Communication of the Commission to the Council and the European Parliament - Accelerated action targeted at major communicable diseases within the context of poverty reduction
Date: 2000-09-20
Institutions: European Commission
Subjects: EU action, developing countries, development aid, infectious disease, poverty

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 20.9.2000
COM(2000) 585 final

COMMUNICATION OF THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT

Accelerated action targeted at major communicable diseases within the context of
poverty reduction

TABLE OF CONTENTS

Executive Summary................................ ................................ ................................ .......... 4

1.

INTRODUCTION ................................ ................................ ................................ ....... 7

CHALLENGES AND OPPORTUNITIES TO REDUCE THE BURDEN OF MAJOR
2.
COMMUNICABLE DISEASES IN DEVELOPING COUNTRIES ................................ ....... 8

2.1. Health systems are under pressure................................ ................................ .......... 8

2.2. Major communicable diseases are a global challenge................................ ............... 9

2.3. The need for an effective global response................................ .............................. 10

2.4. New international partnerships................................ ................................ .............. 12

3.
EUROPEAN  COMMUNITY´S  SPECIFIC  ROLE  IN  ADDRESSING  MAJOR
COMMUNICABLE DISEASES ................................ ................................ .......................... 14

3.1. The EC's current policies and ongoing activities................................ .................... 14

3.2. The EC’s comparative advantage in recent development strategies........................ 16

4.

THREE CORE AREAS FOR INCREASED AND ACCELERATED ACTION......... 16

4.1. Reaching optimal impact of existing interventions in EC development co-operation.
................................ ................................ ................................ ............................ 17

4.2.

Increasing  affordability  of  key  pharmaceuticals  through  a  comprehensive  approach
................................ ................................ ................................ ............................ 19

4.3.

Investment  in  research  and  development  of  global  goods  targeted  at  the  three
diseases................................. ................................ ................................ ..................... 20

5.

CONCLUSIONS AND RECOMMENDATIONS ................................ ...................... 22

Annex 1 Global emergency cause by HIV/AIDS, malaria and tuberculosis....................... 23

Annex 2 EC Health, AIDS and Population Portfolio ................................ ....................... 26

Annex  3  Summary  of  actions  taken  in  follow-up  to  the  Commission  Communication  on
increased solidarity to confront AIDS in developing countries (com-98-407).............. 33

2

Annex 4 DG Research Investments into projects related to HIV, Malaria and TB............ 35

3

EXECUTIVE SUMMARY

This  is  a  Communication  to  the  Council  and  the  European  Parliament  on  the  need  for
accelerated  action  targeted  at  major  communicable  diseases  within  the  context  of  poverty
reduction. It explains  the  issue  of  communicable  diseases  as  a  burden  on  the  poorest  and  an
obstacle to development, analyses the major policy issues involved, reports on the rationale for
continuous  Community  involvement,  and  sets  out  a  framework  with  three  broad  areas  for
targeted action.

Communicable diseases: a burden on the poorest and an obstacle to development

Investments  in  health  can  make  a  major  contribution  to  poverty  reduction  and  economic
growth. In developing countries, communicable diseases, particularly HIV/AIDS, malaria and
tuberculosis continue to limit human development. World wide, these three diseases cause the
deaths of more than five million people each year with the greatest impact on morbidity and life
expectancy in developing countries.

The failure  to  reduce  the burden from these diseases and  evidence of  their increasing  impact
has brought them to the centre of the development debate and has led to calls for urgent action
and a series of international initiatives.

The Commission has made a commitment to support an accelerated response against what has
become a global emergency. There is a need for additional selective and targeted approaches to
complement  long  standing  and  ongoing  Community  support  to  strengthen  health  systems  to
deliver services that benefit the poor.

The rationale for accelerated European Community action

The goal of the new EC Development Policy is poverty reduction. One of the priority areas for
EC development aid is the support to macroeconomic policies in developing countries with an
explicit link with poverty reduction strategies, in particular sector programmes in social areas
(health, education) 1. The European Community has an unique mandate to do so, being able to
coherently  address  humanitarian,  development,  trade,  health,  education  and  research  issues.
Since  1990,  Community  investment  in  Health,  AIDS  and  Population  (HAP)  assistance  has
reached more than 100 developing countries through a variety of complementary instruments
for a total amount of Euro 3.4 billion. The Commission will strengthen its support to the health
sector in developing countries, and calls for complementary actions in the areas of optimising
impact, affordability and investment in research and development. Focus on disease prevention,
promotion  of  health  and  improved  health  systems  shall  remain  the  EC´s  main  long-term
response in improving health and reducing poverty in developing countries.

The  Commission  has  become  increasingly  active  in  the  international  debate  to  increase
developing  countries’  access  to  affordable  key  pharmaceutical  products.  This  has  involved
extensive  consultation  and  review  of  multiple  issues  including;  infrastructure,  financing
mechanisms, international pricing and licensing mechanisms, intellectual property rights, tariffs

1 

COM (2000) 212, p. 25.

4

                                                
and  appropriate 
pharmaceuticals2.

incentives 

to 

increase 

investment 

in  global  health, 

including  key

In  addition,  Europe  can  build  upon  a  long-standing  tradition  of  excellence  in  communicable
disease surveillance and control and in health research. European industry produces more than
60% of the vaccines used in developing countries and is among the largest producers of anti-
infective  drugs.  The  Community  has  increased  investment  in  particular  in  communicable
disease  research  over  recent  years,  and  plays  an  important  role  in  facilitating  new  public–
private partnerships for research and development of drugs and vaccines that are of particular
importance to the health of people in developing countries.

A  framework  for  Community  action  should  contain  three  broad  areas  for  targeted
action.

Reaching  optimal  impact  of  existing  interventions,  services  and  commodities

1.
targeted at the major communicable diseases affecting the poorest populations.

The major communicable diseases are, in principle, largely preventable/and or readily treatable
using  existing  low  cost,  effective  interventions.  However,  often  these  do  not  reach  the  most
vulnerable people where developing countries struggle to deliver essential health care with less
than  USD  5  per  capita  per  year.  Optimising  impact  of  existing  interventions,  services  and
commodities  requires both increased support to strengthen prevention and basic care efforts,
health  systems  and  scaled  up  targeted  support  through  innovative  partnerships  that  reach
beyond the traditional health sector.

Increasing  affordability  of  key  pharmaceuticals  through  a  comprehensive  and

2.
synergistic global approach.

Improving access to key pharmaceuticals can only be achieved through a comprehensive global
approach which addresses a global emergency.

Developing  countries,  in  particular  poor  populations,  have  inadequate  access  to  affordable
services  and  key  pharmaceuticals.  The  reasons  why  are  complex  and  beside  the  main  ones
highlighted  in  area  1,  they  include  the  effects  of  international  and  national  pricing  policies,
tariffs and taxation and implementation of intellectual property rights agreements. Options to
further improve access and affordability include: exploration of the use of differential pricing
(tiered  pricing),  voluntary  licensing  agreements,  parallel  trading,  technology  transfer  and
increase in local capacity for production, use of both generic and patented products and review
of tariff and taxation options at country level.

Increasing investment in research and development of global goods targeted at the

3.
three major communicable diseases.

Research  and  development  in  the  pharmaceutical  industry  is  generally  determined  by  the
demands of industrialised countries´ markets. Those diseases prevalent in developing countries
where  markets  are  perceived  to  be  small  are  neglected.  Only  10  per  cent  of  global  health
research efforts target those diseases  which comprise 90 per cent of the global disease burden.

2 

Key or essential pharmaceuticals are those medicines, including vaccines,  which  are  essential  to  the
public health of a population.  Certain medicines for major diseases in developing countries may well
be 'essential or key' but may not appear on the WHO or country-specific essential drugs list (EDL)

5

                                                
There is need to create global mechanisms and incentives to direct research and development
to diseases that disproportionately affect developing countries. Progress will require expansion
of  the  research  portfolio,  greater  willingness  to  support  risk  investments,  and  a  move  from
serial  to  parallel  testing  of  candidate  products.  Closer  co-operation  of  the  strong  public
research tradition with the extensive capabilities of the European pharmaceutical industry could
bring significant benefits. A priority should be increased investment in the capacity of science
and technology institutions and personnel in developing countries.

The way forward

An  accelerated  Community  response  to  the  major  communicable  diseases  should  be  seen  as
part  of  and  complementary  to  ongoing  Community  investments  in  health  and  poverty
reduction. For the response to be effective, coherent efforts of the Commission in conjunction
with  the  EC  Member  States,  partner  countries,  international  and  civil  society  partners  and
other  stakeholders  are  required,  as  are  greater  innovation  and  more  rapid  action  than
traditional development assistance allowed for so far.

The policy framework set out in this Communication is the Community's first response to the
recommendations  of  the  G8  summit  held  in  Okinawa  in  July  2000.  The  framework  will  be
broadly  discussed  during  a  high  level  Round  Table  with  all  interested  parties,  in  particular
developing  countries,  EU  Member  States,  European  Parliament,  international  development
agencies, civil society, researchers and the pharmaceutical industry. The results of the Round
Table  will  provide  valuable  input  to  the  Commission  in  formulating  a  programme  for  action.

6

1. 

INTRODUCTION

The  complex  interactions  between  the  health  of  a  population  and  poverty  are  now  well
recognised.  There  is  evidence  that  investments  in  health  can  make  a  major  contribution  to
poverty  reduction  and  economic  growth  and  that  ill  health  is  closely  linked  to  poverty,  poor
education  and  weak  health  systems3.  In  developing  countries,  communicable  diseases,
particularly  HIV/AIDS,  malaria  and  tuberculosis,  contribute  disproportionately  to  high  levels
of  ill  health  and  increasingly  limit  human  development.  World  wide  these  three  diseases
continue,  despite  existing  efforts,  to  increase,  and  cause  the  deaths  of  more  than  five  million
people  each  year  with  the  greatest  impact  on  morbidity  and  life  expectancy  in  developing
countries.

These  diseases  can  be  partially  controlled  through  improved  living  conditions  and  effective
public  health  and  education  systems.  In  principle  each  disease  is  preventable  and/or  readily
treatable  using  existing,  effective  and  often  low  cost  interventions  including  access  to
information,  health  commodities  (condoms,  bednets)  and  services  (treatment  of  sexually
transmitted  and  opportunistic  infections,  malaria  and  tuberculosis).  However,  too  often
existing interventions fail to reach the most vulnerable.  There is also insufficient investment in
developing new and more effective interventions at all levels.

The lack of progress in reducing the burden of HIV/AIDS, malaria and tuberculosis through
support  to  strengthen  health  systems  has  brought  these  diseases  to  the  centre  of  the
development debate and has led, in recent years, to the launch of a series of major initiatives.
These include: the International Partnership against AIDS in Africa (IPAA), the International
AIDS Vaccine Initiative (IAVI), the Global Alliance for Vaccines and Immunisation (GAVI),
Roll Back Malaria, the Malaria Medicines Initiative (MMV) and the Stop TB Initiative. A new
momentum has been generated and has been backed by increased financial commitments from
Governments4  and  philanthropic  groups5.  New  working  approaches  between  the  public  and
private sectors are under formulation, such as the initiative of five pharmaceutical companies
and UNAIDS, to provide anti-retroviral drugs at more affordable prices.

This  Communication  proposes  a  policy  framework  to  guide  a  coherent,  comprehensive  and
accelerated EC response to the three major communicable diseases as part of global efforts to
improve the health of the poorest as reflected in the recommendations of the G8 summit held in
Okinawa in July 2000.

This  Communication  briefly  outlines  the  threats  to  global  health  and  development,  posed  by
these diseases, and the challenges and opportunities in addressing them. It defines the role of
the  Community  in  the  context  of  new  international  initiatives.  Finally,  it  identifies  three  core

3 

4

5 

World  Bank  1993  World  Development  Report.  The  Commission  on  Macroeconomics  and  Health
(CMH January 2000) is producing a series of studies on how concrete health interventions can lead to
economic growth.
The  G8  in  Okinawa  committed  to  accelerated  action  against  the  major  communicable  diseases.
Specific  pledges  were  made  by  Japan  (USD  three  billion)  and  The  United  Kingdom  (USD  160
million). The International Development Association (IDA) announced a total credit of USD 1 billion
to combat AIDS, Malaria and TB.
In  2000  only,  the  Bill  and  Melinda  Gates  Foundation  has  provided  grants  of  USD  90  million  for
malaria,  USD  90  million  for  HIV/AIDS  actions  and  more  than  USD  100  million  for  TB  related
actions.

7

                                                
areas  for  increased  Community  action  and  recognises  that  effective  action  will  require
integrated  efforts  of  the  Commission  in  collaboration  with  partner  countries,  international
partners and Member States.

This  Communication  will  be  broadly  discussed  during  a  high  level  Round  Table  with  all
interested parties, in particular developing countries, EU Member States, European Parliament,
international development agencies, civil society, researchers and the pharmaceutical industry.
The Commission will report on the results of the Round Table, and present its proposals for
intervention in a forthcoming programme for action.

2. 

CHALLENGES  AND  OPPORTUNITIES  TO  REDUCE  THE  BURDEN  OF
MAJOR COMMUNICABLE DISEASES IN DEVELOPING COUNTRIES

2.1. 

Health systems are under pressure

Health  systems6  in  the  poorest  countries  are  under  enormous  pressure  and  commonly  lack
resources to provide even a basic level of care. Health services are under-funded, short staffed,
lack  adequate  essential  equipment  and  supplies  and  often  have  limited  institutional  and
management  capacity.  Typical  annual  per  capita  public  health  expenditure  in  sub-Saharan
Africa is less than USD 5 or 2.5% of GNP. 7  This compares with a World Bank 1993 estimate
of USD 12 per capita per year, or 3.4% of GNP, needed to deliver a basic selective package of
care.

More  recent  work  by  WHO  (World  Health  Report  2000)  suggests  that  total  annual  health
investment  of  less  than  USD  60  per  capita  is  likely  to  be  ineffective.  Such  low  levels  of
investment are able only to sustain minimally functional services, even where efforts to reform
and  restructure  health  systems  are  successful.  While  Government  health  care  services  are
usually  intended  to  reach  the  poor  they  often  disproportionately  benefit  the  better  off.  The
increasing  impact  of  HIV/AIDS,  malaria  and  tuberculosis  has  further  exacerbated  the  gap
between need and available resources. Recent financing reforms attempt to correct this bias.

Securing  adequate  resources  to  produce  better  health  outcomes  remains  a  struggle  in  most
developing  countries  and  progress  towards  the  development  of  more  efficient  and  equitable
health systems is a slow process. Significant increases in the health share of national budgets
are unlikely to materialise. Several of the  poorest  countries report  capital expenditure  of 40-
50% of their total public health budget. Most of what is left goes to staff with only a very small
portion  remaining  for  maintenance  and  consumables.  Payment  for  services  funded  through
general  government  revenue  prepayment  schemes  and  social  health  insurance  remains  the

6

7

Health  systems  defined  broadly  (WHO  World  Health  Report  2000),  include  all  of  the  non-personal,
population-based or public health interventions such as healthy life styles, insecticide spraying against
vector  borne  diseases,  anti-tobacco  campaigns,  the  protection  of  food  and  water  as  well  as  personal
services.
Statistical  data  within  this  Communication  are  based  on  most  recent  figures  provided  by  WHO,
UNAIDS and DAC unless otherwise indicated.

8

                                                
preferred and most equitable approach to fair8 financing of basic services and commodities for
public health. This approach has led to the greatest improvements in access to care9.

Where  publicly  funded  care  is  not  sufficiently  available  to  cover  basic  healthcare  costs,  ill
health exposes families to large unplanned expenditures. Such expenses can account for up to
half of total monthly income and can push families into poverty. Much of this expenditure is
particularly for services and pharmaceuticals.

2.2.  Major communicable diseases are a global challenge

Communicable  diseases  are  responsible  for  60  per  cent  of  the  total  burden  of  disease  in
developing countries. HIV/AIDS, malaria and tuberculosis comprise a major proportion of this
burden and together they cause the deaths of more than five million people annually. Most of
those  affected  live  in  developing  countries  and  women  are  especially  vulnerable.    There  is
evidence that the impact of these diseases is increasing due to continuing and worsening levels
of  poverty,  the  effect  of  population  growth,  the  increase  in  man-made  and  natural  disasters
resulting  in  displacement  of  populations,  the  failure  of  health  systems,  the  emergence  of
resistance  to  medicines,  increased  injecting  drug  use,  climatic  changes  and  deteriorating
sanitation.  The  global  emergency  caused  by  HIV/AIDS,  malaria  and  tuberculosis  is  further
detailed in Annex 1.

In addition, communicable diseases do not respect national borders and the failure of control
measures  in  one  country  can  put  neighbours  and  global  health  at  risk.  Only  10%  of  the
predicted illness and death due to HIV/AIDS have occurred to date and the full impact of this
epidemic on people, communities and economies is still to come. Despite 15 years of concerted
effort, the epidemic is out of control in many developing countries.

Malaria is re-emerging in areas where it was previously under control or eradicated. The most
widely used and effective vector control tools, such as DDT, pose wider environmental threats
to human and animal health. While recognising the need to control the use of commonly used
persistent  organic  pollutants  such  as  DDT,  there  is  inadequate  investment  into  research  to
develop  and  test  alternatives.  The  cheapest  and  most  used  treatment  for  malaria  is  rapidly
losing its effectiveness.

It has been possible to diagnose tuberculosis for more than a century, and to effectively treat
the disease for at least 50 years, yet it remains a leading killer.  A course of treatment for one
patient  costs  as  little  as  USD  11.  With  the  present  approach  only  half  of  the  estimated  total
number  of  cases  are  detected.  Less  than  half  of  those  diagnosed  complete  treatment.
Furthermore,  the  emergence  of  resistant  strains  of  tuberculosis,  linked  to  HIV/AIDS,  poor
compliance with treatment prescriptions, or irrational prescriptions, threatens to make existing
drugs ineffective world-wide. TB has increased four-fold in many developing countries and has
re-emerged after steady decline in parts of Eastern Europe.

8

9

Fair  financing  in  health  systems  means  paying  according  to  ability  to  pay  rather  than  to  the  risk  of
illness. This implies that poor people should pay less for the same services.
The  increase  in  social  and  private  health  insurance  coverage  and  expanded  drug  benefits  is  a
promising trend in countries as diverse as Argentina, the People’s Republic of China, Egypt, India, the
Islamic  Republic  of  Iran,  Georgia,  South  Africa,  Thailand  and  Vietnam.  Some  programmes  have
special arrangements for rural and low-income populations. Drugs represent 25% to 70% of total costs
for these schemes.

9

                                                
2.3. 

The need for an effective global response

Countries  where  people  enjoy  higher  levels  of  health  experience  faster  economic  growth10.
There is evidence that improvement in health accounts for a significant proportion of the rapid
economic  growth  of  much  of  the  world  in  the  20th  century.  Effective  education  and  public
health systems are essential prerequisites for poverty reduction and development.

Research demonstrates that targeted investments in the control of communicable diseases can
improve the health of the poorest.  WHO calculates that doubling the projected rate of decline
of  common  communicable  diseases  would  disproportionately  benefit  the  poor,  leading  to  an
increase  of  life  expectancy  of  4.1  years  for  the  poor  against  0.4  years  for  the  rich  (World
Health Report 2000). The greatest potential impact on reducing the burden of these diseases
could  be  achieved  by  a  complementary  and  synergistic  approach,  which  increases  investment
across three main areas.

First,  much  of  the  disease  burden  arising  from  the  three  communicable  diseases  could  be
reduced  through  more  effective  access  to,  use,  and  impact  of  existing  interventions.  These
remain underused and often do not reach the most needy; much more could be achieved with
existing  technologies  and  interventions.  This  requires  intensified  support  to  strengthen  health
systems  to  ensure  improved  access  to  prevention  and  treatment  for  the  poorest  and  most
vulnerable people. However, the global and national emergency created by these three diseases
will  not  wait  for  the  improvement  of  health  systems;  there  is  also  a  need  for  simultaneous
actions beyond the traditional health sector. These must use innovative approaches in health as
well  as  in  other  "enabling"  sectors,  such  as  education  or  transport,  through  increased
partnerships and faster delivery mechanisms. WHO and UNAIDS have estimated the additional
resources needed to provide specific outcomes through accelerated and more effective delivery
of existing interventions including information, health commodities and services over the next
five years (Table 1).

Table 1 Proven cost-effective interventions for malaria and TB with potential for wider use through new
mechanisms

Intervention

Resources USD

Target Group 2005

Outcome

Impregnated bednets

1.5 billion

All  children 
protected from malaria

in  Africa

600,000 child deaths prevented
per year

Anti-malarial drugs

4 billion

Anti-tuberculosis drugs

1 billion

Source: WHO briefing

100  million 
in 
reached 
endemic areas by 2005

children
malaria

70 per cent of new cases of
TB  provided  with  effective
treatment by 2005

25  %  reduction  in  mortality
due to malaria

50 per cent reduction in deaths
caused by TB

10 

This was first revealed in the World Bank 1993 World Development Report.

10

                                                
Cost  estimates  for  HIV/AIDS  prevention  and  care  activities  in  sub-Saharan  Africa  are
estimated  at  USD  1.5  billion  yearly  for  prevention  (including  youth  focused  and  sex  worker
interventions,  public  sector  condom  provision,  condom  social  marketing,  STI  services,
voluntary  counselling  and  testing  (VCT),  blood  transfusion  services,  mother  to  child
transmission  (MTCT),  media,  workplace  interventions,  start-up  capacity  development  and
surveillance,  monitoring  and  evaluation)  and  USD  1.5  billion  yearly  for  care  programmes
(including essential HIV care but not Highly Active Anti Retroviral Treatment (HAART)11.

Most  interventions  are  already  being  delivered  through  actions  both  inside  and  outside  the
formal health sector. Many are being, or could be, provided as over the counter products and
services,  through  social  marketing,  through  non-health  workers  or  through  franchising
mechanisms.

Second,  there  is  considerable  potential  to  improve  affordability  of  key  pharmaceuticals12.  for
the poorest through global approaches and instruments. One-third of the world’s population,
and  in  the  poorest  parts  of  Africa  and  Asia  over  half  of  the  population,  do  not  have  regular
access to the most vital and essential pharmaceuticals. In developing countries, up to 90% of
medicines are paid for "out-of-pocket" directly from household revenues. This expenditure can
represent 50% of household spending and can contribute to impoverishment.

Affordability of pharmaceuticals is a complex issue but price of commodities, and the inability
of most people to pay, is seen as a major obstacle to improving access in developing countries.
Developing  countries  often  lack  the  price  control  mechanisms  which  exist  in  industrialised
countries,  and  the  larger  part  of  the  ultimate  consumer  price  can  consist  of  import  duties,
taxes, distribution costs and dispensing fees.

Greater attention to affordability issues has led to a series of proposals for international action
in the areas of implementation of intellectual property agreements, promotion of generic drug
policies,  pricing  mechanisms,  tariffs,  bulk  purchasing,  technology  transfer  and  increasing
production capacity in developing countries.

Intellectual property rights, including patents, are addressed through the Agreement on Trade
Related  Aspects  of  Intellectual  Property  Rights  (TRIPS13)  and  bilateral  agreements.  Patent14
protection  aims  at  giving  incentives  for  the  development  of  new  products  and  at  ensuring
publication and disclosure of new innovations to the benefit of the public. To recover costs of
product  research  and  development  and  to  generate  the  necessary  resources  to  invest  in  new

11 

12 

13

14

Estimates based on cost of HAART of USD 1400 per person per year would result in resource needs
for sub-Saharan Africa of at least USD 1 billion per year.
Key or essential pharmaceuticals are those medicines, including vaccines,  which  are  essential  to  the
public health of a population.  Certain medicines for major diseases in developing countries may well
be 'essential or key' but may not appear on the WHO or country-specific essential drugs list (EDL)
Agreement  on  Trade  Related  Aspects  of  Intellectual  Property  Rights  –adopted  after  the  Uruguay
Round in 1994 to establish the minimum standards of patent protection that must be followed by all
member countries of the World Trade Organisation (WTO). Application of the agreement is subject to
the transitional arrangements contained in articles 65 and 66 of TRIPS.
A  patent  is  a  title  granted  by  the  public  authorities  conferring  a  temporary  monopoly  for  the
exploitation  of  an  invention  upon  the  person  who  reveals  it,  furnishes  a  sufficiently  clear  and  full
description of it, and claims this monopoly. The product should be new, involve an inventive step and
be industrially applicable. Generally the invention may relate either to a product or a process including
pharmaceuticals.

11

                                                
products, the inventors get an exclusive period of time to commercialise their new products.
However, some representatives of civil society and some developing countries have expressed
concerns that high prices are not always related to recovering investment costs and may delay
the competitive forces of the market to reduce prices.

The  Commission  has  initiated  a  dialogue  with  different  stakeholders  in  order  to  assess  the
implementation of intellectual property rights.  It is recognised that TRIPS provides a number
of  safeguards  including  specific  exceptions  to  patent  rights,  notably  compulsory  licensing15.
Together with its partners from developing countries, the Commission will further explore the
existing safeguards. Experience with vaccines and contraceptives demonstrates that significant
price differentials can be achieved between prices in developed and developing countries. Some
pharmaceutical  companies  have  indicated  a  willingness  to  have  similar  price  differentials  for
other  pharmaceuticals,  including  newer  patented  products.  This  has  led  to  a  recent
announcement  of  a  significant  price  decrease  for  some  anti-retroviral  drugs.  Although  the
percentage of people with HIV who will be able to benefit from lower prices will initially be
low, it is expected that incremental progress can be made. Such initiatives should be carefully
monitored  to  ensure  that  scarce  public  finances  that  target  prevention  and  services  for  the
poorest and the many are not diverted to non-curative treatment for the few.

Third, there is need for more effective and increased global investment in the development of
new products, particularly vaccines, vector control products and drugs targeted at controlling
the three major communicable diseases. Only 10% of global health research funds are presently
targeted at 90% of the global disease burden. Developing countries represent less than 15% of
the  total  value  of  the  global  pharmaceutical  and  commodity  market;  this  results  in  extremely
limited investment into new tools against those diseases with the greatest public health impact.
There  are  particularly  stark  deficiencies  in  the  development  of  new  technologies  against
HIV/AIDS, malaria and tuberculosis which each kill more than one million people each year.

New vaccines, diagnostics, pharmaceuticals and insecticides will all be required for maximum
impact. The cost of developing these technologies is very high, ranging from USD 100 million
for  a  new  treatment  to  USD  500  million  for  a  successful  vaccine.  The  complexity  of  the
science, the efficacy of potential new products, the safety profile, the high development costs
and  the  uncertain  outcome  of  research  and  development  all  represent  significant  obstacles  to
investment.  Yet  the  challenge  and  potential  benefits  to  global  health  and  development  are
massive  and  require  increased  and  more  effective  public  and  private  sector  investment.
Populations  in  developing  countries  and  the  global  community  will  be  the  beneficiaries  of
increased knowledge and new products.

2.4. 

New international partnerships

Many countries are in the midst of redefining their health policies and systems. In many highly
aid-  dependent  countries,  governments  and  donors  are  moving  towards  a  sector  wide
approach,  setting  a  broad  policy  framework  and  establishing  longer-term  partnerships.  This
process  takes  time16.  The  scale  of  the  communicable  disease  problem  requires  that  ongoing

15

16

TRIPS article 31. Compulsory licensing is the granting of a license without the consent of the patent
holder on various grounds of general interest.
Walt  and  Smithson  report:  Before  Ghana’s  single  sector  programme  was  endorsed  by  donors,  the
country had gone through 10 years of institution development, 4 years of policy and strategy work, 3
years  of  strengthening  management,  2  years  of  negotiations,  planning  and  design  and  1  year  of
slippage and delays.

12

                                                
efforts  to  make  health  systems  more  effective  and  responsive  need  to  be  complemented  by
accelerated action. This has led to a series of targeted initiatives over recent years in which the
European Union has largely been involved.

The  UN  Security  Council,  the  World  Bank  Development  Committee,  and  the  G8  have
recognised the threat to development and security posed by HIV/AIDS, and have questioned
the  adequacy  of  measures  to  confront  the  pandemic.  Promising  new  initiatives  include  the
International  Partnership  against  AIDS  in  Africa  supported  by  a  coalition  of  UN  agencies,
donor  governments,  private  and  community  sectors  and  African  governments.  The  EC's
initiatives  to  increase  investments  in  developing  new  products,  including  AIDS  and  malaria
vaccines,  a  microbicide  and  new  medicines,  are  also  encouraging.  The  initiative  of  five
pharmaceutical companies and UNAIDS to provide anti-retroviral medicines for HIV/AIDS at
more  affordable  prices  is  also  a  promising  development.  Donor  funding  for  HIV/AIDS,
estimated at USD 300 million in 1998 falls far short of need.  Yet there are now positive signs
of  significant  increases  from  Governments  and  the  private  sector.  The  EC  is  an  active
participant in these interventions.

A series of high level meetings in recent years have provided renewed political impetus to the
fight against malaria. The G8 (Birmingham 1998, Cologne 1999, Okinawa 2000), the EU-US
summit  (Queluz  2000),  the  EU-Africa  summit  (Cairo  2000),  the  African  Heads  of  State
meeting in Abuja in March 2000 and the social summit in Geneva (June 2000) have all led to
calls for accelerated action.

The  WHO  Roll  Back  Malaria  initiative  is  now  gaining  momentum.  The  European  Malaria
Vaccine Initiative (EMVI) combines efforts of Commission, EU Member States and industry in
malaria vaccine development17. The EU supported African Malaria Vaccine Testing Network
(AMVTN),  which  generates  human  and  institutional  capacity  in  Africa,  is  instrumental  in
accelerated testing and deployment of malaria vaccines. The EC is also supporting large R&D
project  clusters  on  HIV,  malaria  and  tuberculosis  vaccines  involving  extensive  industrial
partnerships.  Other  innovative  partnerships,  such  as  the  Medicines  for  Malaria  Venture
(MMV),  which  bring  together  public  and  private  sectors,  offer  a  promising  route  to  the
development  of  new  drugs.  The  EC  is  involved  in  negotiating  the  control  of  the  use  of
persistent organic pollutants (PoP) such as DDT18.

The Stop TB Initiative, launched by WHO in 1998 and the Amsterdam TB conference (2000)
have  defined  an  agenda  for  action  targeted  at  the  most  affected  countries.  Donors  have
indicated plans for scaled up and improved support to confront the disease.

There are many opportunities for the international community to explore the use of innovative
financing  partnerships,  including  with  the  private  sector,  and  financing  mechanisms  that
leverage  additional  investment.  Several  philanthropic  agencies  have  provided  substantial
support to the fight against communicable diseases. Public-private partnerships are increasing,
and  the  development  banks  are  exploring  possible  new  facilities  to  support  work  on
communicable disease control.

17 

18 

The  initiative  already  produced  tangible  results: two  European  developed  malaria  vaccines  are
entering  clinical  trial  this  year.  EMVI  is  participating  in  the  Global  Alliance  for  Vaccines  and
Immunisation (GAVI).
The EC accepts the continued, but time-limited production of DDT for vector control for public health
purposes as supported by the African Consultation on reduction of reliance on DDT held in Harare in
February 2000.

13

                                                
An effective future global response will require closer integration and synergy between these
multiple initiatives with effective dissemination and incorporation of lessons learned.

3. 

EUROPEAN  COMMUNITY´S  SPECIFIC  ROLE  IN  ADDRESSING  MAJOR
COMMUNICABLE DISEASES

3.1. 

The EC's current policies and ongoing activities

The  EU  (European  Commission  and  Member  States)  together  provides  55%  of  all
development  assistance  and  65%  of  world  assistance  for  Health,  AIDS  and  Population  in
developing  countries.  In  1998  the  European  Community  committed  Euro  8.6  billion  of
development aid.

The goal of the new EC Development Policy (COM (2000) 212) is poverty reduction. One of
the  priority  areas  for  EC  development  aid  is  the  support  to  macroeconomic  policies  in
developing countries with an explicit link with poverty reduction strategies, in particular sector
programmes in social areas (health, education) 19. The EC Health, AIDS and Population (HAP)
policy  and  programmes  are  being  re-formulated  in  relation  to  this  goal,  through  a  variety  of
complementary instruments. In 1998, Euro 700 million was allocated to the Health AIDS and
Population portfolio20 (see Annex 2).

The EC development policy is evolving in the following ways: from project to sector support,
from infrastructure to systems strengthening and institutional development and towards greater
integration  of  cross-sectoral  themes.  There  has  also  been  a  shift  in  policy  focus  towards
targeting  poorer  communities  in  developing  countries.  The  EC's  HIV/AIDS  policy  and
programmes  have  mainly  supported  poverty  reduction  strategies  through  sustained  cross-
sectoral  prevention  efforts  (53%  of  the  activities  financed  1987  -  1997  -  see  Annex  2)  and
primary  health  care  (42%  of  the  activities  financed  1993  -  1997).  Investment  in  knowledge
generation has been at the core of research programmes, which increasingly target the priority
issues of developing countries.

EC  health  support  has  strengthened  systems,  health  services  and  pharmaceutical  access  with
extensive support to improve capacity for procurement, distribution and rational management
of  pharmaceuticals  as  part  of  wider  efforts  to  reform  health  systems.  EC/WHO  support  has
facilitated  21  African  countries  to  work  collaboratively  on  issues  related  to  pharmaceutical
policy.  Specific  contributions  have  been  made  over  the  past  10  years  in  30  developing
countries to develop sustainable and fair financing mechanisms and to the development of more
efficient procurement and distribution systems, regulatory capacities and quality control for key
pharmaceuticals with specific emphasis on contraceptives, vaccines and generic medicines.

The  EC  has  supported  capacity  building  to  enable  regional  action  against  emerging  and  re-
emerging  communicable  disease  threats.  This  has  included  enhanced  surveillance  and  control
efforts,  in  co-operation  with  WHO.    Ensuring  effective  risk  management  of  communicable
disease  outbreaks  is  a  key  feature  of  EC  humanitarian  assistance  programmes.  The  EC  also
supports WHO’s action plan for the reduction of the reliance on products such as DDT.

19 
20

COM (2000) 212, p. 25.
Figures include estimates from structural adjustment funds.

14

                                                
The EC HIV/AIDS programmes have made a major contribution to defining safe blood policy
and practice, in particular in influencing the shift from a reliance on paid donors to a volunteer
base. In Uganda volunteers now provide 60% of the national blood supply. The EC co-funded
the influential Mwanza study (Tanzania), which identified that effective treatment of sexually
transmitted diseases could reduce HIV transmission rates by 40% or more (see Annex 3). The
findings of this study have influenced global HIV/AIDS control efforts. EC support to youth
targeted  education  programmes  in  South  Africa  have  led  to  significant  falls  in  HIV
transmission rates in this age group. Despite the successes, the scale and impact of HIV/AIDS
interventions have been insufficient.

While  the  EC  has  not  provided  substantial  targeted  support  to  malaria  and  tuberculosis
initiatives it has made an impact through a major contribution to health systems development in
many  countries.  The  EC  supported  ARIVAS  programme  has  worked  with  ten  countries  in
West  Africa  to  incorporate  finance  of  priority  public  health  vaccines  including  tuberculosis
vaccine into national budgets. The EC is involved in new international partnerships specifically
related to malaria as detailed in 2.4.

The  EC  has  played  an  active  role  in  debates  on  improving  access  to  and  effective  use  of
medicines.  Assistance  is  provided  to  developing  countries  to  ensure  that  national  legislation
and international agreements on trade are respected.  The Commission has started to address
questions linked to access to pharmaceuticals, such as pricing mechanisms, investment in new
products, and the impact of international property rights.  It is encouraging the participation of
a wide range of stakeholders to achieve well-balanced solutions.  These include research-based
and  generic  pharmaceutical  industries,  NGOs,  national  governments  and  international
organisations.

Europe  has  a  long-standing  tradition  of  excellence  in  vector  control  and  pharmaceutical  and
medical  research.  European  industries  have  considerable  Research  and  Development  (R&D)
capital  and  skills.  More  than  60%  of  the  vaccines  currently  used  in  developing  countries  are
produced  in  Europe  and  several  EU  companies  are  among  the  largest  producers  of  anti-
infective drugs.

The Commission supports a long established R&D portfolio targeted at communicable diseases
with  more  than  Euro  50  million  committed  for  new  research  under  the  first  rounds  of
applications to the new 5th Framework Programme. More than 40 malaria projects were funded
under the last framework programme. The EC has supported important new public-private co-
operation projects, involving WHO, which seek to stimulate research and development of new
medicines  and  vaccines  of  particular  importance  to  the  health  of  people  in  developing
countries. Internationally very relevant activities were supported. Most of the possible malaria
vaccine candidates have been initially characterised in EC projects. An EC funded trial in The
Gambia in collaboration with US researchers and industry on a vaccine candidate is the first to
show  protection  in  a  majority  of  vaccinees  for  more  than  a  month.  At  least  one  new
tuberculosis vaccine candidate is ready for preliminary testing and several new prototypes will
be  forthcoming  very  soon  for  HIV,  including  for  the  types  most  prevalent  in  developing
countries. Research on a totally new class of anti-malarial drugs is also supported. EC funded
North-South collaborative research was first to show the epidemiological links between HIV
and  tuberculosis  in  Zambia  and  between  HIV  and  other  STDs  in  Africa.  Results  of  very
detailed  investigations  on  transmission  give  new  explanations  on  how  fast  people  are  re-
infected after initial cure of tuberculosis. In addition, the EC provided substantial funding for

15

environmentally  friendly  vector  control  research  in  order  to  develop  new  technologies  and
reduce the use of insecticides, and this could also be applied to the malaria vector.

Disease prevention and promotion of health will continue to be the main focus of all health and
development  efforts.  The  EC  intends  to  build  on  past  successes  and  increase  support  for
proven and effective prevention interventions and to improve primary health services. Support
to health reform is valid and will be continued in the longer term. However, the scale of the
problem  created  by  the  continued  spread  of  the  three  major  diseases  warrants  additional
accelerated and more targeted complementary responses.

3.2. 

The EC’s comparative advantage in recent development strategies

Since  mid  1990s  those  involved  in  development  assistance  have  attempted  to  work  through
more  effective  national  and  international  co-ordination  mechanisms,  through  innovative
partnerships and with greater focus on developing countries´ capacity building. More attention
is being directed to ensure that public and private investments are made in the social and health
environments  of  the  poorest  countries  and  populations,  that  these  investments  benefit  the
poorest  and  that  they  target  the  highest  priorities.  A  set  of  ambitious,  internationally  shared
development targets has been endorsed, setting the development agenda for the next 15 years.
The EC has re-oriented its own strategies taking into account its comparative advantages and
financing instruments.

With a strong poverty reduction mandate, the EC has a particular and important role to play in
health, including to confront the problems of communicable diseases affecting the poor more
effectively  and  rapidly.  The  range  of  Commission  competencies  and  instruments  across  the
vital  areas  of  humanitarian  assistance,  development,  environment,  trade  and  enterprise,
research and international health is unique and provides potential for greater synergy between
many  policy  areas.  In  addition,  the  EC  is  active  in  all  developing  countries  and  provides
substantial  grant  aid  assistance.  The  developing  country  partners  (in  particular  the  Least
Developed Countries) have a greater role in all aspects of the aid management cycle than with
other most donor aid.

The  following  paragraphs  present  a  policy  framework.  Specific  proposals  for  action  will  be
developed following wide consultation and will detail the legal basis and financial instruments
proposed. The legal bases for further contributions include development co-operation (articles
177  et  seq  of  the  EC  Treaty)  including  co-operation  with  international  organisations  (article
181),  public  health  (article  152)  and  research  policy  (article  163  et  seq).  Special  instruments
applicable  to  this  field  include  the  Council  regulation  550/97  on  HIV/AIDS  in  developing
countries, which is under review.

4. 

THREE CORE AREAS FOR INCREASED AND ACCELERATED ACTION

The  Commission  shall  continue  and  accelerate  its  support  for  existing  interventions  in  health
but also reinforce promising approaches. Three broad areas for accelerated action are identified
and presented below, building on the comparative advantage, policies and instruments of the
EC.

These  areas  are  to  complement,  and  not  replace,  existing  actions.  They  are  proposed  as
mutually  interdependent  reinforcing  actions.  No  action  in  one  particular  area  can  be  efficient

16

without significant and sustained support in the other two areas. The mix of the areas of action
offers the potential to deliver positive outcomes over the years.

This strategy mix consists of actions to:

·   Optimise impact of existing interventions.

·   Increase the affordability of key pharmaceuticals through a comprehensive global approach.

·   Increase investment in research and development of new medicines and vaccines targeted at

the three diseases.

These three areas have been highlighted because of their direct relevance to the fight against
communicable diseases. However the Commission does not regard these areas as the only ones
important  to  successful  communicable  diseases  control.  Ongoing  EC  interventions  in  areas
such  as  good  governance,  conflict  prevention  and  resolution,  corruption,  transport,
infrastructure, education, gender equality, and the fight against the production, trafficking and
use of illegal drugs, are all being pursued for their wider beneficial and development impact but
will also have a positive effect on communicable disease control. Continued EC action in these
areas  and  above  all  a  continued  commitment  by  partner  governments  to  take  action,  are
essential if the major communicable diseases are to be controlled.

4.1. 

Reaching  optimal  impact  of  existing  interventions  in  EC  development  co-
operation.

Public  health  systems  have  had  varied  success  in  providing  effective  services  to  the  poor.
Government health systems, however, will continue to serve as the largest single provider of
preventive  measures  and  curative  services  for  the  three  diseases.  The  EC  will  improve  its
efforts  to  strengthen  health  systems,  provide  for  key  commodities  and  pharmaceuticals,
support  national  budgets,  scale  up  effective  approaches  and  improve  donor  co-ordination.
Delivering  a  major  increase  in  access  and  utilisation  of  effective  interventions  will  involve
working  through  multiple  complementary  channels.  These  would  include  NGOs/CBOs,  the
for-profit private sector, and traditional providers.

There  are  under-exploited  opportunities  to  scale  up  approaches,  which  have  proven
effectiveness  and  to  develop  innovative  mechanisms  and  partnerships  to  reach  the  poorest.
Useful  experience  has  been  gained  in  franchising,  social  marketing,  use  of  voucher  schemes,
over-the-counter  sales  of  non-prescription  items,  public-private  collaboration,  regulation  and
contracting.  Many  of  these  small-scale  pilots  could  be  scaled  up.  Others  such  as  social
marketing may need to be further refined to reach those who are presently too poor to benefit.
Important  elements  will  be  the  provision  of  information  on  which  consumers  can  make
informed  decisions  and  attention  to  regulatory  and  legal  frameworks  to  strengthen  consumer
rights.

Adequate  and  ring-fenced  public  finance  (external  and  domestic)  for  priority  preventive  and
curative interventions is essential if poor people are to have access to care. However, a range
of  financing  mechanisms  needs  to  be  considered.  The  appropriate  approach  will  depend  on
country context, and will need to be pluralistic.

The following policy orientations will guide future action:

17

·   Focus  on  preventive  activities  should  remain  the  EC´s  main  long-term  response  in

addressing the three major communicable diseases.

·   Encourage  developing  countries  to  establish coherent  and  integrated  health  policies
designed  at  targeting  major  communicable  diseases.  This  includes  ensuring  that  an
adequate balance between prevention and care is maintained in the delivery of Community
assistance.

·   Establish  and  strengthen innovative  partnerships  and  national  mechanisms  that  involve
governments,  but  also  reach  beyond  the  government  health  system.  Examples  could
include partnerships with civil society organisations, support for organisations experienced
in the social marketing of health commodities, partnerships with private sector distribution
networks and qualified private providers. Such an approach will require high quality market
research  on  behaviour  and  attitudes  that  might  affect  the  use  of  commodities  or
interventions.

·   Develop  sustainable  mechanisms  for  progressive,  prepaid  financing  for  effective
prevention and care interventions, which would exempt the poor and provide subsidies
for  the  near-poor,  thus  opening  up  markets  for  low  cost  commodities  and  health
interventions.

·   Support  the  growth  of  strategic  purchasing,  including  the  use  of  contractual  or

franchising  arrangements,  by  public  fundholding  bodies  in  the  health  sector  for  qualified
providers  of  all  types  (public,  private,  not-for-profit).  Ensure incentive  systems,  which
favour  rational  selection  and  safe,  economical  use  of  technologies,  which  promote  and
improve health, by providers of all types.

·   Support  for  improved  delivery  mechanisms  and  quality  insurance  for  commodities  and
interventions  that  are  effective,  such  as  condoms,  bednets,  prevention  of  mother  to  child
transmission,  voluntary  counselling,  HIV  testing  and  care  for  people  with  HIV/AIDS,
sexually transmitted infections (STI), tuberculosis and malaria.

·   Support  will  be  focussed  on  those  countries  which  demonstrate  a  commitment  to
equitable  access  to  essential  services  and  which  demonstrate  positive  outcomes  for  the
poorest  segments  of  the  population.  This  includes  the  development  of  fair  financing
strategies21 and responsive, accountable health systems.

The  EC  and  the  international  community  are  exploring  innovative  financing  partnerships  that
may  also  induce  the  private  sector  to  mobilise  additional  investment.  This  global  partnership
will co-operate with specialised UN agencies, such as WHO and UNAIDS, to back country-
based initiatives with demonstrated ability to increase access to, and make effective use of, key
commodities  and  interventions,  disseminate  lessons  learned,  inspire  others  and  catalyse  more
widespread and effective actions.

21 

For the definition of fair financing, see The World Health Report 2000, p. 35-39.

18

                                                
4.2. 

Increasing  affordability  of  key  pharmaceuticals  through  a  comprehensive
approach

Almost 90% of the products on WHO’s “essential drug list”  are not patented and therefore are
subject to generic competitive tendering and local production. In principle they are available at
lower prices from generic or original producers. Yet still many of these products do not reach
people in developing countries for reasons highlighted in 4.1.

Several key products to prevent, diagnose and treat HIV/AIDS, malaria and tuberculosis are
largely produced in industrialised countries, under patent, are still too expensive for the poor.
Consumer prices can vary widely within, as well as amongst countries, because of differences
in market demand, intellectual property rules, purchasing capacity, tariff levels, differences in
local  incomes,  the  lack  of  a  sustainable  market,  price  setting  and  the  degree  of  competition
among  generic  and  the  R&D-based  pharmaceutical  industry  producers.  The  Brazilian
government  has  recently  started  to  produce  7  of  the  12  drugs  used  to  assist  people  with
HIV/AIDS. The prices of those drugs have fallen 70% on average, while prices of medicines
bought in international laboratories, have fallen less than 10% in the same period 22.

Affordability  of  key  pharmaceuticals  can  only  be  increased  and  accelerated  through  a
comprehensive synergistic approach. The EC recognises that the price of essential drugs and
key  pharmaceuticals  needed  to  prevent  or  to  treat  the  three  major  communicable  diseases  is
one of the major obstacles, but not the only barrier, to improving access to health and health
care for the poor in developing countries.

The following policy orientations will guide future action:

·   The  EC  will  increase  its  present  support  to  countries  to  strengthen  national
pharmaceutical  policies  and  practice  including  procurement,  tendering,  distribution,
quality  assurance  and  technical  capacities  to  improve  the  availability  of  essential  and  key
medicines at country level.

·   The EC recognises the need for the careful review of pricing of key pharmaceuticals for
the three major communicable diseases and the impact of import tariffs and taxes, taking
into  account  effects  on  the  tax  base  and  on  public  expenditure.  Greater  transparency
regarding the breakdown of consumer prices on key pharmaceuticals will also be pursued.

·   The EC also advocates that industry use tiered pricing to allow manufacturers to offer the
lowest  possible  prices  to  the  poorest  countries  without  threatening  profits  in  developed
countries.23 This should build on a volume/price trade off. Where lower income countries
benefit  from  (low)  preferential  prices,  effective  measures  need  to  be  in  place  to  prevent
parallel exporting to (higher price) developed countries. The EC will further examine the
impact of parallel trading,24 taking into account that the general principles of community
law allow patent holders to oppose parallel trade from outside the EEA.

22

23

24

Government of Brazil: Report to International AIDS conference, Durban, July 2000.
Tiered pricing has long been practised in relation to childhood vaccines.
Parallel trading involves cross-border trade in a product without the manufacturer’s permission – i.e.
helps lower drug prices by enabling buyers to shop around for the cheapest drug sources, whether they
are  patent  holders  or  not.  For  parallel  trading  from  outside  of  the  EU  and  exhaustion  of  rights  (for

19

                                                
·   Other  possibilities  could  be  through  engagement  in voluntary  licensing  agreements  to
facilitate local production of key pharmaceuticals and to ensure that developing countries
benefit from technology transfer.

·   The generic and R&D based pharmaceutical industry are invited to develop and co-operate
with  the  local  pharmaceutical  industry  and  research  institutions  in  developing  countries,
provided effective competition is ensured on domestic markets. This would contribute to
increasing  capacity  for  local  production  of  generic  drugs  and  enable  fair  competition
from  generic  drug  manufacturers.  The  EC  will  also  work  with  the  governments  from
developing countries to facilitate local production.

·   The EC acknowledges that developing countries can use, when appropriate, the flexibility
within the TRIPS Agreement to provide compulsory licensing25 (article 31 of TRIPS)  to
address public health concerns and emergency crises. In doing so the EC also takes
into account the need to respect the property rights of the patent holders.  Together
with its partners from developing countries, the EC will explore the flexibility provided by
the TRIPS Agreement to address public health concerns and emergency crises.

The  EC  will  provide  technical  assistance  for  countries  to  implement  the  TRIPS  Agreement.
The  EC  and  their  Member  States  should  co-ordinate  and  enhance  their  technical  assistance
with developing countries aiming at their full compliance with the TRIPS Agreement.

4.3. 

Investment  in  research  and  development  of  global  goods  targeted  at  the  three
diseases.

Actions identified in the previous sections seek to address access and affordability issues that
can  make  an  impact  on  communicable  diseases  in  the  short  to  medium  term.  They  are  to
increase the attractiveness of the market and protect the environment and intellectual property
rights. However, more  attractive markets alone will not provide adequate incentives for new
investment. This will also require measures targeted at the various stages of the research and
development process. They are to overcome obstacles from the past: insufficient co-ordination
between  players,  insufficient  identification  of  the  means  necessary  and  lack  of  institutional
capacity building in the countries hardest hit by the epidemic.

The  EC  proposes  to  address  the  multiple  barriers  for  further  investment  in  research  and
development  through  three  complementary  strategies  consisting  of  larger  scale  and  more
effective  public  investment,  development  of  an  incentive  package  for  private  investment  and
participation in a global partnership.

Larger scale and more effective public investment. The Community has made a significant
past  contribution  to  the  research  agenda  through  the  Biomed  Specific  Programme  of  the  4th
Framework  Programme  and  through  key  actions  on  ‘control  of  infectious  diseases’,  and
‘quality of life’, as well within the INCO programme in the 4th and 5th Framework Programme
(see  Annex  4).  Recent  initiatives  have  increasingly  focused  support  on  confronting
communicable  diseases  in  developing  countries.  The  EC  proposes  to  scale  up  the  different

25

trademarks), see the following ECJ cases: Silhouette International (Case C-355/96) and Sebago (Case
C-173/98) .
The  granting  of  a  license  without  the  consent  of  the  patent  holder  on  various  grounds  of  general
interest.

20

                                                                                                                                                      
components of the R&D process and to further increase coherence between Community and
other  R&D  activities.  The  goal  is  to  rapidly  enlarge  the  R&D  pipeline,  to  accept  a  greater
degree of investment risk and to accelerate the process through a move from serial to parallel
testing  of  candidate  products.  Reinforced  co-ordination  with  Member  States  on  common
strategic R&D will be the key to this acceleration.

Under  the  new  European  Research  Area  policy  framework  (ERA),  the  EC  proposes  to
increase  support  for  capacity  building  of  research  institutions  and  personnel  in  developing
countries. It seeks to ensure that researchers from developing countries are more involved in
early priority setting within the EC R&D process and that countries which host clinical trials
see their communities and scientists both participating adequately in the exercise and benefiting
from  the  results.  Most  rigorous  ethical  standards  need  to  be  established  and  observed.  A
specific Communication on research against major communicable diseases is being prepared.

Development of an incentive package for private investment.  Accompanying measures to
build capacity and further develop innovative public-private partnerships are needed. Increased
private investment in R&D will be encouraged through appropriate incentives. The EC intends
to explore options to improve the expectations of companies that a future market will enable
return of their investment costs for R&D.

Possible  incentives  which  require  further  study  are  two-fold:  low  cost  loans  and  other
incentives for venture capital especially important for small biotechnology firms doing most of
the  early  research  and  development  of  vaccines  and  drugs;  and  purchase  funds.  The
international  debate  on  possible  operationalisation  of  such  funds  is  ongoing26.  Producers  of
newly licensed vaccines could be granted rights for limited patent extension on unexpired drug
or  biological  patents  for  which  the  owner  is  the  holder  of  the  exclusive  license.  Innovative
public-private  licensing  agreements  already  tested  for  HIV/AIDS  vaccine  development  could
also be extended more widely.

There  is  great  scope  to  improve  availability  of  information  at  all  levels.  Developing  country
partners  need  easier  access 
information.
Pharmaceutical companies need improved information on potential markets for products; this
could  be  provided  through  market  exercises  such  as  that  performed  by  the  EC  for
microbicides, condoms and an HIV/AIDS vaccine. Early sharing of intellectual property rights
related to extensive research partnerships will be encouraged.

to  complex  but  publicly  available  patent 

Participation in a global partnership, to make the health research agenda more responsive
to the global needs in the next decade. The EC together with WHO, the World Bank and other
main  partners  in  health  and  development  will  come  together  to  influence  a  more  responsive
health  research  agenda  for  the  next  decade.  The  effort  will  seek  to  reorient  health  research,
both public and private, from the present ratio of 10% investment in 90% of the global burden
of disease towards a more favourable 20/80 ratio. This shift appears to be a realistic goal and
further monitoring tools need to be developed.

26

Here  the  distinction  is  often  made  between  ‘push’  and  ‘pull’  mechanisms.  Examples  of  push
mechanisms  are  public  investment  in  research  and  tax  breaks  linked  to  investment  for  research  by
private  companies.  Examples  of  pull  mechanisms  are  purchase  funds  and  transfer  of  patents.  It  is
argued  that  without  sufficiently  strong  pull  mechanisms,  the  new  drugs  and  vaccines  will  not  be
developed and be put into use, even if the ‘push’  is successful in developing candidate vaccines.

21

                                                
5. 

CONCLUSIONS AND RECOMMENDATIONS

A  new  international  effort  to  reduce  the  impact  of  the  key  diseases  that  keep  the  poor  in  ill
health and poverty and hold back development is long overdue. The international environment
is  supportive  and  the  new  and  evolving  partnership  with  WHO  and  closer  collaboration
between stakeholders, including the World Bank and UNAIDS, offer a new opportunity that
should  be  built  upon.  The  Community  proposes  to  make  a  substantive  contribution  to  the
international effort using the various instruments at its disposal.

The policy framework set out in this Communication is the Community's first response to the
recommendations  of  the  G8  summit  held  in  Okinawa  in  July  2000.  The  Commission  will
elaborate  a  programme  for  action  along  the  lines  of  chapter  4  above.  In  formulating  the
programme  for  action  the  Commission  will  benefit  from  additional  consultations  with
important stakeholders, including developing countries, Member States, Members of European
Parliament,  international  development  agencies,  civil  society,  researchers  and  the  private
sector, at a high level Round Table to be held in Brussels on 28 September 2000.

The  Council  and  the  European  Parliament  are  invited  to  work  with  the  Commission  to  take
forward the ideas in this Communication.

22

Annex 1

Global emergency cause by HIV/AIDS, malaria and tuberculosis

HIV/AIDS

·   HIV/AIDS  kills  over  2  million  people  in  Africa  alone  each  year  –  more  than  10
times the number that perish in wars and armed conflict during the same period.

·   In  1999,  33.6  million  people  world-wide  were  estimated  to  be  living  with

HIV/AIDS with over 16 million people deaths since the start of the epidemic.

·   95%  of  infections  are  in  developing  countries  with  two-thirds  in  sub-Saharan
Africa  where  HIV  prevalence  has  reached  30%  of  the  adult  population  in  seven
countries.

·   In 1999 an additional 5.6 million people were infected including 570,000 children

born to HIV positive mothers.

·   Women  are  particularly  vulnerable  to  HIV  infection  due  to  both  social  and

biological factors.

·   11.2 million children are orphaned due to AIDS.

·   HIV/AIDS  spreads  fastest  in  conditions  of  poverty,  social  instability  and
powerlessness. Such conditions are at their most extreme during emergencies.

·   HIV/AIDS is reversing important developmental gains; in parts of Southern Africa,
infant mortality has increased by 25% and life expectancy has fallen from 64 to 47
years over a period of just three years.

·   HIV/AIDS affects adults in their economically productive years; per capita income
may be reduced by as much as 0.5% per year where more than 8% of adults are
infected.

·   Prevention by reducing vulnerability and curbing transmission of the virus remains

the most effective strategy to control the spread of the epidemic.

·   The  availability  of  care  and  medicines  for  HIV/AIDS  has  significantly  reduced
disease  and  mortality  caused  by  HIV/AIDS  in  industrialised  countries;  the  vast
majority  in  developing  countries  are  deprived  of  all  drugs  including  those  for
treatment of common opportunistic infections.

23

        Malaria

·   Malaria kills at least 1 million people each year and infects 500 million people.

·   90% of cases occur in Africa while 40 percent of the world's population is at risk.

·   The  major  impact  is  on  women  and  children  -  700,000  children  will  die  from
malaria this year - one death every 30 seconds. Women are four times as likely to
suffer malaria attacks during pregnancy.

·   Malaria  control  and  treatment  costs  African  countries  1.5%  of  GDP  or  USD  2

billion in 1997.

·   A  malaria-stricken  family  spends  over  one  quarter  of  its  income  on  malaria
treatment. Families pay  prevention costs and suffer loss of income from repeated
attacks.

·   Complex emergencies and natural disasters increase malaria risk.

·   Malaria is curable if promptly diagnosed and adequately treated.

24

              Tuberculosis

·   Tuberculosis (TB) each year kills 2 million people with 95% of deaths occurring in
developing countries. TB is the leading cause of death among the HIV positive.

·   TB  infection  is  increasing  across  the  globe  with  a  four-fold  increase  in  several
African countries over the past decade and new outbreaks in Eastern Europe after
40 years of steady decline.27

·   Over the next 20 years nearly one billion people will be newly infected, 200 million

people will get sick, and 35 million will die from TB.

·   A person with infectious TB infects 10-15 people every year.

·   TB affects the weakest and traps people in a cycle of poverty and disease. Most of
those affected are in the economically active population with women less likely to
be detected and treated.

·   A highly effective cure exists and a course of treatment costs as little as USD 11.

·   The  emergence  and  spread  of  multi-drug  resistant  TB  due  to  inappropriate
treatment or compliance with treatment prescriptions represents a global threat.

27

While  recognising  the  scale  of  the  TB  problem  in  the  countries  of  Eastern  Europe  in  transition,  the
focus of this initiative will be on developing countries.

25

                                                
Annex 2

EC Health, AIDS and Population Portfolio

Poverty reduction has become the overarching aim of EC development policy with assistance
to health, HIV/AIDS and population programmes (or HAP) playing an increasingly important
role.  As a result, aid to these themes and sectors has grown continuously and from barely 1%
of total EC aid in 1986 now represents more than 8 %. The OECD average support to HAP is
around 5.5 % in 1998.

EC  commitments  to  health,  AIDS  and  population  in  1998  amounted  to  well  over  Euro  700
million (figure 1) for more than 100 developing countries.

Between 1993 and 1997, 22% of HAP support in ACP countries was used for construction,
17% for technical assistance, 13% for equipment, 11% for consumables and 11% for human
and institutional development (figure 3). Since 1998 the shift towards sector wide approaches
in partnerships with Government, civil society and other donors has continued. Less funds are
channelled  to  construction  and  equipment,  while  the  focus  on  human  and  institutional
development  has  significantly  increased.  Figure  7  shows  EC  commitments  on  HAP  1994  -
1998 for Asia, Latin-America, ACP countries and the Mediterranean.

The  EC's  HIV/AIDS  policy  and  programmes  have  mainly  supported  poverty  reduction
strategies  through  sustained  cross-sectoral  prevention  efforts  (53%  of  the  activities  financed
1987 – 1997 – figure 4) and primary health care (42% of the activities financed 1993 - 1997).

Overall  accumulated  EC  commitments  to  HAP  related  activities  in  developing  countries
between  1990  and  1998  amount  to  around  Euro  3.4  billion.  A  forthcoming  portfolio  review
and  overall  evaluation  (programmed  for  2001)  will  define  the  nature  of  commitments,
countries/regions,  partners,  levels  of  interventions  and  type  of  budgetary  instruments.  Taken
together, EC and EU Member States now provide more than half of all development assistance
to health related programmes around the globe.

.

26

Figure 1. Commitments to Health, AIDS and Population

         Overall Commitments to HAP 1998

o
r
u
E

f
o

s
n
o

i
l
l
i

M

1000

900

800

700

600

500

400

300

200

100

0

EU Member States
Bilateral Aid

European Community

Figure 2. Evolution of type of expenditure and project focus in Health, HIV/AIDS and
Population interventions (1988-1992)

Type of Expenditure 1988-1992

Contingencies 
10%

Operating Cost 1%

Training 3%

Studies 2%

TA (Local + Expat)
13%

Consumables
7%

Equipment
19%

Buildings
45%

27

 
 
Project Focus 1988-1992

Primary Health 
Care
18%

Secondary Health 
Care
17%

HIV/AIDS 27%

Essential 
Medicines
3%

Capacity Building
8%

Tertiary Health 
Care
27%

28

Figure 3. Evolution of type of expenditure and project focus in Health, HIV/AIDS and
Population interventions (1993-1997)

Project Focus 1993-1997

HIV/AIDS
15%

Essential Medicines
11%

Capacity Building
16%

Primary Health 
Care
42%

Tertiary Health 
Care 10%

Secondary Health 
Care 6%

Type of Expenditure 1993-1997

Contingencies
8%

Misc. 8%

Support for NGOs
5%

Operating Costs 
5%

Training 6%

Studies 5%

Buildings
22%

Equipment
13%

TA (Local + Expat)
17%

Consumables
11%

29

Figure 4. Commitments to HIV/AIDS interventions (1987-1997)

Commitments by Strategic Sector 1987-1997

Multiple 
Objectives
6%

TA 12%

Research, 
Training, 
Conferences
10%

Socio-Economic 
Impact
1%

Health Sector 
Support
18%

Prevention
53%

Figure 5. Commitments to HIV/AIDS interventions by region (1987-1997)

Commitments by region 1987-1997

Pacific 1%

All ACP
15%

Mediterranean 
3%

Latin America 
7%

Caribbean 4%

Asia 16%

Africa
54%

30

Figure 6.  Commitments to HIV/AIDS interventions by partner type (1987-1997)

Commitments by type of partner 1987-1997

TA 13%

Multiple Partners
10%

Others 6%

Local Institutions
5%

International 
Organisations
16%

Government 
Bodies
33%

European NGOs
12%

Local NGOs 5%

Figure 7. Overall EU Commitments to Health, AIDS and Population 1994 - 1998.

EC Commitments to
Health, AIDS and Population

Mill
ion
Eu
ro

800

700

600

500

400

300

200

100

0

Mediterranean

Latin America

Asia

ACP

1994

1995

1996

1997

1998

OVERALL COMMITMENTS RELATED TO HAP PROJECTS/PROGRAMMES FOR
1995-1999 FUNDED THROUGH EDF & ALAMED FINANCIAL & TECHNICAL
COOPERATION INSTRUMENTS

31

Region

Asia

Latin America

Mediterranean

Commitments Total28

Euro 444.215 million

Euro 173.550  million

Euro 244.860 million

ACP (incl. South Africa)

Euro 497.712 million

Overall Total

Euro 1,359.9 million

COMMITMENTS THROUGH THE HIV/AIDS AND DEMOGRAPHY SPECIAL BUDGET
LINES (B7-6211, B7-6212 and B7-6310)

Region

Amount

All Developing Countries

Euro 18.1 million

Euro 21.9 million

Euro 20.1 million

Euro 23.9 million

Euro 24.8 million

(Euro 20 million

Year

1995

1996

1997

1998

1999

2000)

Overall Total

Euro 108.8 million

28 

First review prepared by DG DEV. 
This  list  does  not  include  interventions  funded  through
other instruments such as budget aid (including structural adjustment), NGO co-financing, research,
refugee budget lines or ECHO nor does it include funding of health programming under PHARE or
TACIS.

32

                                                
Annex 3

Summary of actions taken in follow-up to
the Commission Communication on increased solidarity to confront AIDS
in developing countries (com-98-407)

Adopted  by  the  Commission  on  July  3  1998,  this  Communication  provided  the  basis  for  a
European  response  to  calls  for  more  international  solidarity  with  developing  countries  in
confronting HIV/AIDS, and in particular, calls for increased access to care for HIV/AIDS and
the need for HIV vaccines and microbicides for developing countries.

The Communication stressed the importance for the EU to build upon and strengthen existing
actions in support of affordable and effective targeted preventative interventions, and the need
to  strengthen  health  care  delivery  systems  in  developing  countries  as  a  pre-requisite  for
improved access to drugs, especially anti-retrovirals, for people with HIV/AIDS.

In  addition,  the  Communication  explored  the  potential  for  the  creation  of new  solidarity
mechanisms,  and  examined  the  prospect  of  financing care,  including  anti-retrovirals,  in
developing  countries  and  the  possibility  of  supporting  accelerated  development  of vaccines
and microbicides.

In line with the priorities set in the Communication for additional and new EC  efforts - in
addition to the existing substantive programmes of support for health, including HIV/AIDS, in
developing countries, a number of new initiatives were launched by the European Commission.
There is no doubt that these initiatives on improved access to care and development of
new vaccines and microbicides in the context of HIV/AIDS, form a useful basis for EC
work  under  the  proposed  programme  for  increased  investment  on  communicable
diseases in developing countries.

Initiatives for the prevention of mother to child transmission

1. 

2. 

The  EC  supported  a  number  of  pilot  projects  in  preventing  mother-to-child
transmission of HIV/AIDS in developing countries. The projects included the careful
introduction of an essential package of treatment regimens for zero-positive pregnant
women.

Under the auspices of the EC and in co-operation with UNAIDS and the main other
actors  in  this  field,  the  "Group  of  Ghent"  -  a  think-tank  of  scientists  and  health
professionals  -  developed  a  public  health  strategy  for  mother-to-child  interventions
and  designed  intervention  packages  to  reduce  mother-to  child  transmission  as  an
integral part of antenatal, obstetric and paediatric care. A pilot project based on the
strategy and intervention package has started in Burkina Faso.

3. 

Initiatives in support of the development and availability of an HIV/AIDS vaccine in
developing countries.

Initiatives to support vaccine development

1. 

At  the  initiative  of  the  Directorate  for  Development  a  technical  consultation  on
making  an  AIDS  vaccine  available  in  developing  countries:  economic  and
financing  issues,  was  held  in  March  1999.  The  consultation  prioritised  actions  to

33

address barriers to vaccine development, identified areas where the European Union
has  a  comparative  advantage,  and  led  to  the  establishment  of  an  Inter-Service  HIV
Vaccine Task Team within the European Commission, lead by DG Development.

The Inter-Service HIV Vaccine Task Team includes representatives of Directorates
responsible for development, scientific research, industry and enterprise, the European
Investment  Bank  (EIB)  and  European  Medicines  Evaluation  Agency  (EMEA).  The
Team has developed a comprehensive strategy and action plan.

The EC HIV vaccine strategy and programme of action includes the following key
elements:  vaccine  research  and  development;  public  health  and  economic  research;
vaccine preparedness; policy dialogue; and intellectual property and regulatory issues.

2. 

3. 

Specific sponsored actions to date include:

1. 

2. 

3. 

Funding  for  the  Eurovac  cluster  project,  through  the  Commission’s  Directorate  for
Scientific  Research  Framework  Programme.  This  three-year  collaboration  between
European research institutions and industry will identify potential candidate vaccines
for developing countries and develop new techniques for vaccine delivery and funding
of enabling projects for HIV vaccine development.

A  programme  of  collaboration  between 
the  Commission’s  Directorate  for
Development and the World Bank on “willingness to pay”  studies, in order to assess
the potential demand for an HIV vaccine in a range of developing countries, and on
modelling the potential public health impact and cost-effectiveness of an HIV vaccine
in different settings.

Directorate  for  Development  financing  of  community  preparedness  research  by  the
South  African  AIDS  Vaccine  Initiative  and  the  South  African  Medical  Research
Council,  on 
including  community  mobilisation  and
participation in vaccine development and clinical trials.

legal  and  ethical 

issues 

Initiatives in support of the development and availability of microbicides

1. 

2. 

3. 

The EC commissioned and supervised a study into the market potential for vaginal
microbicides that could protect against STDs, including HIV.

Progress towards the development of microbicides effective against STD's, incl. HIV
has  been  fragmentary,  mainly  because  the  pharmaceutical  industry  lacks  confidence
that such a market exists. Research carried out amongst 4000 individuals in Brazil, the
Ivory  Coast,  Egypt  France,  India,  Kenya,  the  Philippines,  Poland,  South  Africa,
Thailand and Venezuela. The results of the study show a great deal of interest from
women for such a product and that there is, without a doubt, a commercial - as well
as a moral - justification for further product development.

Furthermore,  a  call  for  proposals  was  launched  with  a  specific  thematic  budget  line
(year  2000)  to  support  innovative  programmes  in  the  areas  identified  in  the
Communication on increased solidarity.

34

Annex 4

DG Research Investments into projects related to HIV, Malaria and TB

The international collaboration29 and life sciences30 programmes of DG Research are investing
in a complementary manner into research and development of vaccines and drugs against those
communicable  diseases  affecting  the  poorest  most.  Catalysed  through  the  task  force  on
vaccines and viral diseases, the past years have witnessed a considerable increase of resources
devoted to this field. Moreover, research is successively moving from discovery into preclinical
and clinical validation phases. Recently, major integrated research consortia (“clusters”) have
been established under the life sciences programme.

INCO-DC / INCO-DEV

Under the 4th Framework Programme INCO DC (1994-1998), EC has been funding 154 health
related  projects,  involving  some  119  research  teams  from  31  African  countries,  in  a  total
amount of Euro 80 million. Approximately two-third are directly linked to the priority diseases
HIV,  TB  and  malaria.  Research  covered  epidemiology,  transmission  and  intervention
strategies,  drug  research  as  well  as  molecular  and  vaccine  research.  INCO  supports  the
European  Malaria  Vaccine  Initiative  (EMVI)  and  the  African  Malaria  Vaccine  Testing
Network (AMVTN).

Under  the  5th  Framework  Programme  INCO-DEV  (1999-2002),  Euro  10  million  were
committed  for  vaccine  research,  and  Euro  15  million  could  be  allocated  to  drug  and
diagnostics development (2000). A forthcoming call (2001) will be targeted at the three major
communicable diseases.

BIOMED / BIOTECH / Key Action Control of Infectious Diseases

The  4th  Framework  Programme  programmes  BIOMED/BIOTECH  pursued  different
strategies: BIOMED invested into European networking projects on HIV (Euro 13.7 million
for  31  projects)  and  TB  (Euro  3.3  million  for  7  projects).    BIOTECH  gave  support  to
underpinning  vaccine  research  (Euro  30  million  for  34  projects)  and  to  a  limited  number  of
advanced vaccine research, including clinical trials on HIV, malaria and schistosomiasis (Euro
5.3 million 5 projects).

With  the  5th  Framework  Programme,  the  Key  Action  Control  of  Infectious  Diseases  has
embraced  a  global  view  in  its  programme  objectives.  40%  of  its  currently  committed  budget
(total  budget  over  4  years  is  Euro  300  million)  is  on  projects  linked  to  the  three  major
communicable diseases. A novelty is the successful implementation of large cluster projects, in
particular for HIV, TB and malaria vaccines, as well as for TB drug development. So far, Euro
21.8 million have been committed for HIV, Euro 8.8 million on malaria and Euro 9.9 million
on TB research, with app. 2/3 of the budget being reserved for vaccine research and 1/3 for
drug development.

29 
30 

INCO-DC (International Co-operation Developing Countries) and INCO-DEV.
BIOTECH, BIOMED, Quality of Life “Key Action Control of Infectious Diseases”.

35