COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the manufacture, placing on the market and use of medicated feed and repealing Council Directive 90/167/EEC
Date: 2014-09-10
Institutions: European Commission
Subjects: animal nutrition, labelling, marketing standard, quality standard, veterinary drug, veterinary inspection













EUR-Lex - 52014SC0272 - EN











|



52014SC0272

COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the manufacture, placing on the market and use of medicated feed and repealing Council Directive 90/167/EEC /* SWD/2014/0272 final */










1.                 
INTRODUCTION

The purpose of
this impact assessment (IA) is to support the changes proposed to the Directive
90/167/EEC setting out the conditions under which medicated animal feeds may be
manufactured, placed on the market and used within the EU. Medicated feed is a mixture
of feed materials and a specifically authorised veterinary medicinal product
(VMP). It may be supplied to the holders of animals only on presentation of a
prescription from a veterinarian. 
Giving VMPs to
sick animals via feed is one of several options for the animal holder. Depending
on the specific situation on the farm, the treatment via medicated feed can be
the first best route of administering the VMP to the animal.

2.                 
PROBLEM DESCRIPTION:
Baseline and Problems

The Directive
dates back to 1990, has never been revised and, due to the diverging national
implementations, the significance of medicated feed for farmed animals varies
extremely between the Member States (MS). 
Problem 1 (residues
of VMPs in feed): In several MS with lax national requirements generous
tolerance levels for the carry over of antibiotics from medicated feed into
compound feed exist. If the microbes in the animal are exposed to a certain
dosage of antimicrobials, a significant number of pathogens survive the treatment
and their presence will stimulate the selection of resistant strains of
microbes. In other MS there is no value for the carry over set which means
legal uncertainty for the operators. 
The
consequences of the residues of the medicines are
·        
increased risk for the development of
antimicrobial resistance (AMR) due to the generous tolerance levels of
antimicrobials in feed in some MS and
·        
burdensome case by case evaluation in MS where
no carry over limits exist combined with legal uncertainty for operators.
Problem 2 (imprecise
dosage of VMP): The precise dosage of oral VMPs is crucial for an effective
group treatment i.e. to ensure that each individual animal gets the correct
therapeutic dose. Incorrect dosage may cause toxicity in the animal (too high
dosage) or increase the risk that animals are not cured (too low dosage). Precise dosage is at risk on the one hand if the medicated feed
manufacturing does not guarantee a homogeneous incorporation of the medicine
into the feed e.g. in MS with lax rules or if the medicated feed intake of
animals is lower than expected. Other MS have combined a rigid "zero
tolerance" for VMPs in compound feed with burdensome rules for the
production of medicated feed which leads to a de facto unavailability of
medicated feed. As the overall quantities of VMPs administered to the animals
are independent from the availability of the different routes of
administration, the less precise and controllable administration routes of
VMPs, e.g. top dressing of oral VMP powders, are dominant.
The
consequences of the imprecise dosage are
·        
ineffective treatment of sick animals as they do
not get the therapeutic level of the VMP (failure of therapy for under-dosed)
and residues of the medicines in the animal products (over-dosed animals) both
in MS where medicated feed is displaced by less precise oral powders and in
those where homogeneity of medicated feed is not sufficiently ensured and
·        
increased AMR because of sub-therapeutic levels
antimicrobials on farms in MS with a strict application of the zero tolerance
due to increased use of less controllable alternatives to medicated feed.
Problem 3 (barriers
to expand the production and intra EU trade of medicated feed): Each MS has
created its own national system for medicated feed. This means in reality an
extremely complicated but also costly situation, mainly for the concerned
industries. One reason for this is that the EU-Directive contains vague
provisions re manufacturing which are differently interpreted by the MS. Secondly, the EU-Directive offers several options
for MS to design their national regimes such as allowing distributors for
medicated feed or the anticipated production of medicated feed in advance of
receiving the veterinary prescription.
Consequences of
the existence of differing national schemes:
·        
Barriers to intra EU trade of medicated feed
(walling-off), restricted competition and obstacles to the dissemination of
innovations,
·        
high regulatory burden to the industry if they
do not limit their business to the local market,
·        
unsatisfactory manufacturing quality in MS with
lax rules and
·       
excessive costs for medicated feed in MS that
"gold plated" their regime.
Problem 4 (impossible market access of
medicated feed for pets): Generally medicated feed is used for the treatment of
larger animal groups in livestock farming. However, for certain VMPs the
treatment of pets via a medicated feed could be an excellent route allowing
owners to provide for their pets medication in the form of prepared feed. However, several MS are unsure if the medicated
feed legislation can even apply to pets as it is based on Article 43 (Common
Agricultural Policy), thus considered to be applicable only for farmed animals.

The national
implementations of the Directive are another driver: The requirement for a prescription
to be available in advance of production (as distinct to delivery) goes against
central production and distribution. Several MS do not allow anticipated
manufacturing of medicated feed. Or others do not agree on distributors acting
as intermediaries between manufacturer and user, insisting instead on
distribution direct from the feed mill to the holder of the animal. Pet food marketing
cannot comply with this requirement. 
Consequences of the restrictions for medicated pet food are
·        
big barriers for innovative companies that want
to expand their business in medicated pet food and
·        
the prevention of owners of pets with chronic
diseases from treating them in this comfortable and efficient way.

3.                 
NEED for EU ACTION -
SUBSIDIARITY

The current
legislation on medicated feed is a Directive that has been established before
the creation of the internal market and that had never been adapted in
substance. It can be considered an extreme example of subsidiarity: The
national transposition of this legal instrument has given freedom to MS
regarding interpretation and implementation of the legal provisions, but the flexibility
does not deliver the ambition of a functioning internal market and cause public
and animal health concerns. With respect to the development of the national
systems, the trend over the decades shows that those problems have rather
deteriorated instead of improved even though many MS tried to tackle the
problems with national action plans. Concrete harmonised measures at EU level were
strongly desired according to the external study, targeted consultations and the
online consultation of stakeholders and MS (88% of the respondents). Thus, there
is clear evidence that an EU value added can be created in case the right legal
instrument with proportionate measures is chosen. 
Compared with scattered
action at national level, action at EU level would produce clear benefits in
the areas of economic viability, animal and public health. Therefore, the proposal aims to achieve
harmonisation of the crucial parameters while simultaneously allowing the
actors at the local level to choose the means to comply with them.

4.                 
OBJECTIVES of the EU
INITIATIVE

General policy objectives:
(1)   The
smooth functioning of a competitive and innovative internal market for
medicated feed whilst 
(2)   ensuring
a high level of protection of animal and public health. 
Specific objectives:
·        
Overcome the zero-tolerance for unavoidable
carry-over of VMPs
·        
Make medicated feed available to farmers and pet
owners at a competitive price
·        
Curb AMR-risk from residual and sub-therapeutic
administration of antimicrobials
·        
Improve animal health by precise dosage of oral VMPs
·        
Remove barriers for innovative,
"novel" medicated feed.

5.                 
POLICY OPTIONS

Option 1 -
Maintain status quo - no policy change
No EU action is undertaken in the
area of medicated feed. The existing Directive will keep its general character and still be subject to varying
national interpretation and implementation. Specific rules will apply from one MS
to another. MS will continue to have different residues levels for VMPs in
compound feed.
Option 2 - Amend
Directive 90/167 combined with soft law
The scope of the Directive would be clarified and also
extended to cover medicated feed for pets. This option does not foresee any
changes to the current Directive in terms of technical provisions. Guidelines
for the national authorities and the operators are elaborated for the areas
where problems were identified, such as control mechanisms, manufacturing
standards or residues of VMPs in feed. 
Option 3 - New EU Regulation with detailed rules
In this option the clarifications concerning the scope
in option 2 are undertaken but in the legally directly binding form of a
Regulation. Distributors will be allowed in the whole EU to intermediate
between the manufacturers and the users of medicated feed which is critically
important for medicated pet food. Precise EU criteria for medicated feed in
terms of mixing technology and homogeneity will be established in the
Regulation. Anticipated medicated feed production, mobile and on farm mixing
will be authorised in the EU, while simultaneously tightening the standards for
these schemes. The issuance of precise veterinary prescriptions and their
strict adherence by both the manufacturers and users of medicated feed has to
be severely policed by the authorities of the MS. 
EU wide tolerance levels
will be set for the carry-over of VMPs in feed, based on an assessment of the
risk for the animals and the humans with regard to the different types of
active substances. 
The competent authorities in the MS would be released
the task of trying to interpret the general Directive and could focus their
efforts to ensure that medicated feed is only delivered upon prescription,
homogeneity criteria and carry-over limits are met by all manufacturers and
misuse of medicated feed is avoided. 

6.                 
IMPACT ASSESSMENT of the
POLICY OPTIONS and COMPARISON

The policy options were tested against the objectives of the review
of the legislation and evaluated for their impacts on economics, health and
others: 
In option 1, national implementation of the general EU-rules still
leads to tremendously different economic and safety related parameters in
manufacturing and use of medicated feed. The trend that fewer animals are
treated via medicated feed will continue even if medicated feed would be the
first best route of treatment. For innovative, new applications of medicated
feed the marketing environment remains very scattered and exclusive.
Manufacturers that want to expand outside their "home" MS have to
cope with a different national scheme for medicated feed creates considerable compliance
costs. Manufacturers who want to expand in medicated pet food would be blocked
and many pet owners with chronically diseased pets would be deprived from this comfortable
and efficient way of treatment. In MS with very demanding manufacturing
standards for medicated feed, the farmers apply instead of medicated feed less
controllable routes of medication. This has negative impacts with respect to
correct dosage (=> efficient treatment) and to the problem of sub-therapeutic
use of antimicrobials in non-medicated feed or water. The risk for AMR
development would remain in MS with generous tolerance levels the residues of
antimicrobials in feed. 
In option 2, the economic parameters for the manufacturers of
medicated feed still differ significantly because of the dominant role of the
national regimes on the costs of medicated feed thus no significant change to
the baseline can be expected. The explicit inclusion of pets into the scope
opens a window of opportunities for medicated pet food. The potentially
additional gross margin from medicated pet food could be in the order of
€ 6 mio in the short term. Also the industries administrative and
compliance costs might be slightly smaller because they could rely more on the,
then revised, EU guide for good manufacturing practice.
In one scenario of option 3, the additional costs due to the implicit
upgrade of the manufacturing standards for 50% of the current production would
be € 19 mio. For 25% of the current production no change would result
from the new EU standard. The remaining 25% could realise cost reductions of
app € 31 mio because the producers can (1) choose the most cost efficient
production technology considering the regional situation and (2) profit from
economies of scale because the demand for medicated feed will increase. For the
EU as a whole, the manufacturing costs could be reduced by € 12 mio.
A second scenario has been calculated as a sensitivity analysis (65% of the medicated
feed production would be faced with cost increases - only 10% with reductions):
The cost increase in the first group would exceed the savings in the second by
€ 12 mio. 
With the new, harmonised EU standard for medicated feed production,
the full potential for innovation could be activated which means only in the
area of medicated pet food an additional gross margin in the order of €
15 mio in the short term and considerably more beyond. The setting of product
criteria at EU-level implies very limited administrative costs for the national
authorities and the Commission. In a longer term, the enforcement of the
criteria will reduce the burden for the authorities: on the one hand, the
control of the concrete criteria is simpler than the interpretation of general
principles. On the other hand, the MS can save resources formerly used for the
establishment of the national standards, if applicable. The compliance costs
for the industry are significantly reduced because they are no longer obliged to
follow the different national rules.
Animal health is significantly improved because medicated feed,
produced at optimised standards, can be used as 'first best route' to
administer medicines to a much higher percentage of animals. With respect to
antimicrobials, fewer animals are exposed to sub-therapeutic levels in those
countries where the homogeneity requirements for medicated feed are currently
poor. This positive impact can be also expected in those regions where, due to
preventive requirements for medicated feed manufacturing, the less precise
routes of administration are currently dominant. Furthermore, public health
will be significantly improved because the carry-over limits are set, EU-wide, at
levels that marginalise the risk for the development of AMR both in the MS with
generous tolerance levels or those with an unclear situation on this issue.
The Regulatory competence of the individual MS is
reduced. Option 3 has a slightly positive impact on occupational health as
fewer users are in direct contact with the VMP. Also on animal welfare a
positive effect can be expected because fewer animals have to suffer from
under-dosage and more animals (pets) are treated with their "normal"
feed thus in a more comfortable manner.

7.                 
CONCLUSIONS

In the light of the assessment above, it is considered that option 3
would have the most positive impacts and provides the best way forward to
achieve the objectives for the EU as a whole. It should have a significant
positive impact on cost efficiency and economic growth of the medicated feed
manufacturing, also considering innovative applications of VMPs. Trade-offs in
upstream and downstream activities are very limited. Animal and public health
can be expected to be improved both in MS with currently lax standards for
medicated feed and those with prohibitive standards. Safe maximum residue levels
for the carry-over of VMPs in feed leads to a pragmatic and solid level playing
field for the industry and the control authorities.
The monitoring of the manufacturing and use of medicated feed would
be eased because of the EU-wide establishment of product criteria. These could
be also the base for the evaluation to which extent the objectives of the
legislation have been met. In case these are deemed not to be sufficient, additional
indicators such as price difference between medicated feed and compound feed or
share of VMPs sold as premixes could be sourced from representatives of the
industry. Thus, sufficient data for the evaluation should be available to examine
whether or not the policies implemented achieve the objectives with respect to
the internal market for medicated feed, the competitiveness of medicated feed
production, animal and public health.