Chapter 7 - Rewards and Incentives
206. We recognise that the package of incentives
and rewards proposed in the Regulation are a political compromise,
based on the acknowledged need to provide incentives and the apparent
success of the US model. But we conclude that they are essentially
a leap of faith: it is impossible to judge from the information
we have been given whether these arrangements are likely to provide
the necessary incentives to industry, whether they are likely
to be equitable and proportionate, or whether they may give rise
to excessive profits, penalise the health services of Member States
or create unacceptable disadvantages for the manufacturers of
generic products.
207. We accept that a political compromise is
necessary for the time being to launch the Regulation in the hope
that it will bring the desired benefits for the children of Europe
at a reasonable cost. But we recommend that the Government should
continue to press the Commission to ensure that a full economic
review of these proposals is made as soon as possible.
208. If the Commission are unable to provide
such a review within six years of implementation, as required
by Article 49 of the Regulation, we recommend that they should
be required to explain to the satisfaction of the Council why
it would be premature to do so at that stage and to ensure that
it is done as soon as possible after that.
209. We also recommend that our successors should
subject that review to very rigorous examination when it is submitted
for Parliamentary scrutiny.
210. In the meantime, we recommend that the Government
should make every effort to improve on the adequacy of the estimates
of costs and benefits produced in the Partial Regulatory Impact
Assessment as soon as it is practicable to do so and to submit
the results to Parliamentary scrutiny.
Chapter 8 - Legal Base
211. In principle, we continue to believe that
the Government should take a robust and consistent line in opposing
proposals by the Commission which are, in the Government's view,
brought forward on an inappropriate legal base. In this particular
instance, in light of the overriding importance of the proposal
and the need to make rapid progress in implementing it, we conclude
that the Government is justified in agreeing to the present proposal
with a Minute Statement recording its objection to the legal base.