Implications Of Eu Enlargement Economics Essay

By July 6, 2017 July 11th, 2017 Economics

The intent of this study is to analyze the deductions of EU Enlargement on the pharmaceutical industry peculiarly the chances and the challenges that it brings to the industry. This study will besides discourse some of the policies and directives that have an influence on the pharmaceutical industry in Europe.

2. Introduction

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The European Union ( EU ) views the enlargement procedure as an chance to promote and advance stableness, democracy, human rights and prosperity throughout Europe. At present, there are 27 states in the European Union. The procedure of expansion is considered as one of the most influential policy tool which has assisted in transforming Central and Eastern European counties to go more modern and functioning states. The Treaty of Nice came into force on 1 February 2003 which provided the constitutional instrument for expansion.

3. EU Enlargement & A ; its impacts

Economic Impacts

The expansion of the European Union will decidedly hold a positive impact on the economic system of the states fall ining the European Union. It is hope to convey peace and stableness to the several province. Expansion could besides beef up one of the biggest individual market in the universe and besides go one of the biggest exporters in the universe. Through EU expansion, the acceding states are besides expected to hold a encouragement to their economic growing and prosperity. There will besides be the remotion of duty and non-tariff barriers. It is besides hoped to switch employment from labour intensive sector to a more skill intensive sector which should increase productiveness as a whole.

However, the positive economic impact of expansion will probably be uneven among certain groups of submiting states. The gap of new markets does present some challenges on concerns in traditional industrial sectors and besides some Small Medium Enterprises ( SME ) . Expansion will better the general economic environment in which concerns operate in. Foreign Direct Investments ( FDI ) will besides likely to increase as a consequence from expansion.

Opportunities & A ; Challenges of EU Enlargement


As reference earlier, expansion will finally take trade barriers and accordingly increase trade activities between the bing and new member provinces of the European Union. Existing European Union states will be chances for farther growing in exports to the Central and Eastern Europe states. The Central and Eastern European states besides have the chance to increased exports to the bing European Union member states. There will besides be more chance for most of the bing EU member states to put in new member provinces which will hold lower hazards compared to other emergent markets. This is due to political and economic stableness, more educated work force and within a close geographical propinquity.


There are besides several challenges through EU expansion. For the most of the Western European states, there has been turning concerns that houses in the EU will lose their markets to less dearly-won produced makers from the new member provinces. However, there will unlikely be inexpensive imports as new member provinces already bask duty free entree to EU markets in most sectors where subsidies are limited and are bound by the same regulations regulated by the EU. Expansion does necessitate a significant version of a assortment of European policies which does sometime appears insufficient in the present environment.

4. The Pharmaceutical Industry in Europe

The European Union health care industry is one of the largest in the universe. The new member states are expected to put to a great extent in the health care industry. Most of the new medical specialties developed and introduced by pharmaceutical companies go through a drawn-out, dearly-won and complex research development procedure. The pharmaceutical industry is divided into two different classs. The first class involves original advanced medical specialties which are foremost introduced into the market. The 2nd class involves generic medical specialties where the first advanced medicineaa‚¬a„?s patent protection has expired.

Soon, the pharmaceutical industry is seen as a province of the art system or web of advanced activities which normally involves the production and commercialization of drugs with different companies, research administration, regulative governments, authoritiess, doctors, etc. It is an of all time spread outing multi-billion dollar industry which is driven by new curative attacks and the new engineerings and research for remedies of new emerging diseases. United Kingdom, France, Germany and Italy are among the largest pharmaceutical states within Europe. The EU-enlargement is expected to offer great market chances for the pharmaceutical industry.

Research & A ; Development ( R & A ; D ) intensive pharmaceutical industry ( patented drugs )

The R & A ; D intensive pharmaceutical industry is largely dominated my big transnational administrations which cover around 50 % of the national pharmaceutical markets in more developed states. Most of this administration will run its activities and gross revenues domestically and internationally. These administrations industry merchandises for the bar and intervention of diseases of homo and animate beings. The cardinal constituent of this section of this industry is the intensive research and academic activities that are associated with the find and development of new drugs and medical specialty.

Non-Research & A ; Development intensive pharmaceutical industry ( generic drugs and over the counter merchandises )

The non-R & A ; D intensive pharmaceutical industry comprises of smaller companies that are specialised in the gross revenues of non R & A ; D intensive drugs. Their activities are largely on fabrication and commercialization of drugs. The types of merchandises that they produce are largely generic pharmaceutical drugs and over the counter merchandises.

5. Deductions of EU Enlargement

Challenges in footings of ordinance for pharmaceutical industry

It can be seen that the new member states in Eastern Europe are rather weak in footings of patent protection for pharmaceutical merchandises. However, there have been challenges in footings of dialogues over issues of auxiliary protection certifications, pre-patent termination development work and parallel trade of pharmaceutical merchandises. This is the consequence of viing involvement between the R & A ; D intensive pharmaceutical companies and the new member states.

The Pharmaceutical industry is considered as one of the most standardized industry in the internal market. Therefore, in the position of competition it is of import for the campaigner states adopt the pharmaceutical acquis communautaire before accession. Acquis communautaire refers to the corporate organic structure of European Community Torahs which comprises of the EU aims, substantial regulations, policies and other legislative affairs.

Accession will non hold a direct impact on national patent protection in the several acceding states because the European Patent Convention ( EPC ) which governs the European Patent system is non an EU understanding. Most of the bing EU states and submiting states are members of the EPC.

The EU statute law does supply a Auxiliary Protection Certificate ( SPC ) system for pharmaceutical merchandises in all the member states, which is aimed to widen the period of protection for any holds associating to marketing blessing. A Auxiliary Protection Certificate is a new name for rational belongings that was introduced in 1993.

Data entirely was besides an issue in footings of ordinance. Data exclusivity is a regulative information protection used by most R & A ; D intensive pharmaceutical industry that enabled them to maintain information about their merchandises which was submitted confidential during the selling blessing procedure.

Challenges of economic integrating

Pharmaceutical merchandises in a individual market due to enlargement may hold several challenges. The challenges will be in footings of economic integrating within the wellness system of bing and submiting EU states. The criterion of health care in some of the submiting states will be much lower than the other EU states. This may be due to the limited resources of the submiting states to pass on health care sectors. Therefore, this could present some jobs for the pharmaceutical industry in footings of affordability for their merchandises.

Increase parallel trade for pharmaceutical companies.

Some of the bing and submiting EU states have particular commissariats which allows generic pharmaceutical companies to carry on merchandise clinical tests and commercial testing before the patent of an original pharmaceutical merchandise expires. As a consequence of the complex patent ordinances and really low monetary values for generic pharmaceutical merchandises in the acceding states, it is expected that parallel trade will increase within the European Union. R & A ; D intensive pharmaceutical industry have negotiated a specific disparagement to the rule of the free motion of goods in the EU amongst frights of an influx of inexpensive pharmaceutical merchandises from the new acceding states. However, specific disparagement does non needfully supply some parallel import protection to the R & A ; D intensive pharmaceutical industry in the EU, there are still some countries and fortunes which are still ill-defined that are non covered by the disparagement.

Motion of generic pharmaceutical companies towards the Asia-Pacific part

In the long term, the rewards and benefits degrees in the new submiting EU states will increase and will be similar to EU norm degrees. As a consequence, most of the generic manufacturers in Eastern Europe will go excessively expensive. Therefore, the manufacturers will travel towards the Asia-Pacific market to take advantage of the lower cost of labor.

Opportunities in the hereafter

Even-though Europe is one of the taking pharmaceutical industries in the universe, the extra of new submiting states will decidedly further beef up its place in the pharmaceutical industry. It will supply a more diverse pool of accomplishments, a larger reservoir of patients for clinical tests and more cost-efficient installations. The acceding states are besides considered good place to back up clinical development processes which would potentially speed up the clip a pharmaceutical merchandise is released to the market.

As submiting states in Central and Eastern Europe offer lower costs on clinical development with high on-site productiveness and more flexible ordinances, it could help in live overing some of the bing force per unit areas on pharmaceutical companies in Europe. Central and Eastern Europe besides possess extremely skilled human resources with multi linguistic abilities that could besides turn out beneficial for the pharmaceutical industry.

Clinical Trial in Central and Eastern Europe

Central and Eastern Europe ( CEE ) is considered one of the most aggressive and dynamic parts in Europe. Pharmaceutical industries may happen it advantageous to put clinical research installations in the CEE countries. The population of this part is over 300 million people. The wellness attention system is centralised with developed referral webs. There are besides the handiness of learning infirmaries, medical schools and universities which could be a good beginning of high degree of research sites. Because of its big population, there will be handiness of patients from less developed countries that would necessitate payments for test. It is besides hoped that there would be a superior quality of clinical informations and information which is audited and inspected. There would besides be less cost as there would be fewer yearss needed to finish one instance study of a patient.

There are chances and challenges for the clinical tests in CEE. The accession of new members to the EU and the execution of the European Clinical Trial ( ET CT ) Directive had a important impact on the clinical research sector. Some of the positive impact was in in footings of the clinical tests supply procedure which was more cost efficient due to the riddance of usage barriers due to the free motion of goods as a individual market. However, there were certain challenges through the execution of the ET CT. These challenges were determined by the flexibleness of reading of the local authorities and driven by the handiness of resources. As some states in Central Europe is under significant regulative and legal challenges as a consequence of EU accession and harmonization of ordinances, Eastern Europe could potential go the nest preferable topographic point to carry on clinical tests in the close hereafter.

6. The Pharmaceutical Policy & A ; Directives

Pharmaceutical policy is a really complex interaction of assorted stakeholders that include the authorities sector, pharmaceutical industry, jobbers, medical practicians, druggists and etc. These stakeholders will frequently hold conflicting involvements that differs from one province to another. Therefore, this does do it more disputing for the national authorities to accomplish their several policy ends. Even though the pharmaceutical policy is largely determined by the national authorities, there are still a important sum of EU statute law that exercises influence on the policies of the EU states through ordinances, directives and determinations.

European Union Industrial policy

The aims of the European Economic Community ( EEC ) include the demand for steady enlargement, balance trade and just competition through the constitution of common imposts and duty policies. The European pharmaceutical policy hence tends to tilt to a more industrial policy position which is chiefly aimed at the constitution for a common market for pharmaceuticals with more efficient mandate processs.

European Medicines Agency ( EMEA )

The EMEA is responsible for the direction of the scientific resources that evaluate and supervise pharmaceutical merchandises for homo and animate being usage. There were important alterations in 1995 that involved the fundamental law of the decentralized process combined with the centralized processs through the EMEA. These alterations were seen to hold revolutionised the European pharmaceutical ordinance and made market mandate the chief duty of the EMEA. The centralized drug blessing through the EMEA procedure has been rather successful and will include generic merchandises in the hereafter.

Market mandate

Since the constitution of the EMEA, pharmaceutical companies would hold to acquire market mandate in an EU member province through the centralized process, the decentralized process and the national process.

The centralized process is mandatory for new biotechnology merchandises, orphan drugs and all new merchandises for the intervention of AIDS, malignant neoplastic disease, diabetes and neuro-degenerative diseases. The application is straight submitted to the EMEA for mandate and licensing. Once the merchandise is licenced, the Committee for Medical Products for Human Use ( CHMP ) will be responsible for pharmacovigilance until the merchandise is released to the market.

The decentralized process is applicable for most conventional pharmaceutical merchandises which is based on the rule of common acknowledgment of national mandate that is granted by the national selling governments. The market mandate for one European Member state can be extended to one or more member state that is identified by the maker.

The standard for the mandate of pharmaceuticals in Europe are based on the EU-wide good clinical pattern criterions and include proven safety and efficaciousness, as out-lined in the Directive 2001/20/EC. The chief function of the mandate process is chiefly to vouch that the merchandise really works, safe with acceptable criterion of quality.


After any pharmaceutical merchandise is approved, it undergoes post-marketing surveillance or pharmacovigilance. Pharmacovigilance is the continuance of the rating for the pharmaceutical merchandise. The Directives 65/65/EC and Directive 75/319/EEC which is a portion of the Community Code associating to pharmaceutical merchandises on homo has forced all the relevant stakeholders to roll up, collate and interchange inauspicious drug reactions within the European Economic Area. The EMEA besides has introduced a system by which enables the exchange of pharmacovigilance informations between national medical specialty bureaus, the EMEA and the pharmaceutical industry.

Distribution and categorization of pharmaceutical merchandises

The minute a pharmaceutical merchandise enters a national market ; pharmaceutical jobbers are capable to national ordinance under the Community Code associating to pharmaceutical merchandises. It includes the demand the ownership of an mandate before prosecuting in any sweeping activity.

In footings of categorization, each member states possess its ain categorization system that is set up to that the public benefits from the pharmaceutical merchandise while understating the opportunities of inappropriate usage and injury to the user. In most member states, the pharmaceutical merchandises is classified into three classs ; Prescription Merely Medicine ( POM ) , Pharmacy supervised sale ( P ) and General Gross saless List ( GSL ) .


Under the Community Code associating to pharmaceutical merchandises, public advertisement of Prescription Only Medicines ( POM ) is prohibited. However, In most instances the public advertisement of Over The Counter merchandises are allowed.

EU Transparency Directive

The Transparency Directive was established during the 1980s which was ab initio introduced over turning concerns over possible changes of trade in pharmaceutical merchandises, caused by local steps to command the public outgo of wellness. The purpose of the directive is to guarantee the transparence of the processs that are established by EU member states in footings of commanding the monetary value and reimbursement of pharmaceutical merchandises. It besides ensures public entree to information on pricing, net income control and reimbursement. However, the directive does non impact national policies on scene of monetary values and besides the finding of societal security strategies.

Innovation enterprise

Research and Development is a cardinal component in invention of pharmaceutical patented merchandises. As the European Commission recognises this, it is presently implementing assorted sector specific enterprises as to guarantee that Europe is the prima part for pharmaceutical invention.

The Innovation Medicines Initiatives ( IMI ) is a particular partnership that involves the European Community and the European Federation of Pharmaceutical Industries and Associations ( EFPIA ) . The aim of IMI is to back up the acceleration for find and development of better medical specialties and besides heighten Europeaa‚¬a„?s fight by guaranting that it pharmaceutical sector remains as one of the most dynamic high engineering sector in it field.

7. Decision

Expansion does supply both chances and challenges for the pharmaceutical industry runing in Europe. New member states with its bing economic systems and resources do provide great chances for concern in the pharmaceutical industry. However, there are certain challenges in footings of integrating and parallel trading that could present some menaces to research & A ; development intensive pharmaceutical industry. The pharmaceutical industry is besides capable to certain directives that are aimed to protect the European wellness attention system. The directives and policies are besides aimed to speed up and better Europeaa‚¬a„?s place in the pharmaceutical industry.

Word count: 2, 860 words


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