 188 thereof,

Having regard to the proposal from the
European Commission,

Having regard to the opinion of the
European Parliament[5],

Having regard to the opinion of the
Economic and Social Committee[6],

Whereas:

(1)       Public-private
partnerships in the form of Joint Technology Initiatives (JTIs) were initially provided
for in Decision No 1982/2006/EC of the European Parliament and of the Council
of 18 December 2006 concerning the Seventh Framework programme of the European
Community for research, technological development and demonstration activities
(2007-2013)[7].

(2)       Council Decision No
2006/971/EC of 19 December 2006 concerning the Specific Programme ‘Cooperation’
implementing the Seventh Framework programme of the European Community for
research, technological development and demonstration activities (2007-2013)[8] identified specific
public-private partnerships to be supported, including a public-private
partnership on Innovative Medicines Joint Technology Initiative between the
Union and the European Federation of Pharmaceutical Industries and Associations
(hereinafter "EFPIA").

(3)       Europe 2020 Strategy[9] underscores the need to develop
favourable conditions for investment in knowledge and innovation so as to
achieve smart, sustainable and inclusive growth in the Union. Both the European
Parliament and the Council have endorsed this strategy.

(4)       Regulation (EU) No .../2013
of the European Parliament and of the Council of ... 2013 establishing Horizon
2020 - The Framework Programme for Research and Innovation (2014-2020)[10] aims to achieve a greater
impact on research and innovation by combining Horizon 2020 Framework Programme
and private sector funds in public-private partnerships in key areas where
research and innovation can contribute to the Union's wider competitiveness
goals and help tackle societal challenges. Union involvement in those
partnerships could take the form of financial contributions to joint
undertakings established on the basis of Article 187 of the Treaty under
Decision No 1982/2006/EC.

(5)       In accordance with
Decision (EU) No .../2013 of the Council of ... 2013 establishing the Specific
Programme implementing Horizon 2020 (2014-2020)[11] further support should be
provided to joint undertakings established under Decision No 1982/2006/EC under
the conditions specified in Decision (EU) No [...]/2013..

(6)       The Innovative Medicines
Initiative (hereinafter ''IMI'') Joint Undertaking set up by Regulation (EC) No
73/2008 of the Council of 20 December 2007 setting up the IMI Joint Undertaking[12] has demonstrated the effective
mobilisation of resources by bringing together several partners from the
pharmaceutical industry, academia, small and medium-sized enterprises
(hereinafter ''SMEs''), patient organisations and regulators.

(7)       It has also stepped up
cooperation between stakeholders in the health research and innovation field by
allowing access to other partners’ expertise and increasing the collaboration
between the pharmaceutical industry and other stakeholders in the Union by developing comprehensive research agendas and horizontal policy coordination. No
other European or national programme has enabled cross-company collaboration
within the pharmaceutical sector on the scale that has been achieved by IMI.
The interim evaluation of the IMI Joint Undertaking[13] underlined that it enables
mutual learning and provides the opportunity to improve the reciprocal
understanding of the stakeholders, which benefits all parties and has
significantly contributed to the transition towards an open innovation model in
biopharmaceutical research.

(8)       Research related to the
future of medicine shall be undertaken in areas where combination of societal,
public health and biomedical industry competitiveness goals requires pooling of
resources and fostering collaboration between the public and private sectors,
with the involvement of SMEs. The scope of the initiative should be expanded to
all areas of life science research and innovation. The areas would be of public
health interest, as identified by the World Health Organisation report on
priority medicines for Europe and the World, which is currently being updated
with the new version expected to be released in 2013. The initiative should
consequently seek to involve a broader range of partners, including mid-caps,
from different sectors (e.g. biomedical imaging, medical information
technology, diagnostic and/or animal health industries). A wider participation
would help to advance the development of new approaches and technologies for
the prevention, diagnosis and treatment of diseases with high impact on public
health.

(9)       The continuation of this
initiative should also take into account the experience acquired from the
operations of the IMI Joint Undertaking including the results of its interim
evaluation and stakeholders' recommendations[14]
and be implemented using a more fit-for-purpose structure and rules in order to
enhance efficiency and ensure simplification at operational level. To this
effect, the Innovative Medicines Initiative 2 (hereinafter ''IMI2'') Joint
Undertaking should adopt financial rules specific to its needs in accordance
with Article 209 of Regulation (EU, Euratom) No 966/2012 of the European
Parliament and the Council of 25 October 2012 on the financial rules applicable
to the general budget of the Union[15].

(10)     The private Members to the
IMI2 Joint Undertaking have expressed in writing their agreement to
pursue the research activities in the area of the IMI2 Joint
Undertaking within a structure better adapted to the nature of a public-private
partnership. It is appropriate that the private-sector Members to the IMI2
Joint Undertaking accept the Statutes contained in the Annex by means of a
letter of endorsement.

(11)     As a means to further
develop IMI2 Joint Undertaking's objectives, membership should be open to other
legal entities. Moreover, legal entities interested in supporting IMI2 Joint
Undertaking’s objectives in their specific areas of research should be offered
the possibility to become Associated Partners in the IMI2 Joint Undertaking.

(12)     In order to achieve its
objectives, the IMI2 Joint Undertaking should provide financial support to
participants mainly in the form of grants following open and competitive calls
for proposals.

(13)     Contributions from the
private Members should relate to the administrative costs of the IMI2 Joint
Undertaking and, together with the Associated Partners for their specific area
of research, to the co-financing required to carry out research and innovation
actions supported by the IMI2 Joint Undertaking.

(14)     Participation in indirect
actions funded by the IMI2 Joint Undertaking should comply with Regulation (EU)
No ... /2013 of the European Parliament and of the Council of ... 2013 laying down
the rules for the participation and dissemination in "Horizon 2020 - the
Framework Programme for Research and Innovation (2014-2020)"[16].

(15)     The Union financial contribution
should be managed in accordance with the principle of sound financial
management and with the relevant rules on indirect management set out in
Regulation (EU, Euratom) No 966/2012 and Commission delegated Regulation (EU)
No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU,
Euratom) No 966/2012[17].

(16)     Audits of recipients of Union
funds under this Regulation should be carried out in such a manner that the
administrative burden is reduced, in compliance with Regulation (EU) No
[...]/2013 [Horizon 2020 Framework Programme].

(17)     The financial interests of
the Union and of the other Members of the IMI2 Joint Undertaking
should be protected through proportionate measures throughout the expenditure
cycle, including the prevention, detection and investigation of irregularities,
the recovery of funds lost, wrongly paid or incorrectly used and, where
appropriate, administrative and financial penalties in accordance with
Regulation (EU, Euratom) No 966/2012.

(18)     The Commission's internal
auditor should exercise the same powers over the IMI2 Joint Undertaking as
those exercised in respect of the Commission.

(19)     In accordance with Article
287(1) of the Treaty on the Functioning of the European Union, the constituent
instrument of bodies, offices or agencies set up by the Union may preclude the
examination of the accounts of all revenue and expenditure of those bodies,
offices or agencies by the Court of Auditors. In accordance with Article 60(5)
of Regulation (EU, Euratom) No 966/2012, the accounts of the bodies under
Article 209 Regulation (EU, Euratom) No 966/2012 are to be examined by an
independent audit body which is to give an opinion inter alia on the
reliability of the accounts and the legality and regularity of the underlying
transactions. Avoidance of duplication of the examination of the accounts
justifies that the accounts of the IMI2 Joint Undertaking should not be subject
to examination by the Court of Auditors.

(20)     In accordance with the
principles of subsidiarity and proportionality as set out in Article 5 of the
Treaty on European Union, the objectives of the IMI2 Joint Undertaking in
strengthening industrial research and innovation across the Union cannot be
sufficiently achieved by the Member States and can therefore, by reason of
avoiding duplication, retaining critical mass and ensuring that public
financing is used in an optimal way, be better achieved by the Union. This
Regulation confines itself to the minimum required in order to achieve those
objectives and does not go beyond what is necessary for that purpose.

(21)     The IMI Joint Undertaking
was set up for a period up to 31 December 2017. The IMI2 Joint Undertaking
should provide continued support to the Innovative Medicines research programme
by enlarging the scope of the activities under a modified set of rules. The
transition from the IMI Joint Undertaking to the IMI2 Joint Undertaking should
be aligned and synchronized with the transition from the Seventh Framework
programme to the Horizon 2020 Framework Programme to ensure optimal use of the
funding available for research. In the interest of legal certainty and clarity,
Council Regulation (EC) No 73/2008 should therefore be repealed and
transitional provisions should be set out.

HAS
ADOPTED THIS REGULATION:

Article 1

Establishment

1.           For the implementation of
the Joint Technology Initiative on Innovative Medicines, a joint undertaking
within the meaning of Article 187 of the Treaty (hereinafter ''IMI2 Joint
Undertaking''), is established for a period from 1 January 2014 until 31
December 2024.

2.           The IMI2 Joint Undertaking
shall replace and succeed the IMI Joint Undertaking as established by
Regulation (EC) No 73/2008.

3.           The IMI2 Joint Undertaking
shall constitute a body entrusted with the implementation of a public-private
partnership referred to in Article 209 of Regulation (EU, Euratom) No 966/2012.

4.           The IMI2 Joint Undertaking
shall have legal personality. In each of the Member States, it shall have the
most extensive legal capacity accorded to legal persons under the laws of those
Member States. It may, in particular, acquire or dispose of movable and
immovable property and may be party to legal proceedings.

5.           The seat of the IMI2 Joint
Undertaking shall be located in Brussels, Belgium.

6.           The Statutes of the IMI2
Joint Undertaking are set out in the Annex.

Article 2

Objectives

The IMI 2 Joint Undertaking shall have the
following objectives:

(a)
to contribute to the implementation of
Regulation (EU) No [...]/2013/EU [the Horizon 2020 Framework Programme], in
particular part ... of Decision (EU) No [...]/2013/EU [the Specific Programme
implementing the Horizon 2020 Framework Programme], and in particular to
improving European citizens' health and wellbeing.

(b)
to contribute to the objectives of the Joint
Technology Initiative on Innovative Medicines, in particular to:

i)       increase the success rate in clinical
trials of priority medicines identified by the World Health Organisation;

ii)       reduce the time to reach clinical
proof of concept in medicine development, such as for immunological,
respiratory, neurological and neurodegenerative diseases;

iii)      develop new therapies for diseases
for which there is a high unmet need, such as Alzheimer's disease and limited
market incentives, such as antimicrobial resistance;

iv)      develop diagnostic and treatment
biomarkers for diseases clearly linked to clinical relevance and approved by
regulators;

v)      reduce the failure rate of vaccine
candidates in phase III clinical trials through new biomarkers for initial
efficacy and safety checks;

vi)      improve the current drug development
process by providing support for the development of tools, standards and
approaches to assess efficacy, safety and quality of regulated health products.

Article 3

Union
contribution

1.           The maximum Union
contribution, including EFTA appropriations, to the IMI2 Joint Undertaking to
cover administrative costs and operational costs shall be EUR 1 725 million
which shall consist of the following:

(a)
up to EUR 1 500 million to match the
contribution of EFPIA, or its constituent entities or their affiliated
entities;

(b)
up to EUR 225 million to match additional
contributions from other Members Associated Partners, or from their constituent
or their affiliated entities.

The contribution of the Union shall be paid
from the appropriations in the general budget of the Union allocated to the Horizon
2020 Specific Programme implementing the Horizon 2020 Framework Programme in
accordance with Article 58(1)(c)(iv) and Articles 60 and 61 of Regulation (EU,
Euratom) No 966/2012 for bodies referred to in Article 209 of that Regulation.

2.           The arrangements for the
Union financial contribution shall be set out in a delegation agreement and
annual transfer of funds agreements to be concluded between the Commission, on
behalf of the Union, and the IMI2 Joint Undertaking.

3.           The delegation agreement
referred to in paragraph 2 shall address the elements set out in Article 58(3)
and Articles 60 and 61 of Regulation (EU, Euratom) No 966/2012 and in Article
40 of the Commission delegated Regulation (EU) No 1268/2012 as well as inter
alia the following:

(a)
the requirements for the IMI2 Joint
Undertaking's contribution regarding the relevant performance indicators
referred to in Annex II to Decision (EU) No ... [the Specific Programme
implementing the Horizon 2020 Framework Programme];

(b)
the requirements for the IMI2 Joint
Undertaking's contribution in view of the monitoring referred to in Annex III
to Decision (EU) No ... [the Specific Programme implementing the Horizon 2020
Framework Programme];

(c)
the specific performance indicators related to
the functioning of the IMI2 Joint Undertaking;

(d)
the arrangements regarding the provision of data
necessary to ensure that the Commission is able to meet its dissemination and
reporting obligations;

(e)
the use of and changes to human resources, in
particular the recruitment by function group, grade and category, the
reclassification exercise and any changes to the number of staff members.

Article 4

Contributions of Members other than the Union and of Associated
Partners

1.           EFPIA shall make or
arrange for its constituent entities or their affiliated entities to make
contributions of at least EUR 1 500 million. Other Members other than the Union or Associated Partners shall make, or arrange for their constituent entities or their
affiliated entities to make, the contributions corresponding to the amounts
they have committed when becoming a Member or an Associated Partner.

2.           The contribution referred
to in paragraph 1 shall consist of contributions to the IMI2 Joint Undertaking
as laid down in Clause 13(2), Clause 13(3)(b) and Clause 13(3)(c) of the
Statutes contained in the Annex.

3.           The Members other than the
 Union and Associated Partners shall report each year by 31 January to the
Governing Board of the IMI2 Joint Undertaking on the value of the contributions
referred to in paragraph 2 made in each of the previous financial years.

4.           For the purpose of valuing
the contributions referred to in Clause 13(3)(b) of the Statutes contained in
the Annex, the costs shall be determined according to the usual cost accounting
practices of the entities concerned, to the applicable
accounting standards of the country where each entity is established, and to
the applicable International Accounting
Standards/International Financial Reporting Standards. The costs shall be
certified by an independent external auditor appointed by the entity concerned.
The valuation of the contributions shall be verified by the IMI2 Joint
Undertaking. In case of remaining uncertainties, it may be audited by the IMI2
Joint Undertaking.

5.           The Commission may
terminate, proportionally reduce or suspend the Union financial contribution to
the IMI2 Joint Undertaking or trigger the winding up procedure referred to in
Clause 21(2) of the Statutes contained in the Annex if those Members and
Associated Partners, their constituent entities or their affiliated entities do
not contribute, contribute only partially or contribute late with regard to the
contributions referred to in paragraph 2.

Article 5

Financial
rules

The IMI2 Joint Undertaking shall adopt its
specific Financial rules in accordance with Article 209 of Regulation (EU,
Euratom) No 966/2012 and Regulation (EU) No ... [Delegated Regulation on the
model Financial Regulation for PPPs].

Article 6

Staff

1.           The Staff Regulations of
Officials of the Union and the Conditions of Employment of Other Servants of
the European Union as laid down by Council Regulation (EEC, Euratom, ECSC) No
259/68[18]
and the rules adopted by agreement between the institutions of the Union for
giving effect to those Staff Regulations and those Conditions of Employment of
Other Servants shall apply to the staff employed by the IMI2 Joint Undertaking.

2.           The Governing Board shall
exercise, with respect to the staff of the IMI2 Joint Undertaking, the powers
conferred by the Staff Regulations on the Appointing Authority and by the
Conditions of Employment on the Authority Empowered to Conclude Contract of
Employment (hereinafter "the appointing authority powers").

The Governing Board shall adopt, in accordance
with Article 110 of the Staff Regulations, a decision based on its Article 2(1)
and Article 6 of the Conditions of Employment delegating the relevant
appointing authority powers to the Executive Director and defining the
conditions under which this delegation of powers can be suspended. The
Executive Director shall be authorised to sub-delegate those powers.

Where exceptional circumstances so require, the
Governing Board may by way of a decision temporarily suspend the delegation of
the appointing authority powers to the Executive Director and those
sub-delegated by the latter and exercise them itself or delegate them to one of
its members or to a staff member of the Joint Undertaking other than the
Executive Director.

3.           The Governing Board shall
adopt appropriate implementing rules to the Staff Regulations and the
Conditions of Employment in accordance with Article 110 of the Staff
Regulations.

4.           The staff resources shall
be determined by the staff establishment plan of the IMI2 Joint Undertaking
indicating the number of temporary posts by function group and by grade and the
number of contract staff expressed in full-time equivalents, in line with its
annual budget.

5.           The staff of the IMI2
Joint Undertaking shall consist of temporary staff and contract staff.

6.           All costs related to the
staff shall be borne by the IMI2 Joint Undertaking.

Article 7

Seconded
national experts and trainees

1.           The IMI2 Joint Undertaking
may make use of seconded national experts and trainees not employed by the
Joint Undertaking. The number of seconded national experts expressed in
full-time equivalents shall be added to information on staff as referred to in
Article 6(4) of this Regulation in line with the annual budget.

2.           The Governing Board shall
adopt a decision laying down rules on the secondment of national experts to the
IMI2 Joint Undertaking and on the use of trainees.

Article 8

Privileges
and Immunities

The Protocol on the Privileges and
Immunities of the Union shall apply to the IMI2 Joint Undertaking and its
staff.

Article 9

Liability
of the IMI2 Joint Undertaking

1.           The contractual liability
of the IMI2 Joint Undertaking shall be governed by the relevant contractual
provisions and by the law applicable to the agreement, decision or contract in
question.

2.           In the case of non-contractual
liability, the IMI2 Joint Undertaking shall, in accordance with the general
principles common to the laws of the Member States, make good any damage caused
by its staff in the performance of their duties.

3.           Any payment by the IMI2
Joint Undertaking in respect of the liability referred to in paragraphs 1 and 2
and the costs and expenses incurred in connection therewith shall be considered
as expenditure of the IMI2 Joint Undertaking and shall be covered by the
resources of the IMI2 Joint Undertaking.

4.           The IMI2 Joint Undertaking
shall be solely responsible for meeting its obligations.

Article 10

Jurisdiction
of the Court of Justice and applicable law

1.           The Court of Justice shall
have jurisdiction under the conditions laid down in the Treaty as well as in
the following cases:

(a)
in any dispute between the Members of IMI2 Joint
Undertaking which relates to the subject matter of this Regulation;

(b)
pursuant to any arbitration clause contained in
agreements, decisions or contracts concluded by the IMI2 Joint Undertaking;

(c)
in disputes relating to compensation for damage
caused by the staff of the IMI2 Joint Undertaking in the performance of their
duties;

(d)
in any dispute between the IMI2 Joint
Undertaking and its servants within the limits and under the conditions laid
down in the Staff Regulations of Officials and the Conditions of Employment of
Other Servants of the European Union.

2.           Regarding any matter not
covered by this Regulation or by other acts of Union law, the law of the State
where the seat of the IMI2 Joint Undertaking is located shall apply.

Article 11

Evaluation

1.           By 31 December 2017 the
Commission shall conduct an interim evaluation of the IMI2 Joint Undertaking.
The Commission shall communicate the conclusions thereof, accompanied by its
observations, to the European Parliament and to the Council by 30 June 2018.

2.           On the basis of the
conclusions of the interim evaluation referred to in paragraph 1 the Commission
may act in accordance with Article 4(5) or take any other appropriate action.

3.           Within six months after
the winding up of the IMI2 Joint Undertaking, but no later than two years after
the triggering of the winding up procedure referred to in Clause 21 of the
Statutes contained in the Annex, the Commission shall conduct a final evaluation
of the IMI2 Joint Undertaking. The results of that final evaluation shall be
presented to the European Parliament and to the Council.

Article 12

Discharge

1.           The discharge of the
budget implementation with regard to the Union contribution to the IMI2 Joint
Undertaking shall be part of the discharge given by the European Parliament,
upon recommendation of the Council, to the Commission in accordance with the
procedure provided for in Article 319 of the Treaty.

2.           The IMI2 Joint Undertaking
shall fully cooperate with the institutions involved in the discharge procedure
and provide, as appropriate, any necessary additional information. In this
context, it may be requested to be represented in meetings with the relevant
institutions or bodies and assist the Commission authorising officer by
delegation.

Article 13

Ex-post
audits

1.           Ex-post audits of
expenditure on indirect actions shall be carried out by the IMI2 Joint
Undertaking in accordance with Article 23 of Regulation (EU) No ... [the Horizon
2020 Framework Programme] as part of the Horizon 2020 Framework Programme
indirect actions.

2.           To ensure coherence, the
Commission may decide to carry out the audits referred to in paragraph 1 on
those participants which have received funding from the IMI2 Joint Undertaking.

Article 14

Protection of the financial interests of the Members

1.           Without prejudice to
Clause 17(4), of the Statutes contained in the Annex, the IMI2 Joint
Undertaking shall grant Commission staff and other persons authorised by it, as
well as the Court of Auditors, access to its sites and premises and to all the
information, including information in electronic format, needed in order to
conduct their audits.

2.           The European Anti-fraud
Office (OLAF) may carry out investigations, including on-the-spot checks and
inspections, in accordance with the provisions and procedures laid down in
Regulation (EC) No 1073/1999 of the European Parliament and of the Council of
25 May 1999 concerning investigations conducted by the European Anti-Fraud
Office (OLAF)[19]
and Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning
on-the-spot checks and inspections carried out by the Commission in order to
protect the European Communities' financial interests against fraud and other
irregularities[20]
with a view to establishing whether there has been fraud, corruption or any
other illegal activity affecting the financial interests of the Union in
connection with an agreement or decision or a contract funded under this
Regulation.

3.           Without prejudice to paragraphs
1 and 2 contracts, agreements and decisions resulting from the implementation
of this Regulation shall contain provisions expressly empowering:

(a)
the IMI2 Joint Undertaking and OLAF to conduct
such audits and investigations, according to their respective competences.

(b)
the Commission and the Court of Auditors to
conduct such audits on the recipients of funding from the IMI2 Joint
Undertaking according to their respective competences.

4.           The IMI2 Joint Undertaking
shall ensure that the financial interests of its Members are adequately
protected by carrying out or commissioning appropriate internal and external
controls.

5.           The IMI2 Joint Undertaking
shall accede to the Inter-institutional Agreement of 25 May 1999 between the
European Parliament, the Council and the Commission concerning internal
investigations by OLAF[21].
The IMI2 Joint Undertaking shall adopt the necessary measures needed to
facilitate internal investigations conducted by OLAF.

Article 15

Confidentiality

Without prejudice to Article 16, the IMI2
Joint Undertaking shall ensure the protection of sensitive information whose
disclosure could damage the interests of its Members or of participants in the
activities of the IMI2 Joint Undertaking.

Article 16

Transparency

1.           Regulation (EC) No 1049/2001
of the European Parliament and of the Council of 30 May 2001 regarding public
access to European Parliament, Council and Commission documents[22], shall apply to documents held
by the IMI2 Joint Undertaking.

2.           The IMI2 Joint Undertaking
Governing Board may adopt practical arrangements for implementing Regulation
(EC) No 1049/2001.

3.           Without prejudice to
Article 10, decisions taken by the IMI2 Joint Undertaking pursuant to Article 8
of Regulation (EC) No 1049/2001 may form the subject of a complaint to the
Ombudsman under the conditions laid down in Article 228 of the Treaty.

Article 17

Rules
for participation and dissemination

Regulation (EU) No ... [Rules for
participation and dissemination in Horizon 2020] shall apply to the actions
funded by the IMI2 Joint Undertaking. In accordance with that Regulation, the
IMI2 Joint Undertaking shall be considered as a funding body and shall provide
financial support to indirect actions as set out in Clause 1 of the Statutes
contained in the Annex.

Article 18

Support
from the host State

An administrative agreement may be
concluded between the IMI2 Joint Undertaking and the State where its seat is
located concerning privileges and immunities and other support to be provided
by this State to the IMI2 Joint Undertaking.

Article 19

Repeal
and transitional provisions

1.           Regulation (EC) No 73/2008
is repealed with effect from 1 January 2014.

2.           Without prejudice to
paragraph 1, actions initiated under Regulation (EC) No 73/2008 and financial
obligations related to those actions shall continue to be governed by that
Regulation until their completion.

The actions arising from calls for proposals
provided for in Annual Implementation Plans adopted under Regulation (EC) No
.../2008 shall also be regarded as actions initiated under that Regulation.

The interim evaluation referred to in Article
11(1) shall include a final evaluation of the IMI Joint Undertaking operations
under Regulation (EC) No 73/2008.

3.           This Regulation shall not
affect the rights and obligations of staff engaged under Regulation (EC) No
73/2008.

The employment contracts of staff referred to
in the first subparagraph may be renewed under this Regulation in accordance
with the Staff Regulations.

The Executive Director appointed on the basis
of Regulation No 73/2008 shall, for the remaining period of term of office, be
assigned to the functions of the Executive Director as provided for in this
Regulation with effect from 1 January 2014. The other conditions of contract
shall remain unchanged.

4.           Unless otherwise agreed between
the Members of the IMI Joint Undertaking pursuant to Regulation (EC) No
73/2008, all rights and obligations including assets, debts or liabilities of
the Members of the IMI Joint Undertaking pursuant to that Regulation are
transferred to the Members of the IMI2 Joint Undertaking pursuant to this
Regulation.

5.           Any unused appropriations
under Regulation (EC) No 73/2008 shall be transferred to the IMI2 Joint
Undertaking.

Article 20

Entry
into force

This Regulation shall enter into force on
the twentieth day following that of its publication in the Official Journal of
the European Union.

This Regulation shall be binding in its
entirety and directly applicable in all Member States.

Done at Brussels,

For
the Council

The
President

ANNEX

STATUTES
OF THE IMI2 JOINT UNDERTAKING

1 -
Tasks

The IMI2 Joint Undertaking shall carry out
the following tasks:

(a)
to mobilise the public and private sector
resources needed to achieve the objectives of IMI2 Joint Undertaking;

(b)
to regularly review and make any necessary adjustments
to the Strategic Research Agenda of the IMI2 Joint Undertaking in light of
scientific developments occurring during its implementation;

(c)
to establish and develop close and long-term
cooperation between the Union, other Members, Associated Partners, and the
other stakeholders such as other industries, regulatory bodies, patient
organisations, academia and clinical centres, as well as cooperation between
industry and academia;

(d)
to facilitate coordination with European,
national and international activities in this area, and to communicate and
interact with the Member States and the countries associated with Horizon 2020
Framework Programme;

(e)
to effectively support research and innovation
in life sciences mainly through grants;

(f)
to define and carry out the IMI2 Joint
Undertaking annual work plan mainly through calls for proposals;

(g)
to initiate calls for proposals and any other
necessary procedure for funding, to evaluate proposals, to award funding to
projects according to the applicable rules, within the limits of available
funds;

(h)
information, communication, exploitation and
dissemination activities by applying mutatis mutandis the provisions of
Article 22 of the Regulation (EU) No [...]/2013 [the Horizon 2020 Framework
Programme];

(i)
to organise a meeting at least annually with
interest groups to ensure openness and transparency of the research activities
of the IMI2 Joint Undertaking with its stakeholders;

(j)
any other task needed to achieve the objectives
referred to in Article 2 of this Regulation.

2 -
Members and Associated Partners

1.           The Members of the IMI2
Joint Undertaking shall be the following:

(a)
the Union, represented by the Commission;

(b)
upon acceptance of these Statutes by means of a
letter of endorsement, the European Federation of Pharmaceutical Industries and
Associations (hereinafter ''EFPIA'').

2.           Provided that it
contributes to the funding referred to in Clause 13 of these Statutes to
achieve the objectives of the IMI2 Joint Undertaking set out in Article 2 of
this Regulation and accepts these Statutes, any legal entity that directly or
indirectly supports research and innovation in a Member State or in a country
associated with the Horizon 2020 Framework Programme may apply to become a
Member of the IMI2 Joint Undertaking.

3.           Upon acceptance of these Statutes
by means of a letter of endorsement, any legal entity other than a Member or a
constituent entity of a Member or any affiliated entity of either, supporting
the objectives of the IMI2 Joint Undertaking in its specific area of research, in
a Member State or in a country associated with the Horizon 2020 Framework
Programme, may apply to join IMI2 as an Associated Partner. The letter of
endorsement shall detail the scope of the association in terms of content, of
activities and duration.

4.           Associated Partners shall
contribute like Members other than the Union to the IMI2 Joint Undertaking's
operational costs, in accordance with Clause 13 of these Statutes.

The letter of endorsement shall detail the Associated
Partners’ contribution to IMI2 Joint Undertaking and that the Union will match,
in accordance with Articles 3 and 4 of this Regulation.

3 -
Changes to membership and to association

1.           Any application for
becoming a Member or an Associated Partner to the IMI2 Joint Undertaking shall
be addressed to the Governing Board, accompanied in the case of application for
becoming a Member by a proposal to adapt the composition of the Governing Board
set out in Clause 5.

2.           The Governing Board shall
assess the application taking into account the relevance and the potential
added value of the applicant for the achievement of the objectives of the IMI2
Joint Undertaking. It shall then decide on the application.

3.           Any Member or Associated
Partner may terminate its membership or association to the IMI2 Joint Undertaking.
The termination shall become effective and irrevocable six months after
notification to the other Members and Associated Partners. As of then, the
former Member or Associated Partner shall be discharged from any obligations
other than those approved or incurred by the IMI2 Joint Undertaking prior to
terminating the membership or participation.

4.           Membership of or association
to the IMI2 Joint Undertaking may not be transferred to a third party without
prior agreement of the Governing Board.

5.           The Commission shall
publish on its website immediately upon any change to membership or association
pursuant to this Clause an updated list of Members and Associated Partners of
the IMI2 Joint Undertaking together with the date when such change takes effect.

4 –
Organization of the IMI2 Joint Undertaking

1.           The bodies of the IMI2
Joint Undertaking shall be:

(a)
the Governing Board;

(b)
the Executive Director;

(c)
the Scientific Committee;

(d)
the States Representatives Group;

(e)
the Stakeholder Forum.

2.           The Scientific Committee,
the States Representatives Group and the Stakeholder Forum shall be advisory
bodies to the IMI2 Joint Undertaking.

5 –
Composition of the Governing Board

The Governing Board shall be composed of 5
representatives per Member.

6 –
Functioning of the Governing Board

1.           Without prejudice to
paragraph 2, each Member shall have a percentage out of 100 voting rights
corresponding to the percentage of its contribution to the IMI2 Joint
Undertaking.

The Commission shall hold 50% of the voting
rights. The vote of the Commission shall be indivisible. Each Member may
allocate its voting rights among its representatives in the Governing Board.
The Members shall use their best efforts to achieve consensus. Failing
consensus, the Governing Board shall take its decisions by a majority of at
least 75% of all votes including the votes of those who are not in attendance.

The chairperson of the Governing Board shall be
appointed on a rotating annual basis by each the Union and the other Members,
in turn.

2.           The Governing Board shall
hold its ordinary meetings at least twice a year. It may hold extraordinary
meetings at the request of any Member or at the request of the chairperson. The
meetings of the Governing Board shall be convened by its chairperson and shall
normally take place at the seat of the IMI2 Joint Undertaking.

The Executive Director shall take part in the
deliberations, but shall have no voting rights.

The Governing Board shall invite any Associated
Partner to take part in its deliberations for those points on the agenda that
concern its association. Associated Partners shall have no voting rights.

The chairperson of the States Representatives
Group shall attend meetings of the Governing Board as an observer.

The Governing Board may invite, on a case-by-case
basis, other persons to attend its meetings as observers, in particular
representatives of regional authorities of the Union.

The representatives of the Members shall not be
personally liable for actions they have undertaken in their capacity as
representatives on the Governing Board.

The Governing Board shall adopt its own rules
of procedure.

7 –
Tasks of the Governing Board

1.           The Governing Board shall
have overall responsibility for the strategic orientation and the operations of
the IMI2 Joint Undertaking and shall supervise the implementation of its
activities.

2.           The Governing Board shall
in particular carry out the following tasks:

(a)
assess, accept or reject applications for new
membership or association in accordance with
Clause 3;

(b)
decide on the termination of the membership or association
in the IMI2 Joint Undertaking of any Member or Associated Partner that does not
fulfil its obligations;

(c)
adopt the Financial rules of the IMI2 Joint
Undertaking in accordance with Article 5 of this Regulation;

(d)
adopt the annual budget of the IMI2 Joint
Undertaking, including the staff establishment plan indicating the number of
temporary posts by function group and by grade as well as the number of
contract staff and seconded national experts expressed in full-time equivalents;

(e)
exercise the appointing authority powers with
respect to the staff, in accordance with Article 6(2);

(f)
appoint, dismiss, extend the term of office of,
provide guidance to and monitor the performance of the Executive Director;

(g)
approve the organisational structure of the
Programme Office referred to in Clause 9(5) upon recommendation by the
Executive Director;

(h)
adopt the annual work plan and the corresponding
expenditure estimates, proposed by the Executive Director in close cooperation
with advisory groups referred to in Clause 7(2)(q), after having consulted the
Scientific Committee and the States Representatives Group;

(i)
approve the annual accounts;

(j)
approve the annual activity report, including
the corresponding expenditure;

(k)
arrange, as appropriate, for the establishment
of an internal audit capability of the IMI2 Joint Undertaking;

(l)
approve the calls for proposals as well as,
where appropriate, the related rules for submission, evaluation, selection,
award and evaluation review procedures, proposed by the Executive Director in
close cooperation with advisory groups referred to in Clause 7(2)(q);

(m)
approve the list of proposals selected for
funding;

(n)
establish the IMI2 Joint Undertaking's
communications policy upon recommendation of the Executive Director;

(o)
where appropriate, establish implementing rules
in line with Article 6(3);

(p)
where appropriate, establish rules on the
secondment of national experts to the IMI2 Joint Undertaking and on the use of
trainees in line with Article 7;

(q)
where appropriate, set up advisory groups in
addition to the bodies to the IMI2 Joint Undertaking;

(r)
where appropriate, submit to the Commission any
request to amend this Regulation proposed by any Member of the IMI2 Joint
Undertaking;

(s)
be responsible for any task which is not
specifically allocated to one of the bodies of the IMI2 Joint Undertaking; it
may assign such tasks to one of those bodies.

8 –
Appointment, dismissal or extension of the term of office of the Executive
Director

1.           The Executive Director
shall be appointed by the Governing Board from a list of candidates proposed by
the Commission, following an open and transparent selection procedure. The
Commission shall associate the representation from the other members of the
IMI2 Joint Undertaking in the selection procedure as appropriate.

In particular, an appropriate representation
from the other members of the IMI2 Joint Undertaking shall be ensured at the
pre-selection stage of the selection procedure. For that purpose, the private
members shall appoint by common accord a representative as well as an observer
on behalf of the Governing Board.

2.           The Executive Director is
a member of staff and shall be engaged as a temporary agent of the IMI2 Joint
Undertaking under point (a) of Article 2 of the Conditions of Employment of Other
Servants of the Union.

For the purpose of concluding the contract of
the Executive Director, the IMI2 Joint Undertaking shall be represented by the
chairperson of the Governing Board.

3.           The term of office of the
Executive Director shall be three years. By the end of that period, the Commission
associating the private members as appropriate shall undertake an assessment of
the performance of the Executive Director and the IMI2 Joint Undertaking's future
tasks and challenges.

4.           The Governing Board, acting
on a proposal from the Commission which takes into account the assessment
referred to in paragraph 3, may extend the term of office of the Executive
Director once, for no more than four years.

5.           An Executive Director
whose term of office has been extended may not participate in another selection
procedure for the same post at the end of the overall period.

6.           The Executive Director may
be dismissed only upon a decision of the Governing Board acting on a proposal
from the Commission associating the private members as appropriate.

9 -
Tasks of the Executive Director

1.           The Executive Director
shall be the chief executive responsible for the day-to-day management of the
IMI2 Joint Undertaking in accordance with the decisions of the Governing Board.

2.           The Executive Director
shall be the legal representative of the IMI2 Joint Undertaking. He/she shall
be accountable to the Governing Board.

3.           The Executive Director
shall implement the budget of the IMI2 Joint Undertaking.

4.           The Executive Director
shall in particular carry out the following tasks in an independent manner:

(a)
prepare and submit for adoption to the Governing
Board the draft annual budget, including the corresponding staff establishment
plan indicating the number of temporary posts in each grade and function group
and the number of contract staff and seconded national experts expressed in
full-time equivalents;

(b)
prepare in close cooperation with advisory
bodies referred to in Clause 7(2)(q) and submit for adoption to the Governing
Board the annual work plan and the corresponding expenditure estimates;

(c)
submit for approval to the Governing Board the
annual accounts;

(d)
prepare and submit for approval to the Governing
Board the annual activity report, including the corresponding expenditure;

(e)
submit for approval to the Governing Board the
list of proposals selected for funding;

(f)
sign individual grant agreements or decisions;

(g)
sign procurement contracts;

(h)
implement the IMI2 Joint Undertaking's
communications policy;

(i)
organise, direct and supervise the operations and
the staff of the IMI2 Joint Undertaking within the constraints of
the delegation by the Governing Board as provided for in Article 6(2) of this
Regulation;

(j)
establish and ensure the functioning of an
effective and efficient internal control system and report any significant
change to it to the Governing Board;

(k)
ensure that risk assessment and risk management
are performed;

(l)
take any other measures needed for assessing the
progress of the IMI2 Joint Undertaking towards achieving its objectives;

(m)
perform any other tasks entrusted or delegated
to the Executive Director by the Governing Board.

5.           The Executive Director
shall set up a Programme Office for the execution, under his/her
responsibility, of all support tasks arising from this Regulation. The
Programme Office shall be composed of the staff of the IMI2 Joint Undertaking
and shall in particular carry out the following tasks:

(a)
provide support in establishing and managing an
appropriate accounting system in accordance with the Financial rules of the
IMI2 Joint Undertaking;

(b)
manage the calls for proposals as provided for
in the annual work plan and administer the grant agreements or decisions,
including their coordination;

(c)
provide to the Members and to the other bodies
of the IMI2 Joint Undertaking all relevant information and support necessary
for them to perform their duties as well as responding to their specific
requests;

(d)
act as the secretariat of the bodies of the
Joint Undertaking and provide support to any advisory group set up by the
Governing Board.

10 -
Scientific Committee

1.           The Scientific Committee
shall consist of no more than 7 members appointed for a renewable period of one
year. It shall elect a chairperson from amongst its members for one year.

Additional experts may be appointed if
necessary for specific ad-hoc tasks and limited duration.

2.           The members of the
Scientific Committee shall reflect a balanced representation of world-wide
recognized experts from academia, industry and regulatory bodies. Collectively,
the Scientific Committee members shall have the necessary scientific
competencies and expertise covering the technical domain needed to make
strategic science-based recommendations to the IMI2 Joint Undertaking.

3.           The Governing Board shall
establish the specific criteria and selection process for the composition of
the Scientific Committee and shall appoint its members. The Governing Board
shall take into consideration the potential candidates proposed by the IMI2
States Representatives Group.

4.           The
Scientific Committee shall carry out the following tasks:

(a)
advise on the scientific priorities to be
addressed in the annual work plans;

(b)
advise on the scientific achievements described
in the annual activity report.

5.           The Scientific Committee
shall meet at least once a year. The meetings shall be convened by its
chairperson.

6.           The Scientific Committee
may, with the agreement of the chairperson, invite other persons to attend its
meetings.

7.           The Scientific Committee
shall adopt its own rules of procedure.

11-
States Representatives Group

1.           The IMI2 States
Representatives Group shall consist of one representative of each Member State and of each country associated to the Horizon 2020 Framework Programme. It
shall elect a chairperson from amongst its members.

2.           The States Representatives
Group shall meet at least once a year. The meetings shall be convened by its
chairperson. The chairperson of the Governing Board and the Executive Director
or their representatives shall attend the meetings.

The chairperson of the States Representatives
Group may invite other persons to attend its meetings as observers, in
particular representatives of regional authorities of the Union and
representatives of SME associations.

3.           The States Representatives
Group shall in particular review information and provide advice on the
following matters:

(a)
programme progress in the IMI2 Joint Undertaking
and achievement of its targets;

(b)
updating of strategic orientation;

(c)
links to the Horizon 2020 Framework Programme;

(d)
annual work plans;

(e)
involvement of SMEs.

4.           The States Representatives
Group shall also provide information to and act as an interface with the IMI2
Joint Undertaking on the following matters:

(a)
the status of relevant national or regional
research and innovation programmes and identification of potential areas of
cooperation, including deployment;

(b)
specific measures taken at national level or
regional level with regard to dissemination events, dedicated technical
workshops and communication activities.

5.           The States Representatives
Group may issue, on its own initiative, recommendations to the IMI2 Joint
Undertaking on technical, managerial and financial matters, in particular when
those matters affect national or regional interests.

The IMI2 Joint Undertaking shall inform the
States Representatives Group of the follow up it has given to such
recommendations.

6.           The States Representatives
Group shall adopt its own rules of procedure.

12 - Stakeholder Forum

1.           The Stakeholder Forum
shall be open to all public and private stakeholders, international interest
groups from Member States, associated countries as well as from other
countries.

2.           The Stakeholder Forum
shall be informed of the activities of the IMI2 Joint Undertaking and shall be
invited to provide comments.

3.           The meetings of the
Stakeholder Forum shall be convened by the Executive Director.

13 -
Sources of financing

1.           The IMI2 Joint Undertaking
shall be jointly funded by the Union, the Members other than the Union and the Associated Partners, or their constituent entities or their affiliated
entities, through financial contributions paid in instalments and contributions
consisting of the costs incurred by them in implementing indirect actions and that
are not reimbursed by the IMI2 Joint Undertaking.

2.           The administrative costs
of the IMI2 Joint Undertaking shall not exceed EUR 89,7
million and shall be covered through financial contributions divided
equally on an annual basis between the Union and the Members other than the Union. If part of the contribution for administrative costs is not used, it may be made
available to cover the operational costs of the IMI2 Joint Undertaking.

3.           The operational costs of
the IMI2 Joint Undertaking shall be covered through the following
contributions:

(a)
a financial contribution by the Union;

(b)
in kind contributions by the Members other than
the Union and the Associated Partners, or their constituent entities or their
affiliated entities, consisting of the costs incurred by them in implementing
indirect actions, and in relation to advisory bodies referred to in Clause
7(2)(q) if foreseen in the annual work plan, less the contribution of the IMI2
Joint Undertaking and any other Union contribution to those costs;

(c)
a financial contribution by the Members other
than the Union and the Associated Partners, or their constituent entities or their
affiliated entities, which may be made in addition to, or instead of point (b).

4.           The resources of the IMI2
Joint Undertaking entered to its budget shall be composed of the following
contributions:

(a)
Members' financial contributions to the
administrative costs;

(b)
Members' and Associated Partners’ financial
contributions to the operational costs;

(c)
any revenue generated by the IMI2 Joint
Undertaking;

(d)
other financial contributions, resources and
revenues.

Any interest yielded by the contributions paid
to the IMI2 Joint Undertaking by its Members and Associated Partners shall be
considered to be its revenue.

5.           All resources of the IMI2
Joint Undertaking and its activities shall be devoted to the objectives set out
in Article 2 of this Regulation.

6.           The IMI2 Joint Undertaking
shall own all assets generated by it or transferred to it for the achievement
of its objectives provided for in Article 2 of this Regulation.

7.           Except when the IMI2 Joint
Undertaking is wound up pursuant to Clause 21, any excess revenue over
expenditure shall not be paid to the Members of the IMI2 Joint Undertaking.

14 –
Financial commitments

Financial commitments of the IMI2 Joint
Undertaking shall not exceed the amount of financial resources available or
committed to its budget by its Members and Associated Partners.

15 -
Financial year

The financial year shall run from 1 January
to 31 December.

16 –
Operational and financial planning

1.           The Executive Director
shall submit for adoption to the Governing Board a draft annual work plan, which
shall include a detailed plan of the research and innovation activities, the
administrative activities and the corresponding expenditure estimates for the
coming year. The draft work plan shall also include the estimated value of the
contributions to be made in accordance with clause 13(3)(b).

2.           The annual work plan for a
particular year shall be adopted by the end of the previous year. The annual
work plan shall be made publicly available.

3.           The Executive Director
shall prepare the draft annual budget for the following year and submit it to
the Governing Board for adoption.

4.           The annual budget for a
particular year shall be adopted by the Governing Board by the end of the
previous year.

5.           The annual budget shall be
adapted in order to take into account the amount of the Union contribution as
set out in the Union budget.

17 –
Operational and financial reporting

1.           The Executive Director
shall report annually to the Governing Board on the performance of his duties
in accordance with the Financial rules of the IMI2 Joint Undertaking.

By 15 February each year the Executive Director
shall submit to the Governing Board for approval an annual activity report on
the progress made by the IMI2 Joint Undertaking in the previous
calendar year, in particular in relation to the annual work plan for that year.
That report shall include, inter alia, information on the following matters:

(a)
research, innovation and other actions carried
out and the corresponding expenditure;

(b)
proposals submitted, including a breakdown by
participant type, including SMEs, and by country;

(c)
the actions selected for funding, including a
breakdown by participant type, including SMEs, and by country and indicating
the contribution of the IMI2 Joint Undertaking to the individual participants
and actions.

2.           Once approved by the
Governing Board, the annual activity report shall be made publicly available.

3.           The IMI2 Joint Undertaking
shall report annually to the Commission in accordance with Article 60(5) of
Regulation (EU, Euratom) No 966/2012.

4.           The accounts of the IMI2
Joint Undertaking shall be examined by an independent audit body as laid down
in Article 60(5) of Regulation (EU, Euratom) No 966/2012.

The accounts of the IMI2 Joint Undertaking
shall not be subject to examination by the Court of Auditors.

18 - Internal audit

The Commission's internal auditor shall
exercise the same powers over the IMI2 Joint Undertaking as those exercised in
respect of the Commission.

19 -
Liability of Members and insurance

1.           The financial liability of
the Members for the debts of the IMI2 Joint Undertaking shall be limited to
their contribution already made for the administrative costs.

2.           The IMI2 Joint Undertaking
shall take out and maintain appropriate insurance.

20 - Conflict of interest

1.           The IMI2 Joint Undertaking,
its bodies and staff shall avoid conflict of interest in the implementation of
their activities.

2.           The IMI2 Joint Undertaking
Governing Board may adopt rules for the prevention and management of conflicts
of interest in respect of its Members, Associated Partners, bodies and
staff. In those rules, provision shall be made to avoid conflict of interest
for the representatives of the Members serving the Governing Board.

21 -
Winding up

1.           The IMI2 Joint Undertaking
shall be wound up at the end of the period in Article 1 of this Regulation.

2.           The winding up procedure
shall be automatically triggered if the Commission or all other Members
withdraw from the IMI2 Joint Undertaking.

3.           For the purpose of
conducting the proceedings to wind up the IMI2 Joint Undertaking, the Governing
Board shall appoint one or more liquidators, who shall comply with the
decisions of the Governing Board.

4.           When the IMI2 Joint
Undertaking is being wound up, its assets shall be used to cover its
liabilities and the expenditure relating to its winding up. Any surplus shall
be distributed among the Members at the time of the winding up in proportion to
their financial contribution to the IMI2 Joint Undertaking. Any such surplus
distributed to the Union shall be returned to the Union budget.

5.           An ad hoc procedure shall
be set up to ensure the appropriate management of any agreement concluded or
decision adopted by the IMI2 Joint Undertaking as well as any procurement
contract with a duration longer than its duration.

LEGISLATIVE FINANCIAL
STATEMENT

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.        Title of the
proposal/initiative

1.2.        Policy area(s) concerned
in the ABM/ABB structure

1.3.        Nature of the
proposal/initiative

1.4.        Objectives

1.5.        Grounds for the
proposal/initiative

1.6.        Duration and financial
impact

1.7.        Management mode(s)
envisaged

2.           MANAGEMENT MEASURES

2.1.        Monitoring and reporting
rules

2.2.        Management and control
system

2.3.        Measures to prevent fraud
and irregularities

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected

3.2.        Estimated impact on
expenditure

3.2.1.     Summary of estimated impact
on expenditure

3.2.2.     Estimated impact on
Innovative Medicines Initiative Joint Undertaking's appropriations

3.2.3.     Estimated impact on
Innovative Medicines Initiative Joint Undertaking's human resources

3.2.4.     Compatibility with the
current multiannual financial framework

3.2.5.     Third-party contributions

3.3.        Estimated impact on
revenue

LEGISLATIVE FINANCIAL STATEMENT

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.        Title of the
proposal/initiative

Proposal for a Council Regulation on the Innovative Medicines
Initiative 2 Joint Undertaking

1.2.        Policy area(s) concerned
in the ABM/ABB structure[23]

Policy area: Smart and Inclusive Growth

Activity: Horizon 2020 – The Framework Programme for Research and
Innovation; ‘Societal challenges’; in the challenge ‘Health, demographic change
and wellbeing’

1.3.        Nature of the proposal/initiative

 ̈ The
proposal/initiative relates to a new action

 ̈ The
proposal/initiative relates to a new action following a pilot
project/preparatory action[24]

X The proposal/initiative relates to the
extension of an existing action

 ̈ The proposal/initiative relates to an
action redirected towards a new action

1.4.        Objective(s)

1.4.1.     The Commission's
multiannual strategic objective(s) targeted by the proposal/initiative

The action is part of the Smart and Inclusive Growth strategic
objective.

The action is addressing two objectives of Horizon 2020 strategy:

- Objective number 1. Innovation Union
- Objective number 5. An industrial policy for the globalisation area

The objectives of the IMI2 JU are to:

i.        increase the success rate in clinical trials of priority
medicines identified by the World Health Organisation;

ii.       reduce the time to reach clinical proof of concept in
immunological, respiratory, neurological and neurodegenerative diseases;

iii.      develop new therapies for diseases for which there is a
high unmet need, such as Alzheimer's disease and limited market incentives,
such as antimicrobial resistance;

iv.      develop diagnostic markers for diseases clearly linked to
clinical relevance approved by regulators;

v.       reduce the failure rate of vaccine candidates in phase III
clinical trials through new biomarkers for initial efficacy and safety checks.

1.4.2.     Specific objective(s) and
ABM/ABB activity(ies) concerned

Specific objective Nbr 8
Societal challenge to improve the lifelong health
and wellbeing of all.

ABM/ABB activity(ies) concerned

Societal challenges - JTI IMI2

1.4.3.     Expected result(s) and
impact

Specify the effects
which the proposal/initiative should have on the beneficiaries/groups targeted.

This issue is addressed in the Impact Assessment document attached
to this proposal.

1.4.4.     Indicators of results and
impact

Specify the
indicators for monitoring implementation of the proposal/initiative.

Scientific and technological progress

|| Indicator || Target

· Monitoring achievement of objectives of the JU || Monitoring the achievement of specific objectives || See section 3.2 of the Impact Assessment Report

Number of open innovation networks established || 3 open innovation network between different industry sectors, and 2 clinical trial networks

Number of strategic agenda setting beyond JU || Strategic agenda setting in 3 research areas defined by the specific objectives in section 3.2;

Number of partnerships established || Partnerships in 16 research areas defined by the specific objectives in section 3.2

Monitoring implementation of the strategic research agenda || Number of data points analysed for reaching at unbiased molecular taxonomy of disease || 5 million data points

Number of diseases classified || 4 diseases area

Number of trials analysed for learning from negative results || 125 trials

Level of taking account of health and demographic change and wellbeing policy goals || Strategic research agenda needs to address points 1.1.2, 1.2.2, parts of 1.2.3 and parts of 1.3.1 of partial general approach of Horizon 2020

Monitoring JU operations

Selection of projects and allocation of funding || Time-to-grant || 270 days

Time-to-pay || 30 days

Level of adherence to time schedule || Budget committed and calls launched accordingly

Level of SME participation and benefits || From the beginning 20% IMI2 funding going to SMEs, benefit to SMEs monitored as from 2nd year: at least 70% of SME respondents stating that they benefit from the expertise of industry and/or academic partners; 80% of SMEs stating that objectives could not have been met without IMI2 support.

Efficiency of research programme || Number of publications || On average 20 publications per €10 million funding

Impact factor of journals where articles are published || Average impact factor 10% above EU average

Impact of publications || Citations 20% above average for EU publications

Number of patents || On average 2 patent applications per €10 million funding

1.5.        Grounds for the
proposal/initiative

1.5.1.     Requirement(s) to be met in
the short or long term

IMI2 JU shall contribute to achieving smart, sustainable and
inclusive growth.

1.5.2.     Added value of EU
involvement

This issue is addressed in the Impact Assessment document attached
to this proposal.

1.5.3.     Lessons learned from
similar experiences in the past

The ongoing Innovative Medicines Initiative has achieved a
significant mobilisation of resources, bringing together a large number of
partners from the pharmaceutical industry, academia, SMEs, patient
organisations and regulators in focused projects that mobilise significant
resources (average project size €32 million). The large pharmaceutical industry
participates strongly in IMI (50% of resources, 30% of staff – total commitment
to projects by large industry of €715 million until end 2012), whereas its participation
in European research programmes outside IMI is very low (0.78% of
participations in FP7 Health, total contribution to all of FP7 about €80
million, 1⁄4 of which to FP7 Health).

IMI has significantly contributed to strengthening the links between
the different stakeholders in the health research and innovation field by
opening access to other partner’s expertise and increasing collaboration
between the pharmaceutical industry and other stakeholders in Europe.

IMI also achieves focusing and developing strategic research agendas
and horizontal policy coordination, the former having a structuring effect on
European life science research, notably in neuropsychiatric diseases, in
antimicrobial resistance, and other areas, the latter by coordinating the involvement
of patient organisations and - in projects addressing regulatory sciences - of
regulatory agencies, which was considered a rare achievement in the interim
evaluation.

The ongoing Innovative Medicines Initiative has demonstrated that
bringing together relevant partners can lead to a new model of innovation and
can address key bottlenecks in biomedical and pharmaceutical research.

Areas for improvement concern especially the administrative set-up,
where simplification is required and the opening of the partnership by the
expanding the scope to all areas of life science research and innovation and
consequently involving a broader range of partners. A particular issue that
needs to be addressed is to open the partnership to industrial participants who
are neither EFPIA companies nor SMEs under the EU definition.

1.5.4.     Compatibility and possible
synergy with other appropriate instruments

The societal challenge of the ageing population is so large that the
PPP under Horizon 2020 cannot address it alone. The future IMI will be
complementary to the Ambient Assisted Living Article 185 initiative, which is
focused on deploying technology solutions for helping elderly citizens live
independently. The European Innovation Partnership on Active and Healthy Ageing
(EIP on AHA) under the Innovation Union flagship initiative, aims at increasing
by two the number of healthy life years of European citizens by 2020 through
the coordination of many different activities. Results from IMI2 will support
this EIP on AHA. Research actions conducted under IMI2 will be tightly
coordinated with research funded from the ‘Health, demographic change and
wellbeing challenge’. Finally, this initiative aligns with the proposed EU
Regulation on Clinical Trials, which addresses current shortcomings in Europe resulting from too different national legislations hampering product development.

1.6.        Duration and financial
impact

X Proposal/initiative of limited
duration

X       Proposal/initiative in effect from
01/01/2014 to 31/12/2024

X       Financial impact from 01/01/2014 to
31/12/2020 for commitment appropriations

X       Financial impact from 01/01/2014 to
31/12/2024 for payment appropriations

 ̈ Proposal/initiative of unlimited
duration

–
Implementation with a start-up period from YYYY
to YYYY,

–
followed by full-scale operation.

1.7.        Management mode(s)
envisaged[25]

 ̈ Direct management by the Commission through:

 ̈      executive agencies

 ̈ Shared management with Member States:

X Indirect management by
entrusting budget implementation tasks to:

 ̈      international organisations and their agencies (please
specify);

 ̈      the EIB and the European Investment Bank;

X       bodies referred to in Article 209 FR;

 ̈      public law bodies;

 ̈      bodies governed by private law with a public service mission
to the extent that they provide adequate financial guarantees;

 ̈      bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that
provide adequate financial guarantees;

 ̈      persons entrusted with the implementation of specific actions
in the CFSP pursuant to Title V of the TEU and identified in the relevant basic
act.

2.           MANAGEMENT MEASURES

2.1.        Monitoring and reporting
rules

Specify frequency
and conditions.

The IMI Joint Undertaking will be monitored through intermediary
contacts and as provided in Articles 6 and 16 of the Statutes.

A set of quantitative and qualitative performance indicators will be
established to monitor the implementation of IMI2. These performance indicators
will measure the impact of the JU on EU competitiveness and on achieving the
objectives of advancing health research to bring biomedical innovations to
patients.

The top-level monitoring will fall upon the Governing Board of the
JU, in which the Commission will be represented according to its share of the
overall budget. The Executive Management will monitor the operations of the JU
internally.

In support of the European Research Area objective, the organisation
of the annual Stakeholder forum will continue, in order to report on the
progress of IMI2 operations, to contribute to the exchange of information and
to help coordinating activities between the JTI, other EU initiatives, and
national, regional and private actions.

Quantitative indicators will be measured in a comparative and
systematic manner, and qualitative analyses will be performed annually.

An interim evaluation will be carried out by 31.12.2017 and a final
evaluation within 6 months after the end of IMI2.

2.2.        Management and control
system

2.2.1.     Internal control framework

The Commission (DG RTD) through the Authorising Officer by
Delegation will ensure that the rules applicable to the IMI JTI JU fully comply
with the requirements of Article 60 and 61 of the Financial Regulation.
Monitoring arrangements, including membership of the Governing Board, of the
IMI JTI JU and reporting arrangements will ensure that the Commission services
can meet the accountability requirements both to the College and to the
Budgetary Authority.

The internal control framework for the IMI JTI JU is built on:

-the implementation of the Internal Control Standards offering at
least equivalent guarantees to those of the Commission;

-procedures for selecting the best projects through independent
evaluation, and for translating them into legal instruments;

- project and contract management throughout the lifetime of every
project;

- ex-ante checks on 100% of claims, including receipt of audit
certificates and ex-ante certification of cost methodologies;

- ex-post audits on a sample of claims as part of the Horizon 2020 ex-post
audits;

- and scientific evaluation of project results.

Various measures have been established to mitigate the inherent risk
of conflict of interest within the IMI JTI JU, especially equal votes for the
Commission and for industrial partners in the Governing Board, selection of the
Director by the Governing Board based on a proposal by the Commission,
independence of staff, evaluations by independent experts based on published
selection criteria together with appeal mechanisms and full declarations of any
interests. The establishment of ethical and organisational values will be one
of the key roles of the JTI JU, and will be monitored by the Commission.

2.2.2.     Costs and benefits of
controls

The Commission's internal auditor shall exercise the same powers
over the Joint Undertaking as those exercised in respect of the Commission.
Moreover, the Governing Board may arrange, as appropriate, for the
establishment of an internal audit capability of the Joint Undertaking.

The Executive Director of the IMI JTI JU, as Authorising Officer,
will be required to introduce a cost-effective system of internal control and
management. He/she will be required to report to the Commission on the internal
control framework adopted.

The Commission will monitor the risk of non-compliance through the
reporting system that it will develop, as well as by following the results of
ex-post audits on the recipients of EU funds from the IMI JTI, as part of
ex-post audits covering the whole of the Horizon 2020.

The control system established will need to take account of the
strong feeling, amongst the recipients of EU funds as well as amongst the
legislative authority, that the control burden required to attain an error
limit of 2% has become too great. This runs the risk of lowering the
attractiveness of the Union's Research programme, and so negatively affecting
Union research and innovation.

The European Council of February 4th 2011 concluded that ‘it is
crucial that EU instruments aimed at fostering R&D&I be simplified in
order to facilitate their take-up by the best scientists and the most
innovative companies, in particular by agreeing between the relevant
institutions a new balance between trust and control and between risk taking
and risk avoidance’ (see EUCO 2/1/11 REV1, Brussels 8 March 2011).

The European Parliament, in its Resolution of 11 November 2010
(P7_TA(2010)0401) on simplifying the implementation of the Research Framework
Programmes explicitly supports a higher risk of errors for research funding and
"expresses its concern that the current system and the practice of FP7
management are excessively control-oriented, thus leading to waste of
resources, lower participation and less attractive research landscapes; notes
with concern that the current management system of ‘zero risk tolerance’ seems
to avoid, rather than to manage, risks".

There is therefore an acceptance among stakeholders and Institutions
that the whole range of objectives and interests, especially the success of the
Research policy, international competitiveness and scientific excellence,
should be considered, along with the error rate. At the same time, there is a
clear need to manage the budget in an efficient and effective manner, and to
prevent fraud and waste.

As stated above, the Commission will monitor the risk of
non-compliance through the reporting system that it will establish, as well as
by following the results of ex-post audits on the recipients of EU funds from
the IMI JTI JU, as part of the ex-post audits covering the whole of the Horizon
2020.

2.2.3.     Expected level of risk of
non-compliance

As the Commission reported in the Legislative Financial Statement
for Horizon 2020, it remains the ultimate objective to achieve a residual error
rate of less than 2% of total expenditure over the lifetime of the programme,
and to that end, it has introduced a number of simplification measures.
However, the other objectives set out above as well as the costs of controls
need to be considered.

As the rules for participation of the IMI JTI JU are similar to
those of Horizon 2020, and with a population of beneficiaries with a similar
risk profile to those of the Commission, it can be expected that the level of
error will be similar to that established by the Commission for Horizon 2020,
i.e. to give reasonable assurance that the risk of error over the course of the
multiannual expenditure period is, on an annual basis, within a range of 2-5 %,
with the ultimate aim to achieve a residual level of error as close as possible
to 2 % at the closure of the multi-annual programmes, once the financial impact
of all audits, correction and recovery measures have been taken into account.

See the Legislative Financial Statement for Horizon 2020 for full
details of the error rate expected with respect to participants.

2.3.        Measures to prevent fraud
and irregularities

The Commission will ensure that procedures to fight against fraud at
all stages of the management process are applied by the IMI2 JTI JU. The
proposals for Horizon 2020 have been subject to fraud proofing and an
assessment of their impact. Overall the measures proposed should have a
positive impact on the fight against fraud, especially the greater emphasis on
risk based audit and reinforced scientific evaluation and control.

The Commission will ensure that appropriate measures are in place to
ensure that, when actions financed under this Regulation are implemented, the
financial interests of the Union are protected by the application of preventive
measures against fraud, corruption and any other illegal activities, by
effective checks and, if irregularities are detected, by the recovery of the
amounts wrongly paid and, where appropriate, by effective, proportionate and
deterrent penalties.

The current IMI2 JTI JU already cooperates with the Commission
services in matters relating to fraud and irregularity, the Commission will
ensure that this will continue and be strengthened.

The accounts of the IMI2 Joint Undertaking shall be examined by an
independent audit body as laid down in Article 60(5) of Regulation (EU,
Euratom) No 966/2012. The accounts of the IMI2 Joint Undertaking shall not be
subject to examination by the Court of Auditors. The Court of Auditors may
conduct audits on those participants that have received funding from the IMI2
Joint Undertaking.

The European Anti-fraud Office (OLAF) may carry out investigations,
including on-the-spot checks and inspections, in accordance with the provisions
and procedures laid down in Regulation (EC) No 1073/1999 of the European
Parliament and of the Council of 25 May 1999 concerning investigations
conducted by the European Anti-Fraud Office (OLAF) and Council Regulation
(Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and
inspections carried out by the Commission in order to protect the European
Communities' financial interests against fraud and other irregularities with a
view to establishing whether there has been fraud, corruption or any other
illegal activity affecting the financial interests of the Union in connection
with an agreement or decision or a contract funded under this Regulation.

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.        Heading of the multiannual
financial framework and expenditure budget line affected

· New budget lines requested

In order of multiannual financial framework
headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Number [H1a Competitiveness for growth and jobs] || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

1a || 08.020731 (mother line 08.020301) || [Diff] || YES || YES || YES || YES

3.2.        Estimated impact on
expenditure

3.2.1.     Summary of estimated impact
on expenditure

EUR million (to three decimal places)

Heading of multiannual financial Framework: || H1a || Competitiveness for growth and jobs

IMI 2 Joint Undertaking || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021-2024 || TOTAL

Title 1 Staff expenditure || Commitments || (1) || 0,239 || 0,378 || 0,555 || 0,648 || 2,534 || 2,585 || 12,999 || 0 || 19,938

Payments || (2) || 0,239 || 0,378 || 0,555 || 0,648 || 2,534 || 2,585 || 2,636 || 10,363 || 19,938

Title 2 Infrastructure and operating expenditure || Commitments || (1a) || 0,496 || 0,672 || 0,706 || 0,717 || 3,243 || 3,192 || 15,886 || 0 || 24,912

Payments || (2a) || 0,496 || 0,672 || 0,706 || 0,717 || 3,243 || 3,192 || 3,140 || 12,746 || 24,912

Title 3 operational expenditure || Commitments || (3a) || 207,300 || 211,000 || 214,800 || 190,850 || 276,200 || 293,000 || 287,000 || 0 || 1.680,150

Payments || (3b) || 16,600 || 65,950 || 105,000 || 146,000 || 191,000 || 209,200 || 245,000 || 701,400 || 1.680,150

TOTAL appropriations for [IMI 2 JU] || Commitments || =1+1a +3a || 208,035 || 212,050 || 216,061 || 192,215 || 281,977 || 298,777 || 315,885 || 0 || 1.725,000

Payments || =2+2a +3b || 17,335 || 67,000 || 106,261 || 147,365 || 196,777 || 214,977 || 250,776 || 724,509 || 1.725,000

1 In addition EUR
15.8 million (including EFTA) has been frontloaded in 2013for the IMI running
cost related to the completion of its activities under FP7.

The annual split
of these appropriations as well as the corresponding industry contribution are
presented in the table under point 3.2.3.3.d.

Heading of multiannual financial framework: || 1A || Competitiveness for growth and jobs

EUR million (to three decimal places)

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021-2024 || TOTAL

DG: RTD || ||

Ÿ Human resources || 0,559 || 0,570 || 0,582 || 0,593 || 0,605 || 0,617 || 0,630 || || 4,156

Ÿ Other administrative expenditure || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL DG RTD || Appropriations || 0,559 || 0,570 || 0,582 || 0,593 || 0,605 || 0,617 || 0,630 || || 4,156

TOTAL appropriations under HEADING 1A of the multiannual financial framework || (Total commitments = Total payments) || 0,559 || 0,570 || 0,582 || 0,593 || 0,605 || 0,617 || 0,630 || || 4,156

EUR million (to three decimal places)

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021-2024 || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 208,594 || 212,620 || 216,643 || 192,808 || 282,582 || 299,394 || 316,515 || || 1.729,156

Payments || 17,894 || 67,570 || 106,843 || 147,958 || 197,382 || 215,594 || 251,406 || 724,509 || 1.729,156

3.2.2.     Estimated impact on IMI 2
JU's appropriations

–
 ̈  The proposal/initiative does not require the use of operational
appropriations

–
X  The proposal/initiative requires the use of
operational appropriations, as described below:

Commitment appropriations in EUR million (to three
decimal places)

Indicate objectives and outputs ò || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

OUTPUTS

Type[26] || Average cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Total number || Total cost

SPECIFIC OBJECTIVE NO 1[27] supporting grants for collaborative projects led by EFPIA || || || || || || || || || || || || || || || ||

- Output || Grants || ~€17,5m || 10 || 179,500 || 10 || 182,700 || 11 || 186,000 || 9 || 165,100 || 14 || 239,200 || 15 || 254,000 || 14 || 248,650 || 83 || 1.455,150

Subtotal for specific objective N°1 || 10 || 179,500 || 10 || 182.700 || 11 || 186,000 || 9 || 165,100 || 14 || 239,200 || 15 || 254,000 || 14 || 248,650 || 83 || 1.455,150

SPECIFIC OBJECTIVE No 2 supporting grants for collaborative projects led by other industries || || || || || || || || || || || || || || || ||

- Output || Grants || ~€13,2m || 2 || 27,800 || 2 || 28,300 || 2 || 28,800 || 2 || 25,600 || 3 || 37,000 || 3 || 39,300 || 3 || 38,200 || 17 || 225,000

Subtotal for specific objective No 2 || 2 || 27,800 || 2 || 28,300 || 2 || 28,800 || 2 || 25,600 || 3 || 37,000 || 3 || 39,300 || 3 || 38,200 || 17 || 225,000

- Output || Participation in investment projects || || || || || || || || || || || || || || || || ||

Subtotal for specific objective No 3 || || || || || || || || || || || || || || || ||

TOTAL COST || 12 || 207,300 || 12 || 211,000 || 13 || 214,800 || 11 || 190,700 || 17 || 276,200 || 18 || 293,300 || 17 || 286,850 || 100 || 1.680,150

3.2.3.     Estimated impact on IMI 2
JU's human resources

3.2.3.1.  Summary

– X  The proposal/initiative does not require the use of
appropriations of an administrative nature

–  ̈  The
proposal/initiative requires the use of appropriations of an administrative
nature, as described below:

Staffing numbers
(in headcounts / FTE)[28]

|| Year 2014[29] || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021 || Year 2022 || Year 2023 || Year 2024

Officials (AD Grades) || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

Officials (AST Grades) || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

Contract agents || 8 || 9 || 9 || 10 || 10 || 10 || 10 || 9 || 9 || 9 || 8

Temporary agents (AD only) || 33 || 35 || 38 || 39 || 39 || 39 || 39 || 38 || 37 || 37 || 35

Seconded National Experts[30] || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL || 41 || 44 || 47 || 49 || 49 || 49 || 49 || 47 || 46 || 46 || 43

EUR million (to three decimal places)

|| Year 2014[31] || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021 || Year 2022 || Year 2023 || Year 2024

Officials (AD Grades) || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

Officials (AST Grades) || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

Contract agents || 0,376 || 0,431 || 0,440 || 0,499 || 0,509 || 0,519 || 0,529 || 0,486 || 0,496 || 0,506 || 0,458

Temporary agents || 3,564 || 3,856 || 4,270 || 4,470 || 4,559 || 4,650 || 4,743 || 4,714 || 4,682 || 4,776 || 4,608

Seconded National Experts || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

These amounts
consider costs until 2024 including the phasing out costs.

TOTAL || 3,940 || 4,287 || 4,710 || 4,969 || 5,068 || 5,169 || 5,273 || 5,200 || 5,178 || 5,281 || 5,066

3.2.3.2.  Estimated requirements of
human resources for the parent DG

–
 ̈  The proposal/initiative does not require the use of human
resources.

–
X  The proposal/initiative requires the use of
human resources, as described below:

Estimate to be expressed in full number

|| Year 2014[32] || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020*

Ÿ Establishment plan posts (officials and temporary staff)

XX 01 01 01 (Headquarters and Commission’s Representation Offices) || 0 || 0 || 0 || 0 || 0 || 0 || 0

XX 01 01 02 (Delegations) || 0 || 0 || 0 || 0 || 0 || 0 || 0

08 01 05 01 (Indirect research) || 4 || 4 || 4 || 4 || 4 || 4 || 4

10 01 05 01 (Direct research) || 0 || 0 || 0 || 0 || 0 || 0 || 0

Ÿ External staff (in Full Time Equivalent: FTE)[33]

XX 01 02 01 (CA, SNE, INT from the ‘global envelope’) || 0 || 0 || 0 || 0 || 0 || 0 || 0

XX 01 02 02 (CA, LA, SNE, INT and JED in the delegations) || 0 || 0 || 0 || 0 || 0 || 0 || 0

XX 01 04 yy[34] || - at Headquarters[35] || || 0 || 0 || 0 || 0 || 0

- in delegations || || 0 || 0 || 0 || 0 || 0

08 01 05 02 (CA, SNE, INT - Indirect research) || 0.5 || 0.5 || 0.5 || 0.5 || 0.5 || 0.5 || 0.5

10 01 05 02 (CA, SNE, INT- Direct research) || 0 || 0 || 0 || 0 || 0 || 0 || 0

Other budget lines (specify) || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL || 4.5 || 4.5 || 4.5 || 4.5 || 4.5 || 4.5 || 4.5

*Staff number for the period after 2020
will be decided at the later stage.

The human
resources required will be met by staff from the DG who are already assigned to
management of the action and/or have been redeployed within the DG, together if
necessary with any additional allocation which may be granted to the managing
DG under the annual allocation procedure and in the light of budgetary
constraints.

Description of
tasks to be carried out:

Officials and temporary staff || The tasks of Commission staff in conjunction with the implementation of the IMI JU are to assure the correct budget implementation and supervision of the operations of the IMI JU. Senior managers from Commission services will serve on the IMI2 JU Governing Board. Commission staff members will contribute to the work of the advisory groups of IMI2 that may be established by the Governing Board. It is estimated that 4 advisory groups will be established, each requiring 0.25 FTE of work from Commission staff members for the entire period of establishment of IMI.

External staff || External staff will support officials and temporary staff in assuring the correct budget implementation and supervision of the operations of the IMI JU.

Description of the calculation of cost for
FTE equivalent should be included in the Annex, section 3.

3.2.3.3.  a. Estimated requirements of
human resources for the IMI 2 JU[36]

–
 ̈  The proposal/initiative does not require the use of human
resources.

–
X  The proposal/initiative requires the use of
human resources, as described below:

b. Estimated requirements of human resources
to be financed from appropriations under 2014-2020 Multiannual Financial
Framework

Estimate to be expressed in full in numbers

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020*

Ÿ Establishment plan posts (officials and temporary staff)

XX XX XX XX (PPP body) ||

Temporary (AD grades) || 0 || 0 || 0 || 0 || 0 || 0 || 0

Temporary (AST grades) || 0 || 0 || 0 || 0 || 0 || 0 || 0

IMI JU (PPP body) ||

TA || 4 || 6 || 9 || 10 || 39 || 39 || 39

CA || 1 || 2 || 2 || 3 || 10 || 10 || 10

SNE || 0 || 0 || 0 || 0 || 0 || 0 || 0

INT || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL || 5 || 8 || 11 || 13 || 49 || 49 || 49

*for years 2021 to 2024 please refer to
table 3.2.3.1

Description of
tasks to be carried out:

Officials and temporary staff || The tasks are described in Article 1 of the Statutes annexed to the Council Regulation. The tasks of the Executive Director of IMI2 are described in Article 6 of the Statutes.

External staff || External staff shall assist the temporary staff of the IMI JU in carrying out their tasks.

c. Human resources financed from
appropriations under 2007-2013 Multiannual Financial Framework[37]

Estimate to be expressed in full numbers (of FTE)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017

Ÿ Establishment plan posts (officials and temporary staff)

IMI JU (PPP body) ||

Temporary (AD grades) || 0 || 0 || 0 || 0

Temporary (AST grades) || 0 || 0 || 0 || 0

Ÿ External staff (in Full Time Equivalent: FTE)[38]

IMI JU (PPP body) ||

TA || 29 || 29 || 29 || 29

CA || 7 || 7 || 7 || 7

SNE || 0 || 0 || 0 || 0

INT || 0 || 0 || 0 || 0

TOTAL || 36 || 36 || 36 || 36

d. Contribution to the
running costs for the phasing out of the PPP body under the Multiannual
Financial Framework 2007-2013

EUR million (to 3 decimal places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Total[39]

Contribution in cash from the EU || 3,950 || 3,950 || 3,950 || 3,950 || 15,800

Contribution in cash from third parties || 3,950 || 3,950 || 3,950 || 3,950 || 15,800

TOTAL || 7,900 || 7,900 || 7,900 || 7,900 || 31,600

3.2.4.     Compatibility with the
current multiannual financial framework

–
X  Proposal/initiative is compatible the current
multiannual financial framework.

–
 ̈  Proposal/initiative will entail reprogramming of the relevant
heading in the multiannual financial framework.

Explain what reprogramming is required,
specifying the budget lines concerned and the corresponding amounts. [Not applicable]

–
 ̈  Proposal/initiative requires application of the flexibility
instrument or revision of the multiannual financial framework[40].

Explain what is required, specifying the
headings and budget lines concerned and the corresponding amounts. [Not applicable]

3.2.5.     Third-party contributions

–
The proposal/initiative does not provide for
co-financing by third parties.

–
X The proposal/initiative provides for the
co-financing estimated below:

Appropriations in EUR million (to three decimal
places)

|| Year 2014* || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 and later || TOTAL

European Federation of Pharmaceutical Industries and Associations – contribution in cash to administrative costs || 0,735 || 1,050 || 1,260 || 1,366 || 5,777 || 5,777 || 28,885 || 44,850

Associated partners, future members and participants to the co-investment scheme -contribution in cash to administrative costs || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

contribution in cash to the operational costs - amount currently not specified; is expected to be made || || || || || || || ||

TOTAL appropriations cofinanced by EFPIA || || || || || || || ||

Total appropriations cofinanced by associated partners or future members of the PPP or participations in the co-investment scheme || 0,735 || 1,050 || 1,260 || 1,366 || 5,777 || 5,777 || 28,885 || 44,850

The total contribution from members other
than the Union are laid down by Article 4 of the Council Regulation of the IMI2
Joint Undertaking.

Estimated impact on revenue

–
X  Proposal/initiative has no financial impact
on revenue.

–
 ̈  Proposal/initiative has the following financial impact:

 ̈         on own resources

 ̈         on miscellaneous revenue

[1]               COM(2013) [...]

[2]               http://ec.europa.eu/research/consultations/life_science_h2020/report_public_consultation.pdf

[3]               ftp://ftp.cordis.europa.eu/pub/fp7/health/docs/outcome-imi-participants_en.pdf

[4]               The amount is indicative and will depend on the final
amount for the DG Research & Innovation under the above-mentioned
challenge.

[5]               OJ C [...], [...], p. [...]

[6]               OJ C [...], [...], p. [...]

[7]               OJ L 412 30.12.2006, p. 1

[8]               OJ L 400 30.12.2006, p. 86

[9]               COM(2010)2020 final

[10]             OJ ... [H2020 FP]

[11]             OJ ... [H2020 SP]

[12]             OJ L 30 of 4.2.2008 [FP7 JTI JU Regulation]

[13]             SEC(2011) 1072 final

[14]             http://ec.europa.eu/research/consultations/life_science_h2020/consultation_en.htm

[15]             OJ L 298 26.10.2012, p. 1.

[16]             OJ ... [H2020 RfP]

[17]             OJ L 362 31.12.2012, p. 1

[18]             OJ 56, 4.3.1968, p. 1.

[19]             OJ L 136, 31.05.1999

[20]             OJ L 292, 15.11.1996, p. 2-5

[21]             OJ L 136 from 31.5.1999, p. 1

[22]             OJ L 145 from 31.05.2001

[23]             ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.

[24]             As referred to in Article 54(2)(a) or (b) of the
Financial Regulation.

[25]             Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site:
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[26]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).

[27]             As
described in point 1.4.2. ‘Specific objective(s)’.

[28]             In the case of EU PPP bodies under Article 209 FR, this
table is included for information purposes.

[29]             Year N is the year in which implementation of the
proposal/initiative starts.

[30]             In accordance with Article 7 of the Council Regulation,
the IMI2 Joint Undertaking may make use of seconded national experts and
trainees not employed by the Joint Undertaking. Staff numbers for temporary
agents will be reduced if IMI2 employs ENDs.

[31]             Year N is the year in which implementation of the
proposal/initiative starts.

[32]             Year N is the year in which implementation of the
proposal/initiative starts.

[33]             CA= Contract Agent; LA = Local Agent; SNE = Seconded
National Expert; INT= agency staff (‘Intérimaire’).

[34]             Sub‑ceiling for external staff covered by operational
appropriations (former "BA" lines).

[35]             Mainly for the Structural Funds, the European
Agricultural Fund for Rural Development (EAFRD) and the European Fisheries Fund
(EFF).

[36]             In the case of EU PPP bodies under Article 209 FR, this
section is included for information purposes.

[37]             In the case of EU PPP bodies under Article 209 FR, this
table is included for information purposes.

[38]             CA = Contract Agent; LA = Local Agent; SNE = Seconded
National Expert; INT = agency staff (‘Intérimaire’).

[39]             The total for the EU cash
contribution should equal the amount front-loaded in the 2013 budget for the
completion of the 2007-2013 activities of the body.

[40]             See points 19 and 24 of the Inter-institutional
Agreement.