Explanatory Memorandum to COM(2008)668 - Amendment of Directive 2001/83/EC as regards the prevention of the entry into the legal supply chain of medicinal products which are falsified in relation to their identity, history or source

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dossier COM(2008)668 - Amendment of Directive 2001/83/EC as regards the prevention of the entry into the legal supply chain of medicinal products ...
source COM(2008)668 EN
date 10-12-2008
BACKGROUND TO THE PROPOSAL

THERE IS AN ALARMING INCREASE IN THE EU OF MEDICINAL PRODUCTS WHICH ARE falsified in relation to their identity, history or source. These products are from the point of view of EU pharmaceutical legislation illegal insofar as they do not comply with the Community rules for medicinal products. Therefore, in the context of this proposal for an amendment of the pharmaceutical legislation these products shall be referred to as “falsified medicinal products”.

Falsified medicinal products may contain sub-standard or falsified ingredients, or no ingredients or ingredients in the wrong dosage, including active ingredients. They pose a major threat to European patients and European industry and there are strong concerns in the public and amongst policy makers about the steady increase of these products detected in the EU in the last years.

The potential threat to public health is also recognised by the World Health Organisation (WHO), who set up the International Medical Products Anti-Counterfeiting Taskforce ("IMPACT"). IMPACT developed, with active participation of the Community, Principles and Elements for National Legislation against Counterfeit Medical Products, which were endorsed by the IMPACT General Meeting in Lisbon on 12 December 2007. The efforts of IMPACT have been welcomed in the summit declaration of the Group of Eight (G8) on 7 June 2008.

To this adds that the risk profile has changed. The number of falsifications of innovative and life-saving medicines is increasing. Moreover, in order to increase volume, these products are channelled through the lawful supply chain towards the patient. In this way, in 2007, many thousand packs of falsified life-saving drugs have reached patients in the EU.

While there is uncertainty as to the precise number of cases today or in the future, there is a clear trend visible which threatens the high level of protection of public health in the EU. This trend can have disastrous consequences for the trust of the public in the industry and in the policy maker – well comparable to the “food-and-feed crisis” of the 1990’s.

The underlying causes for falsified medicinal products remaining undetected in the lawful supply chain are manifold, but can be reduced to four aspects:

? Falsified medicinal products can not always be easily distinguished from originals;

? The distribution chain has become very complex and is only as “strong as its weakest link”;

2.

? There are legal uncertainties as to the regime applicable to products introduced into the EU while allegedly not being placed on the market; and


? Already the active pharmaceutical ingredients (“ API ”) entering the manufacturing process may be a falsification of the original API.

The existing provisions of Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use i are in some respects insufficient to address these concrete causes. In view of the time span between the proposal of changes to Directive 2001/83/EC and their effective implementation, there is a clear need for the Commission to act now.

3.

P UBLIC CONSULTATION


In preparation of the impact assessment for this proposal, the Commission had held, from 11 March 2008 to 9 May 2008 a public consultation on “Key ideas for better protection of patients against the risk of counterfeit medicines”. In response to this consultation, the Commission received 128 contributions from stakeholders. Of these, 103 were from industry (pharmaceutical industry, distributors, suppliers of active ingredients, consultants), 15 from citizens, patient (groups), and academics, and 10 from health professionals, pharmacists and health insurers.

Of the 128 stakeholder contributions, in terms of regions, 20 contributions were received from EU-wide associations, 30 from Italy, 14 from the UK, 9 from Germany, 4 each from France and Switzerland, 3 each from Poland and Ireland and the Netherlands, 2 each from Malta, and Denmark, 1 each from Austria, Sweden and Spain, and 18 from non-European third countries. 13 stakeholder contributions were global associations or could not be attributed in terms of region.

30 national and regional authorities profited from this stakeholder-consultation to inform the Commission of their views on the matter.

The respondents unanimously welcomed the initiative stressing that urgent and decisive action was needed, and that the problem of falsified medicinal products is increasing exponentially. Moreover, the “multi-layer” approach by the Commission, based on an identification of the various possible points of entry for falsified medicines was welcomed. A summary of the responses has been published on the Commission website i.

4.

IMPACT ASSESSMENT


THE COMMISSION CONDUCTED AN IMPACT ASSESSMENT IN ACCORDANCE WITH THE COMMISSION IMPACT ASSESSMENT GUIDELINES AND PUBLISHED THE RESULTS IN AN IMPACT ASSESSMENT REPORT.

The impact assessment report identifies and assesses policy options to achieve the objective, which is defined as eliminating, by all practical means, the risk of falsified medicines entering the legal supply chain.

The assessment of the policy options is made against a baseline of “non-action”. For this baseline, various scenarios of the future development of falsified medicines for the period until 2020 have been developed. While these scenarios (and related costs) are by their very nature estimations based on best use of existing data (which is in itself limited), they reveal that societal direct and indirect costs of non action could reach, depending on the scenario, between 9.5bn EUR and 116bn EUR until 2020.

These costs of non-action compare against the costs of the chosen policy options. These costs are estimated to be, until 2020, as follows:

? For manufacturers and importers of medicinal products: between 6.8bn EUR and 11bn EUR, depending on the safety technique chosen. The costs for distributors who remove/exchange safety features depend on the extent of their activity. Moreover, depending on the chosen approach, pharmacies are going to bear costs of approx. 157m EUR.

? For wholesale distributors of medicinal products: approx. 280m EUR;

? For wholesale distributors who engage only in export activity: approx. 403m EUR;

? For other traders situated in the distribution chain: approx. 5m EUR;

? For manufacturers of API: approx. 320m EUR. The bulk of these costs is going to fall upon 3rd country manufacturers.

5.

LEGAL BASIS AND SUBSIDIARITY


The aim of Directive 2001/83/EC, as well as this proposed amendment, is to establish the functioning of the internal market for medicinal products while ensuring a high level of protection of public health in the EU. The legal basis is thus Article 95 of the Treaty.

To the extent that Directive 2001/83/EC establishes exhaustive rules, Member States are not allowed to “add to” these rules. Moreover, the aim to combat falsified medicinal products in the legal supply chain without hampering the functioning of the internal market for medicinal products cannot be sufficiently achieved by the Member States and can be better achieved by the Community.

6.

AMENDMENTS


In order to address the risk of falsified medicinal products entering the legal supply chain, the Commission proposes a number of amendments to Directive 2001/83/EC. These include:

? Certain obligations for other players than wholesale distributors, who act in the distribution chain. These actors are typically involved in the transactions without actually handling the products (for example, by auctioning or brokering products, cf. Article 1 i of the proposed amending Directive).

? A legal basis for the Commission to render obligatory specific safety-features (such as a serialisation number or a seal) on the packaging of prescription-medicines (Article 1 i of the proposed amending Directive).

? A prohibition in principle of manipulating (i.e. removing, tampering with, or over-labelling) safety features on the packaging by actors situated “in-between” the original manufacturer and the last actor in the distribution chain (typically the pharmacist) or end user (doctor/patient).

? Obligatory audits of supplying wholesale distributors of medicinal products in order to ensure reliability of business partners (Article 1 i of the proposed amending Directive).

? Strengthened requirements for imports of API from third countries if it could not be established that the regulatory framework in the respective third country ensures a sufficient level of protection of human health for products exported to the EU (Article 1 i of the proposed amending Directive).

? Audits of manufacturers of API (Article 1(3)(a) of the proposed amending Directive).

? Strengthened rules for inspections including increased transparency of inspection results through publication in the EudraGMP database managed by the EMEA (Article 1 i of the proposed amending Directive).

7.

With regards to the impact on economic operators, the Commission, when choosing the policy options, took care to


? keep any increase of costs for compliance (incl. administrative costs) to the minimum necessary to achieve the aim;

8.

? allow, where possible, for flexibility so that the regulatory framework can be adapted to a changing risk-profile; and


? spread the responsibility amongst all actors, i.e. not just the pharmaceutical industry as such but also wholesalers, API-suppliers and importers.

A detailed discussion of the proposed amendments, including an assessment of their socio-economic impact, is contained in the impact assessment report.

9.

CONSISTENCY WITH OTHER COMMUNITY POLICIES


The proposal is part of the Community strategy for safe, innovative and accessible medicines, as presented by the Commission in its Communication to the Council, the European Parliament and the European Economic and Social Committee: “Safe, innovative and Accessible Medicines: a Renewed Vision for the Pharmaceutical Sector”[3]. The proposal is also in line with the Commission’s strategic objective to protect citizens from health threats as set out in the Commission White Paper “Together for Health: A strategic approach for the EU 2008-2013”.[4]

Contents

1.

BUDGETARY IMPLICATION



IT IS PROPOSED TO EXTEND THE COMMUNITY-DATABASE OF GMP i-compliant companies to GDP i-compliant wholesale distributors (cf. above, point 5, 7th bullet). As set out in the legislative financial statement annexed to the proposal, these IT-related measures are not expected to have budgetary implications.

10.

ADDITIONAL INFORMATION


The proposal concerns an EEA matter and therefore extends to the European Economic Area.