Report on the application of Regulation (EU) 2016/793 of the European Parliament and of the Council of 11 May 2016 to avoid trade diversion into the European Union of certain key medicines

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

Report on the application of Regulation (EU) 2016/793 of the European Parliament and of the Council of 11 May 2016 to avoid trade diversion into the European Union of certain key medicines

Regulation (EU) 2016/793 to avoid trade diversion into the European Union of certain key medicines ("the Regulation"), adopted in May 2016, puts in place safeguards to prevent diversion of medicines from poor developing countries into the European Union. Supplying poor and developing countries with medicines at sustainable low prices is one of the objectives in the fight against the major diseases of HIV/AIDS, malaria and tuberculosis.

In order to achieve this, the European Commission has consistently advocated a policy of "tiered pricing" for medicines, combined with market segmentation between rich and poor countries. The advantage of such a policy is that it encourages manufacturers to distribute the medicines in question in the target countries at the lowest possible (“tiered”) price, while at the same time recouping their research and development expenditure with the higher prices charged in developed countries. This approach is designed to promote sustainable supplies and continuous distribution of life-saving medicines.

This is the ninth Report under Article 12(2) of the Regulation which foresees biennially reports by the Commission to the European Parliament and to the Council on the volumes exported under tiered prices registered under the Regulation. The Regulation notes the report shall also examine the scope of countries and diseases and general criteria for the implementation of Article 3.

This report covers the period from 1 January 2014 to 31 December 2015.

Information on products registered under the Regulation, instructions for pharmaceutical companies wishing to register products, and previous reports are available on-line.

1.REFIT EVALUATION OF THE REGULATION

The Regulation was evaluated in 2016 as part of the Commission’s regulatory fitness and performance programme (REFIT) including on the scope of countries and diseases and general criteria for the implementation of Article 3. An external contractor, Charles River Associates was commissioned to gather data to support the Commission evaluation of the Regulation,

The Regulation was evaluated on four criteria: effectiveness, efficiency, coherence and relevance and assessed against the REFIT criteria of being fit for purpose, having delivered on its objectives at minimum cost and whether there is potential for simplification.

The evaluation concluded that the objective of improving access to medicines in the poorest developing countries remains relevant, that tiered pricing still has value, and that in view of the small administrative burden, the benefits that have been realised, the added value of a signal of support for tiered pricing, and its place in the overall context of action targeting major diseases, the Regulation still has a role in the future in the context of the Commission’s aim, as stated in the Trade for all Communication , to promote an ambitious global health agenda and better access to medicines in poor countries.

The Regulation complements other EU actions such as support for the World Trade Organisation's November 2015 Decision to exempt least developed countries from obligations to provide patent protection for pharmaceutical products until at least 2033, so as to support access to medicines.

Other actions include Commission-funded development programmes supporting low- and middle-income countries’ public health systems and research and development programmes for medicines needed by these countries. The EU contributes for example to the Global Fund to fight AIDS, tuberculosis and malaria that spends USD 3.5 billion a year in developing countries to which the EU collectively contributes about 50% and the Commission contributed EUR 370 million from the Development Cooperation Instrument and the European Development Fund for 2014-2016.

2.PRODUCTS EXPORTED UNDER TIERED PRICES

One company, GlaxoSmithKline / ViiV Healthcare , has medicines registered under the Regulation. These products were registered in 2004 and all aim at the treatment of HIV/AIDS.

The products listed below were exported under tiered prices:

1.COMBIVIR 300/150 mg x 60

2.EPIVIR 150 mg x 60

3.EPIVIR Oral Solution 10mg/ml 240 ml