3.6.2003 Official Journal of the European Union L 135/5 COUNCIL REGULATION (EC) No 953/2003 of 26 May 2003 to avoid trade diversion into the European Union of certain key medicines THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 133 thereof, Having regard to the proposal from the Commission, Whereas: On 21 February 2001, the Commission adopted a communication to the European Parliament and to the Council on accelerated action targeted at major commu- nicable diseases within the context of poverty reduction, according to which the Commission was instructed, inter alia, to establish a global tiered pricing system for key pharmaceuticals for the prevention, diagnosis and treat- ment of HIV/AIDS, TB and malaria and related diseases for the poorest developing countries and to prevent product diversion of these products to other markets by ensuring that effective safeguards were in place. In a resolution dated 14 May 2001 on accelerated action on HIV, TB and malaria, the Council underlined the need to reinforce safeguards against diversion of low priced pharmaceuticals destined for poor markets and prevent price erosion in developed countries markets. On 15 March 2001, a resolution of the European Parlia- ment on access to drugs for HIV/AIDS victims in devel- oping countries noted the inclusion of a commitment to tiered pricing in the Commission's programme for action and called for a system allowing developing countries equitable access to medicines and vaccines at affordable prices. Many of the poorest developing countries are in urgent need of access to affordable essential medicines for treat- ment of communicable diseases. These countries are heavily dependant on imports of medicines as local manufacturing is scarce. Price segmentation between developed country markets and the poorest developing country markets is necessary to ensure that the poorest developing countries are supplied with essential pharmaceutical products at heavily reduced prices. Therefore, these heavily reduced prices cannot be understood as a reference for the price to be paid for the same products in developed country markets. (6) (10) (11) Legislative and regulatory instruments are in place in most developed countries to prevent importation, in certain circumstances, of pharmaceutical products, but these instruments risk becoming insufficient where substantial volumes of heavily discounted pharmaceuti- cals are sold to the poorest developing country markets and the economic interest in trade diversion into high priced markets therefore may increase significantly. There is a need to encourage the pharmaceutical produ- cers to make pharmaceutical products available at heavily reduced prices in significantly increased volumes by ensuring through this Regulation that these products remain on those markets. Donations of pharmaceutical products and products sold under contracts awarded in response to competitive tenders from national govern- ments or international procurement bodies, or under a partnership agreed between the manufacturer and the government of a country of destination may qualify under this Regulation on equal conditions, bearing in mind that donations are not contributing to the improvement of access to these products on a sustain- able basis. For the purpose of this Regulation, it is necessary to establish a procedure which identifies the products, countries and diseases covered by this Regulation. This Regulation serves the purpose of preventing tiered priced products from being imported into the Commu- nity. Exemptions are laid down for certain situations under the strict provision that it is ensured that the final destination of the products in question is one of the countries listed in Annex IL Manufacturers of tiered priced products must differ- entiate the appearance of tiered priced products to facili- tate the task of identifying them. It will be appropriate to review the lists of the diseases and the countries of destination covered by this Regula- tion, as well as the formulae used to identify tiered priced products in the light, inter alia, of the experience gained from its application. The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (). () OJ L 184, 17.7.1999, p. 23.