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Summaries of EU Legislation

Certain key medicines for developing countries — avoiding trade diversion into the EU

Date of last review:
28/11/2016
Initial creation date:
28/11/2016
Summarised document(s):
Author:
Publications Office of the European Union

Certain key medicines for developing countries — avoiding trade diversion into the EU

 

SUMMARY OF:

Regulation (EU) 2016/793 — avoiding trade diversion into the European Union of certain key medicines

WHAT IS THE AIM OF THE REGULATION?

  • It establishes a system of differentiated pricing for drugs to treat the ‘Big 3’ communicable diseases (HIV/AIDS, malaria, tuberculosis and related opportunistic diseases). These drugs are known as ‘tiered-priced products’*.
  • It introduces controls to ensure these cheaper medicines go where they are intended and do not end up on the black market in the EU.

KEY POINTS

  • Manufacturers and exporters wishing to differentiate prices must first secure the approval of the European Commission.
  • To receive this, they must supply the medicine’s name and active ingredient(s), its price and code number and countries in which it will be sold.
  • Once a product has been given the ‘tiered’ status, a distinctive logo is attached to all packaging and documents so it is easily identifiable.
  • A ‘tiered’ price for these drugs may be either 25% of the average price charged in Organisation for Economic Cooperation and Development (OECD) countries or direct production costs plus 15%.
  • 76 countries, ranging from Afghanistan to Zimbabwe, are eligible for this special pricing arrangement.
  • Any of the low-priced medicines discovered being imported back into the EU may be confiscated and destroyed unless the importer agrees to make them available for humanitarian purposes.
  • Regulation (EU) 2016/793 codifies Council Regulation (EC) No 953/2003.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 13 June 2016.

BACKGROUND

  • Developing countries need access to affordable drugs to tackle diseases such as HIV/AIDS, malaria and tuberculosis. To encourage pharmaceutical manufacturers to supply these at reduced prices, measures must be in place to prevent them being diverted back to the EU where the costs of the same medicines are higher.
  • The advantage of ‘tiered pricing’ is that it encourages manufacturers to distribute the medicines to targeted countries at the lowest possible (‘tiered’) price, while they recover their research and development costs through the higher prices charged in OECD countries.
  • For more information, see:

* KEY TERMS

tiered priced products: products, in this case essential medicines, that are sold at a lower price in poorer countries.

MAIN DOCUMENT

Regulation (EU) 2016/793 of the European Parliament and of the Council of 11 May 2016 to avoid trade diversion into the European Union of certain key medicines (codification) (OJ L 135, 24.5.2016, pp. 39–52)

last update 28.11.2016

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