Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - A Stronger European-based Pharmaceutical Industry for the Benefit of the Patient - A Call for Action
Date: 2003-07-01
Institutions: European Commission
Subjects: EU policy, competitiveness, innovation, medicinal product, patient's rights, pharmaceutical industry, pharmaceutical legislation, pharmaceutical product, public health, research and development

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 1.7.2003
COM(2003) 383 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL,
THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE
AND THE COMMITTEE OF THE REGIONS

A Stronger European-based Pharmaceutical Industry for the Benefit of the Patient
– A Call for Action

TABLE OF CONTENTS

Executive Summary ................................................................................................................... 3

1.

2.

2.1.

2.2.

2.3.

2.4.

2.5.

Introduction.................................................................................................................. 4

Implementation of the Recommendations of the G10 Medicines Report.................... 7

Benefits to Patients....................................................................................................... 7

Developing a competitive European-based industry.................................................. 12

Strengthening the EU Science Base........................................................................... 18

Medicines in an enlarged European Union ................................................................ 21

Member States learning from each other ................................................................... 23

Annex A Summary of Recommendations and Implementing Actions .................................... 27

Annex B Benchmarking ........................................................................................................... 41

Annex C Membership of G10 Medicines ................................................................................ 61

LEGISLATIVE FINANCIAL STATEMENT......................................................................... 62

2

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL,
THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE
AND THE COMMITTEE OF THE REGIONS

A Stronger European-based Pharmaceutical Industry for the Benefit of the Patient
– A Call for Action

Commission Response to the Report of the High Level Group
on innovation and provision of medicines - G10 Medicines

Executive Summary

It has long been recognised that the European-based pharmaceutical industry plays a critical
role in both the industrial and health sectors. It can make a major contribution to the strategic
goal,  set  by  the  Lisbon  Council  in  2000,  of  building  the  most  competitive  and  dynamic
knowledge-based economy in the world, capable of sustainable economic growth with more
and better jobs and greater social cohesion.

However,  a  report  on  the  competitiveness  of  the  European-based  pharmaceutical  industry
commissioned by the European Commission concluded that; “Europe is lagging behind [the
USA] in its ability to generate, organise and sustain innovative processes that are increasingly
expensive and organisationally complex”.

The Council of Ministers, in its conclusions on Medical Products and Public Health of June
2000, underlined the importance of the identification of innovative medicines, with significant
added therapeutic value, to the attainment of both industrial and public health sector goals.

Tackling the growing weakness in the EU pharmaceutical industry is a major policy concern
and  is  an  objective  in  itself,  but  competitiveness  issues  were  also  relevant  to  public  health
concerns.

In this spirit a new High Level Group on Innovation and the Provision of Medicines (called
“G10 Medicines”), was set up by the Commission. In establishing the G10 Medicines Group
the  Commission  wanted  to  create  a  new  mechanism  to  take  a  fresh  look  at  the  problems
facing the pharmaceutical sector and to come up with creative solutions. This new Group also
had  to  take  into  account  the  combination  of  Community  and  national  competencies  that
govern the pharmaceutical sector.

The  G10  Group  presented  their  report  to  President  Prodi  on  7  May  2002.  It  set  out  a
framework of 14 wide-ranging recommendations.

The  present  Communication  is  the  Commission’s  response  to  the  above  Report  The
Communication divides the Recommendations into the following five broad themes:

– 

– 

– 

Benefits to Patients

Developing a competitive European-based industry

Strengthening the EU Science Base

3

– 

– 

Medicines in an enlarged European Union

Member States learning from each other

In  each  area  it  sets  out  how  the  Commission  would  like  the  recommendations  to  be  taken
forward and, in areas of national competence, a proposed direction it believes Member States
could take and what the Commission can do to facilitate the process.

Finally  the  Commission  invites  the  Community  institutions  and  bodies,  the  Member  States
and  other  stakeholders  to  take  forward  the  key  actions  highlighted  in  this  Communication
with  the  objective  of  enhancing  the  competitiveness  of  the  pharmaceutical  industry  in  the
context of achieving high level EU public health objectives.

1. 

INTRODUCTION

The European Council on 21 March 2003 concluded: “At Lisbon three years ago the EU set
itself  the  strategic  goal  of  building  the  most  competitive  and  dynamic  knowledge-based
economy in the world, capable of sustainable economic growth with more and better jobs and
greater  social  cohesion.1”  The  European  pharmaceutical  industry  can  make  a  major
contribution to this goal.

The pharmaceutical industry in Europe generates wealth and high quality employment while
playing  a  central  role  in  the  development  of  public  health  with  millions  of  people  using
medicines each day to protect and improve their health. Research also plays a central role in
the  sector  both  to  sustain  and  develop  competitiveness  through  the  identification  of
innovation,  but  also  in  the  constant  search  to  improve  the  quality,  safety  and  efficacy  of
medicines to the public.

The industrial landscape of Europe is made up of large and small and medium sized (SMEs)
industry. This is also true of the pharmaceutical sector. This mix is a benefit to all regions of
Europe.

The sector’s positive contribution to the trade balance in the European Union, the provision of
highly skilled jobs, its contribution to public health and development of new environmentally
friendly  technologies  will  play  a  large  role  in  meeting  the  Lisbon  challenge  of  sustainable
development.

A  strong  and  steady  commitment  to  innovation  and  research  and  development  in  both  the
private  and  public  sectors  is  required.  This  is  particularly  the  case  in  respect  of  high  added
value research programmes in “high risk” areas. It is for this reason that the Commission has
placed  great  emphasis  on  the  fostering  of  biotechnology.  More  and  more  medicines  are
currently being developed either partly or entirely through biotech-derived processes. In many
ways biotechnology represents a large part of the future of the pharmaceutical sector.

However,  a  report  on  the  competitiveness  of  the  European-based  pharmaceutical  industry
commissioned by the European Commission2 concluded that; “Europe is lagging behind [the
USA] in its ability to generate, organise and sustain innovative processes that are increasingly

1 Presidency Conclusions of the Brussels European Council 20 and 21 March
2“Global  competitiveness  in  Pharmaceuticals,  A  European  Perspective”  by  Professors  Gambardella,  Orsenigo

and Pammolli. Published as Enterprise Paper No 1 2001.

4

                                                
expensive  and  organisationally  complex”.  Europe  is  faced  with  a  number  of  structural
weaknesses:

– 

– 

– 

markets are not competitive enough;

Research  and  development  in  the  EU  is  hindered  by  fragmented  research  systems
and a lack of a coherent and integrated approach between public and private sectors;

A  weak  growth  in  R&D  spend:  the  USA  has  led  the  way  in  developing  new
technology suppliers and innovation specialists; and R&D spending in the USA grew
at twice the rate of the EU during the 1990s.

In order to stop the process of erosion Europe must act now if it is to retain its attractiveness
as  a  location  for  industry  in  the  years  to  come  and  prevent  the  loss  of  our  highly  skilled
scientists.

It has been long recognised by the Commission and  Member  States that  the  pharmaceutical
sector plays an important health, social and economic role in the Union. The Internal Market
Council  on  May  1998  recommended  that  Community  policy  should  address,  among  other
priorities, the need to strengthen the competitiveness of the European pharmaceutical industry
with  particular regard  to  encouraging  research  and  development3.  This  was  followed  by  the
Commission  Communication  on  the  Single  Market  in  Pharmaceuticals4  in  November  1998
which highlighted the importance of the sector and suggested a number of ways to reinforce
the competitiveness  of  the  industry.  Furthermore, a number  of  existing EU  policies have an
impact on the pharmaceutical sector, in particular:

– 

– 

– 

– 

– 

Completing the Single Market and ensuring it functions effectively;

Initiatives  to  enhance  the  functioning  of  the  business  environment  and  to  improve
competitiveness;

The development of sustainable economic development;

Initiatives to boost innovation and research; and

Action to ensure a high level of human health protection.

Critical progress has already been made with the establishment of the Community marketing
authorisation  procedures  and  the  creation  of  the  European  Medicines  Evaluation  Agency
(EMEA)  in  1995.  The  Commission  intends  to  build  upon  this  success  by  updating  and
streamlining the existing legal framework, as set out in the package of reforms contained in
the Review of the Pharmaceutical legislation submitted to the Parliament and the Council in
November  2001.  The  Commission  remains  committed  to  completing  the  single  market  in
pharmaceuticals  with  the  final  objective  that  every  medicine  authorised  in  the  EU  will  be
available to patients in all Member States. Part of this process is ensuring that the confidence
in the system is enhanced. A genuine single market would provide more patient choice at an
affordable cost as  well as making the EU  a more  attractive  place  for  R&D  investment.  The
adoption of the Euro has made a contribution by providing a more stable market environment.

3 Internal Market Council Conclusions 18 May 1998.
4 COM(98)588

5

                                                
In  March  2000,  a  health  policy  advisory  group  to  the  Commission5  stated  that  the  public
health  goal  of  the  pharmaceutical  sector  is  “to  make  readily  accessible,  efficacious,  high
quality and safe medicines, including the more recent and innovative  ones,  to all those  who
need  them,  regardless  of  their  income  or  social  status6”  The  Council  of  Ministers,  in  its
conclusions on Medical Products and Public Health7 of June 2000, underlined the importance
of the identification of innovative medicines, with significant added therapeutic value, to the
attainment of both industrial and public health sector goals.

The twin policy developments in the industrial and public health spheres highlight the critical
dual  role  played  by  medicines.  Tackling  the  growing  weakness  in  the  EU  pharmaceutical
industry  is  a  major  policy  concern  and  is  an  objective  in  itself.  But  competitiveness  issues
were  also  relevant  to  public  health  concerns.  Future  policy  would  need  to  take  this  into
account.

In this spirit a new High Level Group on Innovation and the Provision of Medicines (called
“G10 Medicines”), was set up by the Commission.

The  G10  Medicines  initiative  must  be  seen  as  a  useful  contribution  within  the  context  of  a
broader  European  industrial  policy.  A  sound  industrial  policy  inevitably  brings  together  a
horizontal basis and sectoral applications which have to take into account the specific needs
of a particular industry such as pharmaceuticals.

In establishing the G10 Medicines Group the Commission wanted to create a new mechanism
to  take  a  fresh  look  at  the  problems  facing  the  pharmaceutical  sector  and  to  come  up  with
creative  solutions.  This  new  Group  also  had  to  take  into  account  the  combination  of
Community and national competencies that govern the pharmaceutical sector. For reasons of
efficiency, the Group was kept small and at a high level. It was composed in a balanced way
with  membership  drawn  from  five  Member  States,  4  industry  representatives,  one  patient-
related  organisation  and  one  representative  of  European  mutual  health  funds  (the  full
membership is set out at Annex C).

This approach encouraged a good working atmosphere which helped to create the consensus
necessary to develop the wide-ranging recommendations published in their report after only a
year.

The  Commission  has  carefully  considered  the  Group’s  recommendations  and  welcomes  the
analysis and approaches proposed. The purpose of this Communication is to set out how the
Commission sees these recommendations being taken forward in the current context. In areas
of  national  competence  the  Commission  sets  out  a  proposed  direction  it  believes  Member
States could take and what the Commission can do to facilitate the process.

This Communication has been prepared in the spirit of the consensus of G10 Medicines with
consultation  of  experts  from  the  Member  States  and  other  interested  groups  through
committees, stakeholder meetings and various workshops. Although the proposals it contains
are intended to establish a way forward in the same atmosphere the Commission accepts that
G10 Medicines members may not be able to support all the proposed courses of action.

5 Created by the High Level Committee on Health
6  From  the  report  of  the  Working  Group  on  Pharmaceuticals  and  Public  Health,  ‘Pharmaceuticals  and  Public
Health  in  the  EU;  Proposals  to  the  High  Level  Committee  on  Health  for  policies  and  actions  in  the
framework of the Treaty of Amsterdam’. 8 March 2000.

7Council Conclusions of 29 June 2000 on Medical Products and Public Health (2000/C 218/04)

6

                                                
2. 

IMPLEMENTATION OF THE RECOMMENDATIONS OF THE G10 MEDICINES REPORT

2.1. 

Benefits to Patients

Achieving real and long lasting benefits to patients, and the wider public, is a key objective of
pharmaceutical policy. Several trends have emerged in recent years that require a rethinking
of  the  way  in  which  people  interact  with  health  care  services,  and  more  specifically  how
people access, and use, medicines. Principal amongst these are the increasing availability of
health care information, the development of the patient as a partner in decision making, and
the increasing mobility of people, goods and services in Europe.

The  G10  identified  two  major  approaches  that  it  felt  could  generate  significant  benefits  to
patients. The first approach centres on the individual’s growing role as an important decision-
maker  in  health  care.  Here  the  G10  identified  the  need  to  strengthen  the  quality  and
availability  of  information  available  to  patients,  and  the  need  to  increase  capacity  for  their
collective  influence  and  decision-making  at  European  policy  level.  The  second  approach
focused  on  measures  concerning  the  relative  effectiveness  of  medicines,  and  the  need  to
improve pharmacovigilance systems that can ensure the on-going safety of medicines on the
market.

This  section  groups  together  the  G10  recommendations  that  call  for  actions  that  will  offer
direct  and  tangible  benefits  to  patients.  However,  the  intention  of  the  G10  process  is  that
actions towards all other recommendations will provide some measure of indirect benefits to
patients, and consumers of medicines through improving the functioning of health systems.

Key tasks

Improving pharmaceutical information to patients

People are demanding and using health information on an unprecedented scale. This is linked
to the change from the individual as a passive recipient of health care and advice to that of a
more  empowered  and  more  proactive  consumer  of  health  care.  The  greater  access  to
information, combined with changing attitudes, is having an impact on the traditional patient-
doctor relationship.

People  are  seeking  information  from  an  ever  growing,  and  diverse,  range  of  sources,
particularly  via  the  Internet,  to  supplement  advice  received  from  health  care  professionals.
Ensuring that the information available is reliable is essential if it is to contribute to positive
public health outcomes. There are also a number of documented initiatives at national level to
provide  information  services  to  patients  including  on  treatment  options  for  particular
diagnoses.  In  its  conclusions  on  Medicinal  Products  and  Public  Health  of  June  2000,  the
Council  of  Ministers  acknowledged  the  proliferation  of  largely  Internet  based  information
sources by underlining the need to develop objective information to the public, and to health
professionals.

The  Commission  aims  to  provide  a  realistic  and  practical  framework  for  the  provision  of
information  to  patients  on  medicinal  products.  The  Commission  will  explore  with  member
states the need to share information and to build common approaches if appropriate.

The  Commission’s  objective  is  to  improve  the  quality  of  information  to  the  public,  and  to
encourage the development of approved sources that people can trust. In this context, the G10
stressed that quality information is that which is objective, comprehensive, readable, accurate
and  up-to-date.  With  strict  emphasis  on  ensuring  the  quality  of  information  provided,  the

7

Commission  agrees  that  innovative  solutions  to  the  provision  of  information  should  be
investigated.  The  Commission  will  explore  a  range  of  approaches,  involving  the  different
stakeholders including consumer and patient groups, academics, the pharmaceutical industry
and competent authorities in Member States.

Ensuring  that  patients  consume  medicines  appropriately  is  a  key  stage  in  the  rational  and
effective use of medicines for public health. The patient  information  leaflet  (in combination
with the label) provides a source of authorised information on critical  issues concerning the
safe and effective use  of  a medicine, such  as dosage, contra-indications, special  precautions
for  use  etc.  It  should  be  able  to  complement,  for  self-medication  products,  the  advice  of  a
health care professional.

As  part  of  the  Review  of  Pharmaceutical  legislation  the  Commission  has  proposed,  and
reached a political agreement with the Council of Ministers, to re-order the information in the
patient  information  leaflet  to  improve  their  comprehensibility.  This  will  be  combined  with
mandatory readability testing of leaflets. The EMEA is undertaking a project to consider new
ways of ensuring that information medicines takes more account of patient needs.

In  addition,  considerable  efforts  have  been  made  to  improve  the  availability  of  orphan
medicines.  It  is  now  important  that  efforts  are  made  to  inform  health  professionals  of  the
existence of these medicines, and their benefits.

Actions  to  improve  information  to  patients  can  draw  on  a  number  of  recent  initiatives,  in
particular  the  recent  e-health  Commission  communication  on  “Quality  criteria  for  health-
related websites”8. Follow on work to this Communication is envisaged to debate the possible
development  of  European  seals  of  approval  for  health-related  web-sites  in  a  joint  action
foreseen under the new public health programme with eEurope 2005.

The EU established its own pharmaceutical telematics strategy in 2000 which has, as one of
its objectives, to enhance the Europharm database of the EMEA to support regulatory activity
and to provide a harmonised set of information on all products. There should also be a better
European  system  to  facilitate  the  sharing  of  pharmaceutical  data  for  public  health,  in
particular, one that would enable comparative analyses to be carried out.
Key actions

–  A major component of the new public health programme will be to establish an information and knowledge
system. This will give rise to extensive dissemination of information concerning all aspects of public health.
A European Health Portal is being developed in order to disseminate this information to health authorities,
professionals,  citizens  and  patients  alike.  In  areas  of  national  competence,  ways  will  be  sought  to  provide
links from the EC Health Portal to national health sites.

–  The Commission  will explore,  with stakeholders, a range of approaches to provide a realistic and practical

framework for the provision of information on prescription and non-prescription medicines.

–  The prohibition on advertising prescription medicines to the public  will remain. However, non-prescription
medicines will continue to be advertised to the public in full respect of the general requirements for honest,
truthful and not misleading advertising.

–  Competent authorities hold substantial information on medicines and much of this is of significant interest to
health  professionals  and  the  general  public.  It  is  important  that  this  is  made  widely  available  and  the
Commission,  involving  the  EMEA,  will  be  pro-active  in  encouraging  the  Member  States  to  share  this
information with a wider group of stakeholders, including the general public.

8 COM (2002) 667

8

                                                
–  The  newly  created  European  Patients  Forum  (see  below)  also  provides  a  mechanism  to  consider  patient’s

needs in relation to information and how these can be best met.

–  To  increase  public  confidence  in  patient  information  on  medicines,  the  Commission  will  reflect  on
establishing  a  collaborative  Public  Private  Partnership  involving  a  range  of  interested  parties  including
representatives from public authorities, industry, health funds, health care professionals and patient groups. It
could take the form of a small body that would be able to advise and monitor the quality of the information
already  provided  and  produce  guidelines  in  specific  areas  to  support  the  work  of  national  and  Community
regulatory authorities.

–  In terms of Patient Information Leaflets, the Commission is proposing, through the Pharmaceutical Review, a
reordering of the information to improve their comprehensibility and introduce mandatory readability testing.

–  The  EMEA  is  undertaking  a  project,  with  patient  organisations,  to  consider  new  ways  of  ensuring  that

information on medicines takes more account of patient needs.

Strengthening the role of patients in public health decision-making

Patient  groups  have  an  important  contribution  to  make  to  the  development  of  health  and
medicines  policy  by  articulating  the  needs  and  views  of  patients,  scrutinising  new  policy
proposals  and  calling  policy  makers  to  account.  Co-operation  with  patient  groups  is  one
mechanism  to  empower  patients  to  take  more  responsibility  for  the  treatment  of  their
condition  or  disease.  Patient-oriented  groups  and  other  public  health  non-governmental
organisations can also provide different treatment and care services as well as social support.
This is already happening in many EU countries.

The co-ordination of patient groups is rapidly  developing  at EU level,  and  this will become
particularly valuable as international patient mobility increases. To bring forward  this  work,
the  Commission  has  encouraged  and  supported  efforts  to  create  a  European  umbrella
organisation brining together patient groups across Europe. This has led to the foundation of a
European Patient Forum in February 2003.

More generally, in 2001, the Commission set up an EU Health Forum9 which brings together
European health stakeholders to discuss common issues and to provide input into the policy
process  at  EU  level.  Patients  groups  play  a  strong  role  in  this.  This  initiative  reflects  the
growing awareness of the importance of developing civil society mechanisms to play a role in
health policy decision-making, an importance which EU enlargement will increase.

The  Commission  has  also  ensured  that  patient  views  are  integrated  into  the  High  Level
Process  on  patient  mobility  and  health  care  developments  in  the  European  Union.  The
European Patients’ Forum is taking part in this process alongside Ministers of Health and key
stakeholders.

9 Membership of the group comprises stakeholders in the health field including public health and patient groups,
health professionals, health service providers and health-related industry organisations. More details can
be obtained from: http://europa.eu.int/comm/health/ph_overview/Health_forum_en.htm

9

                                                
Key actions

–  To make available, under the new public health programme, funding for the patient and other public health
organisations for networking activities at an EU level and projects on patient information within the priorities
set by the programme decision and the annual work programme.

–  To encourage the patients’  groups, including the Patients’  Forum,  to  take  forward  work  to  define  patients’
needs  in  relation  to  issues  of  information,  and  to  explore  more  generally  the  role  of  the  patient  in  health
systems, and to ensure that patient rights are properly considered in future policy developments.

–  Patients’  organisations  will  have  access  to  the  information  disseminated  through  the  public  health  portal

systems under development in the Public Health Programme

Relative effectiveness

The concept of relative effectiveness is an increasing feature of Member State evaluation of
health technologies. The development of new medicines and other technologies that provide
additional  therapeutic  benefits  will  contribute  to  maintaining  progress  in  improving  the
quality and effectiveness of health care. The Commission’s objective is to provide a forum for
Member States, who wish to use relative effectiveness measures, to share ideas on how they
may be operated effectively, quickly and placing the minimum burden on the parties involved.

Relative  effectiveness,  as  applied  to  health  care  technologies  such  as  medicines,  has  two
components:  the  added  therapeutic  value  (ATV)  of  a  medicine  (its  clinical  effectiveness
compared  to  other  treatments),  and  its  cost  effectiveness,  which  builds  on  ATV  and  brings
cost  considerations  into  the  comparison.  Cost  effectiveness  considerations  are  being
increasingly brought into pharmaceutical pricing and reimbursement decisions by competent
authorities. Particularly as the continuous incorporation of new health technologies into health
care  systems  is  an  important  driver  of  rising  health  care  costs.  ATV  considerations  are  of
interest to a wider group of health stakeholders including health professionals and patients, as
well  as  competent  authorities.  It  is  important  that 
is  effectively
communicated to them.

information 

this 

In  terms  of  pricing  and  reimbursement  decisions,  there  are  a  variety  of  compulsory  and
voluntary  systems  in  Member  States  which  provide  a  mechanism  for  allocating  limited
resources  that  take  account  of  relative  effectiveness,  in  particular  cost  effectiveness,  issues.
The  Commission  wants  to  see  that  such  schemes  operate  as  smoothly  as  possible  and,  in
particular, that patients have quick access to important new medicines. The Commission has a
specific  responsibility  for  ensuring 
the  Transparency  Directive  (Council  Directive
89/105/EEC)  is  implemented  correctly.  The  application  of  relative  effectiveness  criteria  in
member  states  has  a  direct  impact  on  prices  and  reimbursement.  While  the  Commission
recognises  that  pricing  and  reimbursement  decisions  are  the  responsibility  of  each  Member
State,  there  is  a  clear  common  interest  in  generating  and  sharing  information  in  order  to
increase the transparency and effectiveness of relative effectiveness procedures

It  is  the  Commission’s  view  that  the  authorisation  process  for  medicines  must  continue  to
focus  on  the  key  public  health  criteria  of  safety,  quality  and  efficacy.  The  issue  of  relative
effectiveness, while important, should be kept entirely separate from this process as it is most
useful  once  the  medicines  are  on  the  market  and  being  used  alongside  existing  therapeutic
options.

10

Key Actions

Within the context of Pricing and Reimbursement

– 

Provide  a  forum  for  member  states  to  generate  and  share  information  on  common  relative
effectiveness  issues  in  the  context  of  pricing  and  reimbursement  decisions.  A  working  group  of
member  states  has  been  established,  within  the  framework  of  the  Transparency  Committee,  to
develop, eventually, common methodologies  for the assessment  of  relative  effectiveness.  The  group
will:

– 

– 

– 

Take  stock  of  which  member  states  rely  on  a  comparison  between  different  products  in
deciding their price or reimbursement, what is exactly compared, methodologies currently used
by member states in their assessment of relative therapeutic value, frequency of assessments,
information on which the comparison is based, by whom is the assessment carried out and in
what manner

Consider to what extent there are currently common themes in national approaches to relative
therapeutic value and what individual practices might be of general relevance in other member
states

Consider extending the stock-taking exercise to national cost-effectiveness programmes if the
above approach has proved to be of value.

Within the context of wider public health issues

–  Develop further projects as part of the new public health programme to strengthen evaluation of ATV. This
could  include  the  development  of  ways  to  share  information  to  health  professionals  and  to  patients,  in
collaboration with other European bodies.

–  The  Commission  will  take  forward  work  on  health  technology  assessment  under  the  new  Public  Health
Programme (2003-2008). Proposals are being sought in relation to developing mechanisms to bring together
competent authorities in the EU and applicant countries, and where  applicable,  other  stakeholders  with  the
aim of enabling them to co-operate more closely  in  health  technology  assessment.  This  topic  is  also  being
pursued under the High Level Process of Reflection on Patient Mobility and Health Care Development in the
EU.

The  Commission  will  ensure  coherence  to  prevent  any  duplication  of  activities  between  the  work  of  the
Transparency Committee and the Public Health Programme.

Pharmacovigilance

A strong pharmacovigilance  system  is vital  to  ensure patient safety  in relation to  the use  of
medicines. It is an essential part of the framework of controls that govern the safety, quality
and efficacy of medicines throughout their lifecycle. When a medicine is first authorised, all
the safety information is based on experience gained during clinical trials. Once placed on the
market,  and  used  by  a  much  wider  population,  substantially  more  information  becomes
available  about  the  incidence  of  adverse  reactions  in  relation  to  its  use  in  the  general
population, and specific groups, such as young children.

Pharmacovigilance  systems  are  designed  to  continuously  collect  and  disseminate  this
information  to  competent  authorities  in  Member  States,  who  must  make  judgements  about
whether to vary, suspend or withdraw the marketing authorisation if risks to public health are
identified. It is sometimes the case that new uses for the medicine are identified and its scope
of indications is widened.

Both industry  and  Member  States  are  already  required  to  collect  and  evaluate  data  on  side-
effects to medicines and take appropriate action. These activities are supported by the EMEA,
which provides a co-ordinating role for the EU. Although national pharmacovigilance systems
have  proved  their  worth,  it  is  clear  that  there  is  a  strong  case  for  strengthening  the  co-

11

ordination of these activities. Reinforcing EU pharmacovigilance is, therefore, a major theme
of  the  pharmaceutical  review  and  a  priority  for  the  Commission’s  telematic  strategy.  The
Commission believes that these measures will make a  significant  contribution  to  the  overall
objective of ensuring that medicines are more safely and effectively used.

Key actions

– 

– 

– 

Enhance the pharmacovigilance role of the EMEA

Establish  the  framework  conditions,  and  increase  the  frequency,  of  pharmacovigilance  reporting  for
new medicinal products; and

Further  develop  the  EudraVigilance  database  of  safety  information  relating  to  all  medicines  on  the
market in the EU.

2.2. 

Developing a competitive European-based industry

The  Commission’s  objective  is  to  retain  and  develop  a  dynamic  and  thriving  EU-based
pharmaceutical  industry  to  help  meet  our  challenging  economic,  social  and  public  health
goals. As the EU’s 5th largest industrial sector, providing the biggest single contribution to the
European  trade  balance  in  high-technology  and  R&D  intensive  sectors  and  offering  a  key
source of high skilled jobs, the pharmaceutical sector can make a significant contribution to
attaining the goals set by the European Council in Lisbon in March 2000.

The EU institutions have a role to play to ensure that there is a strong and modern legislative
framework  that  ensures  all  the  sectors  operate  smoothly.  However,  Member  States  at  their
national level must ensure that new medicines are made available to their patients as quickly
as  possible.  A  comprehensive  approach,  that  takes  account  of  national  and  European
competence, must be taken if substantive progress is going to be made in this area. The key
issues that must be addressed are:

a)

b)

c)

d)

e)

f)

Updating the regulatory structure, to speed up the authorisation process:

Access to innovative medicines, to put in place the right conditions to encourage the
development of, and the speed of access to, these medicines;

Timing  of  reimbursement  and  pricing  negotiations;  in  particular,  the  need  for
national  action  to  enhance  the  transparency  and  the  speed  of  the  pricing  and
reimbursement procedures;

Full  competition  for  medicines  that  are  neither  purchased  nor  reimbursed  by  the
State;

Developing a competitive generic market; and

Developing a competitive non-prescription market.

Key Tasks

a)           Updating the Regulatory Structure

After  completing  the  technical  harmonisation  of  the  sector,  significant  progress  has  already
been  made  with the  introduction  of  the  Community  marketing  authorisation  procedures  and
the establishment of the European Medicines Evaluation Agency (EMEA) in 1995. The G10

12

Group  identified  two  ways  of  improving  the  Community  marketing  authorisation  scheme:
shortened  assessment  times  in  line  with  public  health  requirements  and  enhanced  use  of
telematics. Under the Pharmaceutical Review there are proposals to improve the functioning
of both the Centralised and Mutual Recognition Procedures. This will speed up the evaluation
process and shorten the time for the final decision to be taken. These would make the average
authorisation  time  for  a  new  medical  product  to  be  one  of  the  fastest  in  the  world.  In  the
meantime,  the  Commission  and  the  EMEA  have  already  reduced  the  length  of  their  own
internal procedures as far as possible within the current legislative framework.

However, real progress in this area can only be achieved in partnership with Member States.
National pricing and reimbursement systems may introduce additional delays to marketing of
a medicine. A recent study showed that this process has delayed full access to the market by
at least another year in a number of Member States10.

b)

Access to innovative medicines

The G10 identified this as a critical issue. It is important from an industry perspective because
the cost of developing new medicines has increased significantly 11, and companies should be
able  to  begin  to  market  their  products  as  soon  as  they  are  licensed.  At  the  same  time,  it  is
equally important that innovative medicines reach patients quickly at affordable prices. This is
part of improving the overall responsiveness of the health care system.

The Commission, in co-operation with the EMEA, is aiming at a more transparent approach
to  the  assessment  of  medicines.  In  particular,  by  improving  dialogue  during  drug
development,  making  the  best  use  of  national  resources  and  speeding  up  the  assessment
procedures.

Support  for  the  development  of  innovative  medicines  will  also  come  through  the  6th
Framework  Programme  for  Research  (FP6)  which  has  a  a  key  thematic  priority  is  research
into “Life Sciences, genomics and biotechnology for health” .

In  addition  the  Commission,  through  the  Pharmaceutical  Review,  has  proposed  several
measures to provide incentives to support research into innovative medicines. At the heart of
this,  is  data  exclusivity.  The  Council  has  reached  a  political  agreement  to  harmonise  data
protection at ten years. For medicines authorised under the mandatory centralised procedure it
would be ten years with the possibility of extending this by one year if the manufacturer can
demonstrate  that  the  medicine  can  be  authorised  for  a  new  indication.  For  medicines
authorised  under  the  mutual  recognition  procedure  or  the  optional  centralised  procedure  the
period  would  be  also  be  ten  years  with  the  possibility  of  generic  medicines  to  launch  their
application for a marketing authorisation two years before the expiry of this ten year period.

An  important  tool  for  speeding  up  the  regulatory  process  will  be  the  increased  use  of
telematics.  In  2000  the  EU  established  its  own  pharmaceutical  telematics  strategy  together
with a detailed implementation plan allowing a more efficient use of the available resources.
The  priority  projects  included  in  the  strategy  are:  EudraNet  (to  allow  efficient  and  safe
exchange  of  information  between  competent  regulatory  authorities),  EudraVigilance  (to
support pharmacovigilance activities), the EuroPharm database (to support regulatory activity
and to provide a harmonised set of information on all products) and the databases concerning
clinical trials.

10 Cambridge Pharma Consultancy: Delays in Market Access. December 2002.
11 EFPIA estimated of cost of developing a new chemical or biological entity in 2002 at €895 million

13

                                                
Key Actions

–  A fast track assessment procedure for medicines that are of major public health interest. The statutory time

limit for assessing these marketing authorisation applications will be reduced from 210 – 150 days.

–  Shortening of the decision-making procedure, after scientific evaluation.

–  Widening  the  scope  of  the  Centralised  Procedure  to  include  all  new  medicines  indicated  for  HIV/AIDS,
cancer,  neuro-degenerative  diseases  and  diabetes  to  contribute  to  the  goal  of  giving  all  European  patients
access to important medicines.

–  Improve  the  functioning  of  both  the  Centralised  and  the  Mutual  Recognition  Procedures  to  complete  the

Single Market in Pharmaceuticals.

–  Data exclusivity, through the Pharmaceutical Review, to be harmonised at 10 years for all products to bring it
into line with the annual protection awarded under the Centralised Procedures. In order to promote research
on new therapeutic indications with a significant clinical benefit an extra  year of data protection should be
granted for such indications.

–  Together  with Member States, support the EMEA to  successfully  manage  and  complete  projects  under  the

Telematics Strategy.

c)

Timing of Reimbursement and Pricing Negotiations

There is a wide variety of  pricing  and  reimbursement  schemes  within  the  EU  as  a  result  of
differences in the way that health care  systems  have  developed  over time.  The Commission
recognises  that  each  Member  State  has  the  responsibility  to  ensure  adequate  supplies  of
medicines while controlling healthcare expenditures. In all Member States the costs of health
care are rising. The focus should be on securing the most effective treatment for the patient
within  an  effective  healthcare  system.  Pharmaceuticals  account,  on  average,  for  15%12  of
health  budgets.  Member  States  also  have  an  obligation  under  Directive  89/105/EEC13  to
ensure  that  decisions  on  pricing  and  reimbursement  are  taken  transparently  in  a  non-
discriminatory way and within a precise timeframe.

To improve the implementation of this Directive, the Commission has recently held meetings
of  the  Transparency  Committee14  to  conduct  a  “preventive  dialogue”  with  Member  State
competent administrations to help resolve emerging  difficulties  or  interpretation issues. One
early result of this will be the establishment of a set of updated data on current Member State
administrative practices and regulations. These validated data, will be analysed in the context
of the implementation of Directive 89/105/EEC..

Promoting market integration and alternative ways to control expenditures

Member States have clear competence to take national measures in order to control healthcare
expenditures.  For  the  time  being,  prices  -  both  ex-factory  and  retail  -  are  widely  divergent
amongst Member States. Enlargement will increase these disparities further. The introduction
of alternative ways to regulate pharmaceutical-related healthcare expenditure could be needed
to alleviate the growing impact of these price differentials.

12Taken from “Benchmarking Pharmaceutical Expenditure” published in 2001 by the Austrian Health Institute.
13  Council  Directive  89/105/EEC  relating  to  the  transparency  of  measures  regulating  the  pricing  of  medicinal
products for human use and their inclusion within the scope of national health insurance systems.

14 Committee on Transparency in the pricing mechanisms of medicinal products

14

                                                
Wide differences in administratively-fixed prices can be detrimental to a smooth functioning
of the internal market. In addition, the length, complexity and diversity of current pricing and
reimbursement  procedures  in  general,  conducted  prior  to  the  effective  launch  of  a  product,
may  significantly  delay  the  marketing  and,  thus,  the  availability  of  this  product  for  the
concerned patients.

In  order  to  give  an  appropriate  answer  to  these  problems,  the  Commission  considers  that  a
reflection should be launched on finding alternative ways to control national pharmaceutical-
related  expenditure  by  Member  States.  More  competitive  and  dynamic  market  mechanisms
will facilitate the objective of creating a more integrated market. One option could be based
on  the  principle  that  manufacturers  are  given  the  possibility  to  set  the  prices  of  products,
while  negotiating  with  the  Member  States  safeguard  mechanisms  to  contain  pharmaceutical
expenditure for example, yearly pay-backs or rebates calculated on the revenues generated by
these products on the national markets. Obviously such a system would need to be developed,
and  run,  in  compliance  with  EU  Treaty  obligations,  in  particular  those  concerning  the
principle of free movement of goods and competition. In particular, they should not result in
the  implementation  of  a  dual  pricing  system  in  order  to  impede  parallel  trade15.  In  order  to
minimise any disruption to healthcare systems in the Member States, this approach could be
focussed on new products that have been authorised under the Centralised Procedure  before
they are launched on the market.

Such system is meant to open the way for the free fixing of prices in the market as with any
other product. This would allow the emergence of a single EU “ex-factory” price by allowing
companies, if they wish to have greater control over setting the price of their products while
still  providing  Member  States  with  an  adjustable  “safety  net”  to  cap  pharmaceutical
expenditures. At the same time, it could facilitate faster access by patients to newly authorised
innovative products. The concrete ways of implementing this possible approach must be left
to the consideration of the Member States; the Commission’s role being limited to checking
the compliance of national measures with Community Law.

Key actions

–  Member States to examine their existing pricing and reimbursement systems to ensure that they operate fully

in accordance with the Transparency Directive.

–  The  Commission  and  Member  States  should,  as  a  priority,  examine  the  scope  for  improving  time  taken
between granting of a  marketing authorisation and  pricing  and  reimbursement  decisions  in  order  to reduce
this time to the absolute minimum.

–  The  Commission  will,  in  parallel,  launch  a  reflection  on  finding  alternative  ways  of  controlling  national
health care expenditures including the option of letting manufacturers set the prices of new products, while
negotiating appropriate safeguards in compliance with EU competition rules.

–  Under the 6th Framework Programme research will be undertaken on comparing member states’ health costs

at individual service level and on performance assessment of health care institutions.

d)

Full Competition for Medicines neither Purchased nor Reimbursed by the State

More  efficient  market  mechanisms  and,  in  particular,  price  competition  for  non-reimbursed
medicines,  would  provide,  in  this  sector,  more  patient  choice  at  a  more  affordable  cost.
However, as far as different prices are set for medicines that are sold to the private sector and

15 See Commission Decision of 8 May 2001 (O.J.L 302, 17.11.2001, p.1)

15

                                                
such that are sold to the public sector, full compliance with the EU competition rules must be
insured. In particular, different pricing must not result in the implementation of dual pricing
systems aimed at impeding parallel trade similar or equivalent to the one that the Commission
condemned 
(OJ  L  302,
its  GlaxoWellcome  Decision  of  8  May  2001 
17.11.2001).Nevertheless, this would  be  fully compatible with member state responsibilities
for  meeting  public  health  expenditure  objectives.  More  generally,  the  Commission  fully
supports  the  G10  Medicines  Group’s  conclusion  that,  as  a  matter  of  principle,  medicines
which are neither purchased nor reimbursed by the state should be open to full competition.

in 

Key actions

–  Member  States  should  remove  price  controls  on  manufacturers  that  prevent  full  competition  of  authorised

medicines that are neither purchased nor reimbursed.

–  Member  States  should  allow  the  immediate  launch  of  all  medicines  after  the  grant  of  a  marketing

authorisation.

e)

Competitive generic market

The increased use of generic medicines is an important factor in improving the sustainability
of  health  care  financing  for  pharmaceuticals.  Health  care  costs  across  Europe  are  rising.
Increased  use  of  generic  medicines  can  improve  the  sustainability  of  financing.  Generic
medicines can provide significant savings to healthcare providers, however, their use must be
balanced with sufficient incentives to develop innovative products.

The overall generic sector in the European Union is strong but the generic penetration in each
national market varies enormously. The sector is particularly strong in UK (18% by value in
200116) and Germany (27%). But in other countries such as Spain, Belgium, Portugal, France
and Spain the penetration remains very low (3-6%).

As the G10 report makes clear, the reasons for this variation depends on a number of factors
in  each  Member  State  such  as  national  pricing  and  reimbursement  criteria,  prescribing  and
dispensing practice and incentives to encourage generic use. However, it has highlighted two
critical  aspects  of  this  issue,  intellectual  property  rights  and  the  need  to  explore  ways  of
facilitating generic penetration.

Key actions

–  Introduction  of  a  ”Bolar-type”  provision  allowing  generic  testing,  as  well  as  the  consequential  practical
requirements, before the end of the patent protection period in order not to delay the introduction of generics
on the market after the expiry of the patent;

–  Following political agreement in the Council, the introduction of a marketing authorisation application for a
generic  and  to  grant  this  authorisation  in  the  last  two  years  of  the  data  protection  period  of  the  reference
product for all products except those falling in the mandatory scope of the centralised procedure. This  will
allow  these  products  to  come  on  to  the  market  immediately  after  the  end  of  the  ten  years  data  protection
period;

–  Providing a clearer Community definition of generics;

–  Introducing greater flexibility for generic producers to supply generic medicines to member states where the

reference product is not on their market; and

16 Figures from various trade associations

16

                                                
–  Addressing the issue of biologically similar products by allowing the production of copies of these products

by establishing a clearer regulatory scheme.

f)

Competitive Non-prescription Market

Non-prescription  (or  over-the-counter)  medicines  can  be  obtained  without  a  medical
prescription.  Normally  they  are  dispensed  in  pharmacies  but,  in  some  European  countries,
certain  categories  of  these  medicines  are  available  through  general  retail  outlets.  The  non-
prescription market makes up nearly 20%17 of the total pharmaceutical market in Europe.

Developing  the  competitiveness  of  the  non-prescription  market,  with  due  consideration  to
issues of safety and affordability to patients, can bring significant benefits to governments and
to consumers as well as to industry itself. Although the costs of the medicines are transferred
to the consumer, they gain in terms of greater accessibility to the medicines, without the need
for a medical consultation beforehand. Accordingly, there are significant time savings to both
the consumer and the health professional.

However,  self-medication  can  only  succeed  if  it  retains  the  confidence  of  both  patients  and
health care professionals.  The  existing  regulatory  structure  requires  that  medicines  can  only
be  reclassified  as  non-prescription  if  they  can  be  made  safely  available  without  the
supervision  of  a  doctor.  In  addition,  patients  must  have  the  support  of  good  quality  patient
information  supplied  with  the  medicine  and  access  to  health  care  advice  from  professionals
such as pharmacists as required.

There  is  inconsistency  in  the  products  which  are  classified  as  non-prescription  amongst
Member  States.  Greater  consistency  of  classification  decisions  should  be  developed  in  line
with the principles of the single market.

The G10 Report also highlighted the issue of the use of trademarks for medicines reclassified
to  non-prescription  status.  Developing  a  new  trademark  for  a  non-prescription  medicine  is
expensive and can be a barrier to companies applying for non-prescription status. The use of
the  same  trademark  for  both  the  prescription  and  non-prescription  medicines  should  be
allowed where Member States are sure that this presents no risk to public health.

Reclassification of medicines from prescription to non-prescription status is a well established
procedure  which  can  bring  benefits  to  patients,  healthcare  professionals,  governments,
healthcare systems and industry alike. To encourage reclassification applications, where it is
safe  to  do  so,  the  Commission,  through  the  Pharmaceutical  Review,  has  proposed  to  allow
two  years  of  data  exclusivity  for  a  reclassification  where  significant  clinical  or  pre-clinical
data has been submitted with the application. The Council of Ministers has reached a political
agreement to reduce this period to one year.

17 AESGP estimate for 2001

17

                                                
Key actions

–  Allow  one  year  data  exclusivity  on  significant  clinical  or  pre-clinical  data  submitted  in  support  of  an

application to reclassify a product from prescription to non-prescription;

–  Ensure greater consistency of classification decisions by Member States in accordance with the principles of

the single market;

–  Member States to allow the use of the same trademark after reclassification where there is no risk to public

health.

2.3. 

Strengthening the EU Science Base

Pharmaceutical  research  is  an  important  engine  of  innovation  and  essential  to  improve  the
quality  and  effectiveness  of  healthcare.  It  is  important  that  research  is  carried  out  in  areas
considered important by society and ensuring that the research process itself is appropriate to
the end use of the medicine in society.

The fragmented nature of European research systems is hindering Europe’s ability to compete
with the USA in terms of generating, organising and sustaining innovative processes. This not
only hinders the EU research effort but is also leading to a loss of our highly skilled scientists.

In recent years, the United States has been more successful in co-ordinating public and private
research.  Part of the  reason  for  its  success  has  been  the  impact  of  the  National  Institutes  of
Health (NIH). Through NIH,  the  United  States Government has  been  able  to  bring  together
scientific  knowledge  and  centres  of  excellence  to  meet  key  public  health  issues  while
providing public funding.

The key barrier, identified by the G10 Medicines Group, to making Europe a more dynamic
centre  of research and  innovation was the lack of widespread  scientific  collaboration  across
national borders and between public and privately funded research.  It proposed tackling this
issue by establishing European virtual institutes of health combined with greater support for
clinical trials and facilitating the development of paediatric and orphan medicines.

is  biotechnology  which 

Another  critical  area 
in
pharmaceuticals.  Around  one-fifth  of  new  molecular  entities  launched  on  the  world  market
are  derived  from  biotechnology18  and  over  50%  of  those  under  development  are  biotech-
derived. It is welcome, therefore, that G10 Medicines gave strong support to the Commission
Communication on Life Sciences and Biotechnology19.

is  playing  an  ever  greater  role 

The completion of the single market, with greater reliance on market measures, would be an
important step towards making Europe the most attractive location for R&D. However, more
specifically, the Commission plans to take the Group’s concept of virtual institutes of health
forward  through  existing  programmes  as  outlined  below.  In  addition,  the  Commission  will
reflect further on how Europe can replicate the success of NIH in Europe.

Key Tasks

Virtual Institutes of Health

18 The Pharmaceutical Industry in Figures 2002. EFPIA
19 Life sciences and biotechnology – A strategy for Europe COM(2002)27

18

                                                
The  objective  in  creating  virtual  institutes  of  health  is  to  stimulate  and  organise  health  and
biotechnology  research  in  Europe  by  bringing  together  researchers  with  common  research
interests and goals, from universities, hospitals and research centres throughout Europe. The
possible use and development of these centres are being considered in the context of the High
Level Process of Reflection on Patient Mobility and Health Care Development in the EU20.

The Commission has a number of initiatives21 that could help this concept forward.

The 6th Framework Programme for research (FP6)22.
The  main  objective  of  FP6  is  to  contribute  to  the  creation  of  the  European  Research  Area
(ERA)  by  improving  integration  and  co-ordination  of  world  class  research  in  Europe.
Although the  Community  budget  for  research  is  significant  (€17.5  billion),  it  accounts  only
4%  of  total  public  resources  available  for  research  in  Europe.  FP6  also  aims  at  providing
broad support for the development of world-class human resources in European  research  by
providing measures and incentives to avoid loss of European highly skilled scientists. Other
initiatives include:

Increase of Community funds for European research
The  Commission  recently  presented  a  R&D  strategy  following  the  Barcelona  European
Council  of  March  2002,  with  the  aim  of  raising  research  spending  to  3%  of  the  European
GPD by 2010 (versus around 1.9% today).

Life Science and Biotechnology Action Plan
The plan suggests a comprehensive set of measures to harvest the potential of biotechnology
in Europe and to ensure responsible governance of this process. It aims at developing a skilled
and mobile workforce and specific legal competence in biotechnology companies. It supports
a strong, harmonised and affordable intellectual property protection system, request measures
to  strengthen  the  capital  base  of  the  biotech  industry  and  the  networking  of  biotechnology
regions  in  Europe.  The  new  instruments  of  the  Framework  Programme  for  research  –
integrated  projects  and  networks  of  excellence  -  will  facilitate  the  objectives  of  EU-wide
collaborations and attaining critical mass. While Europe has been successful in encouraging a
large number of new dedicated biotechnology companies, they are still at a rather early stage
of  development  in  terms  of  size,  capitalisation,  product  pipelines  and  international  co-
operation.  It  is  now  of  high  importance  that  the  industry  consolidates  and  develops  success
stories of more mature and profitable companies and clusters of a meaningful size.

A European Centre for Disease Prevention and Control
The Commission is currently considering the option of setting up such a centre.. Should this
proposal be adopted, the centre should become operational no later than 2005. e. According to
this  proposal  the  Centre  could  create  a  stronger  science  base  for  public  health  in  Europe  in
collaboration  with  national  public  health  centres  in  Member  States.  In  this  way,  it  could
support and assist clinical research in Europe by consolidating the picture of burden of disease
across  the  Union.  As  part  of  the  new  policy,  the  related  research  strand  under  the  6th
Framework  Programme  for  research  has  called  for  proposals  to  strengthen  networks  and
surveillance in the field of communicable diseases research.

Targeting major communicable diseases prevalent in developing countries

20 Council Conclusions of 26 June 2002
21 More information on European Union-funded research can be found on: http://www.cordis.lu/en/home.html
22Details of FP6 projects are available at http://europa.eu.int/comm/research/fp6/index_en.html

19

                                                
The  Commission  will  also  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 products23.

Key actions

–  The 6th Framework Programme for research (FP6) including the Life Sciences, Genomics and Biotechnology

for Health programme with a budget of more than €2.2 billion for the period 2002-2006.

–  The ERA NET which aims to support the co-operation and co-ordination of existing public funded research

activities carried out at national or regional level in the Member States.

–  Increase  research  spending  to  3%  of  GDP  in  the  EU  by  2010  in  line  with  the  R&D  strategy  agreed  at  the

Barcelona European Council in March 2002

–  Implementation of the Biotechnology Strategy Action Plan

–  Reflection on the proposal to establish a European Centre for Disease Prevention and Control

Incentives for Research

Clinical trials are critical to pharmaceutical research. They are vital to public and health and
represent  a  considerable  investment  for  the  pharmaceutical  industry.  Clinical  trials  usually
begin around 6 years after the start of product development and after a third of the budget for
development has already been spent.

G10 Medicines has rightly stressed the need for better co-ordination between Member States.
All clinical trials in the EU, under Directive 2001/20/EC (Clinical Trials), must be conducted
in  accordance  with  the  principles  of  Good  Clinical  Practice  (GCP)  which  require  that  the
well-being  of  patients  is  the  paramount  consideration  in  trial  design.  The  Directive  also
recognises the need for better European co-ordination. It simplifies and harmonises governing
administrative procedures to allow for better co-ordination of trials within the Union. It also
contains  a  provision  setting  up,  for  the  first  time,  a  European  clinical  trials  database.  The
database is designed to help communication between regulatory authorities to enable them to
improve  their  oversight  of  trials  and  provide  for  enhanced  protection  of  patients.  The
Commission is currently preparing detailed guidance on the GCP and the database.

The Commission has recognised that the regulatory  framework on clinical trials needs to be
adapted to ensure that it facilitates trials where the potential pool of clinical trial  subjects is
small  in  particular  with  orphan  medicines  and  for  paediatric  indications.  Much  has  already
been achieved in the area of orphan medicines with the adoption of Regulation 141/2000/EC
which provides a number of incentives to produce orphan drugs including 10 year marketing
exclusivity,  fee  waivers  and  provision  of  scientific  advice.  The  result  has  been  140
designations  for  new  orphan  medicines  through  the  EMEA’s  Committee  for  Orphan
Medicinal Products24, since the entry into force, in 2001, of the Regulation. The Commission
will monitor  the  impact  of  this  regulation  to  ensure  that  it  delivers  significant  public  health
benefits.  In  Spring  2002  the  Commission  also  launched  a  new  proposal  to  provide  the

23 See the Programme for Action on Communicable Diseases (COM(2003)93)
24 This accounts for over 50% of all approvals through the Agency.

20

                                                
framework  to  encourage  the  development  of  paediatric  medicines  (better  medicines  for
children25).

The Commission’s Life Science and Biotechnology Action Plan aims to reinforce research in
a  number  of  ways.  Some  of  these  have  been  mentioned  previously  however,  there  are  two
issues  of  particular  importance  to  the  pharmaceutical  sector.  Firstly,  it  calls  for  the  rapid
implementation  of  the  Directive  on  the  Legal  Protection  of  Biological  Inventions  by  all
Member  States.  Eight  Member  States  have  yet  to  implement  the  Directive  and  the
Commission has begun infringement proceedings against those countries. Unless it is properly
implemented throughout the Union the European biotech industry will fall further and further
behind.  The  directive  provides  a  robust  European  system  for  protecting  biotech  inventions
which is vital if European biotechnology is to continue to thrive.

Secondly,  it  calls  for  the  adoption  of  the  Community  patent-legislation.  The  Commission
welcomes  the  recent  common  political  approach26  agreed  by  Member  States  on  the
Community  Patent.  The  proposed  Community  Patent  will  automatically  give  coverage  over
the whole EU at a considerably reduced cost than is required to acquire individual patents in
each member state at the moment. The Community Patent holder would also benefit from a
single system of litigation. Again this will help to strengthen the EU as a centre for research.

Key actions

– 

– 

– 

– 

– 

– 

– 

The setting up a Clinical Trials Database and adoption of guidelines for implementing the Directive.

Facilitate EU dialogue to help Member States with implementation of the Directive.

Follow  the  consultation  on  better  medicines  for  children  with  regulatory  proposals  to  provide  the
framework and incentive to encourage the development of paediatric medicines.

Facilitate  research  into  orphan  medicines  by  taking  actions  on  rare  diseases  under  the  new  Public
Health Programme. The objective will be to develop research capacity and scientific support for rare
diseases research.

To  use  the  recently  created  Competitiveness  in  Biotechnology  Advisory  Group  to  identify  issues
affecting European competitiveness in biotechnology.

Member  States  to  rapidly  implement  the  Directive  on  Legal  Protection  of  Biological  Inventions
(EC/98/44).

Council to adopt the Community Patent legislation.

2.4.  Medicines in an enlarged European Union

The  enlargement  of  the  Union  will  create  major  opportunities  and  challenges.  One  major
challenge will be the integration of the economies and healthcare systems of the new Member
States  into  the  existing  Union.  Health  status  in  the  Accession  countries,  as  reflected  in
morbidity and mortality statistics, is generally lower than the rest of the EU. At the same time,
most  of  the  countries  joining  the  Union  have  fewer  resources  to  spend  in  their  health  care
sectors  than  the  existing  Member  States.  Within  this  broad  context,  the  availability  and
affordability  of  pharmaceuticals  are  important  issues  which  need  to  be  addressed  in  the
context of support to their public health care systems. Due to the later introduction of patent

25 Better Medicines for Children available on http//:pharmacos.eudra.org
26 Competitiveness Council 3 March 2003

21

                                                
laws  in  some  of  the  new  Member  States,  different  levels  of  intellectual  property  (IP)
protection and, therefore, significant differences in price levels, will be found and this could
lead to an increase in parallel imports.

It has always been recognised that, for a limited period after accession, some medicines on the
market in the new Member States would not have the same level of IP protection found in the
existing  Member  States.  The  Accession  Treaties  were,  therefore,  amended  to  include  a
transitional  period  to  the  full  application  of  the  principle  of  the  free  movement  principle  to
prevent the parallel import of pharmaceutical products that lack equivalent IP right protection.
A  mechanism  is  also  being  introduced  whereby  parallel  importers  have  to  provide
confirmation to the competent authority of a member state that they have informed the patent
holder of an application for a parallel import authorisation. However, the legal responsibility
for enforcing intellectual property rights will remain with the patent holder. The Commission
will reflect on whether guidelines in this area are required.

In addition, under the pharmaceutical review, there will be given a statutory requirement for
parallel  importers  to  inform  both  the  marketing  authorisation  holder  and  the  competent
authorities  (in  the  Member  States  and,  for  the  Centralised  Procedure,  the  EMEA)  of  their
intention to proceed with a parallel import in a given member state.

These measures will help tackle problems of varying levels of  IP protection even if they do
not  address  concerns  over  differences  in  price  levels.  Parallel  importation  of  medicines  can
provide Member States with significant cost savings but, at the same time, there is also a risk
that the significant differences in prices could lead to shortages of supply of key medicines in
certain Member States (new and existing) if they are systematically re-exported to countries
that pay higher prices for medicines.

The  legal  take  over  by  the  new  Member  States  of  the  Community  acquis  in  the
pharmaceutical  sector,  has  been  accompanied  by  a  practical  assistance  to  the  new  Member
States to prepare for accession through the Pan European Regulatory Forum27 (PERF). Under
the umbrella of the PHARE Programme, PERF provides the opportunity for the new Member
States  to  have  a  preventive  dialogue  with  the  Commission  on  difficulties  they  are
experiencing  in  implementing  the  pharmaceutical  legislative  framework.  This  preventive
dialogue  could  be  continued  after  enlargement  by  regular  meetings  to  examine  the
implementation of the Community provisions by these authorities.

27 Further details available on “http://perf.eudra.org/”

22

                                                
Key Actions

–  Implementation  of  the  specific  mechanism,  foreseen  in  the  Accession  Treaties,  on  parallel  imports  from

accession countries.

–  Introduce  a  statutory  requirement  in  the  Pharmaceutical  Review,  for  parallel  importers  to  inform  both  the
MA holder and the competent authorities of its intention to proceed with a parallel import in a given member
state.

–  The  Pharmaceutical  Review  will  allow  generic  supply  of  medicines  in  member  states  where  there  is  no
reference product on the market, and help to alleviate problems of availability in the new member states.

–  Full  use  of  the  legal  provisions  concerning  well  established  use  and  new  legislation  on  traditional  herbal

medicines will clarify the legal basis on many existing products.

–  The Commission to consider the impact of enlargement in implementing all the G10 recommendations. This
is a key objective of the pharmaceutical review. This has been supplemented by providing practical help to
the new member states to prepare for accession through the Pan European Regulatory Forum (PERF).

–  All accession countries have been eligible to take part in the new public health programme since its start in

2003.

2.5.  Member States learning from each other

The G10 Medicines Group were asked to recommend ways to improve the performance of the
pharmaceutical industry in terms of its industrial competitiveness and its contribution to social
and  public  health  objectives.  To  measure  progress  towards  these  objectives,  the  Group
recommended  the  development  of  a  set  of  EU  indicators  to  cover  both  industry
competitiveness  and  public  health  objectives.  To  achieve  it  required  having  access  to  high
quality  and  updateable  data  in  a  range  of  areas  which  limited  the  indicators  that  could  be
selected.  The  exercise  must  therefore  be  linked  to  current  initiatives  to  develop  comparable
pharmaceutical  data  for  public  health  across  the  European  Union.  These  include  ongoing
work  under  the  Health  Monitoring  Programme  (1998  –  2003),  and  activities  planned  by
Eurostat as part of their development of a Systems of Health Accounts.

Competitiveness

Benchmarking is no solution to the problems of competitiveness in itself, however, it will, for
the  first  time,  establish  a  set  of  agreed  EU  performance  indicators  that  will  provide  a
comprehensive and objective basis for measuring the implementation of the recommendations
and to exchange  best  practice. To take  forward  work  on these,  the  Commission  has  already
established a working group to develop competitiveness indicators. The indicators are set out
in  Annex  B 
the  G10  Medicines  website
(http://pharmacos.eudra.org). The number of indicators have been kept to a  minimum  in  the
interests  of  management  of  the  exercise  and  to  maintain  the  focus  on  critical  areas.  This
represents a first start with, in some cases, raw data that needs significant further refinement.
The  real  benefit  of  these  indicators  will  only  be  realised  as  the  Commission  develops  data
over a number of years and allowing for a proper analysis.

available 

also 

and 

are 

on 

The  indicators  cover  4  broad  areas:  Supply,  Demand  &  Regulatory  Framework,  Industry
Outputs  &  Macroeconomic  Factors  and  have  been  divided  into  headline  and  supporting
indicators.

Supply

23

The picture in this area is mixed. The relative total venture capital invested in European and
candidate countries is highly variable. All European countries invested relatively lower levels
of  venture  capital  than  the  US  although  average  rates  are  above  Japan  and  Switzerland.  In
terms of Government funding in health R&D, the message is stark; in 2000 the US invested
nearly 5 times more than the EU . Most European countries invest less than 0.1% of GDP into
health R&D compared to 0.19% in the US.

Demand and the Regulatory Framework
The  indicators  confirm  there  is  a  wide  variety  in  market  shares/values  of  the  innovative,
generic and self-medication sectors within the EU and shows that the US has a vibrant market
in  both  new  molecular  medicines  and  generics.  In  terms  of  access  to  the  market,  overall,
medicines appear more quickly in the market in the US than elsewhere. Part of the reason for
this  is  due  to  the  fact  that  the  American  federal  government  does  not  set,  nor  regulate,  the
price  manufacturers  can  charge  for  medicines.  Other  factors  involved  are  the  length  of  the
regulatory process and company strategy concerning the launch in a particular market.

Industry Outputs
The  indicators  show  clearly  that  although  R&D  expenditure  has  grown  steadily  in  the  EU
over the last decade, the expenditure US has grown rapidly and by 1997 had overtaken that of
the EU. However, the  effectiveness of this expenditure  remains  below that of  Germany, the
UK, the Netherlands and Spain.

Macroeconomic factors
The  indicators  show  that  the  European-based  industry  remains  a  powerful  sector.  All  the
major pharmaceutical producing nations within the EU enjoy a positive trade balance with the
US.  Nearly  €90  billion  of  pharmaceuticals  were  exported  by  EU  countries  in  2001.
Employment levels have remained relatively stable during the 1990s in both the EU and the
US.  Europe  is  still  the  most  significant  source  for  employment  for  the  industry  with  a
workforce over twice that of the US.

Public Health

There are a number of challenges to developing a set of indicators that can monitor the role of
the  pharmaceutical  industry  in  preventing  and  treating  disease.  While  industry  has  clearly
made a major contribution to public health in a number of areas, it is difficult to quantify in
global terms and in terms of individual products, and for specific diseases. This is because a
number of factors contribute to changes in health outcomes at the individual and population
level, such as genetic and environmental factors and the knowledge and behaviour of health
care actors such as the prescribing physician and the patient. For this reason, the Commission
proposes to take a broad approach to the G10 recommendation. The indicators could cover not
only the performance of pharmaceutical products, but also performance issues related to the
health care prescriber.

The  Commission  is  actively  pursuing  ways  to  develop  robust,  easily  understandable
indicators.  One  kind  of  indicator  might  be  constructed  in  terms  of  the  availability  of
pharmaceutical products,  compared to  other  health  care  inputs,  within  priority  disease  areas
and  the  significance  of  available  medicines,  for  example  in  terms  of  their  effectiveness,  as
well as the identification of those areas where there is currently no effective pharmaceutical
response. Another could focus on rational use and prescribing at the health professional and
patient level. A third focus could be on the development of indicators around patient quality
issues such as the acceptability of medicines to patients.

24

Supporting the work of G10 Medicines

To facilitate the work of G10 the Commission will support, where appropriate, relevant events
which have been organised in connection with G10 objectives.

Key actions

–  The Commission will publish annual tables of competitiveness indicators. They will be a dynamic tool which
can easily be adapted in the light of experience and new developments (e.g. enlargement). They would also
provide  a  basis  to  help  inform  discussion  in  Council,  the  European  Parliament  and  in  national  and
international conferences.

–  The Commission will undertake work under the Public Health Programme to develop a broad range of public
health  indicators.  The  results  will  be  used  as  a  basis  for  discussion  and  consultation  with  a  range  of
stakeholders in 2004. This exercise  will  also  consider  the  availability  and  quality  of  data  in  relation  to  the
proposed indicators so that a judgement can be reached on the final choice of relevant and feasible indicators.

–  The Commission will support on an annual basis meetings to supplement the Communication and to verify

progress on key actions for example; the use of generics.

3. 

CONCLUSION

The retention of a dynamic and thriving EU-based pharmaceutical industry, that embraces and
develops  new  technologies  such  as  biotechnology,  is  a  critical  requirement  for  meeting  our
high  level  and challenging economic, social  and  public health  goals.  It will  help  us  achieve
the strategic goal, set by the March 2000 European Council in Lisbon, for the EU to become
the  most  competitive  and  dynamic  knowledge-based  economy  in  the  world,  capable  of
sustainable  economic  growth  with  more  and  better  jobs  and  greater  social  cohesion.  To
accomplish this the EU must act on the warnings of falling competitiveness the Commission
is receiving.

Equally, the pharmaceutical sector is a central component of health care systems  and public
health. The Commission, together with Member States, must provide the right conditions for
patients to be able to take an active role in their own healthcare by providing them with the
appropriate information to be able to do this effectively and safely. They must meet the needs
of  patients,  for  safe,  effective  and  high  quality  treatments.  Together  the  Commission  and
Member  States  must  embrace  the  new  technologies,  such  as  biotechnology,  and  the  new
forms of communication, especially the Internet. Finally, the Commission and Member States
must be prepared to reap the benefits, and face the challenges, of Enlargement.

The proposals set out in this Communication provide the building blocks for achieving these
objectives. Action at both an European and national level is critical to success. Furthermore, it
is  important  that  implementation  respects  the  balance  between  competitiveness  and  public
health objectives established by the original G10 Report. With this in mind the Commission
proposes the following post-G10 measures:

Benchmarking follow-up
The  benchmarking  exercise  is  the  first  tangible  result  of  G10  Medicines.  It  will  provide  a
mechanism to regularly check the strength of the European-based pharmaceutical industry and
the  impact  it  is  having  on  European  public  health.  The  performance  indicators  will  also
support the exchange of best practice between Member States.

For this to be effective the indicators need to be regularly updated and easily accessible. The
Commission  will  update  the  indicators  annually  and  invites  the  Council  and  the  European

25

Parliament to  regularly  discuss  them. The use of  performance  indicators  is  intended  to  be  a
dynamic process. They will be adapted to include data on the new Member States as soon as it
is available and changed to focus on other issues as appropriate. The Commission will set up
a  small  secretariat  to  take  forward  the  benchmarking  exercise  and  other  G10  Medicines-
related work.

Future of G10 Medicines
The G10 Medicines Group has served a useful purpose, in particular, by serving as a catalyst
for  ideas  and  building  links  between  stakeholders.  Its  report  with  its  wide-ranging
recommendations must now be taken forward by all parties involved. The terms of reference
for G10 Medicines say that it must be a time-limited exercise. The G10 Medicines Group will
therefore  continue  until  the  enlargement  of  the  Union  in  May  2004.  This  will  allow  the
existing members to monitor the response of the Council, the European Parliament and other
institutions to the Communication.

Maintaining the momentum of G10

Improving  EU  pharmaceutical  industry  competitiveness  and  public  health  is  a  substantial
exercise  and  it  is  essential  that  there  is  a  comprehensive,  but  light-touch,  mechanism  for
monitoring  progress.  The  benchmarking  exercise  will  be  led  by  the  Commission  in  co-
operation will Member States. In light of this the Commission would like Member States, on
a  voluntary  basis,  to  communicate  national  measures  (legislative  and  non-legislative),  that
could  have  an  impact  on  G10  Medicines-related  issues  such  as  pricing  and  reimbursement.
All notified measures would be shared with other Member States to improve transparency.

The critical objective is to  maintain momentum to ensure  that  the G10  Medicines  initiative,
which  has  already  done  a  great  deal  to  raise  awareness  of  the  current  situation  in  the
pharmaceutical sector, has a mid- and long-term impact. In particular, to involve the Council
and  the  European  Parliament  in  the  process.  The  success  of  G10  will  be  measured  on  this
basis and this depends  on ensuring involving  and  maintaining member state  commitment to
the process.

The Commission now invites the Council, the European Parliament, the Economic and Social
Committee  and  the  Committee  of  the  Regions,  together  with  other  stakeholders,  to  take
forward  the  key  actions  highlighted  in  this  Communication  with  the  objective  of  enhancing
the competitiveness of the pharmaceutical industry in the context of achieving high level EU
public health objectives.

26

Annex A
Summary of Recommendations and Implementing Actions

Recommendation 1: Benchmarking: Competitiveness and Performance

The development by the Commission of a comprehensive set of indicators covering:

– 

the performance of the pharmaceutical industry in relation to indicators of industrial competitiveness;

–  and the prevention and treatment of diseases and emerging health threats with reference to data on morbidity

and mortality, including the performance of products; and

–  the  relationship  between  the  various  EU  and  Member  State  regulatory  structures  (licensing,  pricing  and

reimbursement) and availability (time to licence, time to market) access and uptake of pharmaceuticals

Implementing Actions

1.1.

1.2.

The Commission will publish annual tables of competitiveness indicators. They will
be  a  dynamic  tool  which  can  easily  be  adapted  in  the  light  of  experience  and  new
developments  (e.g.  enlargement).  They  would  also  provide  a  basis  to  help  inform
discussion  in  Council,  the  European  Parliament  and  in  national  and  international
conferences.

The Commission will further undertake work under the Public Health Programme to
develop a broad range of public health indicators. The results will be used as a basis
for  discussion  and  consultation  with a  range of stakeholders  in  2004.  This  exercise
will  also  consider  the  availability  and  quality  of  data  in  relation  to  the  proposed
indicators  so  that  a  judgement  can  be  reached  on  the  final  choice  of  relevant  and
feasible indicators.

1.3.

The  Commission  will  support  on  an  annual  basis  meetings  to  supplement  the
Communication  and  to  verify  progress  on  key  actions  for  example;  the  use  of
generics.

Implementers: The Commission & Member States

Timeframe:

2003-2006

27

Recommendation 2: Access to Innovative Medicines

To secure the development of a competitive innovative-based industry:

a)

b)

that  the  European  Institutions  should,  as  part  of  the  review  of  Community
pharmaceutical  legislation  now  underway,  consider  ways  of  improving 
the
legislation or the operation of the licensing system to improve the introduction to the
market in particular for innovative medicines; and

that  the  European  Institutions  and  Member  States  should  improve  the  use  of
telematics to facilitate the operation of the Community regulatory system.

Implementing Actions

2.1.

A fast track assessment procedure for medicines that are of major public health interest. The statutory
time limit for assessing these marketing authorisation applications will be reduced from 210 – 150 days.

2.2.

Shortening of the decision-making procedure, after scientific evaluation,

2.3.

2.4

2.5.

Widening the scope of the Centralised Procedure to include all new medicines indicated for HIV/AIDS,
cancer,  neuro-degenerative  diseases  and  diabetes  to  contribute  to  the  goal  of  giving  all  European
patients access to important medicines.

Improve the functioning of both the Centralised and the Mutual Recognition Procedures to complete the
single market in pharmaceuticals.

Data exclusivity, through the Pharmaceutical Review, to be harmonised at 10 years for all products to
bring  it  into  line  with  the  annual  protection  awarded  under  the  Centralised  Procedures.  In  order  to
promote research on new therapeutic indications with a significant clinical benefit an extra year of data
protection should be granted for such indications.

2.6.

Together with Member States support the EMEA to successfully manage and complete projects under
the Telematics Strategy.

Implementers: The Commission & Member States

Timeframe:

2003–2006

28

Recommendation 3: Timing of Reimbursement and Pricing Decisions

Respecting national competence, Member States should examine the scope for improving time taken between the
granting  of  a  marketing  authorisation  and  pricing  and  reimbursement  decisions  in  full  consistency  with
Community legislation. To do this with a view to securing greater uniformity and transparency between markets
and rapid access of patients to medicines.

Implementing Actions

3.1.

3.2.

3.3.

Member States to examine their existing pricing and reimbursement systems to ensure that they operate
fully in accordance with the Transparency Directive

The Commission and Member States should, as a priority, examine the scope for improving time taken
between  granting  of  a  marketing  authorisation  and  pricing  and  reimbursement  decisions  in  order  to
reduce this time to the absolute minimum.

The Commission will, in parallel, launch a reflection on finding alternative ways of controlling national
health  care  expenditures  including  the  option  of  letting  manufacturers  set  the  prices  of  new  products,
while  negotiating  appropriate  safeguard  mechanisms  for  Member  States  to  contain  expenditure  in
compliance with EU competition rules.

3.4.

Under the 6th Framework Programme, research will be undertaken on comparing member states’ health
costs at individual service level and on performance assessment of health care institutions

Implementers: Member States

Timeframe:

2003 - 2006

29

Recommendation 4: Competitive Generic Market

Implementing Actions

To secure the development of a competitive generic market in Europe, that:

a)

b)

the European Institutions to agree a way forward on intellectual property rights issues (especially data
exclusivity and Bolar) covered in the Commission’s proposed legislation.

Member  States  –  facilitated  by  the  Commission  -  explore  ways  of  increasing  generic  penetration  in
individual markets (including generic prescribing and dispensing). Particular attention should be given
to improved market mechanisms in full respect of public health considerations

Implementing Actions

4.1.

4.2.

4.3.

4.4.

4.5.

Introduction  of  a  ”Bolar-type”  provision  allowing  generic  testing,  as  well  as  the
consequential practical requirements, before the end of  the  patent  protection  period
in order not to delay the introduction of generics on the market after the expiry of the
patent;

Following  political  agreement  in  the  Council,  the  introduction  of  a  marketing
authorisation application for a generic and to grant this authorisation in the last two
years  of  the  data  protection  period  of  the  reference  product  for  all  products  except
those  falling  in  the  mandatory  scope  of  the  centralised  procedure.  This  will  allow
these products to come on to the market immediately after the  end of  the ten  years
data protection period;

Providing a clearer Community definition of generics;

Introducing  greater  flexibility  for  generic  producers  to  supply  generic  medicines  to
member states where the reference product is not on their market; and

Addressing the issue of biologically similar products by allowing  the production of
copies of these products by establishing a clearer regulatory scheme.

Implementers: The Commission

Timeframe:

2003 - 2006

30

Recommendation 5: Competitive Non-prescription Market

To  meet  public  health  objectives  in  Member  States  and  to  secure  the  development  of  a  competitive  non-
prescription  medicines'  market  in  the  EU  (respecting  that  the  reimbursement  of  medicines  remains  in  the
Member States' competence) by:

a)

reviewing,  with  full  respect  to  health  criteria,  and,  if  appropriate,  amending
mechanisms  and  concepts  for  moving  medicines  from  prescription  to  non-
prescription status; and

b)

allowing the use of the same trademark for products moved to non-prescription status

Implementing Actions

5.1.

5.2.

5.3.

Allow one year data exclusivity on significant clinical or pre-clinical data submitted
in  support  of  an  application  to  reclassify  a  product  from  prescription  to  non-
prescription;

Ensure  greater  consistency  of  classification  decisions  by  Member  States  in
accordance with the principles of the single market.

Member  States  to  allow  the  use  of  the  same  trademark  after  reclassification  where
there is no risk to public health.

Implementers: The Commission & Member States

Timeline:

2003-2006

31

Recommendation 6: Full Competition for Medicines neither Purchased nor Reimbursed
by the State

That the Commission and Member States should secure the principle that a Member State authority to regulate
prices  in  the  EU  should  extend  only  to  those  medicines  purchased  by,  or  reimbursed  by,  the  State.  Full
competition  should  be  allowed  for  medicines  not  reimbursed  by  State  systems  or  medicines  sold  into  private
markets.

Implementing Actions

6.1.

6.2.

Member  States  should  remove  price  controls  on  manufacturers  that  prevent  full
competition of authorised medicines that they neither purchase nor reimbursed.

Member States should allow the immediate launch of all medicines after the grant of
a marketing authorisation.

Implementers: Member States

Timeframe:

2003 2006

32

Recommendation 7: Relative Effectiveness

a)

b)

The Commission should organise a European reflection to explore how Member States can improve
ways of sharing information and data requirements to achieve greater certainty and reliability for all
stakeholders, even if the decisions they take may differ

The objective is to foster the development of health technology assessment (HTA), including clinical
and cost effectiveness, in the Member States and the EU. Furthermore, to improve the value of HTA,
to  share  national  experiences  and  data  while  recognising  that  relative  evaluation  should  remain  a
responsibility of Member States.

Implementing Actions

7.1.

7.2

7.3

7.4

7.5.

7.6.

Provide  a  forum  for  member  states  to  generate  and  share  information  on  common
relative effectiveness issues in the context of pricing and reimbursement decisions. A
working group of member states has been established, within the framework of the
Transparency  Committee,  to  develop,  eventually,  common  methodologies  for  the
assessment of relative effectiveness. The group will:

Take stock of which member states rely on a comparison between different products
in deciding  their price or reimbursement,  what  is  exactly  compared,  methodologies
currently  used  by  member  states  in  their  assessment  of  relative  therapeutic  value,
frequency of assessments, information on which the comparison is based, by whom
is the assessment carried out and in what manner.

Consider to what extent there are currently common themes in national approaches to
relative therapeutic value and what individual practices might be of general relevance
in other member states

Consider  extending 
programmes if the above approach has proved to be of value.

the  stock-taking  exercise 

to  national  cost-effectiveness

Develop  further  projects  as  part  of  the  new  public  health  programme  to  strengthen
evaluation of ATV. This could include the development of ways to share information
to health professionals and to patients, in collaboration with other European bodies.

The Commission will take forward work on health technology assessment under the
new Public Health Programme (2003-2008). Proposals are being sought in relation to
developing  mechanisms  to  bring  together  competent  authorities  in  the  EU  and
applicant  countries,  and  where  applicable,  other  stakeholders  with  the  aim  of
enabling them to co-operate more closely in health technology assessment. This topic
is also being pursued under the High Level Process of Reflection on Patient Mobility
and Health Care Development in the EU.

7.7.

The  Commission  will  ensure  coherence  to  prevent  any  duplication  of  activities
between the work of the Transparency Committee and the Public Health Programme

Implementers: Member States & the Commission

Timeframe: 2003 - 2008

33

Recommendation 8: Virtual Institutes of Health

The  creation  of  the  European  virtual  institutes  of  health,  connecting  all  existing  competence  centres  on
fundamental and clinical research into a European network of excellence

Implementing Actions

8.1.

8.2.

8.3.

8.4.

8.5.

The  6th  Framework  Programme  for  research  (FP6)  including  the  Life  Sciences,
Genomics and biotechnology for health programme with a budget of more than €2.2
billion for the period 2002-2006.

The ERA NET which aims to support the co-operation and co-ordination of existing
publicly  funded  research  activities  carried  out  at  national  or  regional  level  in  the
Member States.

Increase research spending to 3% of GDP in the EU by 2010 in line with the R&D
strategy agreed at the Barcelona European Council in March 2002

Implementation of the Biotechnology Strategy Action Plan

Reflection on the proposal to establish a European Centre for Disease Prevention and
Control.

Implementers: The Commission and Member States

Timeframe:

2003 - 2010

34

Recommendation 9: Incentives for Research

To improve the co-ordination of Community and national activities, by:

a)

b)

c)

Commission and Member States co-ordinate and support the conduct of clinical trials on a European
scale, establish a database of trials and clinical research results;

Commission and Member States put in place an effective policy in terms of incentives to research and
support the development and marketing of orphan and paediatric medicines;

Supporting the development of a biotechnology strategy in Europe

Implementing Actions

9.1.

9.2.

9.3.

9.4.

9.5.

9.6.

The  setting  up  of  a  Clinical  Trials  Database  and  adoption  of  guidelines  for
implementing the Directive.

Facilitate EU dialogue to help Member States with implementation of the Directive.

Follow the consultation on better medicines for children with regulatory proposals to
provide  the  framework  and  incentive  to  encourage  the  development  of  paediatric
medicines.

Facilitate research into orphan medicines by taking actions on rare diseases under the
new  Public  Health  Programme.  The  objective  will  be  to  develop  research  capacity
and scientific support for rare diseases research.

To  use  the  recently  created  Competitiveness  in  Biotechnology  Advisory  Group  to
identify issues affecting European competitiveness in biotechnology.

Member  States  to  rapidly  implement  the  Directive  on  Legal  Protection  of
Biotechnological Inventions (EC/98/44).

9.7.

Council to adopt the Community Patent legislation.

Implementers: The Commission & Member States

Timeframe:

2003 - 2006

35

Recommendation 10: Enhanced Information

a)

b)

c)

–

–

The restriction on advertising of prescription medicines to the general public should
continue;

There  should  be  no  restrictions  on  advertising  of  non-prescription  and  non-
reimbursed  over-the-counter  medicines  in  line  with  existing  requirements  for
advertising  to  encourage  the  rational  use  of  the  product  and  not  to  be  misleading.
There should be sharing of information and development of common approaches to
regulation of such advertising;

Consideration should be given by the European Institutions, as part of  their current
review of the pharmaceutical legislation, to:

in  co-operation  with  all  stakeholders  to  produce  a  workable  distinction  between
advertising and information that would allow patients actively seeking information to
be able to do so, and to develop standards to ensure the quality of such information;
and

to the establishment of a collaborative public-private partnership involving a range of
interested  parties.  The  information  should  be  carefully  piloted  and  evaluated  to
assess the extent to which it meets the needs of patients with these conditions.

Implementing Actions

10.1.

10.2.

10.3.

10.4.

A  major  component  of  the  new  public  health  programme  will  be  to  establish  an
information and knowledge system. This will give rise to extensive dissemination of
information  concerning  all  aspects  of  public  health.  A  European  Health  Portal  is
being  developed  in  order  to  disseminate  this  information  to  health  authorities,
professionals, citizens and patients alike. In areas of national competence, ways will
be sought to provide links from the EC Health Portal to national health sites.

The Commission will explore, with stakeholders, a range of approaches to provide a
realistic and practical framework for the provision of information on prescription and
non-prescription medicines.

The  prohibition  on  advertising  prescription  medicines  to  the  public  will  remain.
However, non-prescription medicines will continue to be advertised to the public in
full  respect  of  the  general  requirements  for  honest,  truthful  and  not  misleading
advertising.

Competent authorities hold substantial information on medicines and much of this is
of significant interest  to  health professionals and  the general  public.  It  is  important
that this is made widely available and the Commission, involving the EMEA, will be
pro-active in encouraging the Member States to share this information with a wider
group of stakeholders, including the general public.

10.5.

The newly created European Patients Forum (see Recommendation 13) also provides
a mechanism to consider patient’s needs in relation to information and how these can
be best met.

36

10.6.

To increase public confidence in patient information on medicines, the Commission
will  reflect  on  establishing  a  collaborative  Public  Private  Partnership  involving  a
range of interested parties including representatives from public authorities, industry,
health funds, health care professionals and patient groups. It could take the form of a
small body that would be able to advise and monitor the quality of the information
already  provided  and  produce  guidelines  in  specific  areas  to  support  the  work  of
national and Community regulatory authorities.

Implementers: The Commission & Member States

Timeframe:

2003 - 2006

37

Recommendation 11: Patient Information Leaflets

In  the  context  of  the  current  review  of  Community  legislation,  the  legislation  relating  to  patient  information
leaflets should be reviewed taking into account views of users as well as regulators and industry.

Implementing Actions

11.1.

The  Commission  through  the  Pharmaceutical  Review  is  proposing  a  re-ordering  of
the information in the patient information leaflet to improve their comprehensibility;

11.2.

The introduction of mandatory readability testing of leaflets;

11.3.

The  EMEA  is  undertaking  a  project,  with  patient  organisations,  to  consider  new
ways of ensuring that information on medicines takes more account of patient needs.

Implementers: The Commission

Timeframe:

2003 - 2006

Recommendation 12:

Pharmacovigilance

That systems  for post-marketing  surveillance  should  be  optimised  to  ensure  that  co-ordinated  processes  are  in
place to gather data on adverse events and patient safety.

Implementing Actions

12.1.

Enhance the pharmacovigilance role of the EMEA

12.2.

12.3.

increase 
Establish 
pharmacovigilance reporting for new medicinal products; and

conditions, 

framework 

and 

the 

the 

frequency,  of

Further  develop  the  EudraVigilance  database  of  safety  information  relating  to  all
medicines on the market in the EU.

Implementers: The Commission and Member States

Timeframe:

2003 - 2006

38

Recommendation 13: Funding of Patient Groups

That the Commission consider providing core funding for European patient groups to enable them to participate
independently in the debate and decision making on health matters in the EU

Implementing Actions

13.1.

13.2.

To make available, under the new Public Health Programme, funding for the patient
and  other  public  health  organisations  for  networking  activities  at  an  EU  level  and
projects  on  patient  information  within  the  priorities  set  by  the  programme  decision
and the annual work programme.

To  encourage  the  patients’  groups,  including  the  Patients’  Forum,  to  take  forward
work  to  define  patients’  needs  in  relation  to  issues  of  information,  and  to  explore
more  generally  the  role  of  the  patient  in  health  systems,  and  to  ensure  that  patient
rights are properly considered in future policy developments.

13.3.

Patients’ organisations will have access to the information disseminated through the
public health portal systems under development in the Public Health Programme.

Implementers: The Commission & patient groups

Timeframe:

2003 - 2008

39

Recommendation 14: Enlargement

That the implementation of the above recommendations should take full account of the future enlargement of the
EU.  In  particular,  rules  should  recognise  the  differences  between  public  health,  marketing  and  economic
conditions between existing Member States and the accession countries, to that extent, a derogation governing
parallel imports should be included in the accession treaties.

Implementing Actions

14.1.

14.2.

14.3.

14.4.

14.5.

Implementation  of  the  specific  mechanism  foreseen  in  the  Accession  Treaties  on
parallel imports from Accession Countries.

Introduce  a  statutory  requirement  in  the  Pharmaceutical  Review,  for  parallel
importers to inform both the MA holder and the competent authorities of its intention
to proceed with a parallel import in a given member state.

The Pharmaceutical Review will allow generic supply of medicines in member states
where there is no reference product on the market, and help to alleviate problems of
availability in the new Member States .

Full use of the legal provisions concerning well established use and new legislation
on traditional herbal medicines will clarify the legal basis of many existing products.

The Commission to consider the impact of enlargement in implementing all the G10
recommendations.  This  is  a  key  objective  of  the  pharmaceutical  review.  This  has
been supplemented by providing practical help to the new member states to prepare
for accession through the Pan European Regulatory Forum (PERF).

14.6.

All  accession  countries  have  been  eligible  to  take  part  in  the  new  public  health
programme since its start in 2003.

Implementers: Member States & the Commission

Timeframe:

2003 - 2006

40

Annex B
Benchmarking

List of main indicators

1.

2.

3.

4.

5.

6a.

6b.

7.

8.

9.

Venture capital invested

Government funds for Health R&D

Market share for new molecular entities launched in the last 5 years

Market share of generics

OTC as a percentage of total sales

Time from approval to launch

Time from approval to launch Time from pricing and/or reimbursement application
to reimbursement

R&D spending and productivity

Trade balance

Pharmaceutical industry employment

41

Indicator 1. Venture capital invested

Total venture capital investment in European and candidate countries is  highly  variable.  All
European  countries invest lower levels  of  venture  capital  than  the  US  although  average  EU
rates are above Japan.
Among  the  high  tech  sectors  relative  investment  in  health/biotechnology  tends  to  be  lower
than in communications or information technology. Relative investment in this sector in  the
US is ahead of all EU countries.

42

Venture Capital invested in health and biotechnology

Euros (million)

1995

1996

1997

1998

1999

2000

2001

Indicator 1

United States

European Union

United Kingdom

904

415

259

419

211

655

412

1.697

3.377

3.033

3.740

6.847

1.561

3.702

2.408

France

Germany

Italy

Sweden

Netherlands

Spain

Switzerland

Belgium

Finland

Norway

Denmark

Ireland

Greece

Portugal

Austria

Japan

67

16

4

6

43

1

6

10

5

1

3

0

0

2

0

69

59

7

3

37

2

5

16

5

1

2

3

4

0

0

72

61

14

2

45

11

7

25

5

3

4

3

0

1

1

981

390

199

222

6

47

67

9

31

8

21

8

7

1

0

0

3

595

155

378

22

191

77

22

74

68

31

11

9

3

6

1

4

679

280

736

20

193

63

168

21

84

49

41

109

5

7

1

14

1.987

304

749

83

178

110

65

49

53

66

14

79

13

1

1

13

54

13

24

19

15

40

Source OECD

1) Definitions of health and biotech venture capital are as follows:

For the Asian countries (including Australia and New Zealand),Medical/Biotechnology refers to (1) Health science (2) Doctors
and  services  (3)  Drugs  -OTC/prescription  (4)  Pharmaceuticals  (5)  Hospital  management  (6)  Home  healthcare  (7)
Diagnostic/therapeutic products

For  the  USA,  in  2001,  Biotechnology  refers  to  (1)  Human  biotechnology  (2)Agricultural/animal  biotechnology  (3)  Industrial
biotechnology (4) Biosensors (5) Biotech related research & production equipment (6) Biotech related research & other services
(7)  Other  biotechnology  related.  Medical/Health  related  refers  to  (1)  Medical  diagnostics  (2)  Medical  therapeutics  (3)
Medical/health products (4) Medical/health services (5) Pharmaceuticals

According to the EVCA (Yearbook), which is the source of data for European countries: Biotechnology refers to (1)
Agricultural/animal biotechnology (e.g. plant diagnostics) (2) Industrial Biotechnology (e.g. derived chemicals) (3)
Biotechnology related research and production equipment. Medical/Health Related refers to (1) Healthcare (2) Medical
instruments/devices (e.g. diagnostic and therapeutic equipment (3) Pharmaceuticals (e.g. drug development).

43

Indicator 2. Government funds for Health R&D

Most European governments invest less than 0.1 percent of GDP into health R&D, this compares
to the US figure of 0.19%.

In 2000 US invested nearly five times more in health R&D than the fourteen EU countries for
whom figures are available.

The EU budget allocated for life sciences (genomics and biotechnology for health) in the 6th
Research Framework Program amounts to € 2,255 million for the period 2003-2006, i.e. € 564
million per year on average.

44

Health research and development in government budget (GBAORD) ¹), as a percentage
of GDP and Euros 2000

% GDP

mn Euros PPP

Indicator 2

Austria

Belgium (1999)

Denmark

Finland

France (1999)

Germany

Greece (1999)

Ireland (1999)

Italy (1998)

Netherlands (1999)

Portugal

Spain (1999)

Sweden

0,0142%

0,0080%

0,0136%

0,0681%

0,0528%

0,0270%

0,0139%

0,0084%

0,0322%

0,0294%

0,0341%

0,0289%

0,0101%

33,95

23,14

23,98

89,22

815,35

603,58

35,43

9,66

596,09

142,26

96,04

304,35

25,16

United Kingdom (1999)

0,1048%

1.729,73

Slovak Republic

Japan

Norway

Switzerland (1998)

0,0200%

0,0253%

0,0545%

0,0026%

14,28

944,04

83,83

6,44

United States

0,1885%

20.988,35

1. Government budget appropriations or outlays for R&D.

Source: OECD Science, Technology and Industry Scoreboard 2001. From OECD, R&D database, May 2001.
Source of GDP and PPP data, OECD Health Data 2002.

45

Indicator 3. Uptake of new medicines

This indicator shows the percentage, by value of national pharmaceuticals markets accounted
for by new molecular entities launched within the last 5 years at 2001.

Source : IMS Health

46

Share of market for new products launched in previous five years 2001 Indicator 3

t
e
k
r
a
m

f
o

e
r
a
h
s
%

35,0%

30,0%

25,0%

20,0%

15%

15,0%

16%

10,0%

5,0%

0,0%

J
a
p
a
n

U
n
i
t
e
d
K
n
g
d
o
m

i

32%

30%

27%

25%

21%

22%

22%

23%

23%

20%

l

B
e
g
u
m

i

G
e
r
m
a
n
y

S
w

i
t
z
e
r
l
a
n
d

S
p
a
n

i

U
n
i
t
e
d
S
t
a
t
e
s

l

i

F
n
a
n
d

P
o
r
t
u
g
a

l

A
u
s
t
r
i
a

I
t
a
y

l

F
r
a
n
c
e

47

 
 
 
 
 
Indicator 4. Market Share of Generics

This indicator seeks to show the development of the pharmaceutical market.

Definitions of generics are not consistent in different countries, which causes problems in data collection, and market data collected from wholesalers does
not identify the status of a product within a pricing system. The headline indicator uses the most reliable data produced by national associations, which in
some cases came from Government sources.

Source: Various trade associations.

48

)
e
u
l
a
v
(

t
e
k
r
a
m

l
a
t
o
t

f
o
%
a
s
a
s
c
i
r
e
n
e
G

0,3

0,25

0,2

0,15

0,1

0,05

0

Chart: % (by value) of national pharmaceuticals market accounted for by generics, 2001

27%

18%

13%

11%

8%

8%

7%

9%

10%

2%

2%

3%

3%

3%

It

Bel

Fr

Ch

E

S

J

USA

Can

Gr

Nor

Nl

UK

D

49

 
 
 
 
 
 
 
Indicator 5. OTC market

This indicator measures the dynamics of bringing ingredients into the category of non-prescription medicines which, due to their safety profile, can safely be
used without the mandatory intervention of a medical doctor.

50

Non-prescription medicines sales as a percentage of the total 
pharmaceutical market in 2001
(Source: IMS Health)

Indicator 5

23,66 24,25

21,74

19,76

11,96 12,02 12,36

13,02 13,52

14,48

16,15 16,24

7,90

8,21

8,67

9,54

9,93

5,89

6,49

7,20

30,00

25,00

20,00

15,00

10,00

5,00

0,00

Austria

Spain

Portugal

Italy

Greece

Netherlands
Norway

Sweden

Hungary

Slovakia

Belgium

Denmark

Finland

Ireland

U K

Czech  Republic 

France

Germany

Poland
Switzerland

51

Indicator 6: Time elapsed between application for market authorisation in first world
market to launch in specific market

Indicator 6a

This measure captures the time lag between application for launch in any market to launch in
specific markets for NMEs launched in the period.

In  order  to  have  as  large  a  sample  as  possible  time  lags  are  expressed  as  hypothetical
composites and do not follow individual NMEs through the process, but  link together  mean
figures for groups of NMEs for each country for each stage and time period.

The  three  main  reasons  for  delay  are  company  strategy  (when  to  apply,  when  to  launch)
length of regulatory process, and length of pricing and reimbursement process.

In the majority of Member States, medicines may only be launched onto the market once the
competent  authorities  have  fixed  a  price  and/or  the  medicine  has  been  admitted  for
reimbursement.  This  indicator  only  measures  time  which  elapses  between  marketing
authorisation and launch regardless of the reimbursement status of medicines.

For those medicines eligible for reimbursement, this indicator cannot be used as a proxy
for  post-marketing  authorisation  delays  resulting  from  pricing  and  reimbursement
systems in Member States.

Indicator 6b

A study measuring elapsed times for pricing and reimbursement decisions for European
countries is also included. In practice, in many countries, patients' access to new medicines
will follow completion of the pricing and reimbursement process.

52

Time elapsed from first world application to application in specific market, application
to regulatory approval, and regulatory approval to launch – 1991 - 2001

Indicator 6a

Days

1st world
application-
application in market

application in
market-approval
in market

total time

approval in
market-
launch in
market

Germany
UK
Sweden
Finland
Ireland
Denmark
Netherlands
Austria
Spain
Luxembourg
Belgium
Italy
Portugal
Greece
France
Switzerland
Norway
USA
Japan

266
197
226
281
285
274
252
281
263
285
285
270
285
285
263
237
303
88
515

Source CMR International

80
157
142
135
120
150
164
212
193
215
237
245
285
292
303
128
110
73
106

748
770
777
807
818
825
847
887
905
916
945
956
989
989
989
785
902
577
1343

402
416
409
391
412
402
431
394
449
416
423
442
420
412
423
420
489
416
723

53

Average time from pricing and/or reimbursement application to reimbursement (days)

Indicator 6b

Time for
pricing
decision

Time for
reimbursemen
t decision

Time taken
for
publication

Total time

Number of
products with
P&R decision
‘pending’

Belgium

Greece

Portugal

France

Austria

Finland

Italy

Norway

Spain

Netherlands

Switzerland

Sweden

Denmark

Ireland

Germany

UK

544

217

336

310

192

30

112

100

32

127

138

68

72

332

47

131

140

0

0

19

389

208

91

0

0

90

60

0

5

0

37

76

8

0

19

37

9

0

17

0

0

761

415

404

394

382

369

284

247

161

159

149

100

100

68

0

0

11

11

9

6

2

5

1

5

3

2

0

0

2

0

0

0

Source: Cambridge Pharma Consultancy, Delays in Market Access, December 2002.

54

Indicator 7: Industry expenditure on, and productivity of, pharmaceutical
R&D

The US reached EU levels of expenditure by the pharmaceutical industry on research and
development, by the middle of the nineties. The last four years of the decade saw the US
overtake the EU in terms of total R&D expenditure and it continues to grow at a faster pace.

High levels of R&D expenditure for a country correlate with the existence of successful
pharmaceutical corporations being headquartered there. This is seen by the growth in the US
and the fact that nearly three-quarters of R&D expenditure in the EU is consumed in the UK,
Germany and France

55

Industry pharmaceutical Research and Development expenditure – EU, USA and Japan 1990 – 2000 Indicator 7

n
o

i
l
l
i

m
U
C
E

25.000

20.000

15.000

10.000

5.000

0

Source: Trade Associations

Total EU

USA

Japan

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

56

 
Indicator 8: Pharmaceutical industry trade balance

The largest share of trade for the EU countries is within the EU.

All the major pharmaceutical producing nations in the EU enjoy a positive trade balance with the US.

All EU candidate countries ran pharmaceutical trade deficits in 2001.

Nearly €90bn of pharmaceuticals were exported by the EU countries in 2001.

57

Indicator 8

Trade balance in pharmaceuticals 2001 – Euro m

2001 Trade €m

Belgium
Denmark
Germany
Greece
Spain
France
Ireland
Italy
Luxembourg
the Netherlands
Austria
Portugal
Finland
Sweden
United Kingdom

Candidate countries

Bulgaria
Czech Republic
Estonia
Cyprus
Latvia
Lithuania
Hungary
Malta
Poland
Romania
Slovenia
Slovakia
Turkey

Other countries

USA
Japan
Switzerland
Norway
World

imports
9.360,91
1.152,02
9.550,17
1.253,96
4.179,42
8.180,80
1.653,17
6.560,30
181,13
4.947,24
2.032,65
1.108,13
837,70
1.583,05
8.960,27

imports
126,42
792,79
95,99
96,76
163,22
267,66
682,58
50,37
2.037,29
314,97
502,66
436,08
1.206,16

imports
17.789,27
4.704,20
6.680,28
814,37
121.400,21

exports
10.078,85
3.315,01
16.683,98
341,46
2.150,93
13.502,79
8.111,87
7.020,78
34,21
5.813,34
2.093,26
272,87
326,69
4.578,02
13.228,81
87.552,88
2001 Trade €m
exports
73,69
189,35
23,74
69,09
61,65
57,66
462,28
26,20
177,60
13,39
252,31
98,45
140,93

2001 Trade €m
exports
13.911,34
2.169,49
12.137,49
239,64
127.826,13

balance
717,94
2.162,99
7.133,81
-912,50
-2.028,50
5.322,00
6.458,70
460,48
-146,92
866,10
60,61
-835,26
-511,01
2.994,98
4.268,54

balance
-52,73
-603,45
-72,25
-27,67
-101,58
-210,00
-220,30
-24,17
-1.859,69
-301,58
-250,35
-337,64
-1.065,22

balance
-3.877,93
-2.534,71
5.457,21
-574,73
6.425,92

Source: Global Trade Information Service – World Trade Atlas – Accessed 20/11/2002
Industry classification used – 30 Pharmaceutical Products

58

Indicator 9: Employment in the pharmaceutical industry

Employment levels in the EU and the US have remained stable throughout the nineties.

Europe is still the most significant source for employment for the industry with a workforce
over twice that of the US or Japan.

59

Pharmaceutical industry total employment, EU, USA, Japan 1990 – 2000

Indicator 9

600.000

500.000

t
n
e
m
y
o
p
m
e

l

l

a
t
o
T

400.000

300.000

200.000

100.000

0

Source: Government and Trade Associations

Total EU

USA

Japan

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

60

 
Annex C
Membership of G10 Medicines

Erkki Liikanen: Commissioner for Enterprise and Information Society

David Byrne: Commissioner for Health and Consumer Protection

Ulla Schmidt: Federal Minister for Health, Germany

Leif Pagrotsky: Minister for Industry and Trade, Sweden

Jean-François  Mattei:  ministre  de  la  Santé,  de  la  Famille  et  des  Personnes  handicapées,
France

Luís Filipe Pereira: Minister of Health, Portugal

Lord Warner: Minister of Health, United Kingdom

Angela Coulter: Chief Executive of the Picker Institute

Jean-François  Dehecq:  Vice-President  of  the  European  Federation  of  Pharmaceutical
Industry Associations

Rory O’Riordan: Chairman of the European Generic Manufacturers Association

Albert Esteve: President of the Association of the European Self-Medication Industry

Chris Viehbacher: President, US Pharmaceuticals GlaxoSmithKline

Ron Hendriks: President of the Association internationale de la Mutualité

61

LEGISLATIVE FINANCIAL STATEMENT

Policy area: ENTERPRISE

Activity: 02 04 GETTING STILL MORE FROM THE INTERNAL MARKET

TITLE OF ACTION:

1.

BUDGET LINE(S) + HEADING(S)

B5-3121 (ABB 02 04 02 02) European  Agency for  the  Evaluation  of  Medicinal
Products - Subsidy for Title 3 (partially)

2.

OVERALL FIGURES

2.1.

Total allocation for action (Part B):

7 €  million  in  2003 and 7,5  € million  in  2004 for  commitment.  These  amounts  are
already  covered  by  existing  (Budget  2003)  or  approved  (PDB  2004)  budget
appropriations in line B5-3121. The potential need for funds in subsequent years will
be discussed in accordance with the appropriate budgetary procedures.

2.2.

Period of application:

Annual action

2.3.

Overall multiannual estimate of expenditure:

(a)

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1)

(financial

€ million (to three decimal places)

Year 2003 Year 2004

Commitments

Payments

7,000

7,000

7,500

7,500

(b)

Technical and administrative assistance and support expenditure(see point 6.1.2)

Commitments

Payments

Subtotal a+b

0

0

0

0

Commitments

Payments

7,000

7,000

7,500

7,500

62

(c)

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure
(see points 7.2 and 7.3)

Commitments/ payments

n.a.

n.a.

TOTAL a+b+c

Commitments

Payments

7,000

7,000

7,500

7,500

2.4.

Compatibility with financial programming and financial perspective

[X] Proposal is compatible with existing financial programming.

2.5.

Financial impact on revenue:28

[X] Proposal  has  no  financial  implications  (involves  technical  aspects  regarding

implementation of a measure)

3.

BUDGET CHARACTERISTICS

Type of expenditure

New

EFTA
contribution

Contributions
form applicant
countries

Heading in
financial
perspective

Non-comp

Diff

NO

YES

NO

No 3

4.

LEGAL BASIS

Dir. 2001/83/EC of the EP and of the Council of 6/11/01 on the Community code relating to
medicinal products for human use, OJ L311/67, 28/11/01;

Reg.  2309/93  of  the  Council  laying  down  Community  procedures  for  the  authorisation  and
supervision of medicinal products for human and veterinary use and establishing a European
Agency for the Evaluation of Medicinal Products, OJ L 214/1, 24/08/1993 ;

Dir. 2001/20/EC of the EP and Council of 4/04/2001 on the implementation of good clinical
practice in the conduct of clinical trials on medicinal products for human use)

28

For further information, see separate explanatory note.

63

                                                
5.

5.1.

DESCRIPTION AND GROUNDS

Need for Community intervention 29

5.1.1. Objectives pursued

(Describe  the  problem(s)/need(s)  (in  measurable  terms)  that  the  intervention  is  designed  to
solve/satisfy (the baseline situation against which later progress can be measured). Describe
the objectives in terms of expected outcomes (for example as a change in the above baseline
situation).)

5.1.2. Measures taken in connection with ex ante evaluation

(This involves:

(a)

explaining how and when the ex ante evaluation was conducted (author, timing and
where  the  report(s)  is/are  available)  or  how  the  corresponding  information  was
gathered;30

(b)

describing briefly the findings and lessons learnt from the ex ante evaluation.)

5.1.3. Measures taken following ex post evaluation

(Where a programme is being renewed the lessons to be learned from an interim or ex post
evaluation should also be described briefly.)

5.2.

Action envisaged and budget intervention arrangements

(This point should describe the logic behind the proposal. It should specify the main actions
to  achieve  the  general  objective.  Each  action  should  have  one  or  more  specific  objectives.
These should indicate the progress expected over the proposed period. They should also look
beyond immediate outputs but be sufficiently precise to allow concrete results to be identified.
Specify for each main action:

– 

– 

– 

– 

– 

the target population(s) (specify number of beneficiaries if possible);

the specific objectives set for the programming period (in measurable terms);

the concrete measures to be taken to implement the action ;

the immediate outputs of each action; and

the  contribution  of  these  outputs  to  the  expected  outcomes  in  terms  of  satisfying
needs or solving problems

Information should also be given on the budget intervention arrangements (rate and form of
the required financial assistance).)

29

30

For further information, see separate explanatory note.
For minimum information requirements relating to new initiatives, see SEC 2000 (1051)

64

                                                
5.3.

Methods of implementation

(Specify the methods to be used to implement the planned actions: direct management by the
Commission using either regular or outside staff or by externalisation. In the latter case, give
details  of  the  arrangements  envisaged  for  this  externalisation  (TAO,  Agencies,  Offices,
decentralised  executive  units,  management  shared  with  Member  States  -  national,  regional
and local authorities.)

Indicate  the  effect  of  the  externalisation  model  chosen  on  the  financial  intervention,
management and support resources and on human resources (seconded officials, etc.).)

6.

FINANCIAL IMPACT

6.1.

Total financial impact on Part B - (over the entire programming period)

6.1.1.

Financial intervention

Commitments (in € million to three decimal places)

Breakdown

Action  1  To  build  and  operate  pharmacovigilance

networks : EudraNet, EudraVigilance and SUSAR

2003

2004

7,000

7,500

TOTAL

7,000

7,500

2003

2004

1) Technical and administrative assistance

a) Technical assistance offices

b) Other technical and administrative assistance:

- intra muros:

- extra muros:

of  which  for  construction  and  maintenance  of
computerised management systems

Subtotal 1

2) Support expenditure

a) Studies

b) Meetings of experts

c) Information and publications

Subtotal 2

TOTAL

65

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

6.2.

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire
programming period)31

(Where  there  is  more  than  one  action,  give  sufficient  detail  of  the  specific  measures  to  be
taken for each one to allow the volume and costs of the outputs to be estimated.)

Breakdown

Action 1

To build and operate pharmacovigilance
networks : EudraNet, EudraVigilance and
SUSAR

Commitments (in € million to three decimal places)

Type
of outputs
(projects,
files )

1

Number of
outputs

Average
unit cost

Total cost

(year 2004)

(year
2004)

2

3

4=(2X3)

3

7,500

In  view  of  the  importance  of  the  telematics
programme 
the
EMEA  has  taken  as  part  of  its  activities  the
realisation of certain telematic projects.

the  pharmaceutical  sector, 

in 

The following systems will be built and operated :

(cid:1)  EudraNet  :  electronic  system,  basis  for  all  the
community regulatory network (Member States,
Commission and EMEA) ;

(cid:1)  EudraVigilance  :  electronic  system  for  the
exchange of pharmacovigilance information ;

(cid:1)  Clinical Trials Databases : data base containing
all  information  related  to  the  clinical  trials
which  are  performed 
in  conformity  with
Community legislation ;

(cid:1)  E-submission 

:  electronic  system  for 

the
submission  of  applications  for  the  marketing
authorisations ;

(cid:1)  EuroPharm  Database  :  data  base  containing  all
information related to the medicines authorised
in  the  Community  ;  on  a  first  stage  the  data
base will only cover products authorised on the
basis of the centralised procedure (Commission
and EMEA).

TOTAL COST

7,500

31

For further information, see separate explanatory note.

66

                                                
7.

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

7.1.

Impact on human resources

Staff to be assigned to management of the
action using existing and/or additional
resources

Number of
permanent posts

Number of
temporary posts

Total

n.a.

n.a.

Description of tasks deriving from the
action

If necessary, a fuller description of the
tasks may be annexed.

Types of post

Officials 
temporary staff

or

A

B

C

Other human resources

Total

7.2.

n.a.

n.a.

Overall financial impact of human resources

Type of human resources

Amount (€)

Method of calculation *

Officials

Temporary staff

Other human resources

n.a.

n.a.

(specify budget line)

Total

n.a.

n.a.

n.a.

n.a.

The amounts are total expenditure for twelve months.

7.3.

Other administrative expenditure deriving from the action

Budget line

(number and heading)

Amount €

Method of calculation

Overall allocation (Title A7)

n.a.

n.a.

A0701 – Missions

A07030 – Meetings
A07031 – Compulsory committees 1
A07032 – Non-compulsory committees 1

A07040 – Conferences

A0705 – Studies and consultations

Other expenditure (specify)

Information systems (A-5001/A-4300)

Other expenditure - Part A (specify)

n.a.

n.a.

Total

n.a.

n.a.

n.a.

n.a.

The amounts are total expenditure for twelve months.

67

8.

FOLLOW-UP AND EVALUATION

8.1.

Follow-up arrangements

(Adequate  follow-up  information  must  be  collected,  from  the  start  of  each  action,  on  the
inputs,  outputs  and  results  of  the  intervention.  In  practice  this  means  (i)  identifying  the
indicators for inputs, outputs and results and (ii) putting in place methods for the collection of
data).

8.2.

Arrangements and schedule for the planned evaluation

(Describe the planned schedule and arrangements for interim and ex post evaluations to be
carried out in order to assess whether the intervention has achieved the objectives set. In the
case  of  multiannual  programmes,  at  least  one  thorough  evaluation  in  the  life  cycle  of  the
programme is needed. For other activities ex post or mid-term evaluations should be carried
out at intervals not exceeding six years.)

9.

ANTI-FRAUD MEASURES

(Article  3(4) of the Financial Regulation: "In order to  prevent  risk  of  fraud  or  irregularity,
the  Commission  shall  record  in  the  financial  statement  any  information  regarding  existing
and planned fraud prevention and protection measures.")

68