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EUKoreaFTA
The EU-Korea Free Trade Agreement
Pharmaceuticals and Medical DevicesImproved transparency
and regulatory cooperation
Fernando PERREAU DE PINNINCKHead of Unit
Industrial Tariff and Non-Tariff Negotiations, DG Trade European Commission
EUKoreaFTA
Content
Background
EU – Korea FTA sector benefits:- Tariffs- Non-tariff barriers
In a nutshell: Annex on pharmaceuticals and medical devices
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Background
EUKoreaFTA
Economic Meaning
Pharmaceuticals and medical devices are two of the EU’s best performing industries
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Background- EU Pharmaceuticals Industry
*2010
EU Pharmaceuticals
Industry
Strong R&D focus
5th largest EU industry (~93
bn. € exports in 2010)
+ 600,000 jobs
Large overall trade surplus
(48 bn. €)
EU exports to Korea 12 times
higher than imports (1.3 bn. €; i.e. over half
of Korean imports)
UK, France, Germany,
Belgium and Italy largest
Member States exporters to
Korea
EUKoreaFTA
Background – EU Medical Devices Industry
EU Pharmaceuticals
Industry
~73 bn. € sales (i.e. about one third of world market), 2nd
after US
40 bn. € exports in
2009
+ 530 000 jobs
Large overall trade surplus
(~10 bn. €)
SMEs constitute 80% of the sector &
Strong R&D focus
EU exports to Korea 3 times higher than imports (475
mn. € i.e. ~35% Korean imports)
Germany by far largest exporter,
followed by Netherlands,
UK, France and Italy
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Benefits to the pharmaceuticals and
medical devices sectors
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EU-Korea FTA sector benefits
Primary obstacles for EU exports:
A) Tariffs EU duties on pharmaceuticals
& medical devices: 0%0% Korea average duty is 6.2%6.2%
(pharmaceuticals) and 5%5%(medical devices)
Korea will eliminate duties on EU products over 5 years for medical devices and 3 years for pharmaceuticals
Tariff line liberalisation
(in %)Medical devices
Pharma-ceuticals
Year of entry into force 74,3 % 90,5 %
Year 3 89,7 % 100 %
Year 5 97,8 %
Year 7 100 %
EUKoreaFTA
EU-Korea FTA sector benefits
Primary obstacles for EU exports:
B) Non-tariff barriers (NTBs) associated, to a large extent,with registration, certification, and pricing & reimbursement requirements, etc.
Pharmaceuticals & medical devices sector annex, to tackle most important NTBsand enhance cooperation between the two parties.
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In a nutshell: the pharmaceuticals and medical devices annex(Annex 2-D)
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The annex in a nutshell
International standards:- EU and Korea will take into account international standards,
practices and guidelines (e.g. WHO, OECD, ICH, GHTF and PIC/S) when developing legislation
Regulatory cooperation:- Possibility to accept conformity assessment results of the
other Party in accordance with international GLP and GMP standards
- Establishment of a Working Group on pharmaceuticals and medical devices, to promote further cooperation
Definitions:- One common definition of pharmaceuticals / medical devices
applicable between the Parties more clarity
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The annex in a nutshell
Transparency: The Parties should ensure that all rules governing the two sectors are published or otherwise made available at an early stage, to enable economic operators to become acquainted with them. The Parties will, insofar as possible:
• Make available such rules in advance;• Provide reasonable opportunities for comment;• Address important issues raised in the comments received, in
writing;• Allow a reasonable interval between publication and their entry
into force.
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The annex in a nutshell
Pricing, listing and reimbursement procedures:Basic principles on pricing and reimbursement to recognise the value
of the patented products and the efficacy, quality and benefits of the product The Parties will ensure that:- “The procedures, rules, criteria and implementing guidelines (…) are
fair, transparent, reasonable and non-discriminatory”- There is no obligation by the Parties to reimburse at any given price
nor prejudge the outcome of price negotiations, but criteria for decision need to be objective and clear, so as to understand the basis of the decision (Art. 2.(a) and footnote 2)
- All rules (« laws, regulations, procedures, administrative rulings and implementing guidelines of general application ») need to be made publicly available
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The annex in a nutshell
Pricing, listing and reimbursement procedures (continued) The Parties will ensure that:
- All criteria for decision are disclosed to applicants- All decisions on applications for pricing or approval are promptly
adopted and communicated to the applicant;- Applicants have opportunities to comment at relevant points in the
decision process;- In cases of rejection, the applicant receives a well-substantiated
statement of reasons, including the criteria applied, and can appeal the decision under an independent review process
- Decision-making bodies are open to stakeholders- Access is granted to national pricing and reimbursement
arrangements
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Monitoring and implementation
The Working Group on Pharmaceutical Products and Medical Devices will meet regularly to address any implementation issues
WG will offer the opportunity to clarify policies insofar as necessary