EU Commission clears 23 million-euro R&D aid to Novartis Italy for vaccines in developing countries

The European Commission has concluded that 23 million euros ($30.2 million) public funding, which Italy intends to grant to Novartis Vaccines & Diagnostics Srl (NV&D), a unit of Swiss drug major Novartis (NVN: VX), for the R&D of innovative vaccines, is in line with European Union state aid rules, in particular because it tackles a genuine market failure and stimulates research in the EU. The project aims at ensuring that developing countries gain quicker access to such innovative products at affordable prices.

Joaquín Almunia, Commission Vice President in charge of competition policy, declared: "If successful, the project will bring new innovative products into the vaccines market without unduly distorting competition. It will also contribute to reaching the EU objectives for R&D while providing the necessary incentives for a faster and better targeted commercialization of these products in poorer countries".

In November 2011, Italy notified its plans to support a research project, also supported by the Gates Foundation, aimed at developing innovative vaccines, including research on antigens to combat illnesses endemic in developing countries. All R&D activities will be carried out by Novartis over a period of five years. The public funding amounts to 23 million euros for expected R&D costs of 76.9 million euros to be incurred by Novartis.