EU exec adopts pharmaceutical reform

BRUSSELS (Reuters) - The European Commission adopted a package of reforms for the pharmaceutical sector on Wednesday that includes concessions to companies that resell prescription drugs but opens the door to public information on treatments.

"We wish to restore the EU's traditional role as the pharmacy of the world," EU Industry Commissioner Guenter Verheugen told a news conference.

So-called parallel traders, which buy and resell prescription drugs to exploit price differences among European Union states, had faced a repackaging ban in an earlier version of the reform as part of efforts to crack down on counterfeit medicines.

Some 2.5 million packets of counterfeit medicines were seized at EU borders last year.

Parallel traders said a ban would have wiped them out, as they have to repackage drugs so that explanatory leaflets to patients are in the right language. They can repackage drugs but not break seals on blisters containing pills or treatments.

"The parallel trader has to abide by the same rules as the producer. In legal trading, counterfeiting and fraud will no longer be possible," Verheugen said.

His initial plan for a repackaging ban had also faced opposition from fellow commissioners who feared it would have hampered the free movement of goods in the 27-country EU.

Parallel trade accounts for 4.5 billion euros (3.9 billion pounds), only a small part of the EU's 130 billion euro prescription drugs market.

But the sector says its ability to undercut manufacturer prices saves national health systems 500 million to 1 billion euros a year. EU states and the European Parliament have the final say on the reform.

"If the current proposals become law, they will help strengthen the existing European pharmaceutical supply chain while at the same time reaffirming the need for cross-border flow of medicines within the EU internal market," said parallel trader lobby group EAEPC.

The European Generic Medicines Association, representing companies that make half of all medicines used in the EU, said the package was well balanced but that it did not address the main source of counterfeiting, the Internet.

The European pharmaceutical industry produced medicines worth 190 billion euros in 2007 and employed 645,000 people, according to the European Federation of Pharmaceutical Industries and Associations, which covers the 27-nation EU, Norway and Switzerland.

Main elements of the reform include:

-- every packet of pills or medicine will have a barcode so it can be traced from producer to patient in a bid to crack down on counterfeit treatments. The Commission says this will increase costs for producers but not patients as prescription drugs are nearly always paid for by the state or health insurance;

-- a better system of "pharmacovigilance" to monitor and report side-effects which cause 197,000 deaths in the EU each year;

-- an industry code of conduct to ensure information about treatments is objective and to stop disguised public relations;

-- a discussion document on ways to improve market access and to develop initiatives to boost EU pharmaceutical research.

Verheugen's original draft reform had also angered consumer and health professionals as it sought to ease a ban on advertising prescription drugs by allowing manufacturers to give details of their products on the Internet or in printed media.

At Wednesday's Commission meeting, EU Health Commissioner Androulla Vassiliou secured a last-minute concession, though drug firms will be able still to give more information to the public than they currently can.

Verheugen had originally proposed monitoring the information after publication, but Vassiliou won an agreement that the information must be vetted beforehand.

Verheugen had also intended to allow information on prescription drugs to be published in all types of print media, but this has been tightened to "specialised health-related media," though he said this can include health supplements in a newspaper.

The reforms would take effect around 2011-2012.

(Editing by Dale Hudson)