Proposal for a Regulation of the European Parliament and of the Council on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems {SEC(2004) 1348}
Date: 2004-10-29
Institutions: European Commission
Subjects: World Trade Organisation, export, patents licence, pharmaceutical product, public health, third country

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.10.2004 
COM(2004) 737 final 

2004/0258 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on compulsory licensing of patents relating to the manufacture of pharmaceutical 
products for export to countries with public health problems 

(presented by the Commission) 

{SEC(2004) 1348} 

EN 

   EN 

 
 
 
  
 
 
 
 
EXPLANATORY MEMORANDUM 

1. 

BACKGROUND 

This proposal aims to implement at Community level the WTO General Council Decision of 
30  August  2003  on  the  Implementation  of  Paragraph  6  of  the  Declaration  on  the  TRIPs 
Agreement and Public Health (WT/L/540 of 2 September 2003).  

By waiving WTO Members’ obligations under Article 31(f) of the WTO Agreement on Trade 
Related  Aspects  of  Intellectual  Property  Rights  (TRIPs  Agreement),  this  Decision  allows 
WTO  Members  to  grant  compulsory  licences  for  the  production  and  sale  of  patented 
pharmaceutical  products  intended  for  export  to  third  countries  with  insufficient  or  no 
manufacturing capacity in the pharmaceutical sector. It includes substantial safeguards against 
trade diversion  and rules  to ensure  transparency, and provides  for  future replacement of the 
Decision by an amendment to the TRIPs Agreement. 

2. 

NEED FOR A COMMUNITY INTERVENTION  

Given  the  active  role  played  by  the  European  Communities  and  their  Member  States  in  the 
adoption  of  the  Decision,  their  commitment  made  at  the  WTO  to  fully  contribute  to  the 
implementation of the Decision and their appeal to all WTO Members to ensure that the right 
conditions are put in place to allow the system set up by the Decision to operate efficiently, it 
is  important  for  the  Community  to  contribute  to  the  system  set  up  by  the  Decision  through 
implementation in the Community legal order. 

Within the Community uniform implementation of the Decision is needed to ensure that the 
conditions for the granting of compulsory licences for export are the same in all EU Member 
States, to avoid distortion of competition for operators in the EU single market and to apply 
uniform  rules  to  prevent  re-importation  into  the  territory  of  the  European  Union  of 
pharmaceutical products manufactured under compulsory licences.  

In view also of the very specific nature of the provisions of the Decision, the fact that national 
arrangements for compulsory licensing already exist, and the need for urgent action to allow 
for  the  export  of  medicines  to  countries  with  public  health  problems,  the  Commission 
proposes implementation by way of a Regulation based on Articles 95 and 133 of the Treaty. 

3. 

PROPOSED PROVISIONS 

Article 1 

The  Regulation  sets  out  a  procedure  and  conditions  for  the  grant  of  compulsory  licences  in 
line with the Decision. While supplementary protection certificates are not mentioned in the 
Decision, within the EU they entail the same effects as patents and so are included. 

Article 2 

The definition of the term “pharmaceutical product” is taken from the Decision, with text to 
reflect the definition of medicinal product in Directive 2001/83/EC. 

Article 3 

The competent authorities for granting compulsory licences pursuant to the Regulation will be 
those notified by the Member States.  

EN 

2 

   EN 

 
Article 4 

Eligibility is based on notifications and declarations to the WTO. 

Article 5 

This  includes  key  elements  of  information  required  under  the  Decision  and  the  TRIPs 
Agreement. The requirement to provide evidence of a specific request to the applicant by the 
importing country or from its authorised representatives should help ensure effective control 
of the amount of product supplied under compulsory licences. 

Article 6 

Competent authorities should verify whether basic conditions to trigger the system set out in 
the Decision have been met.  

Article 7  

Paragraph  1  reflects  Article  31(b)  of  the  TRIPs  Agreement.  While  the  TRIPs  Agreement 
allows  this  requirement  to  be  waived  in  the  case  of  a  national  emergency  or  other 
circumstances  of  extreme  urgency,  here  it  is  retained  (paragraph  2)  in  view  of  the  speed  of 
modern communications and the desirability of voluntary agreements.  

Article 8 

This provision takes over the conditions set out in paragraph 2(b) of the Decision. In addition 
it reflects conditions usually found in licensing agreements.  

Article 9 

This specifies under which conditions a competent authority can refuse an application.  

Article 10 

Paragraph 2(c) of the Decision requires the exporting Member to notify the WTO Council for 
TRIPS about the grant of any licence. As the Commission is the usual interlocutor before the 
WTO for matters falling under the Common Commercial Policy, such notifications should be 
made via the Commission. 

Articles 11 – 13 

These are based on equivalent provisions in Council Regulation (EC) No 953/2003 on trade 
diversion. 

Article 14 

Termination of the licence is provided for if (a) the licence conditions are not respected, or (b) 
the circumstances which led to grant of the licence cease to exist (Article 31(g) of the TRIPs 
Agreement). 

Article 15 

Article 31(i) and 31(j)) of the TRIPs Agreement require provision to be made for review of 
decisions.  

EN 

3 

   EN 

 
Article 16 

As the licensee will not necessarily hold a medicinal products marketing authorisation within 
the EU for the product manufactured under a compulsory licence for export, the Regulation 
provides for licensees to ask for a scientific opinion from the European or national regulatory 
authorities if they should need this for export to the country concerned. Derogations from data 
protection and caducity rules are provided. 

Article 17  

This provides for review three years after entry into force of the Regulation. 

EN 

4 

   EN 

 
2004/0258 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on compulsory licensing of patents relating to the manufacture of pharmaceutical 
products for export to countries with public health problems 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Articles 
95 and 133 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Economic and Social Committee2, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty3, 

Whereas: 

(1) 

(2) 

(3) 

On  14  November  2001  the  Fourth  Ministerial  Conference  of  the  World  Trade 
Organisation  (WTO)  adopted  the  Doha  Declaration  on  the  TRIPS  Agreement  and 
Public  Health.  The  Declaration  recognises  that  each  WTO  Member  has  the  right  to 
grant compulsory licences and the freedom to determine the grounds upon which such 
licences  are  granted.  It  also  recognises  that  WTO  Members  with  insufficient  or  no 
manufacturing capacities in the pharmaceutical sector could face difficulties in making 
effective use of compulsory licensing.  

On  30  August  2003  the  General  Council  of  the  WTO  adopted  the  Decision  on  the 
implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and 
Public Health, hereinafter “the Decision”. Subject to conditions, the Decision waives 
certain obligations concerning the issue of compulsory licences set out in the TRIPS 
Agreement,  to  address  the  needs  of  WTO  Members  with  insufficient  manufacturing 
capacity. 

Given  the  Community’s  active  role  in  the  adoption  of  the  Decision,  its  commitment 
made  at  the  WTO  to  fully  contribute  to  the  implementation  of  the  Decision  and  its 
appeal  to  all  WTO  Members  to  ensure  that  conditions  are  put  in  place  which  will 
allow the system set up by the Decision to operate efficiently, it is important for the 
Community to implement the Decision in its legal order. 

1 
2 
3 

OJ C […] […], p.[…]  
OJ C […] […], p.[…] 
OJ C […] […], p.[…] 

EN 

5 

   EN 

 
                                                 
(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

Uniform implementation of the Decision is needed to ensure that the conditions for the 
granting of compulsory licences for export are the same in all Member States and to 
avoid  distortion  of  competition  for  operators  in  the  single  market.  Uniform  rules 
should also be applied to prevent re-importation into the territory of the Community of 
pharmaceutical products manufactured pursuant to this Regulation. 

This Regulation is intended to be part of the wider European and international action 
to  address  public  health  problems  faced  by  least  developed  countries  and  other 
developing countries, and in particular to improve access to affordable medicines.  

As the  compulsory licensing system  set  up by this Regulation is intended to address 
public health problems, it should be used in good faith. It should not be used with the 
primary purpose of addressing other objectives, and in particular objectives of a purely 
commercial nature.  

Products manufactured pursuant to this Regulation should reach those who need them 
and  should  not  be  diverted  from  those  for  whom  they  were  intended.  Compulsory 
licences  issued  under  this  Regulation  should  therefore  impose  clear  conditions  upon 
the  licensee  as  regards  the  acts  covered  by  the  licence,  the  identification  of  the 
pharmaceutical  products  manufactured  under  the  licence  and  the  countries  to  which 
these products will be exported. 

Provision should be made for customs action at external borders to deal with products 
manufactured  and  sold  for  export  under  a  compulsory  licence  and  which  a  person 
attempts to re-import into the territory of the Community.  

To  avoid  facilitating  overproduction  and  possible  diversion  of  products,  competent 
authorities  should  take  into  account  existing  compulsory  licences  for  the  same 
products and countries, as well as parallel applications indicated by the applicant, 

(10)  Since  the  objectives  of  the  action  to  be  taken,  in  particular  the  establishment  of 
harmonised procedures for the granting of compulsory licences which contribute to the 
effective implementation of the system set up by the Decision, cannot be sufficiently 
achieved by the Member States because of the options available to exporting countries 
under the Decision and can therefore, by reason of the potential effects on operators in 
the internal market, be better achieved at Community level, the Community may adopt 
measures, in accordance with the principle of subsidiarity as set out in Article 5 of the 
Treaty. In accordance with the principle of proportionality, as set out in that Article, 
this  Regulation  does  not  go  beyond  what  is  necessary  in  order  to  achieve  those 
objectives. 

HAVE ADOPTED THIS REGULATION: 

Article 1 

This  Regulation  establishes  a  procedure  for  the  grant  of  compulsory  licences  in  relation  to 
patents  and  supplementary  protection  certificates  concerning  the  manufacture  and  sale  of 
pharmaceutical  products,  when  such  products  are  intended  for  export  to  eligible  WTO 
members affected by public health problems.  

EN 

6 

   EN 

 
Member  States  shall  grant  a  compulsory  licence  to  any  person  making  an  application  in 
accordance with Article 5 and subject to the conditions set out in Articles 5 – 8.  

For the purposes of this Regulation, the following definitions shall apply: 

Article 2 

(1) 

(2) 

“pharmaceutical  product”  means  any  product  of  the  pharmaceutical  sector, 
including  medicinal  products  as  defined  in  Article  1(2)  of  Directive 
2001/83/EC of the European Parliament and of the Council4, active ingredients 
and diagnostic kits;  

“right  holder”  means  the  holder  of  any  patent  or  SPC  in  relation  to  which  a 
compulsory licence has been applied for under this Regulation; in cases where 
more than one right holder is involved, for the purposes of this Regulation the 
singular term should be read as plural; 

(3) 

“importing WTO member” means the name of the WTO member to which the 
pharmaceutical product is to be exported;  

Article 3 

The competent authorities in the Member States for granting compulsory licences under this 
Regulation  shall  be  those  which  have  competence  for  the  granting  of  compulsory  licences 
under national patent law, unless the Member State concerned determines otherwise.  

Member  States  shall  notify  the  Commission  of  the  competent  authorities  designated  for  the 
purposes of this Regulation.  

Notifications shall be published in the Official Journal of the European Union.  

Article 4 

The following are eligible importing WTO members: 

(a) 

any least-developed country member of WTO 

(b) 

any  other  member  of  WTO  that  has  made  a  notification  to  the  Council  for 
TRIPs  of  its  intention  to  use  the  system  as  an  importer,  including  whether  it 
will use the system in whole or in a limited way. 

However, any WTO member that has made a declaration to the WTO that it will not use the 
system as an importing WTO member is not an eligible importing WTO member. 

4 

OJ L 311, 28.11.2001, p. 67 

EN 

7 

   EN 

 
                                                 
Article 5 

1. 

2. 

Any  person  may  submit  an  application  for  a  compulsory  licence  under  this 
Regulation to a competent authority in the Member State or States where patents or 
supplementary protection certificates have effect and cover his intended activities of 
manufacture and sale for export. 

If  the  person  applying  for  a  compulsory  licence  is  submitting  applications  to 
competent authorities in more than one Member State for the same product, he shall 
indicate that in each application, together with details of the quantities and importing 
WTO members concerned.  

3. 

The application pursuant to paragraph 1 shall set out the following: 

(a) 

(b) 

(c) 

(d) 

the name and contact details of the applicant and of any agent or representative 
the applicant has appointed to act for him before the competent authority; 

the  name  of  the  pharmaceutical  product  or  products  the  applicant  intends  to 
manufacture  and  sell  for  export  under  the  compulsory  licence,  including  any 
additional  information  needed  to  ensure  the  precise  identification  of  the 
product or products in question; 

identification of the patent(s) and/or supplementary protection certificate(s) in 
respect of which a compulsory licence is sought; 

the  amount  of  pharmaceutical  product  which  the  applicant  seeks  to  produce 
under the compulsory licence; 

(e) 

the importing WTO member or members; 

(f) 

evidence of prior negotiation with the right holder pursuant to Article 7; 

(g) 

evidence of a specific request to the applicant from authorised representatives 
of the importing WTO member and indicating quantity of product required. 

The  competent  authority  may  prescribe  additional  formal  or  administrative 
requirements for efficient processing of the application. 

Article 6 

The competent authority shall verify that each importing WTO member cited in the 
application  has  made  a  notification  to  the  WTO  pursuant  to  the  Decision  of  30 
August 2003 of the General Council of the WTO on the implementation of Paragraph 
6  of  the  Doha  Declaration  on  the  TRIPS  Agreement  and  Public  Health,  hereinafter 
“the Decision” in respect of each of the products covered by the application that:  

(a) 

specifies the names and expected quantities of the product(s) needed; 

(b)  unless the importing WTO member is a least-developed country, confirms that 
the importing WTO member has established that it either has no manufacturing 
capacities  in  the  pharmaceutical  sector  or  has  examined  its  manufacturing 

4. 

1. 

EN 

8 

   EN 

 
capacity  in  that  sector  and  found  that,  excluding  any  capacity  owned  or 
controlled by the right holder, it is currently insufficient for meeting its needs;  

(c) 

confirms that where a pharmaceutical product is patented in the territory of the 
importing WTO member, that WTO member has granted or intends to grant a 
compulsory  licence  for  import  of  the  product  concerned  in  accordance  with 
Article 31 of the TRIPS Agreement and the provisions of the Decision. 

2. 

The  competent  authority  shall  verify  that  the  quantity  of  product  cited  in  the 
application  does  not  exceed  that  notified  to  the  WTO  by  the  importing  WTO 
member(s),  and  that,  taking  into  account  other  compulsory  licences  ordered  in  the 
Community, the total amount of product authorised to be produced for any importing 
WTO member does not significantly exceed the amount notified to the WTO by that 
member. 

Article 7 

The  applicant  shall  provide  evidence  to  satisfy  the  competent  authority  that  he  has  made 
efforts  to  obtain  authorisation  from  the  right  holder  on  reasonable  commercial  terms  and 
conditions and that such efforts have not been successful within a reasonable period of time. 

The  determination  of  a  reasonable  period  of  time  shall  take  into  account  whether  the 
importing  WTO  member  has  declared  a  situation  of  national  emergency  or  other 
circumstances of extreme urgency. 

1. 

2. 

3. 

4. 

Article 8  

The  licence  granted  shall  be  non-exclusive  and  non-assignable.  It  shall  contain  the 
specific conditions set out in paragraphs 2 to 8 to be fulfilled by the licensee. 

The amount of patented product(s) manufactured under the licence shall not exceed 
what is necessary to meet the needs of the importing WTO member or members cited 
in the application.  

The  licence  shall  be  strictly  limited  to  the  acts  of  manufacturing  the  product  in 
question  and  selling  for  export  to  the  WTO  member  or  members  cited  in  the 
application. No product made under the compulsory licence shall be offered for sale 
or  put  on  the  market  in  any  country  other  than  the  WTO  member(s)  cited  in  the 
application. 

Products made under the licence shall be clearly identified, through specific labelling 
or  marking,  as  being  produced  pursuant  to  this  Regulation.  The  products  shall  be 
distinguished  from  those  made  by  the  right  holder  through  special  packaging.  The 
packaging  and  any  associated  literature  shall  bear  an  indication  that  the  product  is 
subject  of  a  compulsory  licence  under  this  Regulation,  giving  the  name  of  the 
competent  authority  and  any  identifying  reference  number,  and  specifying  clearly 
that the product is exclusively for export to and sale in the importing WTO member 
or  members  concerned.  Unless  the  applicant  proves  that  such  distinction  is  not 
feasible  or  has  a  significant  impact  on  price,  special  colouring  or  shaping  of  the 
products themselves shall also be required. 

EN 

9 

   EN 

 
5. 

Before shipment to the importing WTO member or members cited in the application, 
the licensee shall post on a website the following information: 

(a) 

the quantities being supplied under the licence and the WTO members to which 
they are supplied 

6. 

7. 

8. 

9. 

(b) 

the distinguishing features of the product or products concerned. 

The website address shall be communicated to the competent authority. 

If  the  product(s)  covered  by  the  compulsory  licence  are  patented  in  the  importing 
WTO members cited in the application, the product(s) shall only be exported if those 
countries have issued a compulsory licence for the import and sale of the products. 

The licensee shall keep complete and accurate books and records of all quantities of 
product  manufactured  and  of  all  dealings  therein.  The  licensee  shall  make  these 
books  and  records  available  on  request  to  an  independent  person  agreed  by  the 
parties,  or  otherwise  appointed  by  the  competent  authority,  for  the  sole  purpose  of 
checking whether the terms of the licence, and in particular those relating to the final 
destination of the products, have been met.  

The licensee shall be required to provide proof of exportation of the product, through 
a declaration of exportation certified by the customs authority concerned, and proof 
of  importation  or  putting  on  the  market  certified  by  an  authority  of  the  importing 
WTO  member,  and  shall  retain  such  records  for  at  least  three  years.  Upon  request 
these proofs must be supplied to the competent authority. 

The  licensee  shall  be  responsible  for  the  payment  of  adequate  remuneration  to  the 
right  holder  as  determined  by  the  competent  authority  taking  into  account  the 
economic value of the use that has been authorised under the licence to the importing 
WTO member(s) concerned. 

Article 9 

The competent authority shall refuse an application if any of the conditions set out in Article 5 
(3) and (4) and Articles 6, 7 and 8 is not met. Before refusing an application, the competent 
authority shall give the applicant an opportunity to rectify the situation and to be heard. 

Article 10 

1. 

When a compulsory licence has been granted the competent authority shall notify the 
Commission of the grant of the licence, and of the specific conditions attached to it.  

The information provided shall include the following details of the licence:  

(a) 

the name and address of the licensee;  

(b) 

the product or products concerned;  

(c) 

the quantity to be supplied;  

EN 

10 

   EN 

 
(d) 

the country or countries to which the product or products are to be exported;  

(e) 

the duration of the licence;  

(f) 

the address of the website referred to in Article 8 (5).  

The  Commission  shall  forward  the  information  referred  to  in  paragraph  1  to  the 
Council for TRIPS. 

Article 11  

It  is  prohibited  to  import  into  the  Community  products  subject  of  a  compulsory 
licence  under  this  Regulation  for  the  purposes  of  release  for  free  circulation,  re-
export,  placing  under  suspensive  procedures  or  placing  in  a  free  zone  or  free 
warehouse. 

Paragraph 1 shall not apply in the case of re-export to the importing WTO member 
cited in the application and identified in the packaging and documentation associated 
with the product, or placing under a transit or customs warehouse procedure or in a 
free  zone  or  free  warehouse  for  the  purpose  of  re-export  to  that  importing  WTO 
member. 

Article 12  

Where there is reason to suspect that, contrary to Article 11(1), products subject of a 
compulsory  licence  under  this  Regulation  are  being  imported  into  the  Community, 
customs authorities shall suspend the release of, or detain, the products concerned for 
the  time  necessary  to  obtain  a  decision  of  the  relevant  national  authority  on  the 
character of the merchandise. The period of suspension or detention shall not exceed 
10 working days unless special circumstances apply, in which case the period may be 
extended  by  a  maximum  of  10  working  days.  Upon  expiry  of  that  period,  the 
products shall be released, provided that all customs formalities have been complied 
with. 

The  relevant  national  authority  and  the  manufacturer  or  exporter  of  the  products 
concerned shall be informed without delay of the suspended release or detention of 
the products and shall receive all information available with respect to the products 
concerned.  Due  account  shall  be  taken  of  national  provisions  on  the  protection  of 
personal data, commercial and industrial secrecy and professional and administrative 
confidentiality.  The  importer,  and  where  appropriate,  the  exporter,  shall  be  given 
ample  opportunity  to  supply  the  relevant  national  authority  with  the  information 
which it deems appropriate regarding the products. 

The procedure of suspension or detention of the goods is carried out at the expense of 
the importer. If it is not possible to recover those expenses from the importer, they 
may,  in  accordance  with  national  legislation,  be  recovered  from  any  other  person 
responsible for the attempted illicit importation. 

If the relevant national authority finds that products suspended for release or detained 
by customs authorities were intended for import into the Community contrary to the 

2. 

1. 

2. 

1. 

2. 

3. 

4. 

EN 

11 

   EN 

 
prohibition in Article 11 (1), that authority shall ensure that these products are seized 
and disposed of in accordance with national legislation. These procedures are carried 
out at the expense of the importer. If it is not possible to recover these expenses from 
the  importer,  they  may,  in  accordance  with  national  legislation,  be  recovered  from 
any other person responsible for the attempted illicit importation. 

5. 

6. 

Where products suspended for release or detained by customs authorities subsequent 
to  further  control  by  the  relevant  national  authority  are  found  not  to  violate  the 
prohibition  in  Article  11(1),  the  customs  authority  shall  release  the  products  to  the 
consignee, provided that all customs formalities have been complied with. 

The  relevant  national  authority  shall  inform  the  Commission  of  any  decisions  on 
seizure or destruction which are adopted pursuant to this Regulation.  

Article 13 

Articles  11  and  12  shall  not  apply  to  goods  of  a  non-commercial  nature  contained  in 
travellers'  personal  luggage  for  personal  use  within  the  limits  laid  down  in  respect  of  relief 
from customs duty. 

Article 14 

1. 

Subject  to  adequate  protection  of  the  legitimate  interests  of  the  licensee,  a 
compulsory  licence  granted  pursuant  to  this  Regulation  may  be  terminated  by  a 
decision of the competent authority or by one of the bodies referred to under Article 
16 in either of the following cases: 

(a) 

if the conditions of the licence are not respected by the licensee; 

(b) 

if  and  when  the  circumstances  which  led  to  the  grant  of  the  licence  cease  to 
exist and are unlikely to recur. 

The competent authority shall have the authority to review, on its own initiative or 
upon  reasoned  request  by  the  right  holder  or  the  licensee,  whether  either  of  those 
situations applies. 

Termination  of  a  licence  granted  under  this  Regulation  shall  be  notified  to  the 
Commission who shall inform the WTO. 

Within  a  reasonable  time  following  termination  of  the  licence  the  licensee  shall 
arrange for any product in his possession, custody, power or control to be redirected 
at  his  expense  to  countries  in  need  or  otherwise  as  prescribed  by  the  competent 
authority in consultation with the right holder. 

(2) 

(3) 

Article 15 

Appeals against any decision of the competent authority, and disputes concerning compliance 
with the conditions of the licence, shall be heard by the appropriate body responsible under 
national law.  

EN 

12 

   EN 

 
1. 

2. 

3. 

Article 16 

Where  the  application  for  a  compulsory  licence  concerns  a  medicinal  product 
authorised  in  accordance  with  Article  6 of  Directive  2001/83/EC,  the  provisions  of 
Article 24(4) and (5) and of Article 14(4) and (5) of Regulation (EC) No 726/2004 of 
the European Parliament and the Council5 shall not apply.  

For the purpose of the application of this paragraph, and by way of derogation from 
Article 10(1) of Directive 2001/83/EC, the applicant shall not be required to provide 
the  results  of  pre-clinical  tests  and  of  clinical  trials  if  he  can  demonstrate  that  the 
product concerned is a generic of a reference medicinal product which is or has been 
authorised under Article 6 of that Directive or under Article 3 of Regulation (EC) No 
726/2004. 

Where the application for a compulsory licence concerns a medicinal product and the 
applicant  for  the  compulsory  licence  is  not  the  holder  of  a  marketing  authorisation 
valid within the Community for the product concerned, he may avail himself of the 
scientific  opinion  procedure  provided  for  under  Article  58  of  Regulation  (EC)  No 
726/2004 or any similar procedure provided under national law. 

For the purposes of obtaining a scientific opinion under paragraph (2) and by way of 
derogation  from  Article  10(1)  of  Directive  2001/83/EC,  the  applicant  shall  not  be 
required  to  provide  the  results  of  pre-clinical  tests  and  of  clinical  trials  if  he  can 
demonstrate that the product concerned is a generic of a reference medicinal product 
which  is  or  has  been  authorised  under  Article  6  of  that  Directive  or  Article  3  of 
Regulation (EC) No 726/2004. 

Article 17 

Three years after the entry into force of this Regulation, the Commission shall present a report 
to the European Parliament, the Council, and the European Economic and Social Committee 
on the operation of this Regulation and the contribution it has made to the implementation of 
the system established by the Decision. 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 18 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

5 

OJ L 136, 30.4.2004, p. 1. 

EN 

13 

   EN 

 
                                                 
Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

EN 

14 

   EN 

 
LEGISLATIVE FINANCIAL STATEMENT 

Policy area(s): Internal Market for Goods and Services 

Activit(y/ies): Formulate community law in the area of biotechnology, plant protection and 
pharmaceuticals 

TITLE  OF  ACTION:  PROPOSAL  FOR  A  REGULATION  OF  THE  EUROPEAN  PARLIAMENT  AND  OF 
THE  COUNCIL  ON  COMPULSORY  LICENSING  OF  PATENTS  RELATING  TO  THE 
MANUFACTURE  OF  PHARMACEUTICAL  PRODUCTS  FOR  EXPORT  TO  COUNTRIES  WITH 
PUBLIC HEALTH PROBLEMS 

1. 

2. 

BUDGET LINE(S) + HEADING(S) 

OVERALL FIGURES  

2.1. 

Total allocation for action (Part B): € million for commitment 

Not applicable 

2.2. 

Period of application: 

(start and expiry years) 

Start: Date of entry into force 

Expiry: Indefinite 

2.3. 

Overall multiannual estimate of expenditure: 

(a) 

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

(financial 

None 

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

None 

(c) 

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

2005 

2006 

2007 

2008 

2009 

2010   Total 

0.108 

0.108 

0.108 

0.108 

0.108 

0.108 

0.648 

Commitments/ 
payments 

EN 

15 

   EN 

 
 
 
TOTAL 
a+b+c 

Commitments 

0.108 

0.108 

0.108 

0.108 

0.108 

0.108 

0.648 

Payments 

0.108 

0.108 

0.108 

0.108 

0.108 

0.108 

0.648 

2.4. 

Compatibility with financial programming and financial perspective 

[x]  Proposal is compatible with existing financial programming. 

[…]  Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 

perspective. 

[…]  Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 

Agreement. 

2.5. 

Financial impact on revenue:6 

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

implementation of a measure) 

OR 

[…]  Proposal has financial impact – the effect on revenue is as follows: 

Not applicable 

3. 

BUDGET CHARACTERISTICS 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
form applicant 
countries 

Heading in 
financial 
perspective 

Non-comp 

Diff/ 

NO 

NO 

NO 

5 

4. 

LEGAL BASIS  

Articles 95 and 133 of the EC Treaty. 

6 

For further information, see separate explanatory note. 

EN 

16 

   EN 

 
 
 
 
 
 
 
 
 
                                                 
5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention 7 

5.1.1.  Objectives pursued 

The proposal implements at EU level the WTO General Council Decision of 30 August 2003 
which  sets  out  a  mechanism  in  national  patent  law  to  allow  the  manufacture  and  export  of 
pharmaceutical products to countries in need without the authorisation of the patent holder. At 
present exports without such authorisation may not take place. The aim of this mechanism is 
to facilitate access to affordable medicines for  people  in  developing  countries  which  do  not 
have  sufficient  manufacturing  capacity  themselves.  Intervention  at  Community  level  is 
required  in  view  of  the  Community’s  involvement  in  external  negotiations  and  the  need  to 
avoid differences in application and distortions of competition affecting operators within the 
Internal Market. 

5.1.2.  Measures taken in connection with ex ante evaluation  

The WTO General Council Decision is the result of several years’ negotiation on the basis of 
EU positions coordinated in the Article 133 Committee. 

5.1.3.  Measures taken following ex post evaluation 

Not applicable 

5.2. 

Action envisaged and budget intervention arrangements 

The proposed mechanism is a voluntary one both for the countries in need who seek 
to obtain affordable medicines and the companies who intend to supply them. Once 
the  legislation  comes  into  force,  compulsory  licences  will  be  granted  by  national 
authorities  on  the  basis  of  applications  from  companies  and  notifications  by 
developing  countries  that  they  require  particular  pharmaceutical  products.  No 
financial assistance is involved. 

5.3.  Methods of implementation 

After  adoption  of  the  draft  legislation  by  the  Council  and  European  Parliament,  it 
will be MS national authorities who grant compulsory licences. 

6. 

FINANCIAL IMPACT 

6.1. 

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

Not applicable 

7 

For further information, see separate explanatory note. 

EN 

17 

   EN 

 
                                                 
6.2. 

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire 
programming period)8 

Not applicable 

7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE  

Human  and  administrative  resource  requirements  will  be  covered  from  within  the  budget 
allocated to the managing DG in the framework of the annual allocation procedure. 

7.1. 

Impact on human resources 

Staff to be assigned to management of the 
action using existing resources 

Description of tasks deriving from the 
action 

Types of post 

Total 

Number of 
permanent posts 

Number of 
temporary posts 

1 A 

A 

B 

C 

Officials 
temporary staff 

or 

1 A 

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

to 

through 

Preparing for and attending meetings of 
Council and Parliament to negotiate the 
proposal 
adoption. 
Monitoring  application  and  impact  of 
system  set  up  by  this  legislation,  in 
liaison with stakeholders including EU 
MS,  companies,  third  countries  and 
international organisations. 

Other human resources  0 

Total 

1 

0 

0 

0 

1 

7.2. 

Overall financial impact of human resources 

Type of human resources 

Amount (€) 

Method of calculation *  

Officials 

Temporary staff 

Other human resources 

108.000 

Annual costs per official: 108.000 € 

(specify budget line) 

Total  108.000 € 

The amounts are total expenditure for twelve months. 

7.3. 

Other administrative expenditure deriving from the action 

Not applicable 

8 

For further information, see separate explanatory note. 

EN 

18 

   EN 

 
 
 
 
 
 
 
 
                                                 
The amounts are total expenditure for twelve months. 

1 Specify the type of committee and the group to which it belongs. 

I. 

II. 

Annual total (7.2 + 7.3) 

Duration of action 

III. 

Total cost of action (I x II) 

108.000 € 

2005 - 2010 

€648.000 

8. 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

8.2. 

Arrangements and schedule for the planned evaluation 

Use of the mechanism envisaged by the proposal is optional for business; on-going evaluation 
will be possible through analysis of the notifications made to the WTO and the Commission 
for every compulsory licence granted under the Regulation. Report and review is proposed in 
the Regulation itself five years after entry into force. 

9. 

ANTI-FRAUD MEASURES 

No financial assistance is involved. 

EN 

19 

   EN