EU Seeks to Encourage Drug Companies to Sell Drugs Cheaper to Poor Countries by Combatting Illegal Reimports

European Union governments approved a measure Monday to encourage pharmaceutical companies to sell cut-rate AIDS, malaria and tuberculosis drugs to poor countries by reducing worries the medicines will end up on the European black market. The program applies to 76 countries, mostly in sub-Saharan Africa.

Under the plan, drug companies that agree to sell their products at a 75 percent discount from European prices, or a 15 percent markup over the cost of production -- whichever is cheaper -- will qualify for a special logo to use on packaging. That will help customs officials identify them to prevent illegal reimports back into Europe. According to pharmaceutical giant GlaxoSmithKline, some AIDS drugs supplied to Africa at reduced prices were illegally resold in Europe last year.

The European Union will press the United States and other developed countries to adopt similar programs at the Group of Eight summit next week in Evian, France.

The new regulation is separate from World Trade Organization negotiations to allow poor countries facing health emergencies to import cheap generic copies of patented drugs. Washington's fears about weakening drug patents are holding up an agreement. "We are working to get the American position to budge," EU Trade Commissioner Pascal Lamy said, adding that the European initiative could alleviate some of the pressure.

But Brian Anger, director general of the European Federation of Pharmaceutical Industries and Associations, said drug companies usually team up with a nongovernmental organization to determine a price level that best suits a country. "It's a crude thing to link the issue of affordable medicines and a complex price structure," he said. Anger added that setting strict price guidelines would discourage people from using the regulation. Lamy said it was not feasible to register individual contracts between drug companies and aid groups.

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