IMPACT ASSESSMENT
29. The Commission engaged Rand Europe[20]
to assess the economic social and environmental impacts of the
draft Regulation.
30. The Rand Europe Study Report (Rand Study)[21]
estimated that:
(a) To handle the expected increase in the
number of applications the EMEA budget would have to be increased
by between 67-150%. In the worst case this would mean a rise of
between €130-195 million.
(b) The costs of developing paediatric investigation
plans and the related studies in children would increase costs
to the pharmaceutical industry by an average of €4 million
per product.
(c) The initial costs to industry for paediatric
testing would be around €560 million in the first year, falling
to between €160-360 million in subsequent years (bearing
in mind that the average cost of developing new drugs was estimated
in 2000 to be around US$802 million).
(d) Marginal costs of testing passed on directly
to consumers would be likely to increase drug prices between 0.1%
and 0.4% (although it noted that in many EU Member States the
price of medicines is controlled by Government).
31. The Commission admit that estimating the
financial value of social savings through health improvement likely
to result from the Regulation is "very difficult". They
quote Rand Study figures which would appear to indicate that hospital
costs caused by unlicensed and off-label use of medicines in children
could be between €140-252 million. But they urge caution
in interpreting these figures.
32. The Rand study estimated that the incentives
to the innovative pharmaceutical industry proposed in the Regulation
could enable drug companies to cover the costs of testing and
make a profit of between
€63-205 million in ten years.
33. The six month SPC extensions available to
the innovative pharmaceutical industry were predicted by the Rand
study to cost generic drug manufacturers between €4-51 million
through delayed market access. But the study calculated that the
cost of adjusting to the new market conditions could be absorbed
by the generics industry over a period of five years.
34. The Rand Study estimated the cost impact
of these incentives on total European health care as between 0.01%
and 0.04% in total European health care expenditure and between
0.06% and 0.25% of annual European pharmaceutical expenditure.
But, because of the difficulty of accurately estimating potential
costs and savings, the Commission concluded that these figures
should be regarded as a "worst case scenario".
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