Annual Report(2008) on the application of Council Regulation(EC) No 953/2003 of 26 May 2003 to avoid trade diversion into the European Union of certain key medicines
Date: 2009-10-27
Institutions: European Commission
Subjects: customs regulations, customs territory (EU), discriminatory price, export restriction, medicinal product, third country

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.10.2009 
COM(2009)574 final 

Annual Report (2008) 

on the application of Council Regulation (EC) No 953/2003 of 26 May 2003 to avoid 
trade diversion into the European Union of certain key medicines 

EN 

   EN 

 
 
 
  
 
 
Annual Report (2008) 

on the application of Council Regulation (EC) No 953/2003 of 26 May 2003 to avoid 
trade diversion into the European Union of certain key medicines 

EN 

2 

   EN 

 
TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Background .................................................................................................................. 4 

Commission Reporting under Regulation (EC) No 953/2003 ..................................... 5 

Products registered ....................................................................................................... 5 

Countries of destination ............................................................................................... 6 

Diseases covered .......................................................................................................... 6 

Application of Price Formulae ..................................................................................... 7 

Evaluating the impact of the Regulation over time...................................................... 8 

ANNEX 1: Details of volumes of medicines sold in 2008 ........................................................ 9 

ANNEX 2: Volumes of tiered priced products sold by sub-region between 1 January 2008 and 
31 December 2008 ..................................................................................................... 18

EN 

3 

   EN 

 
This  is  the  fifth  annual  report  foreseen  under  Article  11  of  Regulation  (EC)  No  953/20031, 
which  is  designed  to  prevent  parallel  trade  in  discounted  medicines  intended  for  the  least 
developed countries. This report covers the period from 1 January to 31 December 2008.  

1. 

BACKGROUND 

is 

to 

fight 

HIV/AIDS, 

In 2000 the UN Millennium Summit set the Millennium Development Goals (MDGs), one of 
diseases.  
which 
In response to this commitment, on 20 September 2000 the European Commission adopted a 
comprehensive  framework2  to  accelerate  action  targeted  at  the  three  major  diseases  – 
HIV/AIDS,  malaria  and  tuberculosis  (TB).  A  Programme  for  Action  (PfA)3  was  developed 
outlining specific measures to be taken. The state of play with this programme was described 
in the Second Progress Report4 released on 26 October 2004. Subsequently, on 27 April 2005 
the Commission adopted a European Programme for Action to confront HIV/AIDS, Malaria 
and TB through External Action (COM(2005)179) covering the period 2007-2011.  

malaria 

other 

and 

Supplying poor and developing countries with medicines at sustainable low prices is one of 
the  key  objectives  in  the  fight  against  these  major  diseases.  In  order  to  achieve  this,  the 
European Commission has consistently advocated a policy of "tiered pricing" for medicines, 
combined with market segmentation between rich and poor countries. The advantage of such 
a  policy  is  that  it  encourages  manufacturers  to  distribute  the  drugs  in  question  in  the  target 
countries  at  the  lowest  possible  (“tiered”)  price,  while  at  the  same  time  recouping  their 
research and development expenditure with the higher prices charged in developed (OECD) 
countries.  This  approach  is  designed  to  promote  sustainable  supplies  and  continuous 
distribution of life-saving medicines. It is also less prone to the constraints often encountered 
in "partnership schemes". 

To support tiered pricing, specific safeguards were devised to prevent diversion of medicines. 
In May 2003 the EU adopted Council Regulation (EC) No 953/2003 to avoid trade diversion 
into the European Union of certain key medicines5 ("the Regulation").  

1 

2 

3 

4 

5 

Article 11 of Regulation (EC) No 953/2003 foresees: “(1) The Commission shall monitor on an annual 
basis the volumes of exports of tiered priced products listed in Annex I and exported to the countries 
defined  in  Article  1  on  the  basis  of  information  provided  to  it  by  pharmaceutical  manufacturers  and 
exporters.  For  this  purpose  a  standard  form  will  be  issued  by  the  Commission.  Manufacturers  and 
exporters must submit such sales reports annually for each tiered priced product to the Commission on 
a confidential basis. 
(2)  The  Commission  shall  periodically  report  to  the  Council  on  the  volumes  exported  under  tiered 
prices,  including  on  the  volumes  exported  within  the  framework  of  a  partnership  agreement  agreed 
between the manufacturer and the government of a country of destination. The report shall examine the 
scope of countries and diseases and general criteria for the implementation of Article 3.” 
Accelerated  action  targeted  at  major  communicable  diseases  within  the  context  of  poverty  reduction, 
COM(2000)585. 
Programme  for  Action:  Accelerated  action  on  HIV/AIDS,  malaria  and  tuberculosis  in  the  context  of 
poverty  reduction  COM(2001)96.  Update  on  the  EC  Programme  for  Action:  Accelerated  action  on 
HIV/AIDS, malaria and tuberculosis in the context of poverty reduction. Outstanding policy issues and 
future challenges COM(2003)93. 
Second  Progress  report  on  the  EC  Programme  for  Action:  Accelerated  action  on  HIV/AIDS,  malaria 
and tuberculosis in the context of poverty reduction SEC(2004)1326. 
OJ  L  135,  3.6.2003,  pages  5  –  11.  The  Regulation  has  last  been  updated  by  Commission  Regulation 
1662/2005  of  11  October  2005 
(OJ  L  267,  12.10.2005,  pages  19  –  21):  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:267:0019:0021:EN:PDF 

EN 

4 

   EN 

 
                                                 
 
2. 

COMMISSION REPORTING UNDER REGULATION (EC) NO 953/2003 

This  report  covers  the  period  from  1  January  to  31  December  2008.  During  the  reporting 
period, no new products were registered. 

The report contains the following information: 

– 

– 

– 

– 

The volumes exported under tiered prices for each product  registered in annex  I of 
the Regulation; 

The sub-regions benefiting from these exports at tiered prices; 

The diseases treated with the products at question; 

An assessment of the application of the price formulae in Article 3 of the Regulation 
in relation to each of the products concerned. 

This report is mainly based on the information received from the applicant under Article 11(1) 
of  the  Regulation.  The  Commission  respects  the  confidentiality  of  the  data  provided  by 
applicants and neither guarantees nor questions their accuracy. 

In  order  to  keep  the  public  informed  of  all  products  registered  under  the  Regulation,  their 
producers,  distinctive  features,  countries  of  destination,  and  other  relevant  details,  the 
Commission has established a website where this information is continuously updated: 

– 

http://trade-info.cec.eu.int/cgi-bin/antitradediversion/index.pl 

The  same  website  also  provides  assistance  to  manufacturers  who  wish  to  register  a  new 
product. 

3. 

PRODUCTS REGISTERED  

The  products  listed  below  were  registered  in  2004  by  GlaxoSmithKline  (GSK),  Brentford 
(UK). 

PRODUCT NAME 

OECD PRICE RANGE 

PRICE OFFERED 

EPIVIR 150 mg x 60 

US$ 121.81 – US$ 395.78 

US$ 5.70 

COMBIVIR 300/150 mg x 60 

US$ 177.49 – US$ 767.59 

US$ 19.50 

EPIVIR Oral Solution 10mg/ml - 240 ml  US$ 33.32– US$ 71.73 

US$ 6.73 

RETROVIR 100 mg x 100 

US$ 104.07 – US$ 219.42 

US$ 15.77  

RETROVIR 300 mg x 60 

US$ 125.15 – 295.42 

US$ 17.40 

RETROVIR 250 mg x 40 

US$ 83.84 – US$ 205.16 

US$ 13.27  

TRIZIVIR 750 mg x 60 

US$ 539.09 – 887.97 

US$ 102.00 

ZIAGEN 300 mg x 60 

US$ 152.64 – US$ 411.42  

US$ 72.90 

RETROVIR Oral Solution 10 mg/ml – 
200 ml 

US$ 17.85 – US$ 73.83 

US$ 7.10 

EN 

5 

   EN 

 
 
 
 
 
 
 
 
 
 
 
It  should  be  noted  that  both  the  prices  offered  ("tiered"  prices)  and  the  OECD  price  ranges 
shown in the table above are those reported by the producer at the time when the applications 
were  submitted.  An  update  of  these  price  ranges  and  the  prices  offered  can  be  found  in 
Annex  I,  together  with  the  volumes  sold  in  2008  for  each  product  registered  under  the 
Regulation. 

Under the Regulation, no distinction can be made between purchasers – public or private - for 
products at these prices in the countries listed. However, it must be noted that these prices are 
indicative. The actual sales prices have not been reported, as Article 11(1) of the Regulation 
places  no  obligation  on  applicants  to  do  so.  It  therefore  cannot  be  excluded  that  in  some 
instances lower prices for the products can be and, indeed have been, negotiated6. 

Over the reporting period, no attempts illegally to re-import tiered-priced products registered 
under the Regulation back into the EU were reported to the Commission.  

As  HIV/AIDS,  Malaria  and  TB  are  chronic  diseases,  purchases  of  medication  have  to  be 
sustainable.  The  Commission  has  been  informed  that  most  sales  are  part  of  long-  standing 
agreements  with  purchasers.  No  exports  under  specific  “partnership  agreements”  have  been 
notified to the Commission.  

4. 

COUNTRIES OF DESTINATION 

In the reporting period, tiered priced products have been supplied to 20 of the countries listed 
in  Annex  II  of  the  Regulation.  These  were:  Armenia,  Botswana,  Burkina  Faso,  Cambodia, 
Democratic  Republic  of  Congo,  Ghana,  Guinea,  Haiti,  Ivory  Coast,  Kenya,  Madagascar, 
Malawi,  Mauritania,  Namibia,  Nicaragua,  Nigeria,  South  Africa,  Uganda,  Zambia,  and 
Zimbabwe. 

With the exceptions of Armenia, Cambodia, Haiti and Nicaragua, all the countries concerned 
are in Sub-Saharan Africa, the region where the prevalence of HIV/AIDS is highest. 

Detailed  information  on  the  volumes  of  exports  to  each  of  the  7  sub-regions  (Europe  and 
Central Asia, East Asia and Pacific, Latin America and the Caribbean, West Africa, Central 
Africa, East Africa and Southern Africa) can be found in Annex 2 to this report. 

5. 

DISEASES COVERED 

for 

developing 

HIV/AIDS,  malaria  and  tuberculosis  are  generally  considered  the  gravest  public  health 
concerns 
development.  
and 
This  is  why  EC  development  policy,  including  the  Regulation,  is  specifically  focusing  on 
these  three  diseases.  Considering  that  the  list  of  registered  products  remained  unchanged  in 
2008,  the  diseases  covered  in  this  report  remain  identical,  i.e.  exclusively  treatment  of 
HIV/AIDS. 

a  major 

countries 

obstacle 

to 

6 

Readers  interested  in  obtaining  information  on  actual  sales  prices  may  find  it  on  the  website  of  the 
Global Fund to Fight AIDS, TB and Malaria. 
http://www.theglobalfund.org/fr/procurement/pqr/?lang=fr 

EN 

6 

   EN 

 
                                                 
However, there are certainly some pharmaceuticals for treating malaria and tuberculosis that 
would  benefit  from  registration  under  the  Regulation.  Medicines  to  treat  opportunistic 
infections  associated  with  HIV/AIDS  are  also  eligible  and  suitable  for  coverage  under  the 
Regulation, but there have been no applications so far. 

6. 

APPLICATION OF PRICE FORMULAE 

To date the application of the price formulae provided for in Article 3 of the Regulation has 
caused  no  practical  problem.  The  applicant  has  not  found  it  necessary  to  avail  itself  of  the 
services  of  an  independent  auditor  in  order  to  protect  sensitive  business  data  (a  possibility 
allowed  by  Article  4(2)(ii)  of  the  Regulation).  For  all  nine  products,  it  proved  sufficient  to 
show that the price offered (i.e. the “tiered” price) was less than 25% of the lowest OECD list 
price. Both the tiered price and the OECD list prices are available to the public. 

EN 

7 

   EN 

 
7. 

EVALUATING THE IMPACT OF THE REGULATION OVER TIME 

The  table  below  gives  some  indication  of  the  sales  trends  per  product  registered  under  the 
Regulation over the last three years: 

Product/unit 

2006

2007

2008 % 

Retrovir 250 mg x 40 
Retrovir 100 mg x 100 
Combivir 300/150 mg x 60 
Epivir 150 mg x 60 
Ziagen 300 mg x 60 
Trizivir 750 mg x 60 
Retrovir 300 mg x 60 
Epivir Oral Solution 10mg/ml 
240 ml 
Retrovir Oral Solution 10 mg 
Total 

585
132.176
397.450
975.250
40.208
4.903
48.410

643
92.467
153.793
1.125.986
35.884
17.102
118.725

2.700
136.571
178.216
971.689
26.872
7.475
47.682

difference 
(2007/2008) 
320% 
48% 
16% 
-14% 
-25% 
-56% 
-60% 

406.287
119.807
2.125.076

155.523
272.063
1.972.186

33.311
13.502
1.418.018

-79% 
-95% 
-28% 

Of  all  the  products  registered,  only  Retrovir  250  mg  x  40,  Retrovir  100  mg  x  100  and 
Combivir 300/150 mg x 60 showed an increase in volumes sold at tiered prices, with increases 
of 320%, 48% and 16% respectively. Sales volumes for the other 6 products decreased with a 
drop between 14 and 95%. Overall sales decreased by 28 %.  

This  further  decrease  in  2008  is  again  primarily  due  to  more  customers  purchasing  ARVs 
from other producers and in particular from generic manufacturers, including those licensed 
by GSK. As stated in last year's report, GSK has granted voluntary licences to eight generic 
companies for the manufacture and supply of ARVs (Retrovir, Epivir and Combivir, all used 
mainly  as  first  line  treatment)  to  both  the  public  and  private  sectors  in  sub-Saharan  Africa. 
This  trend  is  welcome  as  it  improves  the  availability  of  affordable  ARVs  for  customers  in 
developing  countries  and  helps  to  maintain  a  sustainable  supply.  In  2008  GSK  licencees 
supplied  279  million  tablets  of  their  versions  of  Epivir  and  Combivir  and  GSK  supplied  70 
million  tablets  making  a  total  of  349  million  tablets  in  2008  compared  with  a  total  of  268 
million  in  2007.  It  should,  therefore  once  again  be  underlined  that,  overall,  access  to 
preferentially priced medicines has increased significantly. 

EN 

8 

   EN 

 
ANNEX 1: DETAILS OF VOLUMES OF MEDICINES SOLD IN 2008 

EPIVIR Oral Solution 10mg/ml – 240 ml 

Sub-region 

Date of Approval: 19 April 2004 

Volumes sold (units)7 
- 1 January 2008 to 31 
December 2008 

Disease targeted: HIV infection 

Active ingredient: lamivudine 

Latin  America  and  the 
Caribbean 

East Africa 

Southern Africa 

Price offered (per unit): US$ 5.42 

Total no. of packs sold 

per month 

Lowest OECD list price:  US$ 39.58 

Preferential/lowest OECD list price: 13.69% 

2,844 

7,457 

23,010 

33,311 

2,776 

7 

In this and the following tables, “units” are the packages in which the products concerned are packed. 
For example, one “unit” of EPIVIR Oral Solution 10mg/ml – 240 ml is one bottle of 240 ml. One unit 
of EPIVIR 150 mg x 60 (see following table) is one package containing 60 tablets. 

EN 

9 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
EPIVIR 150 mg x 60 

Sub-region 

Date of Approval: 19 April 2004 

Volumes sold (units) - 
1 January 2008 to 31 
December 2008- 

Disease targeted: HIV infection 

Active ingredient: lamivudine 

Latin  America  and  the 
Caribbean 

East Africa 

Southern Africa 

Price offered (per unit): US$ 5.23 

Total no. of packs sold 

Per month 

Lowest OECD list price:  US$ 147.49 

Preferential/lowest OECD list price: 3.55%   

6,000 

8,233 

957,456 

971,689 

80,974 

EN 

10 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMBIVIR 300/150 mg x 60 

Sub-region 

Date of Approval: 19 April 2004 

Volumes sold (units)  
- 1 January 2008 to 31 
December 2008- 

Disease targeted: HIV infection 

Active ingredient: lamivudine + zidovudine  

Latin  America  and  the 
Caribbean 

West Africa 

Central Africa 

East Africa 

Southern Africa 

Price offered (per unit): US$ 16.19 

Total no. of packs sold 

Per month 

Lowest OECD list price:  US$ 302.85 

Preferential/lowest OECD list price: 5.35%   

3,912 

31 

120 

41,000 

133,153 

178,216 

14,851 

EN 

11 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RETROVIR 100 mg x 100 

Sub-region 

Date of Approval: 19 April 2004 

Volumes sold (units) - 
1 January 2008 to 31 
December 2008- 

Disease targeted: HIV infection 

Active ingredient: zidovudine 

West Africa 

East Africa 

Southern Africa 

Price offered (per unit): US$ 12.17 

Total no. of packs sold 

Per month 

Lowest OECD list price:  US$ 101.69 

Preferential/lowest OECD list price: 11.97 % 

2,104 

7,242 

127,225 

136,571 

11,381 

EN 

12 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RETROVIR 300 mg x 60 

Sub-region 

Date of Approval: 19 April 2004 

Volumes sold (units) -
1 January 2008 to 31 
December 2008- 

Disease targeted: HIV infection 

Active ingredient: zidovudine 

East Africa 

Southern Africa 

Price offered (per unit): US$ 13.24 

Total no. of packs sold 

Per month 

Lowest OECD list price:  US$ 211.09 

Preferential/lowest OECD list price: 6.27%   

1,166 

46,516 

47,682 

3,974 

EN 

13 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RETROVIR 250 mg x 40 

Sub-region 

Volumes sold (units) -
1  January  2008  to  31 
December 2008- 

Date of Approval: 19 April 2004 

Disease targeted: HIV infection 

Active ingredient: zidovudine 

Price offered (per unit): US$ 11.03 

Lowest OECD list price: US$ 109.16 

Preferential/lowest OECD list price: 10.10% 

East Asia and Pacific 

West Africa 

Southern Africa 

Total no. of packs sold 

per month 

2,400 

250 

50 

2,700 

225 

EN 

14 

   EN 

 
 
 
 
 
 
 
 
 
 
TRIZIVIR 750 mg x 60 

Sub-region 

Date of Approval: 19 April 2004 

Volumes sold (units) - 
1 January 2008 to 31 
December 2008- 

Disease targeted: HIV infection 

Active  ingredient:  abacavir  sulphate  (300  mg)  +  lamivudine 
(150 mg) + zidovudine (300 mg) 

West Africa 

East Africa 

Southern Africa 

Price offered (per unit): US$ 53.71 

Total no. of packs sold 

Per month 

Lowest OECD list price:  US$ 545.81 

Preferential/lowest OECD list price: 9.84 % 

5,884 

130 

1,461 

7,475 

623 

EN 

15 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
ZIAGEN 300 mg x 60 

Sub-region 

Date of Approval: 20 September 2004 

Volumes sold (units) -
1 January 2008 to 31 
December 2008- 

Disease targeted: HIV infection 

Active ingredient: abacavir sulphate 

Latin  America  and  the 
Caribbean 

West Africa 

East Africa 

Southern Africa 

Price offered (per unit): US$ 35.91 

Total no. of packs sold 

per month 

Lowest OECD list price: US$ 255.92 

Preferential/lowest OECD list price: 14.03% 

533 

4,168 

3,865 

18,306 

26,872 

2,239 

EN 

16 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RETROVIR Oral Solution 10 mg/ml – 200 ml 

Sub-region 

Date of Approval : 20 September 2004 

Volumes sold (units) – 
1  January  2008  to  31 
December 2008- 

Disease targeted: HIV infection 

Active ingredient: zidovudine 

Price offered (per unit): US$ 6.35 

Europe and Central Asia 

West Africa 

East Africa 

Southern Africa 

Total no. of packs sold 

Lowest OECD list price: US$ 25.72 

Per month 

Preferential/lowest OECD list price: 24.69% 

24 

516 

5,919 

7,043 

13,502 

1,125 

EN 

17 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 2: VOLUMES OF TIERED PRICED PRODUCTS SOLD BY SUB-REGION BETWEEN  

1 JANUARY 2008 AND 31 DECEMBER 2008 

Sub-regions 

Products  

Europe  and  Central 
Asia 

RETROVIR Oral Solution 

East  Asia 
Pacific 

and 

RETROVIR 250 mg x40 

Latin  America  and 
the Caribbean 

EPIVIR Oral Solution 

EPIVIR 150 mg x 60 

COMBIVIR 300/150 mg x 60 

ZIAGEN 300 mg x 60 

West Africa 

COMBIVIR 300/150 mg x 60 

RETROVIR 100mgx100 

RETROVIR 250mgx40 

RETROVIR Oral Solution 

TRIZIVIR 750 mg x 60 

ZIAGEN 300 mg x 60 

Central Africa 

COMBIVIR 300/150 mg x 60 

East Africa 

EPIVIR Oral Solution 

EPIVIR 150 mg x 60 

COMBIVIR 300/150 mg x 60 

RETROVIR 100mgx100 

RETROVIR 300 mg x 60 

RETROVIR Oral Solution 

TRIZIVIR 750 mg x 60 

ZIAGEN 300 mg x 60 

Southern Africa 

EPIVIR Oral Solution  

EPIVIR 150 mg x 60  

COMBIVIR 300/150 mg x 60  

RETROVIR 100 mg x 100 

RETROVIR 250mgx40 

Units 

24 

2,400 

2,844 

6,000 

3,912 

533 

31 

2,104 

250 

516 

5,884 

4,168 

120 

7,457 

8,233 

41,000 

7,242 

1,166 

5,919 

130 

3,865 

23,010 

957,456 

133,153 

127,225 

50 

EN 

18 

   EN 

 
 
RETROVIR 300 mg x 60  

RETROVIR Oral Solution 

TRIZIVIR 750 mg x 60 

ZIAGEN 300 mg x 60 

46,516 

7,043 

1,461 

18,306 

EN 

19 

   EN