EUROPEAN COMMISSION Brussels, 26.1.2018 COM(2018) 49 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the Member States’ transposition of Article 118a of Directive 2001/83/EC of the European Parliament and the Council of 6 November 2001 on the Community code relating to medicinal products for human use as amended by Directive 2011/62/EU of the European Parliament and of the Council of 8 June 2011



1.Introduction and legal framework The falsification of medicines is a serious threat to public health. Falsification affects a wide range of medicines, such as cancer, sexual dysfunction and Hepatitis C treatments. Falsified medicines can and do penetrate the legal supply chain, as seen with the discovery in 2014 of falsified vials of the cancer treatment Herceptin (trastuzumab) in multiple EU markets . In 2011, the European Parliament and the Council adopted Directive 2011/62/EU (the Falsified Medicines Directive) to amend Directive 2001/83/EC and address increasing concerns regarding falsified medicines in the legal supply chain. The Falsified Medicines Directive introduces mandatory safety features on prescription medicines from February 2019 (unless explicitly exempted), strengthens good distribution practices and requirements for wholesale distributors, reinforces rules on importation, controls and inspections of active substances and their manufacturers, and establishes an EU-wide logo to allow the identification of legal online retailers of medicines (applicable from 1 July 2015). In order to ensure effective enforcement of these provisions, Article 118a of Directive 2001/83/EC requires Member States to ‘lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and [to] take all necessary measures to ensure that those penalties are implemented. The penalties must be effective, proportionate and dissuasive’. Such rules are to address inter alia: ·‘the manufacturing, distribution, brokering, import and export of falsified medicinal products, as well the sale of falsified medicinal products at a distance to the public by means of information society services; ·non-compliance with the provisions of the Directive on manufacturing, distribution, import and export of active substances; and ·non-compliance with provisions of the Directive on the use of excipients. Where relevant, the penalties should take into account the risk to public health presented by the falsification of medicinal products’. Member States were to notify the Commission of their measures by 2 January 2013. Article 118a also requires the Commission to submit a report to the European Parliament and the Council ‘giving an overview of the transposition measures of Member States as regards [the] Article, together with an evaluation of the effectiveness of those measures’. This report provides an overview of the Member States’ transposition measures and a qualitative assessment of their effectiveness. The Commission was aided in its assessment by the TRANSPOSE study conducted by an external contractor. The study provided an overview of transposition measures based on information provided by Member States under Article 118a and from legal experts in the 28 Member States. This was complemented by a qualitative assessment of current penalties relating to falsified medicines, active substances and excipients. The Commission also consulted Member State competent authorities, through the Expert Group on the delegated act on safety features for medicinal products for human use, for further information on penalties in force. 2.Overview of the transposition of Article 118a in the Member States A total of 26 Member States (AT, BE, BG, CY, CZ, DE, DK, EE, EL, ES, FR, HR, IE, IT, LT, LU, LV, MT, NL, PL, PT, RO, SE, SI, SK, UK) have introduced changes to their legislation in relation to penalties for the falsification of medicines, active substances and excipients in order to transpose Article 118a. Hungary made changes to its Criminal Code as a result of the Council of Europe Medicrime Convention. Finland has not changed its legislation, as penalties were already in place before the entry into force of Article 118a. Bodily harm or personal injury is covered by general criminal law in all Member States. Member States also impose general administrative sanctions for unlawful conduct involving medicines. These sanctions are complemented by specific penalties for the falsification of medicinal products, active substances and excipients, as outlined in Article 118a. Current penalties for the falsification of medicines, active substances and excipients are imprisonment (criminal penalties), fines (criminal or civil penalties) and/or administrative sanctions (e.g. the revocation of licences or seizure/withdrawal of unlawful products from the market). Falsification of medicines In all Member States, at least some activities relating to the falsification of medicinal products are a criminal offence. In 21 Member States (AT, BE, CY, CZ, DE, DK, EE, EL, ES, FR, HR, HU, IE, IT, LU, MT, NL, PT, SI, SK, UK), the manufacturing, distribution, brokering, import, export and sale at a distance of falsified medicines all attract criminal penalties. In the seven remaining Member States, some activities are covered by civil penalties (such as fines) rather than criminal penalties. In Bulgaria, criminal penalties apply only to the import or export of falsified medicinal products; the remaining activities are covered by civil penalties. In Finland, there are no specific penalties for brokering or export, but these are covered by more general provisions. In Latvia, criminal penalties cover manufacturing, distribution and brokering; there are civil penalties for import and export. In Romania, import and export are covered by civil rather than criminal penalties. In Poland and Sweden, criminal penalties do not cover export, but this is covered by civil penalties. In Lithuania, import is covered by civil penalties. Figure 1: Prison sentences for the falsification of medicinal products

Maximum prison sentences range from one to 15 years (Figure 1). All Member States apply criminal or civil fines in relation to the falsification of medicines (Table 1). Eight Member States (BE, FI, FR, IE, IT, LU, MT, UK) have criminal fines only. Seven (AT, CZ, HU, LT, RO, SI, SK) have civil fines only. The 13 remaining Member States (BG, CY, DE, DK, EE, EL, ES, HR, LV, NL, PL, PT, SE) have both criminal and civil fines. Maximum fines range from EUR 4 300 in Lithuania to EUR 1 million Spain. Table 1: Maximum fines for the falsification of medicines (EUR) * For non-euro Member States, an approximate euro amount is given. AT BE BG CY CZ DE DK EE 50 000 240 000 25 500 85 000 775 000 25 000 not specified 32 000 EL ES FI FR HR HU IE IT 200 000 1 000 000 not specified 750 000 20 000 not specified 300 000 15 600 LT LU LV MT NL PL PT RO 4 300 20 000 14 000 116 469 450 000 not specified 180 000 6 500 SE SI SK UK not specified 120 000 25 000 unlimited In 24 Member States (AT, BE, BG, CY, CZ, DE, DK, EE, EL, ES, FR, HR, HU, IE, LT, LV, NL, PL, PT, RO, SE, SI, SK, UK), there are specific administrative sanctions for the falsification of medicinal products. Misconduct involving active substances In 23 Member States (AT, BE, BG, CZ, DE, DK, EE, EL, ES, FI, FR, HR, HU, IE, IT, LU, LV, MT, NL, PL, PT, SK, UK), misconduct in relation to active substances is a criminal offence. Figure 2: Prison sentences for misconduct with respect to active substances In 17 of those Member States, misconduct in the manufacturing, distribution, import and export of active substances are all covered by criminal penalties. In Bulgaria, criminal penalties only apply to misconduct in the import or export of active substances; the remaining activities are covered by civil penalties. In Finland, Poland and the United Kingdom, there are no specific penalties covering the export of active substances. In Latvia and Malta, criminal penalties only cover manufacturing and distribution of active substances, but Latvia imposes civil penalties to misconduct involving the import and export of active substances. Maximum prison sentences imposed range from six months to 15 years (Figure 2). A total of 26 Member States (BE, BG, CY, CZ, DE, DK, EE, EL, ES, FI, FR, HR, IE, IT, LT, LU, LV, MT, NL, PL, PT, RO, SE, SI, SK, UK) apply criminal or civil fines in relation to active substances (Table 2). Seven Member States (BE, FI, IE, LU, MT, PL, UK) have criminal fines only. Seven (CY, CZ, LT, RO, SE, SI, SK) have only civil fines. The 12 remaining Member States (BG, DE, DK, EE, EL, ES, FR, HR, IT, LV, NL, PT) have both criminal and civil fines. The maximum fines for misconduct involving active substances range from EUR 1 500 in Lithuania to EUR 1 million in Spain. Table 2: Maximum fines for misconduct involving active substances (EUR) * For non-euro Member States, an approximate euro amount is given. BE BG CY CZ DE DK EE EL 240 000 10 000 42 000 775 000 25 000 not specified 32 000 100 000 ES FI FR HR IE IT LT LU 1 000 000 not specified 375 000 20 000 300 000 100 000 1 500 10 000 LV MT NL PL PT RO SE SI 14 000 11 647 450 000 not specified 180 000 6 500 not specified 120 000 SK UK 35 000 unlimited In 21 Member States (BG, CY, CZ, DE, DK, EE, ES, FR, HR, HU, IE, IT, LT, LV, NL, PL, PT, RO, SI, SK, UK), there are specific administrative sanctions in place for misconduct in relation to active substances. Misconduct involving excipients In 14 Member States (AT, BE, DK, EL, ES, FI, FR, HR, IE, LU, LV, NL, PL, PT), misconduct in relation to excipients is a criminal offence.

Figure 3: Prison sentences for misconduct with respect to excipients In nine of those Member States, misconduct in the manufacturing, distribution, import and export of excipients are all covered by criminal penalties. In Finland, misconduct in relation to the export of excipients is not covered by criminal penalties. In Ireland, only misconduct in relation to the manufacturing of excipients is covered by criminal penalties. In Latvia and Poland, criminal penalties only cover misconduct in the manufacturing and distribution of excipients; however, Latvia has civil penalties for import and export involving excipients. In Luxembourg, criminal penalties cover misconduct in the manufacturing and import of excipients. Maximum prison sentences for misconduct in relation to excipients range from six months to 15 years (Figure 3). A total of 20 Member States (BE, CY, CZ, DK, EL, ES, FI, FR, HR, IE, IT, LU, LV, NL, PL, PT, RO, SE, SI, SK) also apply criminal or civil fines in relation to misconduct with excipients (Table 3). Five Member States (BE, FI, IE, LU, PL) have only criminal fines for misconduct with excipients. Seven (CY, CZ, IT, RO, SE, SI, SK) have only civil fines. The eight remaining Member States (DK, EL, ES, FR, HR, LV, NL, PT) have both criminal and civil fines. The maximum fines range from EUR 2 200 in Romania to EUR 1 million in Spain. Table 3: Maximum fines for misconduct involving excipients (EUR) * For non-euro Member States, an approximate euro amount is given. BE CY CZ DK EL ES FI FR 240 000 42 000 775 000 not specified 100 000 1 000 000 not specified 375 000 HR IE IT LU LV NL PL PT 20 000 300 000 18 000 10 000 14 000 450 000 not specified 180 000 RO SE SI SK 2 200 not specified 120 000 25 000 In 15 Member States (CZ, DK, EE, ES, FR, HR, HU, IT, LT, LV, PL, PT, RO, SI, SK), there are specific administrative sanctions in place for misconduct in relation to excipients. Overall transposition All 28 Member States apply criminal penalties in the form of imprisonment for the falsification of medicines. One Member State (LV) penalises falsification that causes physical harm or death (harm crimes) and two Member States (ES, PT) falsification that causes a risk or danger to the health of a person or public health (concrete endangerment). Four Member States (EL, LT, RO, SI) penalise falsification that is shown to be generally dangerous, i.e. the falsified medicine contains insufficient active ingredients or harmful substances (concrete-abstract endangerment). In the remaining 21 Member States, falsification per se is penalised, without the need to prove that the product is dangerous to health (abstract endangerment). For active substances, 23 Member States apply criminal penalties. For excipients, 14 Member States apply criminal penalties. Where criminal penalties apply for the falsification of medicines, the maximum prison sentence is at least three years in 20 Member States (AT, BG, CY, DE, EE, ES, FR, HR, HU, IE, IT, LT, LU, LV, NL, PL, PT, RO, SI, SK). A prison sentence of at least three years means that the crime falls under the European Investigation Order. As outlined above, all Member States apply fines for the falsification of medicines. For active substances, 26 Member States apply fines. For excipients, 20 Member States apply fines. Fines may take the form of criminal or civil penalties, although maximum levels vary across Member States. All Member States except Finland, Luxembourg and Malta have introduced additional administrative sanctions for the falsification of medicines, active substances and/or excipients. 3.Effectiveness It is difficult to measure the effectiveness of specific national penalties due to a lack of exhaustive data on incidents in the Member States and the inherent illegal nature of the activities. Many of the national legal experts consulted as part of the TRANSPOSE study were unable to provide estimates of the effectiveness of specific penalties in relation to falsified medicines, active substances and excipients. Experts in 10 Member States provided estimates of the effectiveness of national penalties in preventing falsified medicines from penetrating the legal supply chain (i.e. manufacturers, parallel importers, wholesale distributors and pharmacies). They considered that all of the penalties in place (criminal, civil and administrative) had at least some effect in reducing the presence of falsified medicines in the legal supply chain. Overall, administrative sanctions were rated as effective more often. Eight experts provided estimates of the extent to which the presence of falsified medicines in the legal supply chain had been reduced since the introduction of Directive 2011/62/EU. Six experts considered a reduction of more than 25 % had occurred, whereas two considered a reduction of less than 5 % had occurred. For the illegal supply chain (e.g. purchases of medicines from illegal online pharmacies), experts in 12 Member States provided estimates of the effectiveness of national penalties. Six considered that the criminal penalties had at least some effect in reducing the presence of falsified medicines in the illegal supply chain. Two experts considered that civil penalties had a small effect and three considered administrative sanctions to have had at least some effect. Overall, criminal penalties were rated as effective more often. Four experts considered that the presence of falsified medicines in the illegal supply chain had been reduced by at least 25 % since the introduction of Directive 2011/62/EU; seven estimated the reduction at less than 25 %. In general, the study noted that Member States should introduce both criminal penalties and administrative sanctions in order to safeguard the legal supply chain and tackle the illegal sale of falsified medicinal products. Criminal penalties are effective and dissuasive for actors in both the legal and illegal supply chains. Administrative sanctions are useful in addressing misconduct in the legal supply chain (where operators are dependent on licences), but cannot adequately address operators in the illegal market, who already act without authorisations, i.e. illegally. However, administrative sanctions are generally easier to enforce than criminal penalties. As regards criminal penalties, the study noted that it is easier to enforce broader provisions that do not require proof of direct harm to patients, but rather cover medicinal products that are dangerous or falsified. For example, in many Member States falsification per se is penalised, without the need to prove that the product is dangerous to patients’ health. Applying maximum prison sentences of at least three years can also facilitate the sharing of evidence through a European Investigation Order12, which may be relevant if crimes have been committed across multiple Member States. In any case, cooperation is necessary to ensure that evidence is shared for crimes with cross-border relevance.