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COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 21.2.2001
COM(2001) 96 final

**COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE**

**EUROPEAN PARLIAMENT**

**PROGRAMME FOR ACTION: Accelerated action on HIV/AIDS, malaria and**
**tuberculosis in the context of poverty reduction**

**EXECUTIVE SUMMARY**

This Commission’s Programme for Action develops the policy framework presented in the
September 2000 Communication on _“Accelerated Action targeted at major communicable_
_diseases within the context of poverty reduction”_ [1] . It establishes a broad and coherent
Community response, over the period 2001-2006, to the global emergency caused by the three
major communicable diseases, HIV/AIDS, malaria and tuberculosis, which most affect the
poorest populations and which undermine global health.

The Programme, as part of an expanded global effort, targets actions to increase; the impact of
existing interventions, the affordability of key pharmaceuticals, and research and development
of specific global public goods to confront these diseases in developing countries.

The Commission will prioritise investment in health, aids and population in the context of
poverty reduction. A greater focus on communicable diseases will be provided through
options including; redirection of unspent resources, guidance on future programming
exercises and the use of regional funds. More effective aid management processes will speed
up the disbursement of funds to improve health. While the overall approach will be
comprehensive, targeting the support for better health in developing countries, the
Commission will maintain a major focus on prevention. Investment in strengthening
pharmaceutical policies will include the appraisal of opportunities to develop local production
capacities. The Commission will seek to work in close co-operation with the UN, the G8
partners, the World Bank, civil society and EU Member States to, based on each partner's
comparative advantage, promote the reform the international financial architecture to enable
greater co-ordination, complementarity and efficiency of international funding.

The European Community will seek to increase the affordability of key pharmaceuticals
through attention to issues related to taxes and tariffs in developing countries. The European
Community will work towards the introduction of tiered pricing as the norm for the poorest
developing countries [2], while seeking to prevent re-importation to the EU market. Investment
will build capacity within developing countries on health and trade-related issues, including
implementation of the TRIPs Agreement.

The European Community will support new approaches to stimulate the development of
global public goods targeting the three major communicable diseases. Action will include
increased public support to Research and Development, notably for clinical trials, appropriate
incentives to encourage private investment into Research and Development, attention to early
dialogue on regulatory aspects and ensuring participation of developing countries in the
research process. Building increased capacity for research in developing countries will be a
priority.

To meet these objectives, the Commission will explore the use of the full range of available
financial instruments to implement this Programme for Action. The framework presented
identifies main actions, potential partners and instruments, and will be further detailed within
specific work plans following endorsement of this Programme for Action.

1 COM(2000) 585 of 20.9.2000.
2 In the context of this Programme for Action, the poorest developing countries include the Least Developed
Countries (currently 48 countries (UNCTAD:2000) and the other low-income countries with a GNP per
capita of less than USD 765 (currently 24 countries DAC: 2000).

2

Appropriate mechanisms, resources and partnerships will be put in place to monitor
implementation of this Programme for Action, and to participate in a global monitoring
system encompassing the efforts of all international partners. Successful implementation of
this initiative will make a major contribution to global efforts to address the communicable
disease emergency.

3

# **TABLE OF CONTENTS**

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN

PARLIAMENT PROGRAMME FOR ACTION: Accelerated action on HIV/AIDS, malaria and
tuberculosis in the context of poverty reduction......................................................................1

1. CONTEXT...............................................................................................................6

2. OBJECTIVES ANDEXPECTEDOUTCOMESOFTHE PROGRAMME FOR ACTION..6

3. THE PROGRAMME FOR ACTION........................................................................7

3.1. IMPACT...................................................................................................................8

3.1.1. Optimising the impact of Health, AIDS and Population interventions targeted at major
communicable diseases and poverty reduction..........................................................8

3.1.2. Strengthening of pharmaceutical policies and capacity building................................9

3.1.3. Developing local production capacity .......................................................................9

3.2. AFFORDABILITY ................................................................................................10

3.2.1. Tiered pricing .........................................................................................................10

3.2.2. Tariffs and taxes .....................................................................................................11

3.2.3. Intellectual property legislation...............................................................................11

3.3. RESEARCH AND DEVELOPMENT ....................................................................11

3.3.1. Strengthening and increasing support for Research and Development.....................11

3.3.2. Capacity building in developing countries...............................................................12

3.3.3. Incentives for the development of specific global public goods...............................12

3.4. PARTICIPATION IN GLOBAL PARTNERSHIPS: POLICY AND POLITICAL

DIALOGUE ...........................................................................................................13

4. INSTRUMENTS....................................................................................................14

4.1. Identifying the instruments for action......................................................................14

4.2. Partnership, ownership and monitoring ofan effective European Community response.....15

5. CONCLUSION ......................................................................................................15

Annex 1: Programme for Action – Matrix ............................................................................17

Annex 2: Basic Principles for Health, AIDS and Population support ....................................22

Annex 3: Clarification of terminology..................................................................................23

4

Annex 4: Acronyms..............................................................................................................24

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**1.** **CONTEXT**

On 20 September 2000, the Commission adopted a new policy framework presented in the
Communication on “ **Accelerated Action targeted at major communicable diseases within the**
**context of poverty reduction** ” [1] . The European Community policy aims to respond to what is now
generally acknowledged as a global emergency: the death of five million people per year from three
major communicable diseases: **HIV/AIDS, malaria and tuberculosis** . Each disease kills more than
one million people a year, mainly in developing countries, posing a serious threat to global health.

The policy framework identifies three objectives for targeted action and a coherent response to the
three diseases in the area of **impact of existing interventions, affordability of key pharmaceuticals,**
**and research into and development of specific global public goods** . This approach has received a
high level of political support from developing countries, EU Member States and international
development agency partners, civil society and industry. It combines a **coherent and unique mix of**
**development, trade and research policy** and draws on all available expertise within the Commission.

Taking into account the outcome of the international ‘High-Level Round Table’ [2] on the new European
Community policy, and following the conclusions by the Council [3], the **Commission has developed a**
**Programme for Action** targeted at the three major communicable diseases over the coming five years
(2001 - 2006).

**2.** **OBJECTIVES AND** **EXPECTED** **OUTCOMES** **OF THE PROGRAMME FOR**
**ACTION**

The main objective of European Community Development Policy [4] is to foster **sustainable**
**development** designed to **eradicate poverty** in developing countries and to integrate them into the
**world economy** . At the start of the twenty-first century, few investments are wiser than those in good
health. Investments in health can make a major contribution to poverty reduction welfare and
economic growth: countries with higher levels of health grow faster. In the poorest developing
countries [5], communicable diseases, particularly HIV/AIDS, malaria and tuberculosis continue to limit
development.

The European Community policy framework and this Programme for Action targeted at the major
communicable diseases, are entirely in line with and at the same time a pre-requisite for achieving the
objective of the European Community Development Policy. They will allow the European Community
**to contribute substantially and participate fully in global and country efforts** to confront major
communicable diseases. In recognition of the pivotal role of developing countries in ensuring the

1 Communication (2000) 585 of 20.9.2000.
2 In order to ensure a broad consultation on the new Communication, the EC, in partnership with WHO and UNAIDS,
convened a High-Level Round Table in Brussels on 28 September 2000. The Round Table brought together over
170 stakeholders, including 25 developing countries, notably ACP states, EU Member States, the European
Parliament, international development agencies, civil society, researchers and leaders of major pharmaceutical
companies. A high degree of consensus was reached among stakeholders on the content of the Communication.
More information can be found at www.europa.eu.int/comm/development/sector/social/table.
3 Council resolution of 10.11.2000, 2304 th Council meeting.
4 COM (2000) 212 of 26.4.2000.
5 In the context of this Programme for Action, the poorest developing countries include the least developed countries
(currently 48 countries (UNCTAD:2000) and the other low-income countries with a GNP per capita of less than
USD 765 (currently 24 countries DAC: 2000).

6

health of their people, this Programme for Action will pay particular attention to ensuring their full
participation and ‘ownership’ of the actions envisaged.

In line with the objectives of the policy framework, the expected outcomes of the European
Community’s Programme for Action are:

–
optimal impact from existing interventions, services and commodities targeted at the
major communicable diseases affecting the poorest populations;

–
increased affordability of key pharmaceuticals through a comprehensive approach;

–
increased investment in research and development of specific global public goods.

All of these will make a substantial contribution to reducing the burden of the major communicable
diseases, in particular for the poorest developing countries, and will strengthen global poverty
reduction efforts.

**3.** **THE PROGRAMME FOR ACTION**

The European Community’s policy is designed to link country level actions aimed at increasing
people’s access to existing goods and services, with enabling global action on affordability and
investment in the development of specific global public goods (see Annex 3). Consequently **, all three**
**areas for action – impact, affordability and research – are inter-active and synergetic** : the
development and financing of global public goods such as AIDS and malaria vaccines require more
effective research, financing and new partnerships. At the same time a real and sufficiently large
increase in financing for existing vaccines, for example at country level, will be needed to increase
confidence in future uptake of new vaccines. Similarly a reduction in prices and concessions from the
research and development industry will require a market of sufficient size, established public-private
partnerships and a substantial increase in production capacity. **Implementing the European**
**Community Programme for Action will require coherent, collective and simultaneous action** .

This Programme for Action takes into account a number of **basic principles** for European
Community’s Health, AIDS and Population support in developing countries, as highlighted in Annex
2.

**Progress** will be **monitored** at two levels. Impact and high-level outcome indicators will be monitored
as part of a joint gender sensitive and pro-poor global monitoring system to be developed with
international partners. Annex 1 outlines a framework to monitor implementation of this Programme for
Action within the direct areas for European Community action. The framework, which identifies
potential partners, instruments, will be further detailed within specific work plans and monitoring
tools, including yearly progress reports, to be developed by Commission services following
endorsement of this Programme for Action.

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**3.1.** **IMPACT**

_3.1.1._ _Optimising the impact of Health, AIDS and Population interventions_ _[6]_ _targeted at major_
_communicable diseases and poverty reduction_

(1) The Commission will prioritise within the total development co-operation budget, **health,**
**AIDS and population (HAP) interventions** over the next five years (2002-2006). The
proportion allocated to HAP stood at 8% in 2000 (approximately Euro 800 million) and will be
steadily increased as delivery capacity improves. Within those interventions, increased support
will target HIV/AIDS, malaria and tuberculosis, and the actions identified in this Programme
for Action, in accordance with the needs of each country and region.

(2) The ongoing process of European Commission’s reform is establishing more effective aid
management processes and addressing bottlenecks to allow **more rapid disbursement** . The
European Community’s commitments to health, AIDS and population (HAP) totalled Euro 4.2
billion over the period 1990-1999 of which Euro 700 million was committed in 1998 alone.
Most of this supports, will continue to strengthen of the health sector. Measures are underway
to simplify payments and contracting procedures. In addition, the Commission will invite
developing countries to **identify opportunities to direct unspent committed resources** within
country programmes to address the communicable disease burden.

(3) The Commission will provide guidance to developing countries on communicable disease
issues and options for **accelerated action within the current country, regional and thematic**
**programming exercises** [7] **.** Delegations and partner countries will be encouraged to address
from a poverty reduction and gender perspective, communicable diseases within the framework
of Country Strategy Papers (CSPs) and Poverty Reduction Strategy Papers (PRSPs) [8] . Member
States will be co-ordinated with and will be consulted in the competent committees. The
Commission will maintain a comprehensive approach within which **preventive activities** will
continue to receive major attention.

(4) The Commission will establish **co-operative arrangements with WHO/UNAIDS, the World**
**Bank and Member States** to provide necessary technical and normative input to country
programming and identification exercises.

(5) The Commission will consider the use of "all ACP" and other regional funds [9] for **rapid**
**resource transfers** to partners to increase access and utilisation of existing approaches and
scale up innovative practices such as social marketing of bednets, condoms, prevention and
care of mothers with HIV, etc. Subject to the conditions contained in applicable instruments,
funds may include the possibility for transfers to UN agencies/NGOs and CBOs and non

6 EC 'Population interventions' are defined in Council Regulation on Population Policies and Programmes in Developing
Countries N°1484/97, 22 July 1997.
7 In the different elements in this Programme for Action will be adapted to 'unstable' situations or where the local
component is weak (absence of functional Ministries of Health, absence of proper national health strategies, lack
of means to conduct a programme).
8 The European Community’s Development Policy’: COM(2000) 212 of 26.4.2000.
9 See section 4 on instruments. The legal bases for contributions may include development co-operation (articles 177 et seq.
of the EC Treaty) including co-operation with international organisations (article 181), public health (article 152)
and research policy (article 163 et seq.). Special instruments applicable in the field include Council regulation
N°550/97, 24 March 1997, on HIV/AIDS in developing countries, and Council Regulation on Population Policies
and Programmes in Developing Countries N°1484/97, 22 July 1997. Commitments are subject the eligibility
conditions specified in the applicable instruments.

8

traditional partners at the request of developing countries. Innovative practises will be
scrutinised from a poverty reduction and gender perspective before they are used widely.

The Commission will continue to work with **global partners** to develop new approaches through large
scale and more efficient resource transfers to developing countries. See section 3.4 for specific actions.

_3.1.2._ _Strengthening of pharmaceutical policies and capacity building_

(1) Through national and regional co-operation, capacity building, and financial and technical
assistance, the Commission will support the strengthening of pharmaceutical policy and
practice. The Commission will build upon existing programmes [10] where possible. Particular
efforts will be directed to improving budgeting and financial management, planning, quality
assurance, purchasing, tendering, distribution and optimal use of pharmaceuticals. Commission
support will facilitate a review of the impact of import duties and taxation schemes on prices,
address regulatory aspects and ethical standards, and lead to improved information exchange.
The Commission will support the development of regional/sub-regional quality control
laboratory networks to ensure appropriate quality control of pharmaceuticals. This is
particularly important in the context of local production and use of generics in accordance with
WHO approved standards. Developing countries will be supported in their efforts to identify
actions and promote informed dialogue on pharmaceutical policies.

(2) The Commission will **enhance partnerships** with regional technical resource networks,
notably with WHO as the lead technical agency in the pharmaceutical policy area.
Collaboration will be extended with UNICEF, UNAIDS, the pharmaceutical industry and other
partners.

(3) The European Community will work with WHO, to further **refine essential drug policies in**
**favour of developing countries.** Actions include the progressive inclusion of (non-generic)
key pharmaceuticals in the essential drug list and the implementation of appropriate, costeffective regulatory schemes at the regional and country levels. The aim will be to accelerate
registration and marketing approvals of key pharmaceuticals in developing countries based on
existing registration in developed countries. Moreover, the European Community will liase
with WHO for specific rules and regulatory schemes, and the provision of key pharmaceuticals
in emergency situations.

(4) The European Community will work with countries and regions to **develop systems to protect**
**against diversion of tiered priced products** (see 3.2.).

3.1.3. _Developing local production capacity_ _[11]_

(1) The European Community will assist developing countries, at a regional or national level, to
develop high-quality, local production of key pharmaceuticals, many of which are off-patent
and could be produced immediately. Candidate-countries will be identified through **sectoral**
**and market analyses,** in conjunction with **feasibility studies** to identify and assess existing
**business** **opportunities** . In addition, **dialogue** between the private and state-owned
pharmaceutical sectors in both developing and developed countries will be encouraged, and
**business links** between them facilitated. **Support for local production** will go to countries

10 For example the EC programmes ARIVA (Appui Régional a l’Indépendance Vaccinale en Afrique) and APPA (Appui a
la Politique Pharmaceutique en Afrique).
11 See Annex 3: Clarification of Terminology.

9

that have pre-existing capacity and necessary infrastructure. Other countries may be considered
at a later stage.

(2) **Viable projects** will be supported by promoting business opportunities on the basis of **sound**
**business plans** and **studies** focusing on public health benefits as well as profitability.
**Financing** may be through PROINVEST, the investment promotion programme for ACP
countries, the EC-ACP Business Assistance Scheme (EBAS) [12], the private sector Investment
Facility of the Cotonou Agreement through the EIB, and other EC technical and financial cooperation mechanisms (for ALA-MEDA - see section 4 on Instruments).

(3) EU and non-EU generic and research-based industries will be encouraged to enter into
**licensing agreements** and **joint ventures** with suitable developing country partners. This will
require adequate **incentives**, such as securing a high standard of protection for intellectual
property rights, obtaining access to developing country markets by mutual recognition of
marketing approvals, and ensuring that products destined for developing country markets are
not exported to the Community or other developed country markets.

**3.2.** **AFFORDABILITY**

_3.2.1._ _Tiered pricing_ _[13]_

(1) The European Community is at the forefront of international efforts to establish a **global tiered**
**pricing system** for key pharmaceuticals for the poorest developing countries. It remains
convinced that a firm, long-term commitment from manufacturers to supply these products at
the lowest possible prices would be a major contribution to the problem of access to affordable
medicines. Further discussions will therefore be pursued with the pharmaceutical industry, and
with the public authorities in the poorest developing countries, with a view to setting up such a
system at the earliest opportunity. In future, tiered pricing for the poorest developing countries
should no longer be the exception, but the rule.

(2) A successful tiered pricing system targeted at the poorest developing countries must also be
able to **prevent product diversion** to other markets, thus undermining prices. It is essential, in
order to preserve confidence in such a system, that **effective safeguards** are in place to ensure
that all low-priced pharmaceuticals destined for specific markets are delivered to, and remain
in, those markets. Such safeguards include technical measures, such as differential labelling,
packaging and trademarks to identify preferentially priced products, special enforcement
procedures to be applied in the importing and/or exporting country, and contractual
arrangements between the exporter, importer and distributor of the medicines [14] .

(3) **International concertation** (e.g. under the auspices of the UN or the WTO) will be needed to
contain the risk of product diversion, but it will also require the full participation and cooperation of governments in developed and developing countries, the public and private

12 An ongoing programme for ACP businesses, which provides support to individual companies or producer associations in
this sector.
13 Tiered pricing describes a system whereby different prices are charged in different markets. In the context of this
Programme for Action, it refers to a pricing system by which producers of key pharmaceuticals, including both
patented and non-patented medicines, make those products available to the poorest countries at significantly
discounted prices.
14 Measures foreseen in this regard should not affect the free movement of goods within the Community.

10

sectors, and of NGOs. The European Community will continue discussions with its main
trading partners in order to advance this debate.

_3.2.2._ _Tariffs and taxes_

The European Community will continue to analyse the effects of **other factors**, besides the net import
price, on **consumer prices** in developing countries. Such factors, which include **tariffs**, **taxes,** and
**importation, distribution and local registration fees**, can significantly increase prices. Where
appropriate, importing countries shall be encouraged to reduce or abolish these factors.

_3.2.3._ _Intellectual property legislation_

(1) The European Community is committed to **supporting WTO developing country members**
in implementing the **TRIPs Agreement** . The support available includes training, assistance
with legislative drafting, and setting up the appropriate institutional and administrative

structures.

(2) The EC recognises that, within the TRIPs Agreement, there exists a flexibility allowing
countries to issue, in certain circumstances, compulsory licenses [15] in order to address urgent
public health concerns.

For its part, the EC will promote discussions, within the WTO, WIPO or WHO, to address the link
between the TRIPs Agreement and public health protection issues, in order to an achieve international
consensus on this issue.

**3.3.** **RESEARCH AND DEVELOPMENT**

_3.3.1._ _Strengthening and increasing support for Research and Development_

Under the current 5 [th] Framework Programme, the Commission is expected to commit Euro 130 million
for the research on HIV/AIDS, malaria and tuberculosis. More than Euro 80 million have been
committed under the 4 [th] Framework Programme (1994-1998). Recent initiatives have increasingly
focused support on confronting communicable diseases in developing countries. The European
Research Area [16] provides a framework for Europe to develop co-operative Research and Development
strategies. Building on current investments in health research for the three major communicable
diseases, a new major initiative is envisaged to support and accelerate the clinical development of new
interventions. In this context, the Commission is elaborating in the first half of 2001, in consultation
with all relevant stakeholders, a European research strategy for global goods to confront HIV/AIDS,
malaria and tuberculosis. Guided by specific action plans for the three diseases, two directions for
Community support are envisaged:

(1) continued and **increased support for basic and strategic research with greater co-**
**ordination at European and international level** .

(2) the creation of a **European Clinical Trials Platform** to increase number, efficiency and
coherence of clinical trials carried out by the public and private sectors, and involving the

15 The granting of a licence without the consent of the patent holder, but against adequate remuneration, on various
grounds of general interest. See also COM (2000) 585, 20 September 2000, paragraph 4.2.
16 COM(2000) 6, 18 January 2000 and COM(2000) 612, 4 October 2000.

11

developing countries. This platform will also function as an interface for research and
development with other global initiatives including those of the G8 partners.

_3.3.2._ _Capacity building in developing countries_

Developing countries will be involved at all stages of the research and development process for new
public goods. Lasting impact is expected both from basic professional as well as advanced research
training on science and technology capacity and health services performance.

(1) Increased **support to research activities** will include support for collaborative molecular and
clinical, epidemiological, operational and social studies, strengthening the base for healthrelated research. Emphasis will also be put on gender balance and poverty focus. Moreover,
support will be given to ensure appropriate ethical standards and review systems.

(2) Support will be provided for **capacity building** in developing countries to enable them to host
and conduct large-scale population trials. Three major activities are envisaged to be coordinated through the clinical trials platform: a) human resources development, b) social
mobilisation and community empowerment as a support measure for population trials and c)
upgrading of facilities and services at research institutions and clinical institutions in
developing countries.

_3.3.3._ _Incentives for the development of specific global public goods_

(1) The EU will **study and develop an incentive package** to encourage more private investment
by the Research and Development based (R&D) industries in new products to confront the
major communicable diseases in developing countries. Following the adoption of the new
European Community’s policy framework, the UK Prime Minister’s office has established a
working group to assess such potential incentives. The work of the UK group will take place in
close consultation with the Commission and EU Member States. This will provide valuable
input to the EU’s examination of incentives such as the extension of marketing rights, venture
capital, low-cost loans, tax credits, guaranteed markets, and so on.

(2) The Commission will encourage and support initiatives for an **early dialogue on regulatory**
**aspects** in relation to new products for the three major communicable diseases. This will be
essential in avoiding delays in the approval of new products. The **Commission will ensure**
**that regulatory bodies in developing countries** where clinical trials are taking place or
envisaged **are part of such early dialogue** in respect of these new products.

(3) The Commission will increase its support for **economic research** into the demand for specific
global public goods for developing countries. The Commission is already involved with the
World Bank in research on public demand and willingness to pay for an AIDS vaccine. This
includes support for studies to improve market understanding and to assess the potential health
impact and affordability of an HIV vaccine. T he results of this research will yield much-needed
information for policy makers in developing countries as well as for donors.

(4) The Commission will participate in the development of financing mechanisms to address the
need for specific global public goods and to ensure that these become available to people in
developing countries as quickly as possible, particularly for AIDS and malaria vaccines,
tuberculosis diagnostics and vector control products.

12

(5) The work of the **Commission AIDS Vaccine Task Team and co-operation with Member**
**States and other partners such as UNAIDS, IAVI, GAVI will be continued and**
**strengthened.** The AIDS Vaccine Task Team is working on the various actions listed above
with the aim of accelerating the development and availability of an AIDS vaccine for
developing countries as soon as possible. [17]

(6) The **European Clinical Trials Platform** will act as an incentive by removing important
scientific, technological and operational hurdles to product development. It is intended to
extend the platform to developing countries.

**3.4.** **PARTICIPATION IN GLOBAL PARTNERSHIPS: POLICY AND POLITICAL**

**DIALOGUE**

The European Community will continue to **participate in global initiatives** targeting action against
the major communicable diseases in the context of poverty reduction. To this end, the European
Community will:

(1) **promote the reform of the international financial architecture** to foster increased
availability and development of specific global public goods (see Annex 3) and to support
greater co-ordination and efficiency of international funding. The European Community will
pay particular attention to ensuring that global support **unites around comprehensive**
**approaches to health at country level** and is based on the full participation and ownership of
developing countries. To this end, the Commission will continue to **actively participates in**
**the working group of G8 members** which will examine how best to organise increased
spending and targeting of global resources towards the three communicable diseases. In the
lead up to the Genoa G8 meeting (July 2001) the group evaluate the lessons learnt from
existing international mechanisms. These will provide important input to the Commission’s
own examination of the opportunities to fund global mechanisms;

(2) **strengthen partnerships with the UN organisations, in particular with the WHO** **[18]** **and**
**UNAIDS.** Particular aims will be to co-ordinate global efforts more efficiently and to monitor
the accelerated response through resource flows and health outcomes;

(3) **continue close co-operation with the US and Japan** in order to garner support for adequate
global burden sharing, financing mechanisms and the development of a global tiered pricing
system for key pharmaceuticals for the poorest developing countries (see Section 3.2.1.). With
the US this should be part of the co-operation which has been set up by the EU-US Summit
Leaders on the three communicable diseases and will take place in the framework of the New
Transatlantic Agenda [19] and in the context of the G8 discussions.

(4) **this approach will benefit the European Community**, **the international community and**
**recipient countries** . It will facilitate more streamlined technical support from the UN and other
important donors, establish a more effective financial mechanism to speed up delivery, and

17 The EIB and EMEA are already part of the team and there is substantial interest from EU Member States and IAVI
participants.
18 Over the past year the EC and WHO have intensified their co-operation. Letters have been exchanged covering a
memorandum with a framework for co-operation, signed in December 2000. The memorandum defines principles
and objectives, outlines areas of co-operation, establishes procedures and defines priority areas for action,
including those related to the three major communicable diseases.
19 EU-US Summits Conclusions, Queluz May 2000 and Washington December 2000.

13

reduce transaction costs for donor and recipient. At the same time, it will ensure a stronger
voice for the European Community in global policy setting.

**4.** **INSTRUMENTS**

**4.1.** **Identifying the instruments for action**

The European Commission has a large array of policy, legislative, regulatory and financial instruments
which it will activate in support of the Programme for Action [20] . Which of these instruments come in to
play for each action will depend on the various entry levels (national, regional, and global) and will
need to be defined further, following the procedures contained in the respective instruments. **The**
**following development assistance instruments will be used:**

a) Unspent reserves from the 8 [th] EDF, and resources from geographic budget lines (ALA-MEDA).

i) Specific actions in support of initiatives with existing or new partners. Specific Health,
AIDS and Population programming guidelines are being developed to this end.

ii) Within this context the following interventions will be envisaged for financial support as
well:

–
where countries agree to remove tariffs for pharmaceutical imports, technical support
for fiscal reforms and additional financial incentives for countries committed to this will

be examined;

–
technical support for the implementation of the TRIPs Agreement.

b) Resources from the 9 [th] EDF [21], ALA-MEDA and thematic budget lines.

i) It is proposed that a substantial amount would be allocated for partnerships with nontraditional partners, such as the local private sector in developing countries, to use innovative
approaches in the area of social marketing at country level (see 3.1.1).

ii) It is further proposed that a substantial amount be allocated to form a partnership with
WHO for actions envisaged for the strengthening of pharmaceutical policies at regional and
country level (see 3.1.2).

iii) While advocating adequate international burden-sharing and a consensus consistent with
the European Community policy spelt out in this Programme for Action, the Commission will
consider a contribution to a global mechanism providing technical know-how and
commodities in co-operation with other partners (see 3.4).

20 See footnote 9. Development assistance instruments which are proposed to be used in support of the Programme for
Action include: NIPs – RIPs and other EDF instruments, such as the Regional Economic Partnership Agreements
(REPAs) and the new Investment Facility under the Cotonou agreement. Technical and financial co-operation
protocols for Asia, Latin-America and the Mediterranean, thematic budget lines, and Humanitarian Aid managed
by ECHO should also be used. Commitments are subject the eligibility conditions specified in the applicable
instruments. In addition to the development assistance instruments, the European Research Area and research
framework Programmes will be used for supporting the measures envisaged.
21 From 2004 onwards and as set out in the financial protocol to the Cotonou Agreement.

14

c) Several support actions, such as feasibility studies, can be undertaken in support of the development
of production capacity in developing countries [22] . Business linkages may follow from the activities of
the ESIP programme that will start in 2001, in co-operation with the European Investment Bank.

d) In relation to the current debate on untying aid, and with a view to enhancing local capacity and
affordability, the Commission proposes to replicate the ACP regime for non-ACP regional areas,
allowing partner countries’ firms, as well as EU firms, to bid for tenders. Beyond that, the Commission
seeks to explore the opening of calls for tender for procurement of certain services or products, like
key pharmaceuticals for HIV/AIDS, malaria and tuberculosis, to all developing countries. The aim is
to encourage the production and access of such goods and services within developing countries or
regions, as appropriate, and to make available, with or without financial support from external
partners, such goods and services at an affordable price to all developing countries.

In addition to the development assistance instruments, **Research Framework Programmes** will be
used for supporting the measures envisaged under Section 3.3. in line with the objectives of the
European Research Area.

The European Clinical Trials Platform (see Section 3.3.1) will seek to use, in addition to research
funds and where eligible, financial resources from Community development funds, public-private
partnerships and others, necessary to carry out large-scale population trials.

**4.2.** **Partnership, ownership and monitoring of an effective European Community response**

It must be noted that most of these development instruments and resources only become **‘activated’**
**following the request** of developing country partners or international development partners. Many
international and developing country partners have expressed an interest in the actions envisaged under
this Programme for Action. **This interest in collaborating with the European Community is**
**accompanied by a clear call for ‘user-friendly’, ‘action-oriented’ instruments and partnership**
**arrangements** . In order to ensure full **ownership** at country level it is crucial that developing country
partners continue to be involved in the further identification of specific actions.

To date the Commission has not been successful in developing efficient **financial instruments for**
**investing in global initiatives** . The use of small-scale thematic budget lines has only partially allowed
this gap to be addressed. Global mechanisms might well allow the Commission to increase
development spending and lower transaction costs in co-operation with Member States’ activities.

In addition to ‘responsive’ financing instruments a substantial amount of work needs to be done in
terms of **‘policy dialogue** ’ and the use of instruments for policy development and dialogue.
Appropriate institutional arrangements and resources will be at the core of the implementation and
monitoring of this Programme for Action.

**5.** **CONCLUSION**

Successful implementation of this Programme of Action over the next five years (2002-2006) will
make a major contribution to global efforts to address the development crisis presented by HIV/AIDS,
malaria and tuberculosis. The Commission proposes a coherent policy framework to guide accelerated
Community action and has taken a lead in efforts to co-ordinate a more effective response by countries
and the international community. Developing countries and the poorest populations bearing the

22 E.g. through the EBAS programme.

15

greatest burden require co-ordinated support on an unprecedented scale. This will require a strong
commitment from countries, Member States, multilateral and bilateral donors.

16

**Annex 1: Programme for Action – Matrix**

|Col1|Col2|IMPACT (1 of|2)|Col5|
|---|---|---|---|---|
|**ACTIVITIES**<br>|**GEOGRAPHICAL**<br>**FOCUS**|**TIMELINE**|**PARTNERSHIPS**|**MONITORING/OUTCOMES**|
|~~**III 1.1 – Optimising impact of HAP interventions**~~<br>**targeted at major communicable diseases and**<br>**poverty reduction**.<br>Rapid disbursement. Commission to identify<br>opportunities to direct unspent resources to address<br>the three communicable diseases.<br>1.<br>Commission<br>services<br>will<br>provide<br>specific<br>guidance to EC Delegations. Partner countries<br>will<br>be<br>encouraged<br>to<br>address<br>the<br>communicable diseases within the framework<br>for gender sensitive and pro-poor Country<br>Strategy<br>Papers.<br>2.<br>The Commission will establish co-operative<br>arrangements for programming.<br>3.<br>The Commission will facilitate resources for<br>innovative<br>partnerships.<br>4.<br>The<br>Commission<br>will<br>prioritise<br>HAP<br>interventions within overall development aid.<br>5.<br>The European Community will pursue greater<br>articulation<br>between<br>existing<br>global<br>mechanisms and partner countries efforts.|1)<br>All<br>developing<br>countries.<br>2)<br>All<br>developing<br>countries.<br>3)<br>All<br>developing<br>countries.<br>4)<br>Mainly<br>in<br>Sub-<br>Saharan<br>Africa<br>and<br>South Asia<br>5)<br>All<br>developing<br>countries<br>See 3.4.|1)<br>March<br>2001-<br>December 2001.<br>2) March 2001.<br>3) February 2001 –<br>July 2001.<br>4) Continuous from<br>March 2001.<br>5)<br>March<br>2001-<br>2006.<br>See 3.4.|1)<br>All<br>developing<br>countries.<br>2)<br>All<br>developing<br>countries, other donors.<br>3)<br>WHO-UNAIDS<br>-<br>Member States.<br>4) Civil society, private<br>sector, UN agencies.<br>5)<br>All<br>developing<br>countries, other donors.<br>See 3.4.|1.1 HAP disbursement portfolio increased by 50% by<br>end 2001.<br>1.2 Dormant programmes (20) closed or re-oriented<br>by end 2001.<br>2.1 Programming guidelines established and used.<br>2.2. Number of gender sensitive and pro-poor CSPs<br>including HAP interventions increased.<br>2.3. Delegations staff reinforced and trained.<br>3)<br>Partnership<br>and/or<br>Financing<br>Agreements<br>established.<br>4) Resources programmed, partners identified.<br>5) Increased HAP allocation from current 8% in<br>accordance with improved delivery capacity.<br>See 3.4.|

17

**Programme for Action – IMPACT (2 of 2)**

|ACTIVITIES|GEOGRAPHICAL<br>FOCUS|TIMELINE|PARTNERSHIPS<br>EC, developing<br>countries|MONITORING/OUTCOMES|
|---|---|---|---|---|
|~~**III.1.2 Strengthening of pharmaceutical policies.**~~<br>1.<br>Regional<br>co-operation,<br>capacity<br>building,<br>financial<br>and<br>technical<br>assistance.<br>2.<br>Enhanced and improved essential drug policy<br>and regulatory schemes.<br>3.<br>Refine global essential drug policy in favour<br>of<br>the<br>poorest<br>developing<br>countries.<br>4.<br>Developing systems to prevent diversion of<br>tiered priced products.<br>|Actions<br>will<br>primarily<br>take<br>place<br>at<br>regional<br>level<br>and,<br>due<br>to<br>the<br>devastating effect of the<br>three diseases<br>and the<br>poverty factors in the two<br>regions, be targeted at<br>Africa and South Asia.<br>See 3.2.3.|June<br>2001-June<br>2002.<br>See 3.2.3.|For all actions:<br>WHO<br>UNICEF,<br>UNAIDS,<br>Industry.<br>See 3.2.3.|1.<br>Partnerships established.<br>2.1. Agreement with WHO established.<br>2.2. Revision of EDL by WHO by end of<br>2002.<br>3.<br>Partnership<br>with<br>UNICEF,<br>UNAIDS,<br>Industry identified.<br>4. See 3.2.3.|
|~~**III.1.3 Developing local production capacity**~~<br>1.<br>Support<br>to<br>sector<br>and<br>market<br>analyses;<br>dialogue, identification of existing business<br>opportunities.<br>2.<br>Support to the development of sound business<br>plans.<br>3.<br>Promote licensing agreements and business<br>joint ventures through appropriate incentives.|Actions will take place at<br>regional<br>level<br>with<br>a<br>specific<br>geographical<br>focus on countries with<br>pre-existing<br>local<br>production<br>capacity (in<br>either private or public<br>sector).|For<br>all<br>actions:<br>March<br>2002<br>to<br>January 2006.|Partnership<br>will<br>simultaneously<br>involve EU and non-<br>EU<br>generic<br>and<br>research-based<br>industries<br>and<br>relevant<br>regional<br>bodies,<br>the<br>Commission, the EU<br>Member<br>States,<br>the<br>European Investment<br>Bank (EIB) and other<br>financing institutions.<br>Industrial partners.|1. Pre-feasibility studies completed.<br>2.1 Countries identified for business plans.<br>2.2<br>Business<br>plans<br>agreed.<br>3. Licensing agreements and joint ventures<br>promoted.|

18

**Programme for Action – AFFORDABILITY (1 of 1)**

|ACTIVITIES|GEOGRAPHICAL<br>FOCUS|TIMELINE|PARTNERSHIPS|MONITORING/<br>OUTCOMES|
|---|---|---|---|---|
|~~**III.2.1 Tiered pricing**~~<br>1.<br>Lead international efforts to establish a global<br>tiered<br>pricing<br>system.<br>2.<br>Set up effective safeguards against product<br>diversion.<br>**III.2.2 Tariffs and taxes**<br>Impact analysis.<br>**III.2.3 Intellectual property legislation**<br>1.<br>Support for TRIPs implementation.<br>2.<br>Discussion of links between TRIPs agreement<br>& public health protection.|~~Actions at global level for~~<br>the developing countries<br>1. EU, OECD and G8<br>countries.<br>2.<br>Importing<br>and<br>exporting countries.<br>Developing countries.|1. Initiated in September 2000,<br>ongoing.<br>2. From March 2001 .<br>From March 2001.<br>From March 2001.<br>From November 2001.|1.<br>EU,<br>generic<br>and<br>research-based<br>industry,<br>G8,<br>OECD<br>and<br>developing countries<br>2. EU, industry, OECD,<br>G8 and developing<br>countries<br>EU,<br>International<br>organisations, developing<br>countries<br>WTO, WIPO and<br>developing countries.<br>Fourth WTO<br>ministerial, WHO, WIPO,<br>Civil<br>Society,<br>Industry<br>players, EU.|1.<br>Commitments from<br>the<br>industry<br>players<br>and<br>developing<br>countries<br>authorities.<br>Lower consumer prices.<br>Provision of technical assistance where<br>required.|

19

**Programme for Action – RESEARCH and DEVELOPMENT (1 of 2)**

|ACTIVITIES|GEOGRAPHICAL<br>FOCUS|TIMELINE|PARTNERSHIPS|MONITORING/<br>OUTCOMES|
|---|---|---|---|---|
|~~**III.3.1 – Strengthening support for Research and**~~<br>**Development**<br>1.<br>Increased support for basic and strategic<br>research.<br>2.<br>Creation of a European Clinical Trials Platform.<br>**III.3.2 – Capacity building in Developing**<br>**Countries**<br>1.<br>Support to gender sensitive and pro-poor<br>research activities.<br>2.<br>Capacity building (equal opportunities for<br>women and men).<br>**III.3.3 – Incentives for the development of specific**<br>**global public goods**<br>1.<br>EC will examine and develop an incentive<br>package.<br>2.<br>Early dialogue on regulatory aspects.<br>3.<br>Economic research into demand.<br>4.<br>Development of joint financing mechanisms.<br>5.<br>The AIDS Vaccine Task Team strengthened.|All actions will benefit all<br>populations and in<br>particular those in the<br>poorest developing<br>countries.|Ongoing and to be continued<br>up to March 2001 – March<br>2003.<br>1) Preparation as of 2001,<br>incentives in place as of 2002.<br>2) Starting January 2001 - and<br>taking account of February<br>WHO<br>meeting.<br>3) 1-6 months from February<br>2001.<br>4) Starting January 2001-and<br>taking account of February<br>WHO meeting.<br>5) From January 2001.|EU<br>Member<br>States,<br>European<br>Community<br>,<br>G8,<br>developing<br>countries, WHO, UNAIDS, in line<br>with the objectives of the European<br>Research Area..<br>1) Partnership with Member States,<br>developing<br>countries,<br>WHO<br>and<br>others<br>2) Various financial partnerships.<br>3) The UK Prime Minister's office<br>working<br>group<br>and<br>in<br>close<br>consultation with other EU Member<br>States.<br>4) Idem.<br>5) New operational partnership in<br>support of an AIDS vaccine (with<br>UNAIDS and IAVI).|All R & D activities will be<br>externally<br>reviewed<br>according to pre-determined<br>criteria.|

20

**Programme For Action – GLOBAL MECHANISMS (1 of 1)**

|ACTIVITIES|GEOGRAPHICAL<br>FOCUS|TIMELINE|PARTNERSHIPS|MONITORING/<br>OUTCOMES|
|---|---|---|---|---|
|~~**III.4. Participation in global partnerships**~~<br>1.<br>The<br>EC<br>will<br>promote<br>the<br>reform<br>of<br>the<br>international financial architecture to foster increased<br>availability and development of global public goods.<br>2. The EC will strengthen its partnership with the UN<br>organisations.<br>3. The EC will continue its co-operation with the US<br>& Japan, in particular on tiered pricing.|For<br>all<br>actions.<br>Global<br>actions in favour of the<br>poorest<br>populations<br>most<br>affected by the three major<br>communicable diseases.|1.<br>January<br>2001<br>and<br>continued.<br>2. By July 2001.<br>3.<br>November<br>2000<br>and<br>continued.|1. G8 and European States<br>2. UN organisations, and in particular<br>with<br>the<br>WHO<br>and<br>UNAIDS.<br>3. EU/US and Japan.|1.1<br>Adequate<br>burden-<br>sharing in place.<br>1.2<br>Coherent<br>policy<br>between<br>global<br>partners.<br>2.<br>Partnerships<br>with<br>UN<br>established.<br>3.<br>Joint<br>EU/US/Japan<br>position on tiered pricing in<br>place.|

21

**Annex 2: Basic Principles for Health, AIDS and Population support**

(1) Build on the development agenda of each country, targeting poverty reduction and
equality between men and women, however it is expressed and whether within a
Comprehensive Development Framework, a Poverty Reduction Strategy or as a
national development plan. The country’s stakeholders’ ownership is vital.

(2) The approach to effectively address the burden of communicable diseases at country
level will be context specific. The ‘best fit’ for accelerated action will build on what is
in place and will employ a range of interventions, funding mechanisms and partners.

(3) Countries where effective policies, institutions and on-or-off budget co-ordination are
in place will be supported through the mechanism of choice of the country. In
countries without coherent policies and mechanisms and/or where institutions are
weak, or in countries in crisis, support will be facilitated through partnerships with
NGOs and/or UN agencies.

(4) The health, AIDS and population policy environment and practice will define potential
instruments and channels of support.

(5) Efforts should support actions that strengthen health systems and further build national
capacity. Effective support will deliver health outcomes which will be monitored.

(6) Coherent action will support a common framework, in partnership with all
stakeholders - governments and non-government actors, the public and private sector,
donors and international agencies.

(7) Effective pro-poor support will contribute to other important development outcomes
relating to crosscutting concerns such as the promotion of human rights, equality
between men and women, children's rights and the environmental dimension.

(8) Partners will need to employ imaginative approaches which can deliver equitable
health outcomes, are financially fair and responsive to people's demands and which
harness the resources of all potential contributors.

(9) The Commission will invite Member States that are interested in working jointly on
short-term deliverables to develop flexible mechanisms to support interested partner
countries (co-financing, silent partners, technical assistance, etc.).

22

**Annex 3: Clarification of terminology**

**a) Global public goods**

‘Public Goods’ are goods which benefit society as a whole. The concept of ‘national public
goods’ such as the maintenance of law and order is not new. But in an increasingly
interconnected and interdependent world much more attention is now being paid to ‘global
public goods’. Examples range from the control of communicable diseases, to the provision of
global financial stability, the protection of the environment and the prevention of conflict. [1]

The technical know-how necessary to support ‘global public goods’ will benefit all
populations irrespective of who pays for their development. This creates a ‘free-rider’
problem, in that individuals and governments will be willing to pay less than the value of the
benefits they receive. Specifically with regard to for example HIV/AIDS and malaria
vaccines, the private sector is unlikely to recoup research and development costs for health
technologies that primarily benefit countries and populations with low ability to pay.

The solution ultimately lies at global level with countries, donors and the private sector taking
joint responsibility and sharing the cost related to the development and availability of ‘global
public goods’. A co-ordinated approach through a shared public facility may therefore be the
best answer.

**b) Local Production**

Local production refers to the manufacture of key pharmaceuticals (including global goods
such as new vaccines) in accordance with national legislation and with related international
obligations where applicable. It includes local production of patented products under licensing
arrangements and joint venture agreements, as well as other activities such as re-labelling and
re-packaging.

In the context of this Programme for Action, supporting local production of low-cost key
pharmaceuticals means more than simply boosting local manufacturing capacity. It is first and
foremost an industrial development issue involving a technology transfer between European
and developing country industries, as well as promoting South-South co-operation and
helping to integrate developing countries into the world economy. Indeed, those countries,
which are relatively advanced in terms of local production capacity and whose companies
receive support under this Programme for Action, should be prepared to provide technical
assistance and participate in technology transfer ventures for the benefit of poorer countries.

1 Eliminating World Poverty : Making Globalisation Work for the Poor, White Paper on International
Development, UK Government; December 2000.

23

**Annex 4: Acronyms**

|ACP|Africa, Caribbean and Pacific|
|---|---|
|~~**AIDS**~~<br>|~~Acquired Immune Deficiency Syndrome~~<br>|
|~~**ALA**~~<br>|~~Asia and Latin America development co-~~<br>operation programme<br>|
|~~**CBO**~~<br>|~~Community Based Organisation~~<br>|
|~~**CSP**~~<br>|~~Country Strategy Paper~~<br>|
|~~**DAC**~~<br>|~~Development Assistance Committee~~<br>|
|~~**DG**~~<br>|~~Directorate General~~<br>|
|~~**EBAS**~~<br>|~~EU-ACP Business Assistance Scheme~~<br>|
|~~**EC**~~<br>|~~European Community~~<br>|
|~~**ECHO**~~<br>|~~European Community Humanitarian Aid~~<br>Office<br>|
|~~**EDF**~~<br>|~~European Development Fund~~<br>|
|~~**EDL**~~<br>|~~Essential Drugs List~~<br>|
|~~**EIB**~~<br>|~~European Investment Bank~~<br>|
|~~**EMEA**~~<br>|~~European Medicines Evaluation Agency~~<br>|
|~~**ESIP**~~<br>|~~EU SADC Investment Promotion Programme~~<br>|
|~~**EU**~~<br>|~~European Union~~<br>|
|~~**FP**~~<br>|~~Framework Programme~~<br>|
|~~**G8**~~<br>|~~Group of G7 most industrialised countries~~<br>and Russia<br>|
|~~**GAVI**~~<br>|~~Global Alliance for Vaccines and~~<br>Immunization<br>|
|~~**HAP**~~<br>|~~Health, AIDS and Population~~<br>|
|~~**HIV**~~<br>|~~Human Immune Deficiency Virus~~<br>|
|~~**IAVI**~~<br>|~~International AIDS Vaccine Initiative~~<br>|
|~~**LDC**~~<br>|~~Least Developed Countries~~<br>|
|~~**MEDA**~~<br>|~~Mediterranean countries development co-~~<br>operation programme<br>|
|~~**NGO**~~<br>|~~Non-government Organisation~~<br>|
|~~**NIP**~~<br>|~~National Indicative Programme~~<br>|
|~~**OECD**~~<br>|~~Organisation for Economic Cooperation and~~<br>Development<br>|
|~~**PRSP**~~<br>|~~Poverty Reduction Strategy Paper~~<br>|
|~~**R&D**~~<br>|~~Research and Development~~<br>|
|~~**REPA**~~<br>|~~Regional Economic Partnership Agreement~~<br>|
|~~**RIP**~~<br>|~~Regional Indicative Programme~~<br>|
|~~**SADC**~~<br>|~~Southern Africa Development Community~~<br>|
|~~**TRIPs**~~<br>|~~Agreement on Trade Related Aspects of~~<br>Intellectual Property Rights<br>|
|~~**UN**~~<br>|~~United Nations~~<br>|
|~~**UNAIDS**~~<br>|~~United Nations Joint Programme on~~<br>HIV/AIDS<br>|
|~~**UNCTAD**~~<br>|~~United Nations Conference on Trade and~~<br>Development<br>|
|~~**UNICEF**~~<br>|~~United Nations Children's Fund~~<br>|
|~~**WHO**~~<br>|~~World Health Organisation~~<br>|
|~~**WIPO**~~|~~World Intellectual Property Organisation~~|

24

**WTO** World Trade Organisation

25