CM(2004)176 12 October 2004
904 Meeting, 17 November 2004
11 Administration and Logistics
11.4 Revision of the Budget of the European Pharmacopoeia – Budget year 2004
This document sets out the reasons why an adjustment of the Budget of the European Pharmacopoeia is requested.
Amendment of the European Pharmacopoeia 2004 budget for the Proceeds from the Sale of Reference Standards (Sub-head 9999145) and corresponding expenditure budgets
1. The EDQM has been experiencing growth of over 21% in the proceeds of sales of reference standards between 2003 and 2004 - at the end of August 2004 it had billed € 6 407 000 compared to € 5 283 000 at the end of August 2003. This growth also means that the proceeds have already surpassed the 2004 budget for this sub-head that was originally set at € 6.077m.
2. This increase in proceeds has had implications for the expenditure budget of the European Pharmacopoeia, two sub-heads in particular have been severely affected:
· Technical Equipment and Supplies (Sub-head 0000058) which covers the costs of the purchase, production and storage of reference standards and the running costs of the laboratory (which includes the establishment of new reference standards and monitoring of existing standards). Over 40-50 new and 150-180 revised monographs are produced on average each year with most of these requiring the establishment, production and monitoring of a reference standard.
· Document Production and Postage (Sub-head 0000124) covers the costs of courier and postage costs of sending Reference Standards that are in the main recovered through the invoicing of these costs with the reference substances. These costs have risen sharply since 2001 as the transporters pass on the additional costs of security measures and rising fuel prices. Furthermore, the increasing demand of substances from outside Europe especially China and India is causing an impact.
3. During the 2005 budget setting process and the summer 2004 expenditure review it emerged that there was a potential overspend on these two sub-heads, due in the main to two reasons:
· Additional day to day expenditure arising as a direct result of the increase in sales, e.g. additional material for the preparation of new batches of reference substances, packaging, courier costs etc;
· Costs that are indirectly linked to the increased sales of reference substances, i.e. the need to maintain, repair and replace equipment used in for establishing, producing and storing reference standards.
4. To date both these budgets are fully committed but still further expenditure will be required in the coming weeks and months to ensure the uninterrupted supply of reference materials to the pharmaceutical industry and the official medicines control laboratories, notably:
· Purchase of further reference substance material;
· Maintenance and purchase of cold storage facilities; and
· Costs of courier and postage costs.
5. It is proposed to increase the budgets for both these sub-heads in the draft 2005 budget, however, the problem for 2004 remains. To resolve the problems in 2004 it is therefore proposed to increase the budget for proceeds of sales of reference standards from € 6 076 700 to € 6 550 000 and to use these extra funds to increase the expenditure budgets as follows:
· Technical Equipment and Supplies (Sub-head 0000058) from € 902 600 to € 1 215 900 (an additional € 313 300),
· Document Production and Postage (Sub-head 0000124) from € 451 100 to € 611 100 (representing an increase of by € 160 000).
6. The Committee of Ministers is invited to implement the proposed changes to the 2004 budget by adopting the draft Resolution as it appears in the Appendix to this document;
Draft Resolution Res(2004)…
concerning the European Pharmacopoeia
(adopted by the Committee of Ministers on …
at the … meeting of the Ministers' Deputies)
The Committee of Ministers, under the terms of Article 16 of the Statute of the Council of Europe, and with membership restricted to the Representatives of the states parties to the Convention on the Elaboration of the European Pharmacopoeia1,
Having regard to Articles 5, 11, 19, 21 and 26 of the Financial Regulations;
Having regard to Resolution Res(2003)35 of 26 November 2003 approving the budget of the European Pharmacopoeia for 2004;
Having regard to the opinion of the Budget Committee in its September 2004 meeting report (document CM(2004)172);
Considering that the appropriations entered in the 2004 budget of the European Pharmacopoeia call for amendment,
Resolves as follows:
The Budget of the European Pharmacopoeia for 2004 is amended according to the table at the Appendix to the present Resolution.
Appendix (to draft Resolution)