The European Commission has stepped up and given the nod to €47 million in German state aid for Vetter Pharma, which is a German pharmaceutical service provider. The aid is going to support the establishment when it comes to a new aseptic filling plant of injectable medicine into vials as well as syringes in Saarlouis. The measure is going to contribute towards the priorities of the EU in terms of job creation along with regional development and also making sure of affordable medicines that are in line with the Pharmaceutical Strategy of Europe.
The German step
Germany has, apparently, notified the Commission of its plan to go ahead and support Vetter Pharma so as to come up with a new aseptic filling plant based out of Saarlouis, in the Saarland. The plant is going to offer aseptic filling as a service for the pharmaceutical companies and is going to be built on parts of the site that had the former Ford plant in it. Aseptic filling, notably, is a specialized manufacturing process that is used to maintain the sterility when it comes to pharmaceutical products at the time of their transfer into the sterile containers.
The aid is going to take the form of a direct grant of €47 million. The overall project is anticipated to create around 1200 direct jobs and also more indirect jobs. The plant is going to be located in an area that is eligible for regional aid as per Article 107(3)(c) of the Treaty of the Functioning of the EU – TFEU.
The evaluation of the Commission
The Commission evaluated the measure as per the EU State aid rules, especially Article 107(3)(c)Â TFEU, which enables the Member States to go ahead and promote the economic development when it comes to the most disadvantaged areas across the EU, and also the 2022Â Regional Aid Guidelines.
The Commission went on to find out that –
- The measures are sure to contribute toward job creation and also the economic development along with the competitiveness of a disadvantaged area. Especially, the measure is going to create a minimum of 1 200 direct jobs and also certain indirect jobs.
- The aid is going to have an incentive effect, as the beneficiary will have carried out the project in a varied and non-assisted region without any public support.
- The measure has a limited effect on competition as well as trade between member states. Moreover, it is apt for Vetter Pharma to go ahead and set up the new plant in Saarlouis, as it goes on to contribute toward the development of the region.
- The aid is proportionate and also limited to the minimum requirement so as to incentivize the investment in Saarlouis. It is not going to exceed the maximum allowed aid amount for the project, which is calculated based upon the regional aid map of Germany.
On this basis, the Commission went ahead and gave its approval to the German measure under the EU State aid rules.
It is worth noting that Europe has always been characterized by certain major regional disparities when it comes to economic well-being, income, and unemployment. Regional aid looks forward to supporting the economic development across the disadvantaged areas of Europe, while at the same time making sure of a level playing field between the Member States.
Apparently, as per the 2022Â Regional Aid Guidelines, the Commission rolls out the conditions as per which the regional aid may as well be considered compatible with the internal market and also establishes the criteria so as to identify the areas that go on to fulfil the conditions of Article 107(3)(a) and (c) pertaining to the TFEU. On this very basis, Member States went on to notify the Commission of the regional aid maps so as to get the approval.
Interestingly, on December 15, 2021, the Commission gave a nod to the German regional aid map so as to grant regional aid between January 1, 2022, and December 31, 2027. On October 30, 2023, and September 3, 2024, the Commission went ahead and approved the amendments to the German regional aid map.
