European Scrutiny Committee Contents

11 Preventing the counterfeiting of medicinal products



COM(08) 668

+ ADDs 1-2

Draft Directive to amend 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.

Commission staff working documents: impact assessment and summary of assessment.

Legal baseArticle 95 EC; QMV; co-decision
Document originated10 December 2008
Deposited in Parliament22 December 2008
Basis of considerationMinister's letter of 1 October 2010
Previous Committee ReportHC 19-v (2008-09), chapter 5 (28 January 2009)
To be discussed in CouncilPossibly October
Committee's assessmentPolitically important
Committee's decisionCleared


11.1 A Council Directive of 2001 established rules for Member States to authorise and supervise the manufacture, importation, marketing and wholesale distribution of medicinal products for human use.[43] Since then, the Commission has reported a significant increase in the number of counterfeit medicines in circulation in the EU which pose a serious threat not only to public health but also to trust in the pharmaceutical industry. Counterfeit medicines may, for example, contain sub-standard or falsified ingredients, and they may either omit active pharmaceutical ingredients or include them in the wrong dosage. The Commission therefore proposed, in 2008, amending the 2001 Directive to strengthen provisions on the detection of counterfeit medicines and to prevent their entry into the legal supply chain.

11.2 The main changes proposed were to:

  • require all the parties involved in the distribution of medicines (including importers and middle-men) to comply with the wholesale distribution requirements of the 2001 Directive;
  • authorise the Commission, through the comitology procedure, to introduce a requirement for manufacturers to place a safety feature on the outer packaging of prescription-only medicines to enable the authenticity and identity of the product to be confirmed, to ensure its traceability, and to prohibit tampering with the safety features of the packaging;
  • require wholesalers who buy medicines from other wholesalers to verify that the supplying dealer complies with the EU's good distribution practices;
  • require wholesalers who buy medicinal products from manufactures or importers to verify that they hold marketing authorisations;
  • strengthen the requirements for the verification of active pharmaceutical ingredients imported from third countries ("APIs"); and
  • strengthen the rules for inspections to check compliance with the EU's standards of practice for good manufacturing and distribution.

The previous Government's view

11.3 The previous Government agreed with the Commission's assessment that there was an increased risk of counterfeit medicines entering and remaining undetected in the supply chain and that the legislative framework for regulating medicines needed to be strengthened. The Government broadly supported the Commission's proposals while seeking to ensure that any new EU measures were "proportionate to the public health risk".[44]

11.4 Subsequent progress reports from the Government indicated that there was widespread support from stakeholders for firm action to tackle the threat posed by counterfeit medicines, but that negotiations on the proposed changes to the 2001 Directive were proceeding slowly. However, in March the Minister reported that significant headway was being made under the Spanish Presidency.

The previous Committee's view

11.5 The previous Committee welcomed the proposals to prevent counterfeit medicines entering the legal supply chain and thought that the internal market legal base proposed by the Commission was appropriate. The Committee kept the document under scrutiny so that it could continue to consider any changes to the Commission's proposal before a revised draft of the Directive was presented to the Council for agreement.

The Minister's letter of 1 October 2010

11.6 The Parliamentary Under Secretary of State for Quality at the Department of Health (Earl Howe) says that negotiations have progressed well and that the Belgian Presidency of the Council of Ministers is keen to secure a first reading agreement with the European Parliament, based on a compromise text agreed by Member States, later this month. The Minister outlines the main changes which the compromise text would make to the Commission's original proposal:

  • Ensuring all parties involved in the distribution of medicines comply with the wholesale distribution requirements in the 2001 Directive — the compromise text includes "brokers" who deal in medicines but do not take possession of them. The Government supports this change as it says that currently unregulated brokers are often implicated in counterfeit cases;
  • Applying a risk-based approach to the application of compulsory safety features to medicines — safety features are intended to make it possible to identify, authenticate and trace medicines through the supply chain, and include the use of tamper-proof seals. The compromise text would establish a new procedure for determining which medicines are at risk of counterfeiting, based on a number of criteria including price and the potential risk to public health, and so should be subject to the compulsory safety features. The Government supports a risk-based approach as it will allow safety features to be affixed to non-prescription as well as prescription medicines where there is a risk of counterfeiting;
  • Ensuring that wholesalers who purchase medicines from other wholesale dealers are required to verify that the supplying dealer complies with good distribution practices — the Government supports the inclusion in the compromise text of a requirement for wholesale dealers to record the batch numbers of medicines which are subject to the compulsory safety features in order to improve their traceability;
  • Strengthening requirements for importers of APIs from countries outside the EU if that country has not demonstrated that it operates regulatory systems equivalent to the regime in force in the EU — the compromise text includes provision for the supervision and inspection of the premises of manufacturers, importers or distributors of active substances used as starting materials for medicines (APIs), wherever they are located, to ensure that they comply with good manufacturing and distribution practices. The UK supported Commission proposals to establish an EU-wide system of accreditation for third party auditors to verify the quality of APIs manufactured outside the EU, but all other Member States opposed. However, the Minister considers that the compromise text allows sufficient flexibility for the UK to establish its own system of accreditation;
  • Strengthening rules for inspections through publication of the results in an EU database — the Government supports greater transparency as a means of exposing non-compliance as well as encouraging good manufacturing and distribution practice;
  • Clarifying rules applicable to medicines held in customs areas for re-export to third countries — the Minister says that the compromise text makes clear that medicines regulatory authorities are entitled to enter customs areas to check medicinal products intended for re-export to non-EU countries, but that detailed rules setting out the nature of the checks will require separate legislation.

11.7 The Minister draws attention to two additional areas of concern during the negotiations. The first concerns the proposed use of delegated powers, under Article 290 of the Treaty on the Functioning of the European Union (TFEU). This Article enables the Commission to adopt further legislation to supplement or amend "non-essential elements" of the parent legislation (in this case, the amended 2001 Directive). The Government accepts the use of delegated powers to establish detailed rules on the use of safety features, but contests their use for determining the nature of the checks to be carried out by medicines regulators in customs areas. For the latter, the Government considers that Article 291 TFEU, which empowers the Commission to adopt "implementing acts", would be more appropriate as Member States would play a more active role in overseeing the rules and guidance proposed by the Commission. The Minister explains that the UK is in a minority of Member States in opposing the use of delegated powers for customs checks and that he therefore proposes registering UK opposition by means of a "minutes statement" when the draft Directive is adopted.

11.8 Member States have also expressed concern at the absence of regulatory controls on the use of excipients — products with no pharmaceutical effects which are added to medicines, for example, to ensure their stability or provide colour. The Minister says that the compromise text requires manufacturers to conduct a risk-based review of excipients included in medicinal products and to apply good manufacturing processes.

11.9 The Minister sets out the main amendments proposed by the European Parliament and which will form part of the first reading negotiation with the Council. These concern the regulation of internet sales, the supervision of brokers of medicine, and the scope of application of safety features to medicinal products. The Minister says that most Member States favour national regulation of internet sales of medicines, but foresee the possibility of some degree of oversight at EU level provided that it adds value without increasing bureaucracy and costs. The Minister accepts that there is scope for a further tightening of the rules on the supervision of brokers but that these should be proportionate. He says he will seek to encourage the EP to support the risk-based approach to the use of safety features set out in the Council's compromise text.


11.10 We thank the Minister for providing a detailed explanation of the progress made towards agreeing a compromise text which is likely to form the basis for the Council's negotiations with the European Parliament with a view to securing an agreement at first reading. The changes proposed in the compromise text seek to establish an appropriate balance between strengthening controls in the supply chain to help prevent and detect counterfeiting of medicinal products, and to protect public health, while avoiding the imposition of excessive regulatory burdens on the pharmaceutical industry.

11.11 We note that the legal base proposed in the compromise text has been amended to reflect the entry into force of the Lisbon Treaty last December. The text retains an internal market legal base — now Article 114 TFEU — but adds Article 168(4)(c) TFEU which provides for the adoption of measures "setting high standards of quality and safety for medicinal products and devices for medical use". We consider the legal base proposed to be appropriate.

11.12 We also note that the Minister expresses reservations about the proposed use by the Commission of delegated powers to determine the nature of checks that medicines regulators may undertake in customs areas. Article 290 TFEU states that "the objectives, content, scope and duration of the delegated power shall be explicitly defined" in the parent legislation and that "the essential elements of an area shall be reserved for the legislative act and accordingly shall not be the subject of a delegation of power". While we are not in a position to determine whether the use of delegated powers for the particular purpose indicated in this case is justified, we consider that the Government is right to scrutinise carefully any proposed delegation of power in order to ensure that the requirements of Article 290 are satisfied.

11.13 We conclude, on the basis of the information provided by the Minister, that the compromise text represents a reasonable outcome for the UK. As the compromise text largely supersedes the Commission's original proposal, we are content to clear the draft Directive from scrutiny.

43   Directive 2001/83/EC: OJ No. L 311, 28.11.01, p.67. Back

44   Minister's Explanatory Memorandum of 14 January 2009, see HC 19-v (2008-09), chapter 5 (28 January 2009). Back

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