Scope:

Evaluation of Council Regulation (EC) No 953/2003 to avoid trade diversion into the European Union of certain key medicines.

Evaluation findings:

The evaluation considers that the objective of improving access to medicines in the poorest developing countries remains relevant, that tiered pricing still has value and that the Regulation is a signal of EU support for it.

The objective of the Regulation is to ensure that customs authorities prevent the re-importation into the EU of HIV/AIDS, TB and malaria medicines sold to the poorest developing countries at discounted prices. The Regulation empowers the customs authorities to detain, or suspend the release of, products registered under the Regulation.

The Regulation also adds value to the EU commitment in the context of the WHO global strategy and plan of action; one aspect of encouraging differential pricing is to take action against product diversion. The Regulation is seen as a signal of support for tiered pricing which private initiatives cannot send.

The evaluation concluded that the benefits of the Regulation outweigh the costs and that the Regulation plays a relevant role in the context of the Trade for all Communication to promote an ambitious global health agenda and better access to medicines in poor countries.

Estimated savings and benefits

The following regulatory costs were measured by pharmaceutical companies:

• One company incurred costs in registering products with the Commission and adding a logo on its packs. These costs were estimated at around €200 000 for the whole period. There were also one-off costs of getting regulatory authorities to amend/extend marketing authorisations for the medicines due to a change of packaging. As the fee for such amendments in several countries is estimated at more than €100 000, the overall costs associated with the logo were estimated at several hundred thousand euros.

• Other companies choosing to use the Regulation would face similar administrative and authorisation costs.

The benefits of the Regulation include an offsetting of costs, as it reduced the company's need to use other, more costly anti-diversion processes for some products in some areas. It is thus concluded that the benefits can be assumed to have offset the administrative costs. Also, the Regulation improved transparency on the prices at which HIV, TB and malaria medicines were sold to developing countries.

Companies that do not use the optional scheme are under no legal obligation to take measures and so face no additional administrative burden.

Given data limitations, further quantification of regulatory benefits has not been possible.