The European Commission has decided not to raise any objections to an exemption made for sales of medicines made from blood from Belgium’s levy on drug company turnover, as it does not constitute state aid.

The levy, which was introduced in July 1994 with the aim of making the drug industry “co-responsible” for the national health system’s budget, is based on a percentage of the turnover made by individual companies on reimbursable drugs.

In June 2006, another law was brought in to exempt from the levy reimbursable drugs made from blood supplied by voluntary unpaid donors, while drugs prepared from blood supplied by paid donors continued to be subject to it. In January 2008, the Commission concluded that this exemption was compatible with the state aid rules of the European Union (EU).

Then, this February, the Belgian government announced that it planned to make all blood derivatives exempt from the levy, thus ending the distinction made between medicines produced from blood supplied by paid and unpaid donors.

Examining this new law, the Commission has concluded that the exemption for blood derivatives is not “selective,” and will not contribute to inflation in the state health budget.

“Indeed,” it says, “there is no risk of excessive consumption of blood-derived medicines as they are nearly always prescribed and administered in hospitals by specialised doctors to a very small number of patients. In addition, in view of the risk of shortages and viral contamination, doctors make sure that administration of blood derivatives is limited to a minimum.”

A new report on the Belgian pharmaceutical industry notes that drugmakers currently have to return 15.7% of turnover to the government, based on turnover tax of 7.73%, 3% turnover claw-backs and new measures introduced last October which require them to produce savings totaling 57.5 million euros for 2009-10. In all, their contributions total 152.5 million euros, says the report, from Companies and Markets.

In addition, May 1 this year saw reductions in the prices of hundreds of medicines, mostly generics, in a move expected to generate savings of around 63.2 million euros for Belgium’s sickness and insurance programme, INAMI.

The national drug industry association, pharma.be, has warned that these savings measures, combined with additional financial restrictions on drugmakers, are causing foreign multinationals to reconsider investments in the country, particularly in the current financial crisis, and is calling for the establishment of a long-term framework to create a more predictable and investment-friendly environment for companies, says the report.