Communication from the Commission to the Council and the European Parliament - Update on the EC Programme for Action - Accelerated action on HIV/AIDS, malaria and tuberculosis in the context of poverty reduction - Outstanding policy issues and future challenges
Date: 2003-02-26
Institutions: European Commission
Subjects: AIDS, EU programme, TRIPS, developing countries, health expenditure, health policy, infectious disease, medical research, poverty, right to health

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 26.2.2003
COM(2003) 93 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

Update on the EC Programme for Action

Accelerated action on HIV/AIDS, malaria and tuberculosis in the context of poverty
reduction

Outstanding policy issues and future challenges

TABLE OF CONTENTS

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT Update on the EC Programme for Action Accelerated action on
HIV/AIDS, malaria and tuberculosis in the context of poverty reduction Outstanding policy
issues and future challenges ....................................................................................................... 4

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

1.

2.

2.1.

2.2.

3.

Introduction.................................................................................................................. 7

Context and challenges ................................................................................................ 7

Unprecedented international agreement - starting to reconcile the contradictions ...... 8

Globally slow progress on ‘access’ and ‘resource mobilisation’................................. 9

Progress of the PfA to date......................................................................................... 11

3.1.

Impact......................................................................................................................... 11

3.1.1. Optimising the impact of Health, AIDS and Population interventions targeted at

major communicable diseases and poverty reduction................................................ 11

3.1.2.

Strengthening of pharmaceutical policies and capacity building............................... 14

3.1.3. Developing local manufacturing capacity.................................................................. 14

3.2.

Affordability............................................................................................................... 15

3.2.1.

Tiered Pricing............................................................................................................. 15

3.2.2.

Tariffs and taxes......................................................................................................... 16

3.2.3.

Intellectual Property Protection ................................................................................. 16

3.2.4. Corporate Social Responsibility (CSR) ..................................................................... 17

3.3.

Research and Development........................................................................................ 17

3.3.1.

Strengthening of research in poverty related diseases ............................................... 17

3.3.2.

European and Developing Countries Clinical Trials Partnership (EDCTP).............. 18

3.3.3. Capacity building for R&D in developing countries ................................................. 19

3.3.4.

Indirect incentives to increase R&D investments of private sector in specific Global
Public Goods .............................................................................................................. 19

3.4.

Participation in Global Partnerships: Policy and Political Dialogue ......................... 20

4.

5.

Monitoring and Evaluation ........................................................................................ 22

Conclusions................................................................................................................ 23

2

Annex 1 :Acronyms ................................................................................................................. 27

Annex 2: Matrix ....................................................................................................................... 30

Annex 3: The Millennium Development Goals ....................................................................... 43

Annex 4: Price and price reductions for certain HIV/AIDS and Malaria products ................. 45

3

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

Update on the EC Programme for Action

Accelerated action on HIV/AIDS, malaria and tuberculosis in the context of poverty
reduction

Outstanding policy issues and future challenges

EXECUTIVE SUMMARY

The  Commission  adopted  its  Programme  for  Action  (PfA),  entitled  Accelerated  action  on
HIV/AIDS,  malaria  and  TB  in  the  context  of  poverty  reduction  in  February  2001.  The  PfA
entailed  a  series  of  actions  to  increase  the  impact  of  existing  interventions,  increase  the
affordability  of  key  pharmaceuticals,  and  encourage  research  in  and  development  of
specific  global public  goods  to  tackle  HIV/AIDS,  malaria  and  TB  at  the  national,  regional
and  global  level.  The  PfA  has  been  in  place  for  two  years  and  it  is  now  an  appropriate
juncture  at  which  to  assess  its  implementation,  outstanding  policy  issues  and  future
challenges.

The  PfA,  and  its  implementation,  is  important  above  all  because  the  number  of  people
affected, infected and dying from HIV/AIDS, malaria and TB is still on the increase. In 2001
alone,  some  three  million  people  died  from  AIDS,  while  another  five  million  were  newly
infected by HIV. The burden of malaria and tuberculosis continues also to increase. In 2001,
some  two million people died  from  TB  and  1  million  from  malaria.  Current  trends  indicate
that by 2020 nearly one billion people will have become infected with TB, 200 million will
have developed the disease and 35 million of them will have died. Both TB and malaria are
contributing factors in another two to four million deaths annually.

There  is  a  consensus  within  the  international  community  about  the  urgency  of  the  need  to
tackle  HIV/AIDS,  malaria  and  TB  in  developing  countries  and  about  the  mechanisms  by
which this can  be achieved.  All  members  of  the  international  community have signed up to
the  Millennium  Development  Goals  (MDGs).  HIV/AIDS,  malaria  and  TB  targets  feature
prominently, highlighting the link between overall poverty reduction and health investments.
The  WHO-initiated  Commission  on  Macroeconomics  and  Health  (CMH)  presented
convincing  evidence  of  the  need  to  focus  on  the  three  diseases  and  demonstrated  why
investments in health are an effective strategy for reducing poverty. The debate over Global
Public Goods (GPGs) has also advanced and appropriate incentives are being considered for
the  production  of  specific  GPGs,  such  as  controlling  the  HIV/AIDS,  malaria  and  TB
epidemics. There is still no HIV/AIDS, malaria or, effective, TB vaccine available and many
of these global public goods depend on international action.

With regard to ‘increasing impact’, progress has been slow in terms of increased support for
health.  Notwithstanding  the  large  price  reductions  obtained  since  the  adoption  of  the  PfA,
only few have access to anti-retroviral medicines, effective TB and malaria interventions. The
desired increase of health spending in developing countries to at least USD 30-40 per person
per annum, will require, by 2007, approximately USD 27 billion per annum in donor grants

4

and an additional budgetary outlay from developing countries of USD 23 billion. An estimate
of annual financial needs to cover  HIV/AIDS, malaria and TB alone totals USD 9.2 billion.
The results of the effectiveness of the PfA at country level need to be assessed over a longer
time-scale.  However,  EC  spending  on  social  infrastructure  is  planned  to  rise,  dormant
programmes have been re-directed, and spending better focused on those priorities established
by  the  PfA.  At  EU  level  several  resolutions  have  been  adopted  by  Council  and  Parliament
confirming  the  priorities  established  by  the  PfA.  The  Commission  has  also  adopted  a
Communication  on  Health  and  Poverty,  which  identifies  four  broad  approaches  toward
improving  health  outcomes,  and  proposed  a  Regulation  on  Poverty  Diseases  (HIV/AIDS,
malaria and TB). The latter includes a substantial increase in financial resources.

With  regard  to  ‘increasing  affordability’,  intellectual  property  rights  and  the  TRIPs
Agreement  have  caught  a  lot  of  attention  in  the  launching  of  the  new  WTO  Development
Round.  At  the  Ministerial  meeting  of  WTO  Members  at  Doha  in  2001,  the  adoption  of  the
Declaration on relations  between  the  TRIPs  Agreement  and  Public  Health  was  a  significant
step  forward.  The  Commission’s  strategy  towards  tiered  pricing  for  improved  supplies  of
essential pharmaceuticals to developing countries has also yielded tangible results. During the
last two years the tiered pricing concept has gradually become widely accepted within the EU
as an effective way forward in the quest for access to key pharmaceutical products for people
living  in  poverty.  In  this  regard,  the  Commission  has  adopted  a  proposal  for  a  Council
Regulation  to  prevent  trade  diversion  into  the  EU  market  of  pharmaceuticals  sold  at  tiered
prices in developing countries.

In  terms  of  ‘increasing  investment  in  research  and  development’,  substantial  resources
have been allocated from the Research Framework Programmes for HIV/AIDS, malaria and
TB  research,  including  the  establishment  of  the  new  European  and  Developing  countries
Clinical  Trials  Partnership  (EDCTP)  initiative.  The  EDCTP  clearly  constitutes  a  new  step
forward as it contributes to a unified voice to represent European research contributions in the
fight  against  the  three  diseases  in  developing  countries.  Additional  direct  and  indirect
incentives  for  research  and  development  of  specific  global  public  goods  to  fight  the  three
diseases require primary focus in the coming years.

Globally, the EC has been proactive in addressing the issues covered by the PfA, for example,
in the context of the G8, in particular at Okinawa, at EU/US summits, the EU/OAU forum.
The  Commission  is  an  active  Board  Member  of  the  Global  Fund  to  fight  AIDS,  TB  and
Malaria (GFATM). Developing countries have a strong voice in the GFATM Board and the
Fund’s  overall  governance  arrangements.  Important  policy  areas,  which  had  previously  not
been  successfully  addressed  in  other  fora  such  as  tiered  pricing,  are  being  addressed  here.
These can, however, not be dealt with in the GFATM  alone. Renewed efforts are needed to
work jointly at the European level as well as with specific partners, in particular the US, on
these issues.

Two  years  after  its  adoption  the  PfA  remains  a  comprehensive,  forward  looking  and
coherent  EU  policy  framework  aimed  at  making  a  significant  contribution  towards
improved country, regional and global action against the three communicable diseases.
There is, however, still an urgent need for  large-scale collective  action. Where progress has
been  less  visible,  it  is  mainly  the  result  of  the  lack  of  appropriate  resources  within  the
Commission and/or within the Member States to take forward large scale action in areas such
as  local  -production-  capacity,  technology  transfer,  incentives  for  innovative  research  and
development  by the  private sector,  and  working  through  true  partnerships  in  particular  with
the developing countries concerned.

5

The PfA has demonstrated that a strong EU voice is crucial, and, as a result of the PfA, EU
positions on targeted HIV/AIDS, malaria and TB actions have been significantly strengthened
on a global level jointly with other partners. Nevertheless, more efforts are needed to provide
regular  and  structured  consultation  with  developing  countries.  It  is  proposed  that  this  be
further  developed  through  the  creation  of  a  Stakeholders  Forum  on  Communicable
Diseases in the Context of Poverty Reduction.

Major challenges lie ahead for the EU in getting developing countries, other OECD members,
their industry and civil society  to  adopt and apply the different mechanisms needed to  fight
the three diseases.

6

1.

INTRODUCTION

The  EC  Programme  for  Action  on  Communicable  Diseases  in  the  Context  of  Poverty
Reduction  (hereinafter  Programme  for  Action  or  PfA)  is  based  on  the  policy  framework
presented in the  September  2000  Communication  on  “Accelerated  Action  targeted  at  major
communicable diseases within the context of poverty reduction”1. It establishes, as part of an
expanded  international  effort,  a  broad  and  coherent  Community  response,  over  the  period
2001  to  2006,  to  the  global  emergency  caused  by  the  three  major  communicable  diseases,
HIV/AIDS, malaria and tuberculosis (TB). These diseases affect the poorest populations most
and undermine global health and sustainable development. The Community response entails a
comprehensive and mutually reinforcing set of actions to increase: (i) the impact of existing
interventions, (ii) the affordability of key pharmaceuticals, and (iii) research and development
of  specific  global  public  goods  to  confront  HIV/AIDS,  malaria  and  TB  at  the  national,
regional and global levels.

This  Communication  assesses  the  implementation  of  the  PfA  over  the  first  two  years  of  its
existence. It is intended primarily for Council and European Parliament. It is also important
for  the  broader  public  committed  to  contributing  to  improved  sustainable  development
outcomes  to  be  aware  of  the  progress  made  in  the  joint  fight  against  the  three  diseases  in
developing  countries.  The  document  addresses  the  overall  context  and  the  outstanding
challenges globally, and presents results in the areas of impact, affordability and research. A
separate section is devoted to 'monitoring and evaluation', followed by recommendations for
the future.

2.

CONTEXT AND CHALLENGES

In all, over the past two years, more than 160 million healthy life years have been lost to HIV,
80 million to malaria and nearly 72 million to tuberculosis

1.

2.

The number of people affected, infected and dying from HIV/AIDS, malaria and
TB  is  still  on  the  increase.  In  2001  alone,  some  three  million  people  died  from
AIDS, while another five million contracted HIV. Half of all new HIV infections -
over 6,000 daily - occur among 15-24 year olds. The areas with the most rapid spread
are in Eastern Europe, Central Asia, China and India. Most new infections  in  these
areas are among injecting drug users. Yet overall, AIDS remains a major factor in all
regions.

The  development  burden  of  malaria  and  TB  also  continues  to  increase.  Current
trends indicate that by 2020 nearly one billion people will have become infected with
TB,  200  million  will  have  developed  the  disease  and  35  million  of  them  will  have
died.  One-third  of  the  world's  population  is  currently  infected  with  tuberculosis.  In
2001, some two million people died from TB and 1 million from malaria. Both TB
and malaria  are contributing factors in another two to four million  deaths annually.
The  majority  of  malaria  deaths  occur  among  young  children  living  in  Sub-Saharan

1

COM (2001) 96 of 21.2.2001 and COM(2000) 585 of 20.9.2000.

7

                                                
2.1.

1.

2.

3.

4.

2

3

Africa. TB is predominantly linked to the large prevalence of  AIDS and is  a major
factor in South East Asia, East Asia, the Pacific and the Americas.

Unprecedented 
contradictions

international  agreement 

- 

starting 

to 

reconcile 

the

The  past  two  years  have  been  marked  by  a  widespread  consensus  within  the
international community about the urgency of the need to tackle HIV/AIDS, malaria
and  TB  in  developing  countries  and  about  mechanisms  through  which  this  can  be
achieved.  More  than  ever  before,  government  officials,  politicians,  policy  and
decision-makers, civil society actors and business executives, have become aware of
the burden caused by these diseases,  and how it will develop if we do not  scale  up
our efforts to fight them. This consensus has led to a new political momentum, which
has garnered unprecedented international agreement on the interventions that will
make the greatest difference.

All  members  of  the  international  community  have  signed  up  to  the  Millennium
Development Goals (MDGs – Annex 3). Central to these goals is a reduction in the
proportion  of  people  living  in  extreme  poverty  by  50%  by  2015.  Health  targets
feature  prominently,  highlighting  the  link  between  overall  poverty  reduction  and
health  investments.  The  specific  Goal  6  related  to  'HIV/AIDS,  malaria  and  other
diseases'  indicates  a  strong  commitment,  acknowledging  that  without  addressing
these  diseases  the  central  outcome  of  global  poverty  reduction  will  not  be  met.
Specifically, the aim is to halt and reverse the spread of HIV/AIDS and the incidence
of  malaria  and  TB  by  2015.  It  is  now  generally  accepted  that  the  PfA  has  directly
contributed to the international consensus reached on MDG Goal 6.

Other  more  specific  targets  have  been  agreed  upon  globally  or  regionally  for  the
three  diseases:  for  HIV/AIDS  at  the  UN  General  Assembly  Special  Session  on
HIV/AIDS in June 2001, for malaria at the African Summit on Roll Back Malaria in
Abuja in April 2000, and for tuberculosis, inter alia at the World Health Assembly of
May  2000.  The  goals,  targets,  accompanying  indicators  and  measures  for  the  three
diseases  are  also  being  addressed  in  the  newly  established  Global  Fund  to  fight
HIV/AIDS, malaria and tuberculosis (GFATM).

Another  important  global  turning  point  during  the  past  two  years  was  the  work
undertaken  by  the  WHO  Commission  on  Macroeconomics  and  Health  (CMH)2.
The report presents clear evidence of how a heavy disease burden3 reduces economic
growth and limits the resources  available to  governments  to  invest  in  public  health
and  poverty  reduction  efforts.  It  demonstrated  why  increased  investments  in  health
constitute an effective strategy for reducing the number of people living  in poverty
and  estimates  the  return  on  health  investments  in  developing  countries  at  18%  per
annum.  The  CMH  helped  strengthen  a  global  consensus  on  the  need  to  reduce  the
disease  burden  of  people  living  in  poverty  through  concentrating  on  these  three
diseases.

WHO Commission on Macroeconomics and Health, Final report December 2001.
The impact of ill health on individuals, and on their societies, is measured by estimating the number of
years of healthy life they lose as a result of each illness. Cumulatively, the total number of healthy life
years  lost  as  a  result  of  the  illness  can  be  described  as  the  "disease  burden"  that  it  causes.  The  total
disease burden in a society represents the gap between the actual health of the population and an ideal
situation where everyone lives into old age in full health.

8

                                                
5.

6.

7.

Since  the  adoption  of  the  PfA  the  debate  over  Global  Public  Goods  (GPGs)  has
advanced further in different fora. The PfA  was  a  clear statement  of the need  for a
global  GPG  policy approach  based  on  the  understanding  that  investments  in  health
and development are in the interests of all, poor and rich. This policy approach goes
far  beyond  mere  “aid”.  Since  providers  of  public  goods  may  not  be  adequately
compensated through market-based negotiations or through existing public financing
mechanisms,  the  EC  and  the  EU  Member  States  are  now  working  on  developing
appropriate  incentives  for  the  production  of  specific  GPGs  (products,  services,
knowledge) able to help controlling epidemics such as HIV/AIDS, malaria and TB.

A growing body of evidence shows that prevention, treatment and care are parts of
a continuum. Equally, it is increasingly apparent that it is possible to deliver care and
treatment for people with AIDS in resource-poor settings, which is an important part
of efforts to make prevention more effective. This growing perception was apparent
during  the  UNGASS  on  HIV/AIDS  in  June  2001,  and  resulted  in  a  consensus  that
prevention  and  treatment  should  be  addressed  as  complementary,  not  competing
priorities  during  the  XIV  International  Conference  on  AIDS,  in  July  2002.  The
essential link between prevention and care is also common knowledge in the field of
TB  control  since  only  80%  cure  rate  in  a  highly  endemic  community  can  control
transmission. There is increasing evidence that a similar link is strong in the field of
malaria, in particular  for malaria  control  in pregnant  women, as it is often  fatal  for
the mother or the child.

intellectual  property 

There  continues  to  be  strong  public  interest  in  the  need  to  promote  and  improve
access  to  medicines  in  poor  countries.  An  important  focus  of  public  campaigning
has been to establish a better relationship between the protection of public health and
rights  enjoyed  by  pharmaceutical
the  protection  of 
manufacturers. At the Doha Ministerial Meeting in 2001, World Trade Organisation
(WTO)  members  successfully  negotiated  a  Declaration  regarding  the  interpretation
and  implementation  of  the  relationship  between  the  TRIPs  Agreement  and  Public
Health  “…in  a  manner  supportive  of  WTO  Members  right  to  protect  public  health
and in particular to promote access to medicines for all”. The European Community
and  its  Member  States  played  a  decisive  role  in  achieving  agreement  on  this
Declaration, and continue to lead subsequent negotiations on outstanding issues.

2.2.

Globally slow progress on ‘access’ and ‘resource mobilisation’

1.

Despite  the  above,  however,  progress  has  been  slow  in  terms  of  the  urgency  of
delivering  quality  prevention,  treatment  and  care  services,  including  commodities
and  supplies.  This  was  one  of  the  central  elements  of  the  PfA.  There  is  overall
agreement  that  appropriate  use  of  condoms  and  prevention  of  mother  to  child
transmission with anti-retrovirals could halt the spread of the  HIV/AIDS pandemic,
while Highly Active Antiretroviral Treatment (HAART) has proven to be life-saving
in many cases and an incentive for effective prevention through an increased uptake
of voluntary counselling and testing, and through health information and education in
general. Whilst during the  last two  years the  prices of anti-retroviral drugs (ARVs)
and some drugs against opportunistic infections have started to fall, in some cases by
large margins (annex 4), and countries such a Brazil have progressed substantially in
providing overall access to pharmaceuticals for HIV infected people, it remains the
case  that  only  0.3%  of  the  people  living  with  HIV/AIDS  in  developing  countries
have  access  to  ARVs.  Therefore  more  effective,  better-adapted  and  simplified
treatments need to be developed.

9

Interventions  to  prevent  the  spread  of  TB  still  lack  the  desired  efficacy,  yet  Direct
Observed Treatment by Short regimes (DOTS) has shown how high cure rates and a
reduction in incidence, morbidity and mortality can be achieved. Although a total of
148 countries currently use the DOTS strategy, access is only offered to about 55%
of  the  world’s  population.  In  several  countries,  nation-wide  commitment  to  the
DOTS  strategy has  succeeded in reversing  an  increasing  trend  in  the  prevalence  of
TB  and  putting  the  country  on  track  to  halving  new  cases  or  the  incidence  of  TB
every 10 years.

Insecticide-treated  nets  and  intermittent  preventive  treatments  can  significantly
reduce a large proportion of the burden of disease from malaria. Despite the fact that
more  than  five  million  insecticide-treated  nets  were  distributed  during  2000-2001,
the proportion of children under five in Africa sleeping under insecticide-treated nets
remains below 10%,  and the average use of bednets  is still  only  1%  of the  African
populations at risk. It is only in Vietnam where the child mortality rate due to malaria
has declined over the last decade. In Sub-Saharan Africa the incidence of malaria has
increased. The rapid increase in drug resistance suggests that malaria deaths may be
poised  to  rise  sharply.  Progress  on  phasing  out  DDT  for  malaria  control  has  been
made  with  the  adoption  of  the  Persistent  Organic  Pollutants  (POPs)  Convention  in
Stockholm  May  2001.  Exemptions  have  been  given  to  developing  countries  on  the
condition that research for safe and alternative chemicals and non-chemicals would
continue  in  order  to  find  an  equally  efficient  and  affordable  tool  for  malaria
prevention.

A particularly important issue for HIV/AIDS is the current focus by the international
community on instability and insecurity whereby a  series  of  measures,  which  are
not always built on the defence of fundamental human rights are being proposed
and taken further. The respect or non-respect for human and civil rights and the non-
discrimination  or  discrimination  against  people  with  HIV/AIDS  are  of  increasing
concern in many countries but are not always sufficiently addressed. The debate goes
well beyond the right to health and includes non-discrimination in the workplace and
society,  the  right  to  inheritance,  freedom  of  movement,  and  the  right  to  marry.
Frequently, legislation discriminates against HIV-infected people.

Financial  resources  remain  derisory.  The  CMH  calculated  that  current  actual
spending  on  health  in  the  least  developed  countries4  (approximately  USD  13  per
person per annum) need to be increased to at least USD 30-40 per person per annum.
This will require approximately USD 27 billion per annum in donor grants by 2007,
compared  with  the  USD  6  billion  per  annum  currently  available,  and  an  additional
budgetary outlay from  developing countries of  USD 23  billion  by 2007.  The  CMH
also  provided  a  detailed  estimate  of  annual  financial  needs  to  cover  HIV/AIDS,
malaria  and  TB,  totalling  USD  9.2  billion.  This  is  a  minimum  estimate  for

The  Least  Developed  Countries  are  presently  49:  Afghanistan,  Angola,  Bangladesh,  Benin,  Bhutan,
Burkina Faso, Burundi, Cambodia, Cape Verde, Central African republic, Chad, Comoros, Democratic
Republic  of  Congo,  Djibouti,  Equatorial  Guinea,  Eritrea,  Ethiopia,  Gambia,  Guinea,  Guinea  Bissau,
Haiti,  Kiribati,  Lao  People’s  Democratic  Republic,  Lesotho,  Liberia,  Madagascar,  Malawi,  Maldives,
Mali,  Mauritania,  Mozambique,  Myanmar,  Nepal,  Niger,  Rwanda,  Samoa,  Sao  Tome  and  Principe,
Senegal, Sierra Leone, Solomon  Islands,  Somalia,  Sudan,  Togo, Tuvalu,  Uganda,  United  Republic  of
Tanzania, Vanuatu, Yemen and Zambia (UNCTAD 2001 -
http://www.unctad.org/en/pub/ldcprofiles2001.en.htm).

10

2.

4

                                                
investments  with  immediately  possible  levels  of  delivery  with  an  emphasis  on
expanding  the  lower  levels  of  district  health  systems,  such  as  health  posts  and
outreach  services.  African  countries  have  agreed  to  allocate  15%  of  their  national
budgets to health  (Abuja, April 2000). Some, such as Nigeria, are  using debt relief
for  substantial  renewed  investments  in  health,  in  particular  HIV/AIDS.  Countries
with  a  high  disease-burden  are  demonstrating  their  commitment  to  TB  control  by
financing  60%  of  TB  treatment  budgets  themselves.  Nevertheless,  considerable
resource  mobilisation  challenges  remain  -  particularly  for  Africa,  and  most
particularly  for  HIV/AIDS.  The  Global  Fund  to  Fight  AIDS,  TB  and  Malaria
(GFATM)  aims  at  an  additional  outlay  of  USD  2.3  billion  for  2003  and  USD  4.6
billion  for  2004;  to  date  a  total  of  USD  2.1  billion  has  been  committed  for  the
forthcoming five years.

3.

PROGRESS OF THE PFA TO DATE

The PfA was  designed  to link  country-level actions aimed  at increasing  people’s  access  to
existing interventions, goods and services, with enabling global action on affordability and
investment in the development of specific global public goods. Three areas for action were
identified:  impact,  affordability  and  research.  These  areas  for  action  are  inter-related  and
complementary. Implementation requires coherent, collective and simultaneous action.

3.1.

Impact

3.1.1. Optimising  the  impact  of  Health,  AIDS  and  Population  interventions  targeted  at

major communicable diseases and poverty reduction

The  ambitious  target  in  the  Programme  for  Action  to  increasingly  prioritise  in-country  /
regional  allocations  for  improved  'health'  outcomes,  in  partnership  with  developing
countries  and  other  partners,  has  so  far  brought  relatively  indistinct  results.  A  longer  time-
scale  will  be  needed  before  real  impact  becomes  clearly  visible.  'Health'  allocations  are
traditionally and proportionally higher in the EC-funded programmes in Asia, Latin America
and  the  Mediterranean,  than  in  the  European  Development  Fund  (EDF).  A  more  coherent
focus  on  reaching  the  MDGs  within  the  RELEX  family  is  needed,  especially  for  countries
where the HIV/AIDS epidemic is advancing rapidly (India and China). The establishment of
an EC Programme for Action Interservice Group (November 2002) is intended to take the
PfA forward across the Commission and in all developing countries.

1.

5

At the end of 2001 Programming Guidelines for Health, AIDS and Population were
shared  with  Commission  Delegations.  All  EC  Country  Strategy  Papers/National
Indicative  Programmes  (except  for  the  'non-notified  ACP  countries')  have  been
finalised at the end of 20025. The current level of allocations for 'health as a focal
sector' programmed under the 9th EDF is 3.7% (€ 280 million). 22.3% from the
9th  EDF  (€  1.6  billion)  is  programmed  for  'macro-economic  support  with  social
development conditionalities'. During 2002, regional and intra-ACP funds have been
programmed for 'health' in ACP countries from the 6th - 9th EDF (€ 104 million in
total:  €  60  million  for  the  GFATM  from  the  6th  and  7th  EDF  and  €  44  million  for
reproductive health / malaria from the 8th and 9th EDF). Additional funding from the

Commission staff working paper: ‘Progress report on the implementation of the  Common Framework
for  Country  Strategy  Papers,  SEC  (2002)  1279,  26.11.2002.  See  Annex  2  for  multi-annual  financial
provisions.

11

                                                
9th  EDF  intra-ACP  regional  funds  and  from  9th  EDF  reserves  is  currently  being
discussed with the ACP countries. MEDA programming for ‘health’ for 2002-2004
represents  2%,  Asia  (2002-2004)  is  14.1%  and  Latin  America  (2002-2006)  1.9%.
The current multi-annual provisions for all developing countries total € 423.2 million
for  ‘health  and  population’,  less  than  3.3%  of  total  EC  development  aid
programming.  EU  Member  States  -  FI,  DE,  UK,  B,  FR,  S  and  NL  -  have  moved
towards a greater focus on the MDGs for health in their aid programming.

At  the  beginning  of  2002,  the  Commission  agreed  with  the  European  Parliament
Committee on Development to ensure that, for development spending from the EC
Budget, at least 35% will be allocated to 'social infrastructure'. This benchmark is an
indicator  for  health  and  population,  education,  water  supply  and  sanitation  and
government and civil society, following DAC sector category 1. The current multi-
annual provisions for all developing countries for ‘social infrastructure’ represents €
4.651 billion, i.e. 36.3% of total EC development aid programming.

During 2001 the Commission revisited 22 dormant 'health' programmes (ACP and
ALAMEDA) and de-committed or redirected funds where appropriate6. The reform
of  the  Commission’s  External  Relations  services,  helped  speed  up  disbursement
levels  substantially.  In  February  2001,  the  total  ongoing  Health,  AIDS  and
Population  portfolio  disbursement  rate  was  set  at  17%  (i.e.  disbursement  versus
total  commitments).  This  is  set  to  date  at  23%  for  the  same  portfolio  (1995-2000).
Yet  figures  for  2001  and  2002  are  more  promising  with,  throughout  the  past  two
years, a clear improvement in the overall budget execution performance, including an
increase of 20% in 2001 payments compared to 2000.7 The new information system
(CRIS)  has  been  phased  in  during  2002  and  is  expected  to  be  fully  operational  by
beginning 2003.

The European Community and its Member States are increasingly working towards
the harmonisation of policies and procedures to improve impact in-country. Joint
European  Commission/European  Union  missions  to  a  number  of  pilot  countries
(Mozambique - Morocco - Vietnam - Nicaragua) were launched in September 2002
with the aim of assessing the potential for better harmonisation in the areas of health
and education. It is clear that closer donor co-ordination should be based on a step by
step  approach,  moving  from  joint  consultation  and  information  exchange  to  joint
situation  analyses,  programming  and  implementation  structures,  including  an
effective information flow between HQ and delegations/embassies. The Commission
has established a Task Force to work on a detailed Harmonisation Action Plan for
health, HIV/AIDS and education. As a result, the current in-country work on the use
of  specific  indicators  and  on  measuring  progress  towards  the  MDGs  should  be
improved.

While not all dormant 'health' projects have been closed, the mass of "dormant" funds against "active"
resources is 27% for health in general, 10.3% for HIV/STI related projects and 6.8% for programmes
targeting control of communicable diseases.
COM(2002) 490 final Annual Report 2001 on the EC Development policy and the Implementation of
the External Assistance, 12.09.2002.

12

2.

3.

4.

6

7

                                                
5.

6.

7.

8.

8

9

10

11

12

Throughout 2001 several resolutions on the Programme for Action were adopted: the
Council resolution on 14 May 2001; the EP resolution on 4 October 20018; the ACP-
EU  Joint  Parliamentary  Assembly  resolution  on  1  November  2001.  The
Commission’s proposal for a legal base for the EC contribution to the Global Fund to
fight AIDS, Tuberculosis and Malaria (GFATM) was adopted on 23 October 2001,
and on 19 December 2001 the Council and EP adopted the contribution by the EC to
the GFATM9.

The Commission has reformulated the regulation creating a special budget line (B7-
6311) for HIV/AIDS, malaria and TB, in line with the follow-up to the Programme
for  Action.10  Throughout  2002  this  regulation  has  been  thoroughly  discussed  in
Council and Parliament.11 The Commission proposed an almost threefold increase in
allocations (from € 25.27 to € 73.35 million). It is expected that the regulation will be
adopted by the EP and Council beginning 2003.

In March 2002 the Commission adopted a Communication on Health and Poverty12
and  a  subsequent  Council  resolution  was  adopted  on  30  May  2002.  Council’s
resolution referred to increasing the volume and improving the delivery of aid. It
stated:  […]  in  view  of  reaching  better  health  outcomes  and  attaining  the
internationally agreed health development goals, the EU will strongly support those
developing countries who agreed to work towards the targets set by themselves for
investments in health, such as in Abuja  (15%  of  national  budgets) […] and […] In
this context, the Council recalls its conclusions on the UN Conference on Financing
for  Development  in  Monterrey,  agreed  by  Foreign  Ministers  on  14  March  and
endorsed  by  the  European  Council  in  Barcelona  whereby  the  Member  States
collectively commit themselves, as a first significant step, to increasing their overall
ODA volume in the next four years. A substantial share of that increase should go
to support for social development in developing countries with special emphasis on
improving  health  and  education  outcomes.  […]  Discussions  in  the  European
Parliament on the  Health  and  Poverty  Communication  started  in  October  2002  and
remain in progress.

At the OECD/DAC in  2001  the  Commission  declared  its  determination  to  increase
the  participation  of  contractors  from  developing  countries  in  the  execution  of
Community development programmes and projects through an initiative in favour of
the  increased  untying  of  Community  aid.  The  Commission  proposed  to  use

On  15  March  2001  a  European  Parliament  Resolution  on  access  to  drugs  for  HIV/AIDS  victims  in
developing  countries  noted  the  inclusion  of  a  commitment  to  tiered  pricing  in  the  Commission’s
Programme  for  Action  and  called  for  a  system  allowing  developing  countries  equitable  access  to
medicines and vaccines at affordable prices.
Decision  No  36/2002/EC  of  the  European  Parliament  and  of  the  Council  of  19  December  2001
concerning  the  Community  contribution  to  the  Global  Fund  to  fight  HIV/AIDS,  tuberculosis  and
malaria, Official Journal L 007 , 11/01/2002 P. 0001 - 0002.
Proposal for a Regulation of the European Parliament and of the Council On aid  for poverty diseases
(HIV/AIDS,  malaria  and 
-
COD 2002/0051.
In  parallel,  the  Commission  proposed  the  revision  of  the  regulation  for  the  special  budget  line
(B7-6312) on 'aid to population programmes' to include 'reproductive and sexual health and rights'.
COM(2002)  129  final,  22.03.2002.  This  Communication  details  the  relationship  between  health  and
poverty. It outlines critical elements of a coherent development approach to improve health and  well-
being and establishes, for the first time, a single Community policy framework to guide investment in
health, AIDS, and population within the context of overall European assistance to developing countries.

in  developing  countries.  COM/2002/0109 

tuberculosis) 

final 

13

                                                
medicines and supplies/products for HIV/AIDS, malaria and TB as a pilot exercise.
The  first  EC  dossier  to  benefit  from  untying  was  an  international  tender  in
Zimbabwe.  On  18  November  2002,  the  Commission  adopted  a  Communication  on
untying of aid, which further clarifies the approach taken by the Community in light
of the OECD/DAC decision related to aid untying.

3.1.2.

Strengthening of pharmaceutical policies and capacity building

1.

2.

3.

The strengthening of pharmaceutical policies has been substantially reinforced for
ACP  countries.  The  EC  programmed,  through  a  partnership  with  the  WHO,  €  25
million  (9th  EDF)  for  regional  co-operation  and  capacity  building  including
enhanced and improved essential drug policy and regulatory schemes. The financing
proposal has been discussed at the EDF Committee in November 2002 yet adoption
will  only  take  place  once  the  9th  EDF  is  formally  ratified.  Additional  efforts  are
ongoing to develop and finance a broader strategic partnership13 with the WHO.

In April 2002, the WHO Expert Committee on essential drugs decided  on the 12th
WHO Model List of Essential Medicines (the first having been adopted in 1977). It
contains 325 medicines, including 12 ARVs14 for the treatment of  HIV. Along with
the  model  list,  the  WHO  released  guidelines  on  scaling  up  ARV  treatment.  The
action  is  seen  as  a  breakthrough  in  a  comprehensive  "prevention  through  care"
package that could contribute to wider access to treatment over the coming years.

Discussions are under way between the Commission and ACP countries, Roll Back
Malaria,  Médicins  Sans  Frontières  and  other  partners  relating  to  existing  malaria
national protocols. There is a need for a change of protocols to include artemisine
combination therapies, especially in East Africa15.

3.1.3. Developing local manufacturing capacity

1.

2.

13

14

15

It  is  becoming  apparent  that  there  is  an  emerging  need  to  consider  global
manufacturing  capacity  for  many  essential  medicines  and  pharmaceutical  starting
materials. If the scale of the epidemics continues to grow, it is not impossible that the
current  capacity  of  pharmaceutical  production  will  be  insufficient.  There  are  finite
amounts of raw materials for some ARVs, for example, due to the limited numbers
of  manufacturers.  The  Commission  will  examine  the  extent  of  such  production
capacity  constraints  as  tiered  pricing  and  public  tendering  increase,  affordability  is
promoted and demand rises.

Several initiatives for the development of local production capacity are in progress.
One, for example, is for the local production of condoms in South Africa, linked with
social  marketing.  The  European  Investment  Bank  (EIB)  is  taking  this  analysis
forward and is considering financial support. The EC is also exploring other partners

A Strategic Partnership could include: involvement of EC in governing, statutory and political bodies of
the  selected  partner;  contribution  to  policy  debates;  financial  cooperation  in  operational  activities;
financial support for core capacities (15.7.2002 DG DEV A/2 note to Joint Management Meeting).
They  include  nevirapine  and  zidovudine  -  previously  listed  for  prevention  of  mother-to-child
transmission  but  now  also  recommended  for  treatment  of  HIV  in  adults  and  children.  The  new
medicines in the EML are abacavir, didanosine, efavirenz, indinavir, lamivudine, lopinavir, nelfinavir,
ritonavir (low-dose), saquinavir, and stavudine.
The new EML includes Artemether-lumefantrine (Co-artem) as a combination artemesin product.

14

                                                
3.

in priority areas for technology transfer and local production of pharmaceuticals, for
instance anti-retrovirals, artesunate and an oral polio vaccine.

The  transfer  of  high  volume  production  capacity  to  poor  countries  as  well  as
building up of R&D capacity, is an important part of a strategy to create sustainable
access to medicines. These developments must run in parallel as no technology can
be  mastered  without  significant  adaptations  and 
technical
competence. Moreover, it will not necessarily disadvantage Europe’s pharmaceutical
industry.  For  some  products,  freeing  production  capacity  for  what  may  be  more
profitable production may create a win-win situation. However, in some cases, such
as vaccines, it is important that manufacturing capacity be developed well before the
lowering of production in OECD markets. There is now a real shortage of some low-
profit  traditional  vaccines,  such  as  the  oral  polio  vaccine  and  the  yellow  fever
vaccine,  as  producers  in  developed  countries  have  tended  to  focus  production
capacity on more profitable – and expensive – vaccines.16

increasing 

local 

3.2.

Affordability

3.2.1.

Tiered Pricing

1.

2.

16

17

18

Europe’s  advocacy  of  the  tiered  pricing  concept  has  been  successfully  pursued.
The PfA, the May 2002 Council Conclusions and the EP Resolutions on the subject,
all include clear references to the need to introduce tiered pricing as the norm for key
pharmaceuticals  destined  for  the  poorest  developing  countries,  while  at  the  same
time  seeking  to  prevent  imports  of  the  tiered  priced  products  to  the  EU  market.
Discussions on taking the tiered pricing agenda further forward, along with other PfA
actions,  have  taken  place  with  the  Member  States  and  with  civil  society.  Tiered
pricing  is  also  consistently  addressed  by  the  EC  in  discussions  relating  to  the
procurement  of  goods  and  services  funded  by  the  GFATM.  There  is,  in  general,
broad consensus in favour of tiered pricing and support for the mechanism is on the
increase in Europe. Yet discussions with  the  US have, so  far, only  gradually  led to
tangible results.17

On 30 October 2002 the Commission adopted a proposal for a Council Regulation
to  avoid  trade  diversion  into  the  European  Union  of  certain  key  medicines
originally  destined  for  the  poorest  developing  countries  and  sold  at  very  reduced
prices18. This regulation provides for increased protection against import to the EU of
pharmaceutical  products  which  have  been  sold  to  least  developed  and  low  income
developing countries at prices reduced by at least 80% compared to OECD average
ex-factory price or, alternatively, sold at direct manufacturing cost plus a maximum
of  10%.  The  draft  regulation  is  a  novelty  as  it  aims  at  protecting  both  products
covered  by  intellectual  property  rights  and  non  IP-protected  goods  and  is  also
identifying  a  target  to  be  achieved  in  price  reduction.  In  practise  producers  and
exporters are invited to notify to the Commission the products for which they  wish
together  with  appropriate
the  additional  protection  offered.  The 

list  will, 

See  WHO,  UNICEF,  The  World  Bank,  State  of  the  World’s  Vaccines  and  Immunisation,  November
2002.
During  the  GFATM  Board  Meeting  in  October  2002  the  US  agreed  to  use  tiered  pricing  as  a
mechanism for GFATM procurement.
Proposal  for  a  Council  Regulation  to  avoid  trade  diversion  into  the  European  Union  of  certain  key
medicines, COM/2002/0592 final - ACC 2002/0257

15

                                                
identification  in  the  form  of  a  mandatory  logo  and  possibly  additional  voluntary
differentiation,  enable  the  customs  authorities  to  suspend  the  release  of  suspected
tiered priced products at the borders of the EU market. Industry participation in the
scheme  is  entirely  voluntary.  The  draft  regulation  invites  also  non-European
producers to notify their products. The regulation will hopefully serve as a model for
other  developed  countries  to  follow.  The  more  pharmaceutical  products  are
submitted for approval under the regulation, the more likely it is that other countries,
including  the  US,  will  become  receptive  to  the  idea  of  definitively  preventing  the
flow of low-priced medicines back to their market.

3.2.2.

Tariffs and taxes

The Commission commissioned a study on tariffs and other duties paid when pharmaceuticals
are  imported  into  developing  countries.  Preliminary  results  show  great  differences  in  the
application  of  tariffs,  other  duties  and  fees.  Customs  duties  vary  from  0%  to  35%  for
compounds as well as for medicines and vaccines in the 57 countries reviewed. It is clear that
populations in a number of developing countries which apply high rates, would benefit from
cuts.  In  the  Doha  tariff  negotiations  on  non-agricultural  goods,  the  need  to  improve  the
situation on tariff cuts for pharmaceuticals could be addressed.

3.2.3.

Intellectual Property Protection

1.

2.

Throughout 2001 and 2002 the EC and other WTO Members advanced substantially
on  discussions  relating  to  intellectual  property  rights  (IPRs)  and  public  health.
These efforts were  most  apparent  in the results  of  the  negotiations  in  Doha,  by  the
adoption  of  the  Doha  Declaration  on  TRIPs  and  Public  Health.  The  Declaration
usefully  clarifies  the  rights,  obligations  and  flexibility  available  under  the  TRIPs
Agreement.  In addition  it  allows  LDCs  to  defer  implementation  of  patent  law  with
respect to pharmaceuticals until 1 January 2016. Presently, discussions take place in
the TRIPs Council relating to paragraph 6 of the Doha Declaration. In March 2002
the EC presented a position paper discussing two possible 'expeditious solutions' to
the  difficulties  faced  by  WTO  Members  with  insufficient  or  no  manufacturing
capacities with regard to making effective use of compulsory licensing provided for
under  the  TRIPs  Agreement.  The  EC  approach  is  that  article  31(f)  should  be
amended  to  include  a  clearly  circumscribed  exception  to  the  export  restriction
imposed by the same article. Outstanding issues were expected to be resolved before
the  end  of  2002,but  this  deadline  could  not  be  met  because  of  the  US  refusal  to
endorse a draft decision on which all other WTO  Members had  agreed.  In order to
break this deadlock, the EU tabled a compromise proposal on 7 January 2003. As a
result, discussion resumed in Geneva.

The Commission is also developing a work plan for reinforced technical assistance
in  the  areas  of  trade  and  development,  which  includes  support  to  the  efforts  of
developing  countries  to  participate  in  trade  negotiations,  support  to  building
developing  countries'  capacity  to  implement  trade  agreements  and  support  for  the
necessary  policy  reforms  and  investments19.  Several  countries,  such  as  Mauritius,
requested  specific  studies  on  IP  and  a  general  study  on  TRIPs  implementation  in
Sub-Saharan Africa is being contracted. Less progress has been made on work with
the World Intellectual Property Organisation (WIPO), but partnerships  with key

19

Trade and Development Communication COM (2002) 513 final.

16

                                                
civil society groups, such as Oxfam and MSF, and with the pharmaceutical industry
(in particular with regard to tiered pricing) have been further developed.

3.

Some Member States, in particular the UK and NL, organised special fora to discuss
Access  to  Medicines  and  IP  issues.  In  November  2002,  the  UK  High  Level
Working  Group  on  Access  to  Medicines,  in  which  the  Commission  took  part,
presented a set of recommendations to support specific action  on the R&D agenda,
and  to  facilitate  a  voluntary  system  of  widespread  tiered  pricing  as  the  operational
norm.20

3.2.4. Corporate Social Responsibility (CSR)

The area of Corporate Social Responsibility (CSR) was not specifically highlighted in  the
PfA yet its rising importance has been an opportunity to further the PfA’s overall objectives.
In September 2002 the Commission launched an implementation strategy with respect to CSR
following the July adoption of a specific Communication21 and laying the basis for a special
CSR Stakeholder Forum, established on 16 October 2002. Different corporations and NGOs
are planning to participate actively in the specific Round Table (scheduled for 2003) on "CSR
and Development" which will promote the international dimension of CSR, and during which
thematic areas such as health,  HIV/AIDS  (developing sound  workplace  policies  and  private
sector  advocacy  responsibilities),  education,  gender  and  core  labour  standards  will  be
examined. It is often argued that corporate businesses are not empowered by shareholders to
make substantial financial contributions to development, yet many are increasingly concerned
about developing or preserving their reputations through being developmentally responsible.
A  number  of  examples  of  businesses  becoming  involved  in  providing  for  HIV  infected
employees  are  now  emerging  and  more  efforts  will  need  to  be  undertaken  to  further
encourage  the  corporate  sector  (not  just  the  pharmaceutical  industry)  and  shareholders  to
become  socially  involved,  acknowledge  their  responsibility  for  achieving  the  MDGs  and
participate in the international development agenda. In this context, the provision of malaria
and  TB  treatment  to  workers  by  businesses  in  the  agricultural  and  mining  sectors  are  being
explored as well.

3.3.

Research and Development

With the Programme for Action, the European Community agreed to support new approaches
that  will  stimulate  the  development  of  specific  global  public  goods  targeting  HIV/AIDS,
malaria and TB. The support will be given through direct as well as indirect incentives by
providing  much  higher  levels  of  public  funding  for  Research  and  Science  &  Technology
(S&T) capacity building.

3.3.1.

Strengthening of research in poverty related diseases

1.

20

21

The  Fifth Framework Programme for Research, Technological Development and
Demonstration  Activities  (FP5,  1998-2002)  allocated  more  than  €  109  million  to
research  on  HIV/AIDS,  malaria  and  TB.  More  than  77  research  projects  were
funded, under the Quality of Life Programme (QoL) or the International Cooperation
(INCO) Programme. 32 of the projects were on HIV/AIDS (with a budget of around

Report  to  the  Prime  Minister,  High  Level  UK  Working  Group  on  'Increasing  access  to  essential
medicines  in  the  developing  world,  policy  recommendations  and  strategy'.  Clare  Short,  Secretary  of
State for International Development, 28 November 2002
Corporate social Responsibility: a business contribution to Sustainable Development, COM (2002) 347.

17

                                                
€  49  million),  24  on  malaria  (€  29  million)  and  21  on  tuberculosis  (€  30  million).
Research  includes  methods  to  increase  DOTS  uptake  and  the  long-term  validity  of
ITN use. The  research  projects were implemented  in partnerships  between  research
institutions from EU Member States, Associated Countries, countries in Africa, Latin
America, and Asia, and the USA. Projects funded under the QoL Programme aimed
to  develop  new  vaccine  candidates  and  new  lead  substances.  Impressive  scientific
results have been achieved by some of the projects, giving hope that new preventive
and/or therapeutic interventions against HIV/AIDS, malaria and tuberculosis can be
developed.

Poverty related diseases have become one of the priorities of the Sixth Framework
Programme of Research, Technological Development and Demonstration Activities
(FP6, 2002-2006). FP6 was adopted in July 2002 and a substantial budget increase of
€ 400 million has been allocated to HIV/AIDS, malaria and TB research. The overall
research strategy for R&D in FP6 is built on two components:

the  support  for  large  research  consortia  which  integrate  different  disciplines  and
approaches  and  which  generate  new  partnerships  between  the  different  players
involved. Different phases of the R&D development process from discovery to safety
testing  in  humans  shall  be  covered.  Roughly  €  200  million  are  earmarked  for  such
activities.

the  establishment  of  a  clinical  trials  programme  to  unite  and  support  Europe’s
clinical  trial  activities  specifically  targeted  at  interventions  for  use  in  developing
countries (EDCTP). The Commission earmarked € 200 million for this initiative.

2.

i)

ii)

3.3.2.

European and Developing Countries Clinical Trials Partnership (EDCTP)

The  overall  goal  of  the  EDCTP  is  to  accelerate  the  development  and  evaluation  of  new
vaccines,  drugs,  and  other  preventive  or  therapeutic  tools  against  HIV/AIDS,  malaria
and TB. Discussions in the European Parliament and Council are currently ongoing to use for
the first time Article 169 of the Treaty to establish and implement the EDCTP22. The EDCTP
has three major objectives:

1)

2)

3)

networking and co-operation between national programmes to ensure their efficiency
and impact;

acceleration  of  the  development  of  new  products  by  supporting  clinical  trials  in
developing countries;

strengthening clinical research capacities in developing countries.

The  EDCTP  will  have  a  target  budget  of  €  600  million.  One  third  of  the  budget  will  be
contributed by the Community, whereas  another € 200 million will be provided by Member
States and Norway  with an additional € 200 million  expected  from the private sector,  R&D
industry,  foundations  and  charities,  and  Community  development  funds  (EDF  or  special
budget line).

22

Article 169 enables the Community to participate in research programmes undertaken jointly by several
Member  States,  thereby  creating  incentives  for  co-operation  of  national  activities  and  creating  added
value and critical mass at the European and Developing Countries level.

18

                                                
The  EDCTP  is  expected  to  be  operational  during  the  second  half  of  2003.  In  line  with  the
Doha declaration, the developing countries should have access to the products developed by
the EDCTP. A carefully balanced management structure ensures that the developing countries
are important stakeholders and equal partners in strategic decisions. In line with this, African
partners  will  both  participate  in  prioritising  new  interventions  and  in  the  development  of
strategic clinical trials action plans.

3.3.3. Capacity building for R&D in developing countries

1.

2.

Clinical testing and introduction of new drugs and vaccines in developing countries
require  training  of  national  health  workers.  Within  the  EDCTP  budget  €  150
million  is  therefore  earmarked  for  capacity  building  in  developing  countries.
Activities include support to South-South, North-South networking and co-operation,
technology transfer, strengthening and upgrading of facilities and services at research
institutes  and  clinical  institutes  in  developing  countries.  To  ensure  sustainability,
mechanisms have shall be developed for retention of well-trained and qualified staff
in Africa.

Most importantly, support for capacity building in clinical trials shall be linked with
more  general  support  measures  for  infrastructures  in  developing  countries.
Mechanisms  still  have  to  be  developed  to  ensure  this.  The  prioritisation  of  health
investments  by  the  countries  concerned  is  one  important  component.  Continued
efforts  to  support  infrastructures  and  investments  through  institutional  capacity
building in developing countries are essential in this regard.

3.3.4.

Indirect incentives to increase R&D investments of private sector in specific Global
Public Goods

1.

2.

The  EC  intends  to  increase  the  overall  R&D  expenditure  in  the  EU  up  to  3%  of
GDP.23  To  achieve  this,  the  EC  will  particularly  explore  various  initiatives  to
stimulate  investments  by  the  private  sector.  Indirect  incentives  to  increase  the
private sector’s research in HIV/AIDS, malaria and TB have so far focused on ways
to  facilitate  market  access  and  increase  profitability.  In  line  with  this,  the
introduction of a special regulatory procedure to obtain a marketing authorisation for
poverty-related products shall be further explored.

Such  an  approach  has  been  successfully  used  for  rare  (so-called  orphan)  diseases.
The  expectation  that  the  EU  orphan  drug  regulation24  would  also  stimulate  the
development  of  medicines  for  poverty-related  diseases  (which  falls  below  the
prevalence thresholds in Europe set by the orphan drug regulation, such as malaria),
has not as yet been fulfilled and was neither the regulation’s prime objective. Yet, -
other-  specific  legislative  instruments  to  encourage  the  clinical  development  of
new therapies for poverty-related  diseases will  therefore  have  to be re-examined or
further explored. This could include specific provisions for fast track approval,  and
extended  marketing  authorisation  exclusivity.  Next  to  other  indirect  subsidies  for
research,  product  development  and  testing  -  such  as  corporate  taxation  -  the
extension of patent protection and / or the transfer of patent rights were identified in
the PfA as an alternative way forward and shall be further explored. Scientific advice

23

24

COM(2002) 499 final, 11.09.2002.
EU Regulation on Orphan Medicinal Products COM 141/2000.

19

                                                
3.

4.

to  develop  medicines  for  resource  poor  settings,  and  advice  leading  to  GMP/GCP
certification  shall  be  considered.  As  a  first  step,  the  EC  has  revised  its
pharmaceutical  regulation  to  allow  CPMP,  the  body  giving  scientific  evidence  to
EMEA, to provide scientific advice on medicinal products destined for exclusive use
in third countries.

In June 2002 the EC AIDS Vaccine Task Force reviewed preliminary results of the
World Bank studies  on ability and  willingness to pay for a vaccine.  Following  this
meeting  contacts  have  been  reinforced  with  the  South  African  AIDS  Vaccine
Initiative  (SAAVI)  and  the  International  AIDS  Vaccine  Initiative  (IAVI).  The
Commission  has  also  committed  an  additional  €  1.35  million  to  the  Medical
Research  Council  in  South  Africa  in  order  to  consolidate  lessons  learned  and
intensify  an  ongoing  EC-funded  vaccine  preparedness  programme,  providing  the
required enabling environment for expanded HIV vaccine development activities in
South  Africa.  The  Commission  is  part  of  the  IAVI  policy  advisory  board  and  the
for
country  preparedness  advisory  group  of 
Microbicides.

International  Partnership 

the 

The  during  the  past  two  years  the  Commission  has  discussed  several  ways  of
increasing  and  enhancing  partnerships  with  existing  global  alliances  directly  or
indirectly linked to the three major communicable diseases. In May 2002 discussions
were  held  with  the  Global  Alliance  for  Vaccines  and  Immunisation  (GAVI).
GAVI  works  towards  having  80%  of  the  poorest  countries  with  adequate  delivery
systems  capable  of introducing hepatitis B vaccine by  2002  and  by  2005  having  at
least  80%  coverage  with  routine  immunisation  in  all  districts.  The  Commission  is
considering  how  to  assist  countries  develop  plans  to  sustain  GAVI-funded
vaccination programmes after their five-year grant ends (inter alia through linkages
with  budget  support  for  poverty  reduction  strategies  that  include  immunisation
coverage as an indicator). GAVI is considered an important partner in consolidating
efforts to prepare the ground for a future AIDS vaccine. The Commission will also
need to consider how best to encourage further private sector participation.

3.4.

Participation in Global Partnerships: Policy and Political Dialogue

1.

2.

25

Throughout  2001  and  2002  the  European  Community  and  its  Member  States  have
been  proactive  in  addressing  the  specific  issues  addressed  by  the  Programme  for
Action  in  global  fora  such  as  G825  Summits,  the  EU/US  Summits  in  Queluz,
Washington  and  Gothenburg,  the  EU/Canada  and  EU/Japan  Summits  in  2001,  the
follow-up  to  the  Cairo  Plan  of  Action  within  the  EU/OAU  forum  (leading  to  the
EU/AU Summit in Lisbon in 2003), the LDCIII Conference in Brussels in 2001, the
UNGASS on HIV/AIDS in 2001, the Barcelona AIDS Conference in 2002, and the
Doha WTO Ministerial, the Monterrey Conference and the Johannesburg Summit.

At  the  Barcelona  European  Council  (and  the  Monterrey  Conference)  the  EU
Member  States  agreed  to  increase  their  ODA  in  order  to  approach  the  0.7%
ODA/GNI UN target by raising average contributions from 0.33% to 0.39% by 2006.
Together with the EU Member States Health and Education Experts the Commission

The EC / G8 EU Member States consensus was clearly demonstrated during the negotiations leading to
the  G8  Summits  in  Okinawa  (2000),  Genoa  (2001),  Kananaskis  (2002)  and  now  preparing  for  Evian
(2003), with the Okinawa Communiqué presenting the most comprehensive global approach to tackling
the three diseases.

20

                                                
3.

will  further  develop  a  framework  for  the  increased  ODA  focused  on  social
development with an emphasis on improved health and education outcomes.

From the outset the Commission has been an active partner in the establishment and
operation  of  the  Global  Fund  to  fight  HIV/AIDS,  TB  and  Malaria  (GFATM).
After having participated in a series of informal meetings to establish the GFATM,
the  EC  hosted  a  stakeholders  forum  in  Brussels  (in  July  2001).  This  led  to  the
establishment  of  a  transitional  working  group  (TWG)  and  a  technical  support
secretariat (TSS). The final TWG meeting took place on 13-14 December 2001 and
the first Board Meeting, on 28-29 January 2002, marking the official hand-over from
the  TWG  to  the  Board  of  the  Global  Fund.  The  Commission,  in  a  constituency
including  Belgium  and  Austria,  holds  a  seat  on  the  Board26.  So  far  the  European
Community has  contributed € 120 million (€ 60 million from the 6th and  7th  EDF
and  €  60  million  from  the  EC  Budget).  In  view  of  the  need  to  boost  the  EU
contribution  to  the  Fund,  the  Commission  is  currently  examining  the  scope  for
additional future contributions from both the EC budget and the EDF (reserves).

At the GFATM Board Meetings (three so far) the EC has insisted on upholding the
previously agreed principles for the GFATM, including a) the Fund is a financing
mechanism and should not become a UN body or new international institution; b) the
structure should remain 'lean and mean' with no new entities established in country;
c) the interests of developing countries are the key determinants for decisions and the
poverty  focus  is  non-negotiable;  d)  decisions  should  be  made  transparently  and  on
merit  rather  than  through  political  lobbying  and  should  be  based  on  high-quality
proposals; e)  the  Fund  should  deliver  improved  health  outcomes  while  fully  taking
into  account  national  frameworks  and  ownership,  and  building  on  existing
mechanisms  -  i.e.  the  Fund  is  not  a  ‘vertical’  instrument;  f)  monitoring  and
evaluation indicators and criteria must be well defined and programme and financial
accountability  clarified  before  the  first  disbursements  are  made.  Other  specific
agenda items agreed in the Programme for Action and taken forward in the GFATM
are:  working  in  innovative  ways  with  the  private  sector  through  new  partnerships,
increasing  financial  resources,  poverty  focus,  price  transparency  and  tiered  pricing,
the consistent reference to the TRIPs flexibility instruments reinforced by the Doha
Declaration,  preference  for  locally  produced  products,  discouragement  of  in-kind
medical donations.

In-country  the  GFATM  works  through  Country  Co-ordinating  Mechanisms  (CCM)
which incorporate all relevant stakeholders. The set up and functioning of CCMs are
unique and have great potential for working in true partnership at country level. At
the  October  2002  Board  meeting  consensus  was  reached  on  policy  principles  for
procurement and supply management, with the US and the private sector agreeing to
tiered pricing, price transparency and restrictions on in-kind donations, in line with
the  EC/EU  position.  The  Fourth  Board  meeting  will  be  held  at  the  end  of  January
2003, and the Fifth is to coincide with the Evian G8 Summit.

One  of  the  biggest  challenges  the  Fund  will  face  is  in  maintaining  its  momentum.
There is also an ongoing need for close co-ordination among EU participants in the
Fund,  currently  spread  among  several  different  “constituencies”  represented  on  the

26

For  more  information  about  the  GFATM  and  EC  contribution  see  the  EC  DEV/RELEX/AIDCO  and
DELEGATIONS STAFF BRIEFING NOTE - September 2002.

21

                                                
4.

Board.  The  need  for  co-ordination  is  likely  to  increase  over  time  rather  than
diminish.

Over the past two years a series of activities has been undertaken to foster stronger
partnerships  with  EU  Member  States,  civil  society  and  the  private  sector,  UN
agencies, funds and programmes, the World Bank  and  the  EIB. Discussions started
with  the  latter  on  local  condom  production  in  Africa.  The  World  Bank  is  a  strong
partner  in  different  global  fora  for  capacity  building  and  specific  activities  such  as
research  into  willingness  to  pay  for  a  vaccine  and  community  preparedness  for  an
AIDS vaccine.  Work with UNAIDS  and  the  WHO has  been  reinforced  at  different
levels  and  in  different  fora,  with  the  shared  key  priority  for  forthcoming  years  of
better  partnership  at  the  country  level.  Dialogue  with  civil  society  has  been
institutionalised through the ‘trade and public health’ debate but is, as yet, less strong
in  the  other  areas  of  the  Programme  for  Action.  Pharmaceutical  companies  are
increasingly involved as partners in policy and implementation, in particular in areas
such  as  tiered  pricing  and  research  and  development.  Other  private  sector  partners
are  also  increasingly  committed  and  ready  to  work  with  the  EC/EU  on  fighting
communicable  diseases  in  developing  countries.  Partnerships  with  the  developing
countries  (in  particular  the  LDCs  and  the  LICs)  are  likely  to  grow  in  significance,
once these are brought together in a Stakeholder Forum on Communicable Diseases
in the Context of Poverty Reduction which the Commission intends to establish.

4.

MONITORING AND EVALUATION

The  PfA  stipulated  that  appropriate  mechanisms,  resources  and  partnerships  will  be  put  in
place  to  monitor  implementation  and  to  participate  in  a  global  monitoring  system
encompassing the efforts of all international partners. Efforts are being made by a number
of  international  partners,  including  EU  Member  States  and  the  EC,  to  agree  on  impact  and
high-level  outcome  indicators  as  part  of  a  joint  pro-poor,  global  and  gender-  sensitive
monitoring system to assess progress towards the MDGs. These efforts must be consistent and
complement the Commission’s efforts to strengthen country ownership and national statistical
capacity to monitor pro-poor health outcomes and health systems performance.

1.

27

28

Coherence  with  the  PRSP  process  and  country  programming.  The  shift  of  EC
co-operation towards macro-economic support linked to social sector outcomes and
sector-wide  approaches  has  led  to  increased  efforts  towards  consistency  in  country
programming. The work on sectoral indicators is co-ordinated with the development
of  overall  Development  Indicators  in  the  context  of  PRSPs  and  macro-economic
support27. The intention is for the 2003 EC Annual Report to include reporting on the
MDGs  based  on  a  limited  number  of  indicators  (12  impact/outcome  and  output)
drawn from the list of 48 indicators associated with the MDGs. Countries that have
opted for a sector-wide approach in health have developed a set of about 20 sector-
wide  indicators.  In  Ghana  for  example,  the  Commission  has  directly  supported  the
process  of  selection  and  application  of  these  indicators  through  its  own  Technical
Assistance28.  More  efforts  are  under  way  to  measure  pro-poor  health  sector
performance and to disaggregate data by social sector, gender and regions.

DG DEV 2002, Guidelines for the use of indicators in country performance assessment.
Accorsi, S. 2002,  Measuring  Health Sector  Performance  through  indicators:  towards  evidence-based
policy. A review of the experience monitoring in the framework of sector-wide approach in Ghana.

22

                                                
2.

3.

4.

5.

1.

2.

29

30

31

OECD/DAC. The Commission is, as are most EU Member States, taking active part
in the DAC Network on Poverty  Reduction /  Subgroup  on  Poverty  and  Health  and
contributed a sub-chapter on Monitoring  and  Evaluation  to the  Draft Guidelines on
Poverty and Health drafted by the Subgroup. The Guidelines have formulated a set of
key  principles  for  monitoring  health  systems  performance  towards  pro-poor  health
outcomes.29

Partnerships with DfID, the WHO, the World Bank, the private sector and civil
society.  The  Commission  and  other  EU  Member  States  have  joined  a  DfID-led
working programme for monitoring health systems performance and pro-poor health
outcomes. Others taking part in this joint programme (2003-2009) are the WHO, the
World  Bank,  USAID,  the  Rockefeller  Foundation  and  others.  The  aim  of  the
programme  is  to  improve  the  capacity  to  measure  poverty  and  health,  to  monitor
health  system  performance,  and  to  evaluate  PRS  and  health  sector  reforms  in
achieving  pro-poor  health  outcomes.  The  programme  will  run,  on  demand,  in
8-12 selected  countries  in  Africa,  Asia,  Latin  America  and  transition  countries.
Country-led processes are expected to allow a sector- wide approach in co-ordinating
external  support  for  performance  and  outcome  monitoring  and  statistical  capacity
building30. The private sector and civil society could be significant interlocutors and
partners in monitoring and evaluation.

GFTAM.  Within  the  Global  Fund,  the  Commission  and  EU  Member  States  have
supported  the  Monitoring,  Evaluation  and  results-based  disbursement  working
Group.  Here  the  attempt  is  being  made  to  apply  results-based  disbursement  to  a
range  of  indicators  that  has  to  respond  to  a  variety  of  proposals  financed  by  the
GFTAM.  Proposed  indicators  are  output,  process  and  outcome  indicators,  ranging
from the improvement of reproductive health knowledge in school settings to actual
HIV prevalence rates.31

CONCLUSIONS

Two  years  after its inception the Programme  for Action  remains a comprehensive,
forward-looking  and  coherent  EU  policy  framework  making  a  significant
contribution towards improved country, regional and global action against the three
major  communicable  diseases.  The  PfA  is  strongly  supported  by  Council  and
Parliament, as well as by civil society and the private sector.

The case for targeting these three diseases remains valid and has even become clearer
than before with respect to HIV/AIDS. It remains the case that general opinion is not
yet fully mobilised around a clear sense of the global crises that these three diseases
constitute, and there is still an urgent need for  large-scale collective  action. The
European Community and its Member States are committed to keep the momentum
going  in the  fight  against  the  three  diseases  as  demonstrated  above,  particularly  by

DAC  &  Subgroup  on  Poverty  and  Health  2002  draft  Guidelines  on  Poverty  and  Health,  4  October
2002.
DfID,  M.  2002,  Final  draft  for  consultation  on  a  programme  of  work:  "Measuring,  monitoring,  and
evaluating health systems performance to achieve pro-poor health outcomes".
GFATM 2002, Report of the Monitoring, Evaluation and Results-based disbursement Working Group -
October 2002.

23

                                                
3.

4.

5.

6.

7.

8.

9.

the vast scale of parallel and, in the case of the EDCTP, joint EC-MS actions at the
EU level presented in this report.

Many global public goods will not be achieved through domestic policy action alone
and  depend  fundamentally  on  concerted  international  action  including  significant
increase on R&D  activities. The mobilisation of resources from national health and
other sectoral budgets and from the private  sector will increasingly be  necessary to
ensure full and reliable funding for global health concerns. GPG policy needs to be
further  developed  to  ensure  co-operation  and  equitable  burden  sharing  in  this
respect.

A number of actions spelled out in the PfA has been taken forward at the country,
EU and global level. Where progress has been less visible, this was either due to a
lack  of  appropriate  resources  within  the  Commission  and/or  within  the  Member
States, in particular in-country resources, to take forward large-scale programmes in
areas  such  as  local  manufacturing  capacity,  technology  transfer,  social  marketing
partnerships  with  civil  society,  innovative  research  and  development  and  working
through  true  partnerships  in  particular  with  the  developing  countries  concerned.
Outstanding areas will be further addressed mainly but not exclusively through
the use of the EC poverty diseases budget line (2003 to 2006). All PfA actions are
directly  or  indirectly  linked  to  other  Community  policies  and  actions  working  on
improved health, AIDS and population outcomes in developing countries.

The increase in ODA towards 0.7% ODA/GNI UN target by 2007 raises the need for
an  EU  framework  for  increased  ODA  focused  on  social  development  with  an
emphasis on improved health and education outcomes.

A strong EU/EC voice is clearly key with respect to each area of action – impact,
affordability  and  research,  and  at  global,  EU  and  country  level.  EU  positions  on
targeted HIV/AIDS, malaria and TB actions have been significantly strengthened at
the global level, jointly with other partners, as a result of the PfA. Nevertheless, more
efforts are needed to provide regular and structured consultation with developing
countries at all levels.

One  way  such  consultation  will  be  further  developed  is  through  the  creation  of  a
Stakeholders  Forum  on  Communicable  Diseases  in  the  Context  of  Poverty
Reduction.  It  is  intended  that  this  forum  will  bring  together  Commission  and  EU
Member State officials, representatives of developing countries, NGOs, industry and
others.

In  addition,  civil  society  partners  have  an  increasingly  strong  voice  in  policy
debates within all EU institutions, as well as nationally and globally. Implementation
of the PfA is subject to increasing monitoring by civil society and organisations and
business interests. The same bodies  are  highly  active members  on the Board of  the
GFATM.  It  is  important  for  this  reason  also,  therefore,  to  strengthen  existing
partnerships with all stakeholders involved,  and to develop new partnerships where
necessary.

For the  EC,  successful partnerships  require  greater flexibility - to  lead  on  some
issues  where  there  is  a  genuine  institutional  gap,  but  to  devolve  responsibility  for
other  issues  where  the  EC  does  not  have  a  clear  competence  or  is  unable  to  bring
added  value.  The  degree  of  formality  in  these  partnerships  should  vary,  with  some

24

10.

11.

12.

13.

14.

partnerships  requiring very precise joint agreements while others can  rely  on  much
more informal understandings and working arrangements.

The Global Fund to fight HIV/AIDS, TB and malaria is one of the PfA actions to
have  produced  clear  results  in  terms  of  resource  mobilisation  and  innovative
approaches.  Policy  areas,  which  had  previously  not  been  successfully  addressed  in
other fora, are being addressed here. The developing countries have a strong voice in
the  GFATM  Board  and  the  Fund’s  overall  governance  arrangements.  Important
topics  such  as  tiered  pricing  and  the  strengthening  of  local  manufacturing
capacities are also being addressed here. These cannot, however, be dealt with in the
GFATM alone. Renewed efforts are needed to work jointly at the European level as
well  as  with  specific  partners,  in  particular  the  US,  on  these  issues.  The  next  G8
Summit  in  Evian  will  provide  a  possible  forum  for  taking  forward  the
Communicable Diseases agenda as reflected in the PfA as a follow up from what
was adopted by the G8 in Okinawa in 2000.

The Commission’s advocacy of tiered pricing for pharmaceuticals has clearly yielded
tangible  results,  culminating  in  the  Commission’s  October  2002  proposal  for  a
Council Regulation to avoid trade diversion into the European Union of certain
key medicines originally destined for the poorest developing countries and sold
at greatly reduced prices. Once adopted by Council, the Regulation should provide
a real protection for exporters, which in turn should develop from increased sales and
offers  of  low  priced  products  to  a  larger  number  of  countries.  As  exporters  benefit
from the added protection there shall be pressure made on other developed countries,
including the US,  to provide for  similar  measures. As the draft Council Regulation
includes  reporting  of  volumes  sold  at  tiered  prices,  these  data  will  be  useful  to
improve  access  to  data  about  the  volumes  of  medicines  distributed  in  the  poorest
countries.

The paucity of information about pharmaceutical prices and production capacity is an
impediment  to  the  development  of  robust  pro-poor  policies.  Price  transparency
(ensuring that production costs of producers are kept strictly confidential for reasons
of  fair  competition)  will  become  increasingly  important  as  developing  countries
increase  their  procurement  of  key  medicines  within  or  outside  the  context  of,  for
instance,  the  GFATM.  It  is  unsatisfactory  for  public  authorities  to  have  to  piece
together  price  information  about  life-saving  medicines  from  the  fragmentary  data
collected by NGOs or provided by just one or two companies, especially since price
remains an important determinant of access, and therefore life, for millions of people.
The  Commission  will  study  what  measures  should  be  introduced  to  improve
access  to  information  about  pharmaceutical  prices.  The  same  goes  for
information  about  pharmaceutical  manufacturing  capacity,  especially  with
respect to pharmaceutical raw materials.

The EDCTP is a unique opportunity to create a long-term, sustainable and  genuine
partnership  between  the  EU  and  developing  countries,  which  is  essential  to
accelerate the development of new products to fight the three diseases.

Nevertheless,  additional  efforts  are  needed  in  the  area  of  the  research  and
development  of  new  specific  Global  Public  Goods,  through  the  kind  of
partnerships  described  above  (public/private  –  EU/developing  countries)  and  new
proposals  for  incentives  and  financing  mechanisms.  Increased  attention  should
now  be  devoted  to  this  area  of  policy,  which  will  probably  prove  of  particular

25

importance over the long term. The Commission will focus on developing proposals
to  incentivise  R&D  for  diseases  which  are  currently  neglected  or  where  R&D  is
lacking.  Such  proposals  will  include  further  examination  of  a  number  of  ideas:
venture capital, low-cost loans, tax credits, guaranteed markets and the extension of
patent  rights  and/or  market  exclusivity  including  through  the  relationship  which
might be established between different products.

In  addition,  the  Commission  will  consider  the  need  for  a  specific  legislative
instrument to incentivise R&D for neglected and poverty diseases, along the lines
of the EU Orphan Drug Regulation. The Orphan Drug Regulation has been a success,
with a large number of applications now having been submitted to the EMEA for the
authorisation  of  such  medicines.  The  Commission  will  explore  whether  the
environment for R&D into neglected diseases can be transformed in a similar way.

A final key challenge remains implementation and impact at country level. A series
of  actions  related  to  the  ‘harmonisation  of  EU/EC  policies  and  procedures’  has
started  and  will  be  further  developed  into  specific  action  plans  on  a  country-by-
country basis.

15.

16.

The  support  of  the  European  and  International  community  will  only  be  effective  where
countries  themselves  show  a  strong  political  commitment  and  have  demonstrably  ascribed
high priority to public health policies, prevention, care and treatment.

26

ACP
AIDS
ALA
ARIVA
CMH
CPMP
CRIS
CSP
CSR
DAC
DDA
DfID
DG
EBAS
EC
ECHO
EDCTP
EDF
ED/M/L
EIB
EMEA
ESIP
EU
FP
G8
GAVI
GCP
GFATM
GMP
GPG
HAP
HIV
IAVI
ITN
LDC
LIC
MEDA
NGO
NIP
OECD
PfA

PRSP
R&D
RIP
SADC
TRIPs
UN
UNAIDS

Annex 1 :Acronyms

Africa, Caribbean and Pacific
Acquired Immune Deficiency Syndrome
Asia and Latin America development cooperation programme
Appui Régional a l'Indépendance Vaccinale en Afrique
Commission on Macro-economics and Health
Committee for Proprietary Medicinal Products (EMEA)
Common Relex Information System
Country Strategy Paper
Corporate Social Responsibility
Development Assistance Committee
Doha Development Agenda
Department for International Development (UK)
Directorate General
EU-ACP Business Assistance Scheme
European Community
European Community Humanitarian Aid Office
European Development Clinical Trials Partnership
European Development Fund
Essential Drugs/Medicines List
European Investment Bank
European Agency for the Evaluation of Medicinal Products
EU SADC Investment Promotion Programme
European Union
Framework Programme
Group of G7 most industrialised countries and Russia
Global Alliance for Vaccines and Immunisation
Good Certification Practice
Global Fund to fight AIDS, Tuberculosis and Malaria
Good Manufacturing Practice
Global Public Good
Health, AIDS and Population
Human Immune Deficiency Virus
International AIDS Vaccine Initiative
Insecticide-treated nets
Least Developed Country
Low Income Country
Mediterranean countries development cooperation programme
Non-governmental Organisation
National Indicative Programme
Organisation for Economic Cooperation and Development
EC  Programme  for  Action  on  Communicable  Diseases  in  the  Context  of  Poverty
Reduction
Poverty Reduction Strategy Paper
Research and Development
Regional Indicative Programme
Southern Africa Development Community
Agreement on Trade Related Aspects of Intellectual Property Rights
United Nations
United Nations Joint Programme on HIV/AIDS

27

UNCTAD
UNICEF
WHO
WIPO
WTO

United Nations Conference on Trade and Development
United Nations Children's Fund
World Health Organisation
World Intellectual Property Organisation
World Trade Organisation

28

Annex 2: Matrix

INCREASE THE IMPACT OF EXISTING INTERVENTIONS

EXPECTED RESULTS

INDICATIVE TIME
TABLE

PROGRESS STATUS 1.1.2003

1.  The  Commission  will  prioritise  HAP  interventions  within  overall  development  aid  and  increase  support  to  ATM  (  HIV/AIDS,  Tuberculosis  and
Malaria )

1.1.  First Round Programming CSPs/PRSPs finalised

1.1. End 2002

1.1. Done

1.1.1.  Majority  of  CSPs  (ACP/ALA-MEDA/OCTs)  adopted;
HAP  programmed  9th  EDF  ACP  CSPs  allocation  increased  to
15% (Abuja target);

1.1.1. End 2004

1.1.1. Ongoing. Current level HAP allocations programmed for 9th EDF –
ACP is 3.7%. ALAMEDA programming includes on average 40% for social
development support.

1.1.2. PfA issues reflected in CSPs;

1.1.3. PfA issues reflected in PRSPs

EP target of 35% of EC Budget committed to ‘social infrastructure’;

Renewed mid-term programming review cycle working towards expected
results (starting 2003);

1.1.2.  Ongoing.  Currently  less  than  5%  of  all  CSPs  reflect  specific
HIV/AIDS, malaria, TB interventions;

1.1.3. Ongoing.

29

1.2. PfA and Health and Poverty policies / resolutions adopted;

1.2. End 2002

1.2.  Ongoing.  Council  resolution  on  PfA  adopted  on  14  May  2001;  EP
resolution on PfA adopted on 4 October 2001; EC contribution to GFATM
regulation  adopted  on  23  October  2001;  ACP-EU  Joint  Parliamentary
Assembly  resolution  adopted  on  1  November  2001;  EP  adoption
contribution  EC  GFATM  December  2001;  Health  and  Poverty
Communication  adopted  March  2002  -  Council  resolution  on  Health  and
Poverty  adopted  on  30  May  2002;  EP  report  on  Health  and  Poverty
Communication  ongoing;  Regulation  on  Poverty  Diseases  to  be  adopted
latest January 2003.

1.3.1. Programming and implementation 2002 special HIV/AIDS
budget line in line with PfA

1.3.2.  Regulation 
including increase financial allocation.

'Poverty  Diseases'  budget 

line  revised,

1.3.3. HIV/AIDS integral part of Reproductive and Sexual Health
and Rights budget line.

1.4.  EC  staffing  plan  developed.  Number  of  staff  in  HQ  and
delegations  responsible  for  health,  AIDS  and  population
increased.

1.5. Partnerships with MS

1.6. Active participation in international for a

1.3. End 2002

1.3.1. Done. Call for Proposals launched August 2002.

1.3.2.  Ongoing.  Negotiations  revised  regulation  Poverty  Diseases  B7-
6311.  PDB  2003  includes  180%  increase  for  special  budget  line  (from  €
25.3 to € 73.4 million).

1.3.3.  Ongoing.  Text  revised  regulation  includes  clear  reference  to
HIV/AIDS.

1.4. Ongoing. DEV B/3 HAP staff increased back to 1999 level. AIDCO
social  development  units  adequately  staffed.  Staffing  plan  delegations  to
be developed in light of discussions deconcentration.

1.5. Ongoing. ATM on agenda regular EU MS meetings. MS agreement to
use additional ODA for health, AIDS and population.

1.6. Ongoing. Programme for Action reflected in G8, EU/US, EU/Canada,
EU/Japan, Cairo Plan of Action negotiations; Durban, LDCIII, UNGASS
HIV/AIDS, Doha, Monterrey, Barcelona, Johannesburg.

30

2.  Commission  services  will  provide  specific  guidance  to  EC  geographical  desks  and  delegations  on  policies,  programming  guidelines  and  the
implementation of the Programme for Action

2.1.1. Programming guidelines disseminated.

2.1. End 2001

2.1.1. Done.

2.1.2. Proper e-correspondence network with Delegations.

2.1.2. Ongoing.

2.2.1. Programming guidelines reviewed and updated.

2.2. End 2002

2.2.1. Ongoing.

3. The Commission will achieve more rapid disbursement and speed up and harmonise procedures

3.1. All HAP dormant programmes closed or re-identified.

3.1. End 2001

3.1. Ongoing.

3.2. HAP disbursement rates increased by 50%.

3.3. CRIS fully functional.

3.2. End 2001

3.2.  Ongoing.  HAP  disbursement  portfolio (1995-2000)  was  set  at
17% May 2001, increased up to 23%.

3.4.  Four  case  studies  on  harmonisation  of  procedures
identified.

3.3. End 2002

3.5.  Other  opportunities 
(EDF/Budget) identified.

to  direct  unspent  resources

3.4. End 2002

3.5. End 2002

3.3.  ‘Health’  coding  -  according  to  DAC  -  and  CRIS  operations
ongoing

3.4.  Missions  -  started  September  2002  -  in  Mozambique,
Nicaragua, Morocco, Vietnam.

3.6. Opportunities for rapid resource transfers identified.

3.6. End 2002

3.5. No progress.

3.6. No progress apart from GFATM process.

31

4.The Commission will facilitate resources for innovative partnerships with international agencies and private sector

End 2006

4.1. Active participation in the GFATM

4.2. Partnership with GAVI (TB/malaria vaccines)

4.3. Partnership with IAVI (HIV vaccine)

4.4. Strategic partnership with WHO (see 5)

4.5.  Negotiations  with  UNICEF  (malaria  bednets  -  social
marketing)

4.6. Discussions with UNFPA / EIB / Condomi on condom
production

4.7.  Negotiations  with  pharmaceutical  industry  on  tiered
pricing

4.8.  Co-operative  agreement  with  World  Bank/MS/WHO-
UNAIDS 
country
programming and identification processes

to  provide 

technical 

input 

to 

Negotiations revised regulation Poverty Diseases B7-6311 ongoing,
including  proposal  substantial increase  financial resources  for  PfA
2003-2006.  Additional  resources  programmed  for  9th  EDF  intra-
ACP

4.1.Ongoing. EC GFATM Board Member. EC contribution of 120
million from 6-7th EDF and 2001 Budget.

4.2. Ongoing. Intense discussions in May 2002. Development plan
for countries to fill financing gaps for childhood vaccines from own
national budgets once GAVI has to face out;

4.3.  Ongoing.  Discussions  in  June  2002.  Support  for  Medical
Research Council in South Africa through IAVI.

4.4. Ongoing. Programmed 9th EDF.

4.5. Initial discussions beginning 2002. Programmed from 9th EDF

4.6.  Ongoing.  Discussions  with  EIB  August  2002.  UNFPA  no
progress as yet.

4.7.  Ongoing.  Regular  discussions  with 
industry.  Lengthy
interservice  meeting  with  GSK  in  March  2002.  Pharma  industry
part of TRADE consultation rounds.

4.8.  Little  progress.  Proposal  for  Strategic  Partnership  with  WHO
under discussion.

32

5. Strengthening of pharmaceutical policies

5.1.  Strategy  in  place  for  support  for  regional  cooperation,
capacity  building,  financial  and  technical  assistance,  including
enhanced  and  improved  essential  drug  policy  and  regulatory
schemes in ACP countries. Partnership with WHO strengthened.

5.1.1.  Regional/sub-regional  quality  control  laboratory  networks
to  ensure  appropriate  quality  control  of  pharmaceuticals
developed.

5.1.2. Malaria protocols revised.

5.1.3.  Essential  drug  policies  refined  in  favour  of  developing
countries.

5.1. End 2002

5.1.  Ongoing.  Financing  proposal  €  25  million  with  WHO  discussed  at
EDF Committee November 2002, pending ratification 9th EDF.

5.1.1. End 2003

5.1.1. Part of WHO partnership. Extension ARIVA

5.1.2. Progress on discussions on the change of national malaria protocols
in highly resistant countries (MSF).

revision  of  11th  WHO  EDL 

5.1.3.  Ongoing.  WHO  pre-qualification  scheme  for  drugs/diagnostics  for
includes  non-generic  key
AMT, 
pharmaceuticals.  Discussion  ongoing  within  GFATM  Procurement  Task
Force  and  newly-established  GFATM  Portfolio  Management  and
Procurement Committee.

5.2. Other partners identified.

5.2. End 2002

5.2. GFATM work in progress

33

6. Untying of Community aid

6.1. EC Memorandum on untying of aid.

6.1. End 2001

6.1. Done

6.2. Tender dossiers for ACP untied.

6.2. Mid 2002

6.2. Done. First case for Zimbabwe.

6.3. ALA regulation includes untying.

6.3. Mid 2002

6.3. Done

6.4. Communication untying discussed in Council/EP

6.4. End 2002

6.4. Ongoing. Communication adopted November 2002.

6.5. EC aid for medicines and products for ATM fully untied.

6.5. End 2003

6.5. Ongoing

34

7. Developing technology transfer and local manufacturing capacity

7.1.  Support  identified  for  sector  and  market  analyses;
dialogue,  identification  of  existing  business  opportunities
for  production  of  quality  key  pharmaceuticals  -  many  of
which are off-patent.

7.1. End 2003

7.1.  Ongoing.  Discussions  with  EIB/Condomi  in  August  2002  on
condom production linked with social marketing.

7.2.  Specific  geographical  focus  on  countries  with  pre-
existing  local  production  capacity  (in  either  private  or
public sector).

7.2. End 2003

7.2. In progress.

7.3.  Licensing  agreements  and  business  joint  ventures
promoted through appropriate incentives.

7.3. End 2004

7.3. Ongoing discussions with generic and R&D industry. UK High
Level Working group. Establishment ISG Incentives - Nov. 2002

7.4.  Importance  local  production  addressed 
international fora.

in  other

7.4. End 2002

financing 

instruments 

identified
7.5.  Appropriate 
(PROINVEST,  the  investment  promotion  programme  for
ACP  countries,  the  EC-ACP  Business  Assistance  Scheme
(EBAS)32,  the  private  sector  Investment  Facility  of  the
Cotonou  Agreement  through  the  EIB,  other  EC  technical
and financial cooperation mechanisms).

7.5. End 2002

7.4. Value local production acknowledged in UNGASS HIV/AIDS
-  WHA  G8  Okinawa  Action  Plan  -  AU  Action  Plan  a/o.
Negotiations ongoing in GFATM - DDA

7.5. Revised legal base for special budget line for Poverty Diseases
resources.  9th  EDF
2003-2006 
to  provide 
programming  entails  provisions  for 
local  production.  Other
instruments to be developed.

for  additional 

INCREASE AFFORDABILITY OF KEY PHARMACEUTICALS THROUGH A COMPREHENSIVE APPROACH

32

An ongoing programme for ACP businesses, which provides support to individual companies or producer associations in this sector.

35

                                                
EXPECTED RESULTS

INDICATIVE TIME
TABLE

PROGRESS STATUS

8. Lead international efforts to establish political commitment for a wide spread - voluntary and predictable tiered pricing mechanism

8.1. Political commitment EU MS and developing countries

8.1. End 2002

8.1.  Ongoing.  Two  Development  Council 
resolutions.  EC
participation  in  UK  High  Level  Working  Group  on  Access  to
Medicines and in NL Access to Medicines debate.

8.2. Industry commitments to tiered pricing

8.2. 2003

8.2. Ongoing. GSK and Novartis made public commitments.

8.3.  Tiered pricing part of GFATM policies and principles

8.3. End 2002 - onwards

8.4.  Tiered pricing as part of PfA back on G8 agenda

8.4. Mid 2003

8.5. EU/US transnational agenda

8.5. End 2002

8.3. Ongoing. GFATM works according to ‘lowest possible prices’.
EC part of procurement working group. Work in progress on further
definition tiered pricing

8.4. Ongoing. Follow up to agreement in Okinawa (2000). Work in
progress for 2003 Summit in France.

8.5. Ongoing. No progress on TP since Gothenburg May 2001.

8.6. EU/Canada agenda

8.7. EU/Japan

8.6. End 2001

8.7. End 2001

8.6. Done.

8.7. Done.

8.8. EU/AU - Cairo Plan of Action

8.8. End 2001

8.8. Done - ongoing preparations for Lisbon 2003

8.9. Tiered pricing in OECD

8.9. End 2003

8.9. No progress

8.10. Jburg Plan of Action

8.10 Mid 2002

8.10. No result

8.11. Close partnership with WHO/UNAIDS

8.11 Up to end 2006

8.11. Ongoing.

36

9. Lead international efforts to establish arrangements for a wide spread, voluntary and predictable tiered pricing mechanism

9.1. Regulation against diversion tiered priced products into
EU (US) markets.

9.1. First part 2003

9.1  Ongoing.  Adopted  by  Commission  on  30  October  2002.
Council discussions with a view to adoption in first quarter 2003.

9.1.1. International concertation in place to contain the risk
of product diversion.

9.1.1. End 2003

9.1.1. Discussions TRIPs Council on Doha Declaration paragraph 6.

9.2. Mechanism defined for transparency and monitoring

9.2. Mid 2003

9.2  Ongoing  discussion  EC/WHO,  within  UK  high  level  working
group  and  most  recently  within  GFATM  Task  Force  on
procurement.

9.3. Lower consumer prices in developing countries

9.3. End 2003

9.3. Ongoing33.

10. Analyse tariff data from DCs to assess basis for negotiations on reduction/abolition in Doha Round

10.1 Study on taxes, other duties and tariffs being finalised.

10.1. Early 2003

10.1. Under preparation 34

10.2. 
Information  on 
registration fees available.

importation,  distribution  and

10.2. End 2002

10.2.  Ongoing.  Discussions  ongoing  in  the  GFATM  Procurement
Task Force.

33

34

See: 'Untangling the Web of Price Reductions' - June 2002 - www.accessmed-msf.org - Médecins Sans Frontières.
See draft study 'Duties and Taxes on Essential Medicines used in the treatment of the major communicable diseases', DG TRADE F/4 July 2002.

37

                                                
11. Support TRIPs application and discuss links between TRIPs Agreement and Public Health protection - Follow up to Doha Declaration on TRIPs and
Public Health

11.1 Broker different  positions  -  get  development  deal for
Doha Round;

11.1. End 2002

11.1  Done.  Doha  Declaration  on  TRIPs  and  Public  Health,
subsequent  decision  to  allow  LDCs  to  defer  implementation  of
pharma patents until 2016. Compulsory licenses export prohibition
regulated by end 2002.

EC  position  on  Doha  para's  6  and  7  developed  and  currently
discussed in TRIPs Council.

11.2  Work  plan 
implementation for developing countries.

for 

reinforced  TA  on  TRIPs

11.2. End 2003

11.3. End 2003

11.2.  Ongoing.  Study  on  TRIPs  implementation  in  Sub-Saharan
Africa on tender stage. Mauritius requested a study on IP and TRIPs
at contract stage.

11.3  Technical  assistance  provided  upon 
according to plan.

request 

/

11.4. End 2002

11.3. Ongoing.

11.4 No progress.

11.4. Cooperation with WIPO reinforced.

38

INCREASE INVESTMENT IN RESEARCH AND DEVELOPMENT OF SPECIFIC GLOBAL PUBLIC GOODS

EXPECTED RESULTS

INDICATIVE TIME
TABLE

PROGRESS STATUS

12. Strengthening support for Research and Development through increased support for basic and strategic  research  and the  creation  of  a  European
Development Clinical Trials Partnership

12.1 Sixth Framework Programme adopted.

12.1 Mid 2002

12.2  EDCTP  launched  -  essential  EC  development  policy
principles reflected in set-up.

12.2 End 2002

12.3. Fifth Framework Programme prioritises ATM.

12.1  Done.  Commission  proposal  for  6th  Framework  Programme
adopted  by  EP  and  Council  in  first  reading.  Large  support  for
considerably  increased  earmarked  R&D  budget  (€  400  in  total  for
ATM,  including  €  200  million  for  EDCTP).  DC  countries  can
participate with COM funding in all projects on the three diseases.

12.2  Ongoing.  Preparation  phase  launched  in  April  2002.  COM
proposal  adopted  in  August  2002.  Council  and  EP  discussion  end
2002. Steering Committee of the EDCTP will define modalities for
implementation  based  on  development  principles  and  with
significant involvement of DCs.

12.3.  Fifth  Framework  Programme  includes  more  than  77  ATM
R&D projects and programmes for more than € 109 million.

39

13. Capacity building in Developing Countries

13.1  Sixth  Framework  Programme  includes  focus  on
including  support  for  collaborative
capacity  building 
molecular  and  clinical,  epidemiological,  operational  and
social  studies,  strengthening  the  base  for  health-related
research.  Emphasis  put  on  gender  balance  and  poverty
focus.

13.1. End 2001

13.1 Ongoing.

13.2 EDCTP includes issues of capacity building measures
such  as:  a)  support  for  facilities  and  services  at  research
institutions and clinical institutions in developing countries,
b) human resources development,

13.2 Mid 2003

13.2.  Ongoing.  EDCTP  foresees  capacity  building  in  the  areas:
networking  and  cooperation; 
transfer;  strengthen
clinical  research  capacities;  initiate  and  develop  clinical  testing
facilities;  finance  training  schemes  for  African  scientists.  €  150
million earmarked for capacity building.

technology 

40

14. Incentives for the development of specific global public goods

14.1. The reform of the international financial architecture
to  foster  increased  availability  and  development  of  global
public goods promoted.

14.1. End of 2002

14.1.1 Ongoing work in relation to UN special task force on GPGs

14.1.2 OECD work on GPGs for health

14.1.3 Work within GFATM progressing rapidly

14.2 Incentive package examined and developed (extension
of patent protection/marketing rights – venture capital - low
cost loans – tax credits – guaranteed markets, etc.).

14.3 Regulatory aspects developed.

14.2 End 2003

14.2 Ongoing discussions with industry.

Work  with  UK  High  Level  Working  Group  on  Access  to
Medicines.

14.3 End 2002

14.3  No  progress.  Discussions  on  involving  regulatory  bodies  in
DCs in the EDCTP.

14.4 Economic research demand completed.

14.4 End 2002

14.4 Ongoing research with the World Bank. First results discussed
in June 2002.

14.5 Joint financing mechanisms developed.

14.5 End 2003

14.5 Ongoing. GFATM effort. Little progress on additional efforts
(linked to special GPG task force)

14.6 EU AIDS Vaccine Task Team strengthened.

14.6 

End 

2003

14.6 Ongoing. Last meeting June 2002.

14.7 Partnership with IAVI strengthened.

14.8 Partnership and continuing co-operation with EMEA

14.7 End 2003

14.8 End 2003

14.7 Ongoing

14.8 Ongoing

41

Annex 3: The Millennium Development Goals

42

43

Annex 4: Price and price reductions for certain HIV/AIDS and Malaria products

The Programme for Action recognises that the price of pharmaceuticals is only one element in
the  fight  against  HIV/AIDS,  malaria  and  TB.  Complementary  action  is  needed  in  all  other
areas  identified  in  the  Programme  for  Action,  including  sustainable  financing,  the
strengthening of health systems, and the focus on improved health outcomes through sectors
other than health.

last 

two  years  many  pharmaceutical  manufacturers  reduced 

The 
their  prices  for
pharmaceuticals sold in developing countries. This change has been generated by the  global
and  public  focus,  including  by  the  EU,  on  ‘affordability  of  medicines’,  as  well  as  by  the
prospect  of  competition  by  generic  manufacturers.  Price  reductions  have  included  not  only
pharmaceuticals for HIV/AIDS but also for malaria and other diseases.

Price reductions are the result of number of factors such as 1) voluntary bilateral agreements,
2)  bulk  purchasing,  3)  voluntary  licensing,  4)  compulsory  licensing  /  or  threat  to  use
compulsory licensing, and 5) generic production.

Examples  of  voluntary  agreements  include;  those  between  six  participating  firms  and
countries  to  supply  anti-retrovirals  drugs,  through  the  UN  sponsored  Accelerated  Access
Initiative  (launched  in  2000  and  currently  covering  about  1%  of  those  needing  treatment);
agreements between the pharmaceutical company Novartis, South Africa and WHO currently
on  a  pilot  basis  (24,000  people  covered)  for  the  tiered  priced  malaria  medication,  Coartem;
and  a  partnership  coming  on  stream  between  GSK  and  WHO  for  the  Anti-malarial
LAPDAP35.

35

See for more detail: Background paper to the UK High Level Working Group ‘Differential Pricing of
Essential Medicines in the Developing World’, London, 26 July 2002.

44

                                                
The table below gives estimated price reductions for anti-retroviral drugs (ARVs).

Estimated price reductions offered to certain developing countries compared to retail price 
VAT exluded in Switzerland (November 2002)

Stavudine (BMS)

Lamivudine (GSK)

Ritonavir (Abbott)

Didanosine (BMS)

Efavirenz (MSD & BMS)

Indinavir (MSD)

Lamivudine & Zidovudine (GSK)

Zidovudine (GSK)

Nevirapine (BI)

Saquinavir (Roche)

Amprenavir (GSK)

Nelfinavir (Roche)

92

91

91

88

88

88

88

88

87

60

55

49

0

10

20

30

40

50

60

70

80

90

100

Source: MSF, November 2002

Coartem  has  been  registered  under  two  different  brand  names  with  different  prices  and
different packaging. It segments the market providing a drug for OECD markets, one for the
private sector of  malaria endemic countries and a  third product  available  through  WHO  for
use in the public sector. The likely constraint to reaching scale may be i) that the substantially
reduced price is only available through the public sector, patients (including the poor) access
malaria medications primarily through the private sector, and ii) the incentive and feasibility
for leakage from poor to wealthy markets within poor countries.

45