REPORT FROM THE COMMISSION Annual Report (2012-2013) 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: 2014-12-16
Institutions: European Commission
Subjects: developing countries, discriminatory price, export (EU), export restriction, infectious disease, medicinal product, poverty, public health













EUR-Lex - 52014DC0737 - EN











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52014DC0737

REPORT FROM THE COMMISSION Annual Report (2012-2013) 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 /* COM/2014/0737 final */









TABLE OF
CONTENTS
1........... Background.................................................................................................................. 3
2........... Commission
Reporting under Regulation (EC) No 953/2003...................................... 4
3........... Products
registered....................................................................................................... 4
4........... Countries
of destination............................................................................................... 5
5........... Diseases
covered........................................................................................................... 5
6........... Application
of Price Formulae...................................................................................... 5
7........... Evaluating
the impact of the Regulation over time...................................................... 5
ANNEX 1: Details of
volumes of medicines sold in 2012-2013
This is the eighth annual
report foreseen under Article 11 of Regulation (EC) No 953/2003, which is
designed to prevent parallel trade in discounted medicines intended for the
least developed countries. This report covers the period from 1 January 2012 to
31 December 2013. 
As in previous reporting
periods, the volume of sales of registered tiered priced medicines has further
declined in 2012 and 2013. With a historic low sales volume in 2012. This is
explained by the fact that currently fourteen licenses have been granted by the
applicant for the manufacture and supply of medicines for the treatment of
HIV/AIDS (ARVs), as opposed to nine in 2011. 
As part of the REFIT
exercise[1],
the European Commission will evaluate the Regulation by 2015.
1.           Background
In 2000 the UN Millennium
Summit adopted eight Millennium Development Goals (MDGs), aimed at freeing
humanity from extreme poverty, hunger, illiteracy and disease by 2015. MDG
number six aims specifically at halting and reversing the spread of HIV/AIDS,
malaria and other major diseases by 2015. In 2011 there was a UN Political
Declaration supporting the achievement of MDG 6 which sets forth a series of
ambitious targets and elimination commitments for 2015.[2]
HIV/AIDS, tuberculosis and
malaria remain major plagues in many resource-poor countries, particularly in
Sub-Saharan Africa.The UNAIDS report on the global AIDS epidemic 2013[3]
informs about the historic declines in AIDS-related deaths and new HIV
infections in low- and middle-income countries. According to the report, as of
December 2012, an estimated 9.7 million people in low- and middle- income
countries were receiving antiretroviral therapy. This is a historic increase of
1.6 million over 2011. Hence, the goal of the 2011 UN Political Declaration to
reach 15 million people living with HIV with lifesaving antiretroviral
treatment by 2015 is approaching. However, access to treatment varies
considerably within and between countries and regions. The 9.7 million people worldwide receiving antiretroviral therapy in
low- and middle-income countries represent only 34% of the 28.6 million people
eligible under the WHO 2013 guidelines. 
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 medicines 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.
To support tiered pricing,
specific safeguards were devised to prevent diversion of medicines from poor
developing countries into the European Union. 
In May 2003, the EU
adopted Council Regulation (EC) No 953/2003 to avoid trade diversion
into the European Union of certain key medicines[4] ("the
Regulation"). 
2.           Commission
Reporting under Regulation (EC) No 953/2003
The report contains the
following information:
–                        
The volumes exported under tiered prices
for each product registered in annex I of the Regulation;
–                        
The diseases treated with the products in
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. 
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
available:
http://trade.ec.europa.eu/cgi-bin/antitradediversion/index.pl
The same website also
provides information for manufacturers who wish to register a new product.
3.           Products
registered 
There were no new products registered during the reporting period.
The products listed below,
aimed at the treatment of HIV/AIDS, were registered in 2004 by GlaxoSmithKline
(GSK), Brentford (UK):
 EPIVIR 150 mg x 60 ||   ||   ||   
 COMBIVIR 300/150 mg x 60 ||   ||   ||   
 EPIVIR Oral Solution 10mg/ml 240 ml ||   ||   ||   
 RETROVIR 100 mg x 100 ||   ||   ||   
 RETROVIR 300 mg x 60 ||   ||   ||   
 RETROVIR 250 mg x 40 ||   ||   ||   
 TRIZIVIR 750 mg x 60 ||   ||   ||   
 ZIAGEN 300 mg x 60 ||   ||   ||   
 RETROVIR Oral Solution 10 mg/ml – 200 ml ||   ||   ||   
Price ranges and the
prices offered can be found in Annex I, together with the volumes sold in 2012
and 2013 for each product registered under the Regulation, with the exception
of RETROVIR 300 mg x 60. ViiV Healthcare has discontinued the supply of this
medicine.
Over the reporting period,
no attempts to illegally re-import tiered-priced products registered under the
Regulation back into the EU were reported to the Commission.
4.           Countries
of destination
Countries of destination
during the reporting period were: Kenia, Laos, South Africa and Uganda.
5.           Diseases
covered
The Regulation allows for
the registration of medicines treating HIV/AIDS, malaria and tuberculosis.
These diseases are generally considered the gravest public health concerns for
developing countries and a major obstacle to development. 
This is why EU development
policy, including this Regulation, is more specifically focusing on these three
diseases. Only medicines for the treatment of HIV/AIDS have been registered by
the applicant. Considering that the list of registered products has remained
unchanged since 2004, the diseases covered in this report remain identical,
i.e. exclusively the treatment of HIV/AIDS.
6.           Application
of Price Formulae
For seven of the 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. 
However, for two products
–Epivir oral solution and Retrovir oral solution-, the tiered price was higher
than the 25% of the lowest OECD price. Retrovir oral solution has not been
supplied during the reporting period. 
The applicant justified
the higher percentages by the decreasing volumes of products being sold as a
consequence of their licensing policy of the last years. The commercial price
is also low in the OECD country and the access price is based on the cost of
producing the product. Oral solutions are also more expensive to manufacture.
This has led to a situation where the commercial selling price is close to the
actual cost of the good, which is reflected in the access price.
7.           Evaluating
the impact of the Regulation over time
The table below gives the
sales trends per product registered under the Regulation over the last eight
years:
Figure 1:
 Product/unit || 2006 || 2007 || 2008 || 2009 || 2010 || 2011 || 2012 || 2013 
 Combivir 300/150 mg x 60 || 397.450 || 153.793 || 178.216 || 66.344 || 478 || 8.459 || 3.000 || 0 
 Retrovir 250 mg x 40 || 585 || 643 || 2.700 || 17.240 || 0 || 0 || 0 || 0 
 Retrovir 100 mg x 100 || 132.176 || 92.467 || 136.571 || 10.185 || 322 || 385 || 323 || 390 
 Trizivir 750 mg x 60 || 4.903 || 17.102 || 7.475 || 9.895 || 1.333 || 140 || 296 || 0 
 Retrovir Oral Solution 10 mg || 119.807 || 272.063 || 13.502 || 7.305 || 9.932 || 1.944 || 0 || 0 
 Ziagen 300 mg x 60 || 40.208 || 35.884 || 26.872 || 5.058 || 113.591 || 13.697 || 432 || 90.748 
 Epivir Oral Solution 10mg/ml 240 ml || 406.287 || 155.523 ||   33.311 ||   4.008 ||   24.731 ||   11.571 || 72 || 0 
 Epivir 150 mg x 60 || 975.250 || 1.125.986 || 971.689 || 0 || 2.605 || 42.701 || 0 || 0 
 Retrovir 300 mg x 60 || 48.410 || 118.725 || 47.682 || 0 || 2.335 || 6.035 || 642 || NA 
 Total || 2.125.076 || 1.972.186 || 1.418.018 || 120.035 || 155.327 || 84.932 || 4.765 || 91.138 
Figure 2:
As shown in figure
2, the total sales of registered tiered priced medicines has significantly and
steadily decreased over the last eight years. This constant drop, which
accentuated itself in 2009, could be explained primarily by more customers
purchasing ARVs from other producers and in particular from generic manufacturers,
including those licensed by GlaxoSmithKline through its licenses. ViiV
Healthcare, a company established by GlaxoSmithKline and Pfizer, has now
granted fourteen licences for the manufacture and supply of ARVs. 
Over the two year period
(2012-2013), some 95.000 packages of ARVs were exported to LDC under the
Regulation. There was a major decline in 2012 with a sales volume of no more
than 4.765 packages which fell under the Regulation. This concerned mostly the
export of Combivir 300/150 mg x 60 to Uganda. In 2013 the sales volume
increased, due to the sales of Ziagen tablets to South Africa (around 90.000
packages).
[1]               For more info consult: http://ec.europa.eu/smart-regulation/refit/index_en.htm
[2]               General Assembly Resolution 65/277. Political
Declaration on HIV and AIDS: Intensifying our efforts to eliminate HIV and
AIDS, A/RES/65/277 (10 June 2011), available from undocs.org/A/RES/65/277.
[3]               UNAIDS
Global Report 2013, available from http://www.unaids.org/en/resources/campaigns/globalreport2013/globalreport/

[4]               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
ANNEX 1: Details of volumes of medicines sold
in 2012-2013
 EPIVIR Oral Solution 10mg/ml – 240 ml Date of Approval: 19 April 2004 ||   || Volumes sold (units)[1] - 1 January 2012 to 31 December 2013 
   Disease targeted: HIV infection       Active ingredient: lamivudine                   Price offered (per unit) 2012: US$ 8.74 Price offered (per unit) 2013: US$ 7.03         Lowest OECD list price 2012: US$ 13.95       Lowest OECD list price 2013: US$ 18.29   Preferential/lowest OECD list price 2012: 62.63 % Preferential/lowest OECD list price 2013: 38.44 %     ||   ||   
   ||   
   ||   
     Total no. of packs sold 2012 ||     72 
 Total no. of packs sold 2013 || 0 
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
 EPIVIR 150 mg x 60 Date of Approval: 19 April 2004 ||   || Volumes sold (units) - 1 January 2012 to 31 December 2013- 
   Disease targeted: HIV infection       Active ingredient: lamivudine                   Price offered (per unit) 2012: US$ 3.60   Price offered (per unit) 2013: US$ 3.85           Lowest OECD list price 2012: US$ 40.45 Lowest OECD list price 2013: US$ 40.45   Preferential/lowest OECD list price 2012: 8.90 % Preferential/lowest OECD list price 2013: 9.52 %             ||   ||   
         Total no. of packs sold 2012 ||         0 
 Total no. of packs sold 2013 || 0 
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
 COMBIVIR 300/150 mg x 60 Date of Approval: 19 April 2004 ||   || Volumes sold (units) - 1 January 2012 to 31 December 2013- 
   Disease targeted: HIV infection Active ingredient: lamivudine + zidovudine         Price offered (per unit) 2012: US$ 10.20 Price offered (per unit) 2013: US$ 7.80           Lowest OECD list price 2012: US$ 158.70 Lowest OECD list price 2013: US$ 130.20   Preferential/lowest OECD list price 2012: 6.43 % Preferential/lowest OECD list price 2013: 5.99 %             ||   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
 Total no. of packs sold 2012 || 3000 
 Total no. of packs sold 2013 || 0 
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
   ||   
 RETROVIR 100 mg x 100 Date of Approval: 19 April 2004 ||   || Volumes sold (units) - 1 January 2012 to 31 December 2013- 
   ||   ||   
 Disease targeted: HIV infection Active ingredient: zidovudine                   Price offered (per unit) 2012: US$ 7.00   Price offered (per unit) 2013: US$ 6.37         Lowest OECD list price 2012: US$ 99.11 Lowest OECD list price 2013: US$ 99.11   Preferential/lowest OECD list price 2012: 7.06 % Preferential/lowest OECD list price 2013: 6.43 %               ||   ||   
   ||   
   ||   
   ||   
 Total no. of packs sold 2012 || 323 
 Total no. of packs sold 2013 || 390 
   ||   ||   
 RETROVIR 250 mg x 40 Date of Approval: 19 April 2004 ||   || Volumes sold (units) -1 January 2012 to 31 December 2013- 
   Disease targeted: HIV infection Active ingredient: zidovudine                   Price offered (per unit) 2012: US$ 7.20 Price offered (per unit) 2013: US$ 3.96   Lowest OECD list price 2012: US$ 51.99 Lowest OECD list price 2013: US$ 51.99   Preferential/lowest OECD list price 2012: 13.85 % Preferential/lowest OECD list price 2013: 7.62 %     ||   ||   
   ||   
       Total no. of packs sold 2012 ||       0 
 Total no. of packs sold 2013 || 0 
 TRIZIVIR 750 mg x 60 Date of Approval: 19 April 2004 ||   || Volumes sold (units) - 1 January 2012 to 31 December 2013- 
   Disease targeted: HIV infection Active ingredient: abacavir sulphate (300 mg) + lamivudine (150 mg) + zidovudine (300 mg)                Price offered (per unit) 2012: US$ 22.80 Price offered (per unit) 2013: US$ 19.20     Lowest OECD list price 2012: US$ 442.50 Lowest OECD list price 2013: US$ 470.14   Preferential/lowest OECD list price 2012: 5.15 % Preferential/lowest OECD list price 2013: 4.08 %   ||   ||   
   ||   
   ||   
   ||   
   Total no. of packs sold 2012 ||   296 
 Total no. of packs sold 2013 || 0 
   ||   
 ZIAGEN 300 mg x 60 Date of Approval: 20 September 2004 ||   || Volumes sold (units) -1 January 2012 to 31 December 2013- 
   Disease targeted: HIV infection Active ingredient: abacavir sulphate                         Price offered (per unit) 2012: US$ 12.60 Price offered (per unit) 2013: US$ 11.40     Lowest OECD list price 2012: US$ 95.86       Lowest OECD list price 2013: US$ 95.86         Preferential/lowest OECD list price 2012: 13.14 % Preferential/lowest OECD list price 2013: 11.89 %         ||   ||   
   ||   
   ||   
   ||   
   ||   
 Total no. of packs sold 2012 || 432 
 Total no. of packs sold 2013 || 90,748 
   ||   
   ||   
 RETROVIR Oral Solution 10 mg/ml – 200 ml Date of Approval : 20 September 2004 ||   || Volumes sold (units) – 1 January 2012 to 31 December 2013- 
   Disease targeted: HIV infection Active ingredient: zidovudine                   Price offered (per unit) 2012: US$ 8.37 Price offered (per unit) 2013: US$ 6.83           Lowest OECD list price 2012: US$ 10.40 Lowest OECD list price 2013: US$ 10.40   Preferential/lowest OECD list price 2012: 80.50 % Preferential/lowest OECD list price 2013: 65.69 %             ||   ||   
   ||   
   ||   
   ||   
   ||   
 Total no. of packs sold 2012 || 0 
 Total no. of packs sold 2013 || 0 
   ||   
   ||   
   ||   
   ||   
   ||   
[1]               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.