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Regulation (EU) 2016/793 of the European Parliament and of the CouncilShow full title

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)

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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)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Acting in accordance with the ordinary legislative procedure(1),

Whereas:

(1) Council Regulation (EC) No 953/2003(2) has been substantially amended several times(3). In the interests of clarity and rationality, that Regulation should be codified.

(2) Many of the poorest developing countries are in urgent need of access to affordable essential medicines for the treatment of communicable diseases. Those countries are heavily dependent on imports of medicines as local manufacturing is scarce.

(3) Price segmentation between developed country markets and the poorest developing country markets is necessary to ensure that the poorest developing countries are supplied with essential pharmaceutical products at heavily reduced prices. Therefore, those heavily reduced prices cannot be understood as a reference for the price to be paid for the same products in developed country markets.

(4) Legislative and regulatory instruments are in place in most developed countries to prevent the importation, in certain circumstances, of pharmaceutical products, but such instruments risk becoming insufficient where substantial volumes of heavily discounted pharmaceuticals are sold to the poorest developing country markets, and the economic interest in trade diversion into high priced markets therefore may increase significantly.

(5) There is a need to encourage pharmaceutical manufacturers to make pharmaceutical products available at heavily reduced prices in significantly increased volumes by ensuring through this Regulation that such products remain on the poorest developing country markets. Donations of pharmaceutical products and products sold under contracts awarded in response to competitive tenders from national governments or international procurement bodies, or under a partnership agreed between the manufacturer and the government of a country of destination should be able to qualify under this Regulation on equal conditions, bearing in mind that donations do not contribute to the improvement of access to such products on a sustainable basis.

(6) It is necessary to provide for a procedure which identifies the products, countries and diseases covered by this Regulation.

(7) This Regulation serves the purpose of preventing tiered-priced products from being imported into the Union. Exemptions are laid down for certain situations on the strict condition that it is ensured that the final destination of the products in question is one of the countries listed in Annex II.

(8) Manufacturers of tiered-priced products should differentiate the appearance of tiered- priced products to facilitate the task of identifying them.

(9) It will be appropriate to review the lists of the diseases and the countries of destination covered by this Regulation, as well as the formulae used to identify tiered-priced products in the light, inter alia, of the experience gained from its application.

(10) With regard to tiered-priced products contained in travellers' personal luggage for personal use, the same rules as set out in Regulation (EU) No 608/2013 of the European Parliament and of the Council(4) apply.

(11) Where tiered-priced products have been seized under this Regulation, the competent authority should be able, in accordance with national legislation and with a view to ensuring that the intended use is made of the seized products to the full benefit of the countries listed in Annex II, to decide to make them available for humanitarian purposes in those countries. In the absence of such decision, the seized products should be destroyed.

(12) In order to add products to the list of products covered by this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in order to amend the Annexes to this Regulation. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council,

HAVE ADOPTED THIS REGULATION:

Article 1U.K.

1.This Regulation lays down:

(a)the criteria for establishing what is a tiered-priced product;

(b)the conditions under which the customs authorities shall take action;

(c)the measures which shall be taken by the competent authorities in the Member States.

2.For the purposes of this Regulation:

(a)‘tiered-priced product’ means any pharmaceutical product which is used in the prevention, diagnosis or treatment of a disease, referred to in Annex IV, and which is priced in accordance with one of the optional price calculations set out in Article 3, verified by the [F1Secretary of State] or an independent auditor as provided for in Article 4 and entered in the list of tiered-priced products set out in Annex I;

(b)‘countries of destination’ means the countries listed in Annex II;

(c)‘competent authority’ means an authority designated by a Member State to determine whether goods suspended by the customs authorities in the respective Member State are tiered-priced products and to give instructions depending on the outcome of the review.

[F2(d)‘customs tariff’ is the system provided for in regulations made under section 8 of the Taxation (Cross-border Trade) Act 2018.]

Article 2U.K.

1.The importation into [F3Great Britain] of tiered-priced products for the purposes of release for free circulation, [F4export], [F5or a special Customs procedure] shall be prohibited.

2.The following shall be exempted from the prohibition regarding tiered-priced products as set out in paragraph 1:

(a)[F6export of the tiered-priced products] to countries of destination;

(b)placing under a transit or [F7storage procedure] for the purpose of [F8export of the tiered-priced products] to a country of destination.

[F93.In this Article—

(a)‘special Customs procedure’ has the meaning given by section 3(4) of the Taxation (Cross-border Trade) Act 2018;

(b)‘storage procedure’ has the meaning given by paragraph 2(1) of Schedule 2 to the Taxation (Cross-border Trade) Act 2018.]

Article 3U.K.

The tiered price referred to in Article 4(2)(b) shall, at the option of the applicant, be either:

(a)

no higher than the percentage set out in Annex III of the weighted average ex factory price charged by a manufacturer in markets of the Organisation for Economic Cooperation and Development (OECD) for the same product at the time of application; or

(b)

a manufacturer's direct production costs, with the addition of the maximum percentage which is set out in Annex III.

Article 4U.K.

1.In order for products to benefit from this Regulation, manufacturers or exporters of pharmaceutical products shall submit applications to the [F10Secretary of State]. [F11Applications must be sent to [F12the Department for Business and Trade, Old Admiralty Building, Admiralty Place, London SW1A 2DY].]

2.Any application addressed to the [F13Secretary of State] shall contain the following information:

(a)the product name and active ingredient of the tiered-priced product and sufficient information to verify which disease it prevents, diagnoses or treats;

(b)the price offered in relation to either of the optional price calculations set out in Article 3 in sufficient detail to enable verification. Instead of submitting such detailed information, the applicant may submit a certificate, issued by an independent auditor, stating that the price has been verified and corresponds to one of the criteria set out in Annex III. The independent auditor shall be appointed in agreement between the manufacturer and the [F13Secretary of State]. Any information submitted by the applicant to the auditor shall remain confidential;

(c)the country or countries of destination to which the applicant intends to sell the product concerned;

[F14(d)the goods classification code for the goods based on the equivalent goods classification code that is in the customs tariff, as it applies at the time of the application, to identify unambiguously the goods concerned; and]

(e)any measures taken by the manufacturer or exporter to make the tiered-priced product easily distinguishable from identical products offered for sale within [F15Great Britain].

[F163.The Secretary of State must determine whether a product, which is the subject of an application under paragraph 2 or a notification under paragraph 6, fulfils the requirements of this Regulation to qualify as a tiered-priced product. The Secretary of State must inform the applicant of the decision before the end of the period of 15 days, beginning with the date on which the decision was made.]

[F173A.The Secretary of State must, from time to time, make regulations to amend Annex I to add any product to the list set out in that Annex if the Secretary of State determines, under paragraph 3, that that product fulfils the requirements of this Regulation to qualify as a tiered-priced product.]

4.If an application is not sufficiently detailed for a review as to substance, the [F18Secretary of State] shall request the applicant in writing to submit such missing information. If the applicant does not complete the application within the time period set out in that written request, the application shall be null and void.

5.If the [F19Secretary of State] finds that the application does not fulfil the criteria set out in this Regulation, the application shall be rejected and the applicant shall be informed within 15 days of the date of the decision. Nothing shall prevent the applicant from submitting a modified application for the same product.

6.Products destined to be donated to recipients in one of the countries listed in Annex II may be the subject of a notification to that effect for the purposes of approval and insertion in Annex I.

F207.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F218.The Secretary of State may by regulations amend Annexes II, III and IV to revise—

(a)the list of diseases,

(b)the countries of destination covered by this Regulation, or

(c)the formulae used to identify tiered-priced products,

if the Secretary of State considers that it is necessary to do so in light of the experience gained from the application of this Regulation or in order to respond to a health crisis.]

Textual Amendments

[F22Article 5U.K.

1.The Secretary of State must from time to time—

(a)carry out a review of this Regulation;

(b)set out the conclusions of the review in a report; and

(c)publish the report.

2.The report must in particular—

(a)set out the use of the powers to make regulations at Article 4(3A), Article 4(8), Article 7 and Article 8;

(b)set out any other matters the Secretary of State considers relevant in respect of the powers referred to at paragraph 2(a).

3.The first report must be published before the end of the period of five years beginning with the date on which the Prevention of Trade Diversion (Key Medicines) (EU Exit) Regulations 2020 come into force.]

F23Article 6U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F24Article 7U.K.

1.For products listed as tiered-priced products in Annex I, an applicant must submit information to the Secretary of State relating to any change which has occurred since the product was added to that list with respect to the information provided in the application specified in Article 4(2). Such information must be sent to the address provided at Article 4(1).

2.The Secretary of State must, from time to time and upon receipt of information under paragraph 1, review whether a product listed as a tiered-priced product in Annex I fulfils the requirements of this Regulation to qualify as a tiered-priced product.

3.The Secretary of State may make regulations to amend the list of tiered-priced products in Annex I to remove any product from that list if the Secretary of State determines, under paragraph 2, that that product no longer fulfils the requirements of this Regulation to qualify as a tiered-priced product.]

[F25Article 8U.K.

The Secretary of State may by regulations make such provision regarding marking, labelling or other identification requirements for tiered-priced products listed in Annex I as the Secretary of State considers appropriate.]

Article 9U.K.

1.Where there is reason to suspect that, contrary to the prohibition provided for in Article 2, tiered-priced products will be imported into [F26Great Britain], customs authorities shall suspend the release of, or detain, the products concerned for the time necessary to obtain a decision of the [F27competent authority] on the character of the merchandise. The period of suspension or detention shall not exceed 10 working days unless special circumstances apply, in which case the period may be extended by a maximum of 10 working days. Upon expiry of that period, the products shall be released, provided that all customs formalities have been complied with.

2.It shall be sufficient reason for the customs authorities to suspend the release of, or detain, products if there is sufficient information available to consider that the product in question is tiered priced.

3.The competent authority F28... and the manufacturer or exporter mentioned in Annex I shall be informed without delay of the suspended release or detention of the products and shall receive all information available with respect to the products concerned. Due account shall be taken of [F29the law relating to] the protection of personal data, commercial and industrial secrecy, and professional and administrative confidentiality. The importer and, where appropriate, the exporter, shall be given ample opportunity to supply the competent authority with the information which it deems appropriate regarding the products.

4.The procedure of suspension or detention of the goods shall be carried out at the expense of the importer. If it is not possible to recover those expenses from the importer, they may, in accordance with national legislation, be recovered from any other person responsible for the attempted illicit importation.

Article 10U.K.

1.If products suspended for release or detained by customs authorities are recognised by the competent authority as tiered-priced products under this Regulation, the competent authority shall ensure that those products are seized and disposed of in accordance with national legislation [F30(as to which, see Part 11 of the Customs and Excise Management Act 1979)]. Those procedures shall be carried out at the expense of the importer. If it is not possible to recover those expenses from the importer, they may, in accordance with national legislation, be recovered from any other person responsible for the attempted illicit importation.

2.Where products suspended for release or detained by customs authorities subsequent to further control by the competent authority are found not to qualify as tiered-priced products under this Regulation, the customs authority shall release the products to the consignee, provided that all customs formalities have been complied with.

F313.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F32Article 11U.K.

1.This Regulation does not apply to non-commercial goods or personal gifts within the accompanied baggage of a qualifying traveller if at the time of import a relief from import duty is available in respect of the goods or gifts.

2.In this Article, “non-commercial goods”, “personal gifts”, “accompanied baggage” and “qualifying traveller” have the meaning given to them by regulation 2 of the Customs (Import Duty) (EU Exit) Regulations 2018.]

F33Article 12U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 13U.K.

[F341.The application of this Regulation does not affect procedures laid down in the Human Medicines Regulations 2012.]

2.This Regulation shall not interfere with intellectual property rights or rights of intellectual property owners.

Article 14U.K.

Regulation (EC) No 953/2003 is repealed.

F35...

Textual Amendments

Article 15U.K.

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

[F36Article 16U.K.

1.Regulations made under a provision specified in paragraph 2—

(a)are to be made by statutory instrument;

(b)may make different provision for different purposes and different areas;

(c)may include incidental, supplemental, consequential, transitional, transitory or saving provisions, including consequential amendments to these Regulations.

2.The provisions specified in this paragraph are—

(a)Article 4(3A);

(b)Article 4(8);

(c)Article 7;

(d)Article 8.

3.A statutory instrument containing regulations made under the provisions specified in paragraph 2 is subject to annulment in pursuance of a resolution of either House of Parliament.]

F37...

Done at Strasbourg, 11 May 2016.

For the European Parliament

The President

M. Schulz

For the Council

The President

J.A. Hennis-Plasschaert

Textual Amendments

ANNEX IU.K.LIST OF TIERED-PRICED PRODUCTS

Modifications etc. (not altering text)

a

Only if applicable.

ProductManufacturer/exporterCountry of destinationDistinctive featuresDate of approval [F38Goods classification code under the customs tariff]

TRIZIVIR

750 mg × 60

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

Afghanistan

Angola

Armenia

Azerbaijan

Bangladesh

Benin

Bhutan

Botswana

Burkina Faso

Burundi

Cambodia

Cameroon

Cape Verde

Central African Republic

Chad

Comoros

Congo

Côte d'Ivoire

Democratic Republic of the Congo

Djibouti

Equatorial Guinea

Eritrea

Ethiopia

Gambia

Ghana

Guinea

Guinea-Bissau

Haiti

Honduras

India

Indonesia

Kenya

Kiribati

Kyrgyzstan

Laos

Lesotho

Liberia

Madagascar

Malawi

Maldives

Mali

Mauritania

Moldova

Mongolia

Mozambique

Myanmar/Burma

Namibia

Nepal

Nicaragua

Niger

Nigeria

North Korea

Pakistan

Rwanda

Samoa

São Tomé and Príncipe

Senegal

Sierra Leone

Solomon Islands

Somalia

South Africa

Sudan

Swaziland

Tajikistan

Tanzania

Timor-Leste

Togo

Tuvalu

Uganda

Vanuatu

Yemen

Zambia

Zimbabwe

Distinctive access pack — trilingual text19.4.20043004 90 19

EPIVIR

150 mg × 60

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

Distinctive access pack — trilingual text — red tablets3004 90 19

RETROVIR

250 mg × 40

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

General export pack (blue) not used in EU.

French hospital pack — Francophone markets

19.4.20043004 90 19

RETROVIR

300 mg × 60

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

General export pack (blue) not used in EU.

French hospital pack — Francophone markets

19.4.20043004 90 19

RETROVIR

100 mg × 100

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

General export pack (blue) not used in EU.

French hospital pack — Francophone markets

19.4.20043004 90 19

COMBIVIR

300/150 mg × 60

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

Distinctive access pack — trilingual text

Bottle (rather than blister pack) ‘A22’ embossed red tablets

3004 90 19

EPIVIR ORAL SOLUTION

10 mg/ml

240 ml

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

Distinctive access pack — trilingual text19.4.20043004 90 19

ZIAGEN

300 mg × 60

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

General export pack — not used in EU.

French hospital pack — Francophone countries

20.9.20043004 90 19

RETROVIR ORAL SOLUTION

10 mg/ml

200 ml

GLAXO SMITH KLINE

GSK House

980 Great West Road

BRENTFORD, MIDDLESEX

TW8 9GS

United Kingdom

Distinctive access pack — Trilingual text20.9.20043004 90 19

ANNEX IIU.K. COUNTRIES OF DESTINATION

Afghanistan

Angola

Armenia

Azerbaijan

Bangladesh

Benin

Bhutan

Botswana

Burkina Faso

Burundi

Cambodia

Cameroon

Cape Verde

Central African Republic

Chad

China

Comoros

Congo

Côte d'Ivoire

Democratic Republic of the Congo

Djibouti

Equatorial Guinea

Eritrea

Ethiopia

Gambia

Ghana

Guinea

Guinea-Bissau

Haiti

Honduras

India

Indonesia

Kenya

Kiribati

Kyrgyzstan

Laos

Lesotho

Liberia

Madagascar

Malawi

Maldives

Mali

Mauritania

Moldova

Mongolia

Mozambique

Myanmar/Burma

Namibia

Nepal

Nicaragua

Niger

Nigeria

North Korea

Pakistan

Rwanda

Samoa

São Tomé and Príncipe

Senegal

Sierra Leone

Solomon Islands

Somalia

South Africa

Sudan

Swaziland

Tajikistan

Tanzania

Timor-Leste

Togo

Turkmenistan

Tuvalu

Uganda

Vanuatu

Vietnam

Yemen

Zambia

Zimbabwe

ANNEX IIIU.K. PERCENTAGES REFERRED TO IN ARTICLE 3

Percentage referred to in Article 3(a): 25 %

Percentage referred to in Article 3(b): 15 %

ANNEX IVU.K. SCOPE OF DISEASES

HIV/AIDS, malaria, tuberculosis and related opportunistic diseases

F39ANNEX VU.K.LOGO

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX VIU.K. REPEALED REGULATION WITH LIST OF ITS SUCCESSIVE AMENDMENTS

Council Regulation (EC) No 953/2003

(OJ L 135, 3.6.2003, p. 5)

Commission Regulation (EC) No 1876/2004

(OJ L 326, 29.10.2004, p. 22)

Commission Regulation (EC) No 1662/2005

(OJ L 267, 12.10.2005, p. 19)

Regulation (EU) No 38/2014 of the European Parliament and of the Council

(OJ L 18, 21.1.2014, p. 52)

Only point 3 of the Annex

F40ANNEX VIIU.K.CORRELATION TABLE

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1)

Position of the European Parliament of 9 March 2016 (not yet published in the Official Journal) and decision of the Council of 11 April 2016.

(2)

Council Regulation (EC) No 953/2003 of 26 May 2003 to avoid trade diversion into the European Union of certain key medicines (OJ L 135, 3.6.2003, p. 5).

(3)

See Annex VI.

(4)

Regulation (EU) No 608/2013 of the European Parliament and of the Council of 12 June 2013 concerning customs enforcement of intellectual property rights and repealing Council Regulation (EC) No 1383/2003 (OJ L 181, 29.6.2013, p. 15).

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