COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC
Date: 2023-04-26
Institutions: Directorate-General for Health and Food Safety, European Commission
Subjects: Cyprus, Ireland, Malta, Northern Ireland, consumer information, labelling, market approval, marketing standard, medicinal product, pharmaceutical legislation, public health

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.4.2023  SWD(2023) 191 final  COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC {COM(2023) 192 final} - {SEC(2023) 390 final} - {SWD(2023) 192 final} - {SWD(2023) 193 final}  
 
 
Subsidiarity Grid 

-  As proposed by the Committee of the Regions with guidance in blue  

-  Obviously, the answers to the questions below, the explanatory memorandum and – if 

applicable – the impact assessment should be consistent. This may require some iterations.  

-  Please try to stay under 10 pages.  

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

The  proposal  is  based  on  Articles  114(1)  and  168(4)(c)  of  the  Treaty  on  the  Functioning  of  the 
European Union (TFEU). 

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

While the internal market and common safety concerns in public health matters fall within a shared 
competence  of  the  EU  and  Member  States,  once  the  EU  adopts  harmonised  legislation  in  such  an 
area,  Member  States  can  no  longer  exercise  their  own  competence.  This  is  the  case  for  the  EU 
pharmaceutical legislation. 
The  proposal  respects  Member  States’  exclusive  competence  in  the  provision  of  health  services, 
including pricing and reimbursement policies and decisions as well as the prescription of medicines 
(cf. Article 168(7) of the TFEU). 

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 21: 

-  Has there been a wide consultation before proposing the act? 
- 

Is there a detailed statement with qualitative and, where possible, quantitative indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

- 

- 

To collect all relevant views and engage with stakeholders as much as possible, different 
consultation methods were combined. DG SANTE consulted with stakeholders via (i) the 
publication of inception impact assessments for feedback, (ii) two online consultations (one 
concerning general medicines, the other one targeted at medicines for children and rare 
diseases), (iii) targeted stakeholder surveys, (iv) interviews, (v) focus groups to discuss some 
of the main issue of the revision of the provisions relating to medicines for children and rare 
diseases, (vi) a validation workshop on the impact assessment findings. Summaries of all 
consultation activities and their outcomes are provided in Annex 2 – Synopsis report of the 
respective Impact Assessment SWDs.  
The explanatory memorandum and the impact assessment SWD (chapter 3) contain a section 
on the principle of subsidiarity (see also question 2.2 below). 

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN  

1 

 
 
 
 
                                                           
2.2 Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the conformity with the 
principle of subsidiarity? 

Common  standards  of  quality,  safety  and  efficacy  for  the  authorisation  of  medicines  constitute  a 
cross-border  issue  for  public  health  that  affects  all  Member  States  and  thus  can  effectively  be 
regulated only at EU level. EU action relies also on the single market to achieve a stronger impact as 
regards access to safe, effective and affordable medicines, as well as the security of supply across the 
EU. Uncoordinated measures by Member States may result in distortions of competition and barriers 
to intra-Union trade for products that are relevant for the entire EU, and would also likely increase 
administrative  burden  for  the  pharmaceutical  companies  which  often  operate  in  more  than  one 
Member State. 
At the same time, the proposed revisions of the pharmaceutical legislation respect Member States’ 
exclusive  competence  in  the  provision  of  health  services,  including  pricing  and  reimbursement 
policies and decisions. 

2.3 Based on the answers to the questions below, can the objectives of the proposed action be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

While the internal market and common safety concerns in public health matters fall within a 
shared  competence  of  the  EU  and  Member  States,  once  the  EU  adopts  harmonised 
legislation in such an area, Member States can no longer exercise their own competence. 
As diseases do not know borders, common provisions for the authorisation of medicine are 
necessary.  Uncoordinated  measures  by  Member  States  could  result  in  distortions  of 
competition  and  barriers  to  intra-Union  trade  for  products  that  are  relevant  for  the  entire 
EU, and would also likely increase administrative burden for the pharmaceutical companies 
which  often  operate  in  more  than  one  Member  State.  Adapted  frameworks  with  specific 
regulatory  requirements  tailored  to  the  characteristics  or  methods  inherent  to  certain, 
especially  novel,  medicines  will  ensure  an  agile  and  future  proof  common  regulatory 
environment while keeping the high standards of quality, safety and efficacy. Furthermore, a 
specific  objective  of  the  revisions  is  to  ensure  timely  patient  access  in  all  Member  States, 
including 
impacted  by  the  EU 
pharmaceutical legislation. 

in  smaller  Member  States,  which  can  partially  be 

(a)  Are there significant/appreciable transnational/cross-border aspects to the problems being 

tackled? Have these been quantified? 

Diseases  do  not  know  borders.  Common  provisions  for  the  authorisation  of  medicines 
constitute a cross-border issue for public health that affects all Member States and thus can 
effectively  be  regulated  only  at  EU  level,  given  that  the  authorisation  of  medicines  is  fully 
harmonised at EU level. 
Data  collected  in  the  impact  assessment  SWD  have  shown  that  concerning  access  to 
medicines no major improvement over the last years have been observed. Indeed, there is a 
90% variance between Northern and Western European countries and Southern and Eastern 
European  countries  in  terms  of  patient  access  to  new  medicines,  which  also  largely 
corresponds to the launch patterns according to market size and purchasing powers of these 
countries. The average delay between market authorisation and patient access can vary from 
as little as 4 months to 29 months. 

(b)  Would national action or the absence of the EU level action conflict with core objectives of 

2 

 
 
 
the Treaty2 or significantly damage the interests of other Member States? 

Uncoordinated  measures  by  Member  States  could  result  in  distortions  of  competition  and 
barriers to intra-Union trade for products that are relevant for the entire EU, and would also 
likely increase administrative burden for the pharmaceutical companies which often operate 
in  more  than  one  Member  State.  Furthermore,  the  proposed  revision  of  the  EU 
pharmaceutical  legislation  should  guarantee  a  high  level  of  public  health  by  ensuring  the 
quality,  safety  and  efficacy  of  medicines  for  EU  patients.  The  proposal  is  based  on  Articles 
114(1) and 168(4)(c) of the Treaty on the Functioning of the European Union (TFEU). 

(c)  To what extent do Member States have the ability or possibility to enact appropriate 

measures? 

While the internal market and common safety concerns in public health matters fall within a 
shared  competence  of  the  EU  and  Member  States,  once  the  EU  adopts  harmonised 
legislation  in  such  an  area,  Member  States  can  no  longer  exercise  their  own  competence. 
This  is  the  case  for  EU  pharmaceutical  legislation.  However,  the  proposed  revision  of  the 
pharmaceutical legislation respects Member States’ exclusive competence in the provision of 
health services, including pricing and reimbursement policies and decisions. 

(d)  How does the problem and its causes (e.g. negative externalities, spill-over effects) vary 

across the national, regional and local levels of the EU? 

The problem and its causes are similar in all member States as most of the provisions in the 
pharmaceutical field are harmonised since long time.  

(e)  Is the problem widespread across the EU or limited to a few Member States? 

The problem is affecting all Member States. 

(f)  Are Member States overstretched in achieving the objectives of the planned measure? 

Some  specific  expertise  might  not  be  easily  available  in  all  Member  States,  therefore  the 
necessity to bring simplification and efficiency in the current legislative. 

(g)  How do the views/preferred courses of action of national, regional and local authorities 

differ across the EU? 

Pharmaceutical legislation is implemented at national level in the Member States. There is an 
overall consensus among competent authorities – as confirmed in the context of the various 
above-mentioned  consultation  activities  -  on  the  necessity  to  streamline  and  simplify  and 
make the current legislative framework future-proof.  

2.4 Based on the answer to the questions below, can the objectives of the proposed action be 

better achieved at Union level by reason of scale or effects of that action (EU added value)? 

Common  standards  of  quality,  safety  and  efficacy  for  the  authorisation  of  medicines 
constitute a cross-border issue for public health that affects all Member States and thus can 
effectively be regulated only at EU level. Furthermore, provisions at European scale reduce 
burden  amongst  others  for  companies  and  preserve  the  single  market.  There  will  also  be 
benefits for national authorities (streamlining of procedures and simplification will enhance 

2 https://europa.eu/european-union/about-eu/eu-in-brief_en  

3 

 
 
                                                           
efficiencies at all levels, for instance). 

(a)  Are there clear benefits from EU level action?  

Common  standards  of  quality,  safety  and  efficacy  for  the  authorisation  of  medicines 
constitute a cross-border issue for public health that affects all Member States and thus can 
effectively be regulated only at EU level. EU action relies also on the single market to achieve 
a stronger impact as regards access to safe, effective and affordable medicines, as well as the 
security  of  supply  across  the  EU.  For  example,  a  harmonised  approach  at  EU  level  also 
provides greater potential for incentives to support innovation and for concerted action for 
development of medicines in areas of unmet needs. 

(b)  Are there economies of scale? Can the objectives be met more efficiently at EU level (larger 

benefits per unit cost)? Will the functioning of the internal market be improved? 

Having  provisions  at  European  level  reduces  the  administrative  burden  and  preserve  the 
single market for pharmaceutical companies which often operate in more than one Member 
State ensuring a strongly positive environment for pharma industry to continue to develop its 
cutting-edge products within the EU.  The revision will also aim at improving the affordability 
of medicinal products benefiting national health systems. A simplified and better integrated 
regulatory system will benefit national regulators. 

(c)  What are the benefits in replacing different national policies and rules with a more 

homogenous policy approach? 

The  sector  is  already  completely  harmonised  since  many  years.  The  first  legislation  in  the 
area of medicines was adopted in 1965.  

(d)  Do the benefits of EU-level action outweigh the loss of competence of the Member States 
and the local and regional authorities (beyond the costs and benefits of acting at national, 
regional and local levels)? 

The proposal will not impact the existing national competencies with regard to Member 
States’ exclusive competencies in the provision of health services, including pricing and 
reimbursement policies and decisions. 

(e)  Will there be improved legal clarity for those having to implement the legislation? 

Yes,  the  proposed,  revised  legal  framework  will  clarify  definitions,  introduce  classification 
mechanisms as well as further streamlining and simplification. This will reduce administrative 
burden for companies and authorities and hence improve efficiency and attractiveness of the 
EU system. 

3.  Proportionality: How the EU should act 

3.1  Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal and a statement allowing appraisal of the compliance of the proposal with the 
principle of proportionality? 

The initiative does not go beyond what is necessary to achieve the objectives of the revision. It does 
so in a way that is conducive to national action, which would otherwise not be sufficient to achieve 
those objectives in a satisfactory way. 

4 

 
 
 
The principle of proportionality has been reflected in the comparison of different options evaluated 
in the impact assessment. For example, trade-offs are inherent between the objective of innovation 
(promoting  the  development  of  new  medicines)  and  the  objective  of  affordability  (which  is  often 
achieved by generic/biosimilar competition). The revision maintains the incentives as a key element 
for innovation, but they are adapted to better encourage and reward product development in areas 
of  unmet  medical  needs  and  to  better  address  timely  patient  access  to  medicines  in  all  Member 
States. The explanatory memorandum reflects the above considerations.   

3.2 Based on the answers to the questions below and information available from any impact 
assessment, the explanatory memorandum or other sources, is the proposed action an 
appropriate way to achieve the intended objectives? 

The initiative does not go beyond what is necessary to achieve the objectives of the revision and is 
appropriate to achieve them. The choice of the legal instrument is justified and as simple as possible 
and coherent. The proposal does not modify the current repartition of competences.  

(a)  Is the initiative limited to those aspects that Member States cannot achieve satisfactorily on 

their own, and where the Union can do better? 

The initiative does not go beyond what is necessary to achieve the objectives of the revision. 
It  does  so  in  a  way  that  is  conducive  to  national  action,  which  would  otherwise  not  be 
sufficient to achieve those objectives in a satisfactory way. 

(b)  Is the form of Union action (choice of instrument) justified, as simple as possible, and 

coherent with the satisfactory achievement of, and ensuring compliance with the objectives 
pursued (e.g. choice between regulation, (framework) directive, recommendation, or 
alternative regulatory methods such as co-legislation, etc.)? 

The proposed Directive introduces a large number of amendments to Directive 2001/83/EC 
and  incorporates  part  of  the  current  provisions  and  amendments  to  Regulation  (EC)  No 
1901/2006. The new Directive will introduce provisions aiming at promoting innovation and 
access  to  affordable  medicines-creating  a  balanced  pharmaceutical  ecosystem  modulating 
incentives  related  to  regulatory  data  protection,  increase  competition  thanks  to  earlier 
market entry of generic and biosimilar medicines, increase transparency of public financing, 
enhance  the  security  of  supply  of  medicines,  reduce  the  environmental  impact  of  the 
pharmaceutical  product  lifecycle,  reduce  the  regulatory  burden  by  providing  a  flexible 
regulatory  framework  to  support  innovation  and  competitiveness.  A  new  directive  (rather 
than  an  amending  directive)  is  therefore  considered  the  appropriate  legal  instrument.  In 
addition,  the  Directive  should  both  be  maintained  to  avoid  fragmentation  of  national 
legislation  on  medicinal  products  for  human  use,  given  that  the  legislation  is  based  on  a 
system  of  national  and  Union  authorisations.  National  authorisations  are  granted  and 
managed  on  the  basis  of  national  law  implementing  the  EU  law.  The  evaluation  of  the 
general  pharmaceutical  legislation  has  not  shown  that  the  choice  of  legal  instrument  has 
caused specific problems or created disharmonisation. In addition, a REFIT Platform opinion 
in  2019  showed  that  there  is  no  support  among  the  Member  States  to  turn  Directive 
2001/83/EC into a Regulation. 

(c)  Does the Union action leave as much scope for national decision as possible while achieving 
satisfactorily the objectives set? (e.g. is it possible to limit the European action to minimum 
standards or use a less stringent policy instrument or approach?) 

The proposal does  not modify the repartition of competencies between the Union and the 

5 

 
 
 
Member States compared to today. 

(d)  Does the initiative create financial or administrative cost for the Union, national 

governments, regional or local authorities, economic operators or citizens? Are these costs 
commensurate with the objective to be achieved? 

Budgetary implications are mainly related to additional tasks to be carried out by the European 
Medicines Agency in terms of providing scientific, administrative and IT support in the following main 
areas: 

- Enhanced pre-authorisation scientific and regulatory support 

- Decision-making on orphan designations and management of Union Register on designations of 
orphan medicines 

- Active substance master file assessment and certification 

- Inspection capacities in third countries and support to Member States 

- Environmental Risk Assessment 

- Shortage management and security of supply 

Furthermore, for health systems the public health budgets would also benefit from the modulated 
incentive scheme since more EU citizens will have access to treatments, which results in savings due 
to more effective treatment and reduced hospitalisations. They will also benefit from stronger 
competition and transparency measures around public funding for clinical trials. There would be 
additional societal benefits for families and carers too, in terms of both quality of life / independence 
and earning potential. Overall, the new incentives will come with costs for healthcare budgets but 
the public health benefits should outweigh those.  

For regulators, the effects of the proposed changes would be overall positive especially due to 
various horizontal measures, which will allow to better coordinate, simplify and accelerate regulatory 
processes to the benefit of industry and launch new digitalisation programmes to improve the 
integration and efficiency of the regulatory system overall (as well as its interfaces with other 
regulatory systems). 

(e)  While respecting the Union law, have special circumstances applying in individual Member 

States been taken into account? 

Cyprus,  Ireland,  Malta  and  Northern  Ireland  have  historically  relied  on  the  supply  of 
medicinal  products  from  or  through  parts  of  the  United  Kingdom  other  than  Northern 
Ireland.  Following  the  withdrawal  of  the  United  Kingdom  of  Great  Britain  and  Northern 
Ireland from the European Union and the European Atomic Energy Community, to prevent 
shortages  of  medicinal  products  and  ultimately  to  ensure  a  high  level  of  public  health 
protection, specific timely limited derogations are included for medicinal products supplied 
to Cyprus, Ireland, Malta and Northern Ireland from or through parts of the United Kingdom 
other than Northern Ireland.  

6