Free trade to save EU pharmas €230m

EU member states this week adopted the international agreement, which was the third revision of the Pharma-GATT Agreement (General Agreement on Tariffs and Trade), and is anticipated to improve the competitiveness of EU pharmaceutical companies.

The new regulations will cancel customs duties that were previously applied to new pharmaceuticals and the chemical intermediates used in their production. EU member states will now be able to trade with Switzerland and the US with impunity, and Japan is expected to sign up to the agreement later this year.

Many pharmaceutical and chemical intermediates already benefit from free trade terms covered by the World Trade Organisation's Pharma-GATT Agreement of 1994, but continuous innovation and development since then has meant that many new compounds and intermediates were not covered by the original pact.

As part of the Agreement revisions, 1,290 new pharmaceuticals and chemical products have been added to the existing 7,329 products already covered by duty-free directives applied following their importation into the EU.

The list has also been updated to include more of the prefixes and suffixes used to describe pharmaceutical derivates, making the system more clear and flexible, according to the European Commission.

The register of duty-free pharmaceuticals will be available on the European Customs Inventory of Chemical Substances (ECICS). See here​ for more information.

In 2003 pharmaceutical imports in Europe totalled around €130bn, and exports around €170bn. Germany had control of a quarter of the European pharmaceutical market in 2004, with France not far behind with 22 per cent and Italy coming in third with 15 per cent, according to European Union sources.

EU Confidential...featuring Japan​

The European Commission also announced last week that ties between the EU and Japan were to be strengthened following confidentiality agreements signed by representative agencies from both parties.

The partners will now be able to exchange confidential information on medicinal products, covering matters such as safety issues with marketed medicines and products being developed or under consideration for authorisation.According to representatives from the European Commission, this partnership will allow earlier access to information making it easier to take rapid action to protect public health, and help tackle technical barriers to trade in medicines.

Other potential benefits from the agreements are expected to include accelerated access to new medicines for patients, reduced duplication of assessments leading to cost-savings, and improved performance and safety resulting from regulatory expertise from both the EU and Japan, said the commission.

The confidentiality arrangements cover human medicines under evaluation, as well those authorised under the centralised authorisation procedure or products authorised by individual EU member states.

In 2005, pharmaceutical sales in Europe grew by 7.1 per cent (greater than the US which experienced 5.2 per cent growth) and hit $169.5bn (€129.6). Japan, the world's second largest market and expected to sign up for the new duty-free agreement later this year, also did well in 2005 with its highest year-on-year growth since 1991, increasing by 6.8 per cent to $60.3bn.