I am writing to inform you of the Government's proposed position on the Review of EU Medicines Legislation at the Council of Ministers meeting on 2/3 June, and to explain why I am unable to fulfil the normal parliamentary scrutiny requirements. I have also written to members of the Ministerial Committee on European Issues (EP) to seek agreement to the proposed position.

BACKGROUND

  The Review encompasses proposed changes to EU legislation (a Regulation and two Directives) governing the authorisation and supervision of medicinal products for human and veterinary use for which the Department of Health and the Department for Environment, Food and Rural Affairs share responsibility.

  The Greek Presidency intends to seek political agreement to a common position on the Regulation and the Directive governing medicinal products for human use of 2/3 June. Negotiations on the Directive governing medicinal products for veterinary use have not yet been concluded, but we expect political agreement on this text to be reached during the summer with a view to reaching a common position on all three texts in the autumn. Member States have been negotiating the proposals since November 2001. In October 2002 the European Parliament published its First Reading Reports. The Commission published modified proposals to amend the Regulation in October 2002, and on 30 April 2003 transmitted to Council the modified proposals for the human and veterinary Directives.

CURRENT STATE OF NEGOTIATIONS

  A number of compromise proposals have emerged following publication of the modified proposals, some of which have been further modified as negotiations have progressed. Following a number of separate discussions at COREPER (most recently on 28 May), agreement has been achieved in several important areas, although some important issues remain unresolved. The main issues on which further deliberation is likely at the 2/3 June Council meeting are the harmonised periods of data exclusivity, scope of the centralised procedure for human medicines, voting rights of co-opted members of EMEA scientific committees, and changes to the legal base for the Regulation.

  There are important grounds for supporting the Presidency in its plans to achieve "political agreement" at the Council of Ministers meeting. The accession of 10 new Member States in May 2004 could significantly delay the passage of this legislation, as the new Member States may wish to reopen the debate in areas in which the Government has fought hard to achieve levels of consensus in Council. A particular area of concern relates to the Commission's proposal to harmonise the period of data protection provided to R&D companies from generic competition at 10 years, plus an additional year's protection where work is undertaken that results in a new therapeutic use for the product ("10+1"). The UK supports this measure.

  The Government's position on this was formed in the context of the Pharmaceutical Industry Competitiveness Task Force (PICTF), established by the Prime Minister in 2001 to promote structured and effective dialogue with the pharmaceutical industry. The 10 accession countries strongly oppose the Commission's "10+1" proposal as they currently have none, or are introducing only six years. There is a very real possibility that after enlargement they, together with five or six current Member States that support only six years' data exclusivity, could drive this period down. In view of this, the Government will aim to ensure that progress on this dossier can (and without significant disadvantage to the UK position) be maintained, to minimise the possibility that the accession countries could re-open negotiations.

PARLIAMENTARY SCRUTINY

  Lord Hunt of Kings Heath and Lord Whitty of Camberwell jointly submitted an Explanatory Memorandum (EM) in January 2002, which set out the Commission's package of amendments to the European medicines regulatory regime. The House of Commons Scrutiny committee cleared this EM in June 2002 following a debate in European Standing Committee C. The House of Lords Scrutiny subsequently cleared the EM in January 2003. A further EM was submitted in December 2002 to inform the Committees of the contents of the European Parliament's First Reading Reports. An EM was submitted in January 2003 outlining the Commission's modified proposals to amend Regulation 2309/93. It was agreed that this would be considered with the corresponding EM covering the modified proposals to amend the Directives, which was submitted on 14 May 2003 in accordance with parliamentary timescales.

  It is unfortunate that the late publication of the proposals to amend the Directives coincided with the parliamentary recess. As a consequence, the Committees have not had the opportunity to consider the package in advance of this Council meeting. However, I recognise that a letter to the Committees in advance of recess could have set out our preliminary position when it became clear that publication of the modified proposals to amend the Directives was delayed. The relatively late emergence and fluid nature of a number of compromise proposals has further prevented the full completion of the normal scrutiny process. I understand that the package will now be considered on 3 June.

OVERALL POSITION AT COUNCIL

  The Government's overall approach at the Council meeting will be to expedite decision-making on this dossier and to ensure that the amended legislation takes account of enlargement, continues to provide a high level of public health protection and maintains the UK as an attractive location for investment by the pharmaceutical industry.

  The Government has continued concerns about use of Article 95 as the legal base for fundamental changes that we believe require use of Article 308 of the Treaty. When voting on political agreement, we will abstain or, of this will adversely affect our ability to achieve what we want on issues of substance, vote in favour on policy grounds but seek a written statement to the effect that we have concerns about question of the legal base.

29 May 2003