Minds Open –  
Sustainability 
of 
the 
European 
regulatory
system for medicinal products 
 
 
RIVM Report

RIVM Report  
 Page 2 of 77 
Colophon 
 
 
 
 
ISBN:  
 
© RIVM 2014 
Parts of this publication may be reproduced, provided acknowledgement is given 
to: National Institute for Public Health and the Environment, along with the title 
and year of publication. 
 
Joëlle Hoebert, RIVM 
Robert Vonk, RIVM 
Katja vd Laar, RIVM 
Ingrid Hegger, RIVM 
Marjolein Weda, RIVM 
Susan Janssen, RIVM 
 
 
Contact: 
Joëlle Hoebert 
VZ/GZB/EVG 
joelle.hoebert@rivm.nl 
 
 
This investigation has been performed by order and for the account of the Dutch
medicines chain, within the framework of the research program Dutch medicines
chain

RIVM Report  
 
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Publiekssamenvatting 
De houdbaarheid van het Europese regulatoire geneesmiddelensysteem 
 
Het Europese geneesmiddelensysteem is sterk gereguleerd. Voordat een 
geneesmiddel een handelsvergunning krijgt en op de markt mag worden 
gebracht, moet eerst worden aangetoond dat de kwaliteit, veiligheid en 
werkzaamheid voldoende zijn. Dit is geen eenmalige gebeurtenis maar gebeurt 
continu gedurende de tijd dat het geneesmiddel op de markt is. De maatregelen 
die hiervoor nodig zijn, zijn erg omvangrijk geworden en hebben effect op 
innovatie, kosten en de beschikbaarheid van geneesmiddelen. Daardoor leeft 
zowel binnen de overheid als de maatschappij de vraag of dit systeem 
toekomstbestendig is. 
 
Het RIVM heeft daarom de knelpunten van het huidige systeem in kaart 
gebracht. Het blijkt dat de vier belangrijke thema’s van het systeem (veiligheid 
& effectiviteit, kosten, innovatie en beschikbaarheid) nauw met elkaar 
samenhangen. Een verandering binnen een van de thema’s raakt altijd aan de 
andere, en een optimale balans is lastig te bepalen. Zo zorgen soepelere regels 
om innovatie te stimuleren ervoor dat geneesmiddelen sneller op de markt 
beschikbaar zijn. Als keerzijde daarvan is er minder kennis over de veiligheid en 
effectiviteit op het moment dat een vergunning wordt verleend. Extra 
veiligheidsmaatregelen leiden daarentegen tot langere studies, en daarmee tot 
hogere kosten voor (de ontwikkeling van) geneesmiddelen en een beperktere 
beschikbaarheid.  
 
Bovendien hebben factoren buiten het geneesmiddelensysteem invloed op de 
vier thema’s, zoals commerciële belangen en de besluitvorming over de 
nationale vergoeding van geneesmiddelen. Ook ontbreekt op meerdere terreinen 
transparantie, bijvoorbeeld in de opbouw van kosten of de uitwisseling van data.  
 
Aangezien belangen per partij verschillen (van industrie, tot verzekeraars, 
patiënten en zorgprofessionals), is het lastig om een balans te vinden die alle 
partijen tevreden stelt. Bij eventuele aanpassingen aan het systeem is het van 
belang hiermee rekening te houden. Patiënten met een ernstige ziekte waarvoor 
nog geen behandeling beschikbaar is, zullen bijvoorbeeld meer risico’s 
accepteren 
op 
het 
gebied 
van 
veiligheid 
en 
effectiviteit 
dan 
geneesmiddelenbeoordelaars of het algemene publiek.

RIVM Report  
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Abstract 
Minds Open – sustainability of the European regulatory system for 
medicinal products.  
 
The European system for the production, authorization and marketing of 
medicinal products is strongly regulated. Medicines have to meet predetermined 
standards concerning safety, quality and efficacy before they are granted market 
authorization. Safeguarding these standards does not stop at the moment of 
market authorization. During the time an authorized medicinal product is 
available on the market, it is subject to a continuous process of surveillance.  
The regulation supporting this process of continuous surveillance has expanded 
increasingly and is affecting the amount of innovation of new medicinal 
products, the availability and the costs of medicinal products. Against this 
background, the question whether the current regulatory system for medicinal 
products is still sustainable in future has come to the fore. 
 
The RIVM analyzed potential vulnerabilities in the current regulatory system with 
a focus on the themes safety & efficacy, innovation, costs and availability of 
(new) medicinal products. 
This report shows that these themes show a strong interdependency and cannot 
be separated easily. Interventions in one theme will have an effect on another 
theme or even on multiple themes; e.g. more attention to safety and efficacy 
will lead to higher costs and a decline in both innovation and availability of 
medicinal products. The four main themes can be seen as four gear wheels. 
When one wheel is being turned, the others are also set in motion.  
 
Furthermore, during this study the themes ‘transparency’ and ‘accountability’ 
were also found to be important. The lack of transparency and accountability of 
both the pharmaceutical industry and the medicines regulatory authorities leads 
to public distrust in the system. It also hinders innovation, raises costs and 
restricts the availability of necessary pharmaceuticals. 
 
Finally, external factors such as national variations in reimbursement decisions 
or commercial reasons influence these themes. Different interest between 
stakeholders (industry, patients, health care professionals and regulators) make 
adjustments to the system complex. This should be kept in mind when 
discussing possible solutions for improvement of the pharmaceutical regulatory 
system.

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Contents 
 
Contents 
5 
Summary 7 
1 
Introduction 10 
1.1 
Background 10 
1.2 
Aim of this study 
10 
1.3 
Definitions and scope 
10 
2 
Historical background European regulation of pharmaceuticals 11 
2.1 
The era of therapeutic catastrophes, 1900-1964 
11 
2.2 
The birth of a European framework, 1965 
12 
2.3 
Between fragmentation and centralization, 1975-1985 14 
2.4 
Breaking the stalemate, 1985-1999 
15 
2.5 
A more centralized regulatory system, 2000-2013 
17 
2.6 
Conclusions 18 
3 
Methods 
21 
3.1 
Overview 
21 
3.2 
Step 1, literature review 
21 
3.2.1 
Snowball search 
21 
3.2.2 
Scientific literature search 22 
3.2.3 
Study Selection 
22 
3.2.4 
Snowball search – collection of relevant information not available in 
scientific literature databases 
23 
3.2.5 
Analysis 
23 
3.3 
Step 2, semi-structured interviewing of national experts 
24 
3.4 
Step 3, identification of illustrative cases 
24 
4 
Literature review results 
25 
4.1 
Introduction 25 
4.2 
Safety & Efficacy 
25 
4.2.1 
Current issues 
25 
4.2.2 
Potential causes 
25 
4.2.3 
Government reactions 
28 
4.3 
Innovation 31 
4.3.1 
Current issues 
31 
4.3.2 
Potential causes 
32 
4.3.3 
Government reactions 
36 
4.4 
Costs 
38 
4.4.1 
Current issues 
38 
4.4.2 
Potential causes 
39 
4.4.3 
Government reactions 
40 
4.5 
Availability 42 
4.5.1 
Current issues 
42 
4.5.2 
Potential causes 
44 
4.5.3 
Government reactions 
45 
4.6 
Transparency and Accountability 
47 
4.6.1 
Current issues 
47 
4.6.2 
Potential causes 
48

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4.6.3 
Government reactions 
48 
5 
Interview results 
50 
5.1 
Introduction 50 
5.2 
Safety & efficacy 
50 
5.2.1 
Public trust and the perception of risks 
50 
5.2.2 
Cautious regulators 
51 
5.2.3 
Excessive regulations 
51 
5.2.4 
Post market approval: pharmacovigilance 51 
5.2.5 
Premarket approval: the RCT and efficacy 52 
5.3 
Innovation 53 
5.3.1 
Decreasing innovation 
53 
5.3.2 
Patents 
54 
5.3.3 
Purchasing innovation 
54 
5.3.4 
Stimulating innovation 
55 
5.4 
Costs 
56 
5.4.1 
Price setting: a black box 56 
5.4.2 
Synergy between authorization and reimbursement 
56 
5.5 
Availability 57 
5.5.1 
Risk minimization 57 
5.5.2 
Centralization of production sites 58 
5.5.3 
Compassionate Use 
58 
5.6 
Transparency and accountability 
58 
5.6.1 
Culture of secrecy 58 
6 
Discussion and conclusion 
60 
6.1 
Key Questions 60 
6.2 
Public health or economic interests: an ambivalent relationship? 
60 
6.3 
Safety & efficacy: the root of all problems? 
60 
6.4 
The less flourishing side of innovation 61 
6.5 
Costs: the black box 
62 
6.6 
Availability: a complex issue 
62 
6.7 
Transparency and accountability: a culture of secrecy? 63 
6.8 
Pharmaceutical regulation: an intricate system of wheels and gears 
63 
6.9 
Strengths and weaknesses of this study 
64 
6.10 
Conclusions 64 
7 
Acknowledgements 66 
8 
List of abbreviations 67 
9 
Glossary 
68 
10 
References 71

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Summary 
This report is a data-driven review of the sustainability of the European Union 
(EU) regulatory system for pharmaceuticals. It aims at identifying areas of 
special interest by analysing potential vulnerabilities in the regulatory system 
with a focus on the themes safety & efficacy, innovation, costs and availability of 
(new) pharmaceuticals.  
 
The project was split in four main activities: an inventory of the pharmaceutical 
regulatory history (presented as an outline), a literature review (including 108 
documents), semi-structured interviewing of national key experts (n=9) and 
identification of illustrative cases.  
 
For the analysis of data, we identified four major themes that we defined as 
follows: 
1. 
Safety & efficacy; the safeguarding of public health by denying market 
access of ineffective and/or harmful products and/or withdrawing them 
from the market; 
2. 
Innovation; the possibility to bring pharmaceuticals on the market, 
either with a new chemical entity (NCE) or a new formulation; 
3. 
Availability; the extent in which (new) pharmaceuticals are available for 
patients; 
4.  
Costs; the financial expenditure for the development, regulation and 
monitoring of pharmaceuticals.  
Based on a heuristic tool reflecting the four major themes and their 
interdependence, we analysed the literature data for each research theme 
separately and for interdependence between the themes. In the semi-structured 
interviews, we discussed our literature findings with national experts and asked 
their opinion on emerging issues. Based on both the literature review and the 
interview outcomes, we identified potential vulnerabilities in the pharmaceutical 
regulatory system. We completed our report with some cases to illustrate the 
potential vulnerabilities to the reader.  
  
The European regulatory system has been built on the pillars ‘public health’ and 
‘economic interests’: guaranteeing the safety of medicines available on the 
market, but safeguarding the interest of the European pharmaceutical industry 
at the same time. This dual nature of the regulatory regime causes tension 
between economic interests and public health, which is a constant factor in the 
policy making process around pharmaceuticals.  
   Our study shows that the existing regulatory system performs well in terms of 
safety and efficacy.  Yet, at the same time, ‘the outside world’ does not (always) 
share this view as has been shown by the increasing public attention to incidents 
like those with Vioxx® or Diane 35®. The classic response of regulators to 
public commotion is an increasing emphasis on medicines safety by new rules. 
Our study shows that this has negative effects on innovation, availability and 
costs.  
   Despite some impressive pharmaceutical innovations last decennia, fewer new 
chemical entities reached the market, while there is still a need for new 
products. Total R&D expenditure rose sharply as did the costs for a new 
chemical, there is stagnation/decline of output and worsening of attrition rates. 
The regulatory system responds to this trend by stimulating innovative products

RIVM Report  
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through specific procedures, for example a regulation specifically for orphan 
medicinal products, fee reduction and administrative assistance for micro, small 
and medium-sized enterprises, adaptive licensing procedures and guidance to 
facilitate early dialogue between regulators, health-technology-assessment 
bodies and medicines developers. Nevertheless, the lack of real innovation can 
only partly be attached to the regulatory system and remains difficult to resolve. 
   The growing amount of regulatory guidelines and the additional requirements 
for reimbursement often gets the blame for the steadily increasing costs of 
pharmaceuticals, but this allegation is difficult to substantiate because most 
pharmaceutical producers do not disclose how they compile their prices.    
   The availability of pharmaceuticals is a complex issue in which many 
stakeholders play an important role. In addition, both regulatory system factors 
and external factors can be linked to variation in availability between products 
and/or countries. National policy makers have vast range of tools, like pricing 
policies, to improve medicine availability and affordability for their citizens. Any 
future changes to the EU regulatory system should be made as robust as 
possible towards plausible national and international scenarios that may affect 
availability.  
    
During the study, two additional themes revealed to be important. The lack of 
transparency and accountability of both the pharmaceutical industry and the 
medicines regulatory authorities contributes to the public distrust in the 
pharmaceutical system. It also hinders innovation, raises costs and restricts the 
availability of necessary pharmaceuticals. 
 
The potential vulnerabilities of the pharmaceutical regulatory system, as 
described in this report, are strongly interrelated. Interventions in one theme 
will have an effect on another theme or even on multiple themes; e.g. more 
attention to safety and efficacy will affect costs, innovation and availability of 
pharmaceuticals. The four major themes can be seen as a four gear wheel. 
When one wheel is being turned, the others are also set in motion. In addition, 
all four themes are influenced by transparency and accountability. This 
interrelatedness makes adjustments to the system complex and should always 
be kept in mind when discussing possible solutions for improvement of the 
pharmaceutical regulatory system. 
 
The results show that a mixture of factors, internal and external to the system, 
combined with a slow-moving organizational structure, give reasons to believe 
that the current regulatory system for pharmaceuticals is not sustainable in the 
future. There is a growing need to rethink the balance between ensuring 
medicines safety on the one hand and the need to promote innovation, ensure 
availability and limit costs on the other. This rethinking should take into 
consideration 
risks 
perceived 
by 
society 
and 
patients, 
benefit-risk 
communication needs, medical needs and expected risks related to use in daily 
practice. Second, all experts and decision makers in the marketing approval 
process should be aware of the balance between the gain in safety versus the 
feasibility and costs of requesting additional information or data. Third, a 
continuous dialogue between regulators, the public at large, patients, healthcare 
professionals and pharmaceutical industry is needed to address both balances 
and to aim for development of products with greater efficacy benefits for 
patients. Regulation should keep pace with (fast) changes in society and adopt

RIVM Report  
 
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societal dynamics. Finally, establishing a robust baseline of transparency and 
accountability is a prerequisite for success.

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1 
Introduction 
1.1 
Background 
In recent years, the efficiency of the pharmaceutical regulatory system is under 
debate by governments as well as society. These concerns relate to the 
possibilities for innovation, lack of flexibility in the system, the timely availability 
on the market, pharmacovigilance and resources necessary to comply with and 
to check all requirements (1). An important issue for the pharmaceutical 
industry sector is that it is confronted with increasing research and development 
(R&D) costs, while at the same time the success rate of innovation seems to 
decline.(2) In addition, recent developments, like the new European legislation 
for Pharmacovigilance, the development of the European Union (EU) Clinical 
Trial Regulation to replace Directive 2001/20/EC and the increased focus on the 
development of personalized medicine, provoke a re-assessment of the current 
system. The European Medicines Agency (EMA) itself emphasizes that 
“medicines regulation today is characterized by the increasing complexity of 
applications for new medicines, such as nanomedicines or personalized 
medicines, and the drug-development environment as a whole.”(3) Finally, 
reduced public finances, the need for less (restrictive) rules and the call from 
society for greater transparency, require a review of the current regulatory 
system. 
 
1.2 
Aim of this study 
This report is a data-driven review of the sustainability of the EU regulatory 
system for pharmaceuticals. It aims at identifying areas of special interest by 
analysing potential vulnerabilities (that demand closer attention) in the 
regulatory system; with a special focus on innovation, availability of (new) 
pharmaceuticals, safety & efficacy and costs.  
 
1.3 
Definitions and scope 
In this study, the research area includes the marketing authorization procedure 
and other stages relevant to the marketing authorization; the preregistration 
stage and the post marketing stage. For both stages we only took legislation 
specifically related to the marketing authorization process of pharmaceuticals 
into account (see figure 1.1). Legislation is taken in a ‘broad sense’: laws (e.g. 
European regulations, directives and decisions; legally binding) as well as ‘soft 
laws’ 
(e.g. 
guidelines, 
communications; 
not 
legally 
binding) 
and 
companies’/person’s interpretation of legislation. 
 
 
Figure 1.1 The drug development pathway from discovery to product 
launch and post market monitoring. All areas in green are within the scope of this 
research.

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2 
Historical 
background 
European 
regulation 
of 
pharmaceuticals 
Today pharmaceuticals are one of the most regulated products on the market. 
Their safety, efficacy and quality are under permanent surveillance. Before new 
medicinal products can be put on the market, they have to undergo an 
authorization procedure. After they have gained market access, new medicinal 
products are supervised for unknown adverse effects. Furthermore, most 
European countries have extensive legislation concerning the prices, labels and 
promotion of medicinal products, while the European Pharmacopoeia guards the 
compilation of pharmaceutical products, their formulas and methods of 
preparation (4).  
This has not always been the case. The European Union and its 
predecessors – the European Economic Community (EEC) and the European 
Community (EC) – have played a central role in the development of 
pharmaceutical legislation in Europe, which eventually lead to a centralized and 
comprehensive regulatory system for medicinal products. This development was 
driven by two conflicting forces: the endeavour of ‘Europe’ to be something 
more than a free trade area or customs union and the constant political 
resistance of individual member states against the limitation of their sovereign 
power (5). Knowledge of the historical dynamics that have shaped the European 
regulatory regime is crucial for a careful assessment of its strengths and 
weaknesses.  
In the following chapter, we give a short overview of some of the main 
developments in the history of the pharmaceutical risk governance in Europe. 
Risk governance incorporates all regulations, institutions and stakeholders 
(embedded in their own legal, institutional, social and economic context) that 
deal with various aspects of a risk process. Within a risk process several phases 
can be discerned, such as risk assessment (identifying and exploring risks), risk 
management (prevent, reduce or alter the consequences identified by the risk) 
and risk communication (bridging the tension between expert judgment and 
public perceptions of risks) (6, 7). In other words, the regulatory framework 
ascribes responsibilities to different actors, both horizontally (government, 
industry, science) and vertically (regional, national or supranational levels), who 
are often interlinked to one another. 
During the course of the 20th and 21st century the focus of the European 
regulatory system for pharmaceuticals has shifted between various aspects of 
risk governance, depending on and driven by the constant interaction between 
various 
actors 
and 
institutions 
in 
the 
arena 
of 
pharmaceuticals. 
 
2.1 
The era of therapeutic catastrophes, 1900-1964 
The development of pharmaceutical legislation in Europe (and the United States 
of America) is intrinsically interwoven with the ascent of industrially produced 
medicinal products during the first decades of the 20th century. Around 1900, 
the production of vast majority of available pharmaceuticals, which was still 
largely in the hands of individual pharmacists, was regulated by national 
pharmacopoeia. The education and professional status of pharmacists was 
governed by law as well.  On the contrary, there was no or very little legislation 
specifically aimed at industrially produced medicinal products - at this time still a 
very small segment of market for pharmaceuticals.

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There was no clear ‘European’ legislative tradition. In Germany, the 
United Kingdom and the United States (US), the pharmaceutical industry was 
largely left unregulated. In France and the Netherlands, on the other hand, 
monitoring agencies were established, though their authority was limited. The 
Dutch Rijks Instituut voor Pharmaco-Therapeutisch Onderzoek (National 
Institute for Pharmacotherapeutic Research) was founded in 1920. This institute, 
however, could only inform the public and physicians about hazardous products, 
but was not able to prevent medicinal products from entering the market. The 
French Visa Ministériel-system, under which firms had to apply for a ‘visa’ before 
being able to sell pharmaceuticals in France, did contain regulations concerning 
the safety of medicinal products, but it was primarily aimed at protecting the 
French pharmaceutical industry from foreign competition (4).  
Partially due to the focus on production by individual pharmacists, 
nobody seemed to be prepared for the large-scale consequences that the large-
scale (industrial) production and distribution of hazardous medicinal products 
could have. The implicit reliance on the self-control (or self-regulation) of the 
pharmaceutical industry that underlined the government’s restraint, turned out 
to be misplaced. Selling lethal drugs might be bad for business, but this did not 
mean it did not happen. In 1937, the ‘sulfanilamide incident’ shocked the United 
States. In order to cater the demand for a liquid form of sulfanilamide, a product 
that was widely used for the treatment of streptococcal infections, the firm S.E. 
Massengill launched an Elixir Sulfanilamide. More than a 100 people died. The 
company had erroneously mixed sulfanilamide with diethylene glycol, more 
commonly used as antifreeze. Under the then existing regime, the US 
government could not charge Massengill with selling lethal medicines. It could 
only fine the company for using an incorrect (and misleading) label: according to 
the pharmacopoeia, elixirs were solutions based on alcohol, which was evidently 
not the case with Elixir Sulfanilamide. The American federal Food and Drug 
Authority (FDA) was established as a direct result of this incident (8, 9). 
In Europe, two similar events lie at the basis of the introduction of 
pharmaceutical legislation. Of these incidents, the thalidomide disaster is 
indisputably the most well-known. The German company Grünenthal started to 
market Contergan® (NL: Softenon®, UK: Distaval®) in the late 1950s as a safe 
and non-addictive sleeping pill. It contained high levels of thalidomide. Shortly 
after the market introduction of the product, reports of previously unknown 
neural damage surfaced which could be traced back to the intake of Contergan. 
The most devastating effect, however, was the deformities thalidomide caused 
in unborn children whose mothers took Contergan® during pregnancy. During 
the 1958 and 1960, Contergan was introduced in 46 different countries 
worldwide resulting in an estimated 10.000 babies being born with phocomelia 
and other deformities. (4, 9).  
In France, thalidomide did not gain market access, but the stalinon 
drama had the same devastating effect. Stalinon®, a mix of diiododiethyl tin 
and isolinoleic acid esters, was a popular product used to treat staphylococcal 
infections. A dispensing error lead to a product being sold in which the levels of 
diiododiethyl tin were three times higher than in the sample that was used in the 
clinical trial. Around a 100 people died and a similar number was left 
permanently affected (9, 10).  
 
2.2 
The birth of a European framework, 1965 
The response to these incidents varied from country to country. Some years 
prior to the Thalidomide incident, in 1958, the Netherlands had introduced a 
pharmaceutical law and a regulatory agency – het College ter beoordeling van 
verpakte geneesmiddelen.  Still, even after the effects of thalidomide became

RIVM Report  
 
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fully clear, it took some years – until 1963 – before the law actually came into 
force (11). In France, the United Kingdom and Germany pre-market controls for 
pharmaceuticals were introduced in 1967, 1968 and 1976 (4). 
 
On the European level, actions were taken at a faster pace. In 1964, a 
Convention was signed for the elaboration of a European Pharmacopoeia 
between eight member states of the Council of Europe1: Belgium, France, 
Germany, Italy, Luxemburg, The Netherlands, Switzerland and the United 
Kingdom. Both the European Economic Community and the World Health 
Organization (WHO) became observers in the European Pharmacopoeia-
committee. The convention was based on a dual commitment: 1. to create a 
common pharmacopoeia by contributing both financially and in manpower; 2. to 
make it the official pharmacopoeia, if necessary replacing the existing national 
requirements (12). 
 
The European Economic Community played an important role by 
canalizing and reinforcing the regulatory reactions of national governments to 
the thalidomide incident. Directive 65/65/EEC, issued in 1965, stated that ‘no 
proprietary medicinal product may be placed on the market in a Member State 
unless an authorization has been issued by the competent authority of that 
Member State’.2 This meant that all member states were obliged to establish 
pre-market controls for medicinal products. Furthermore, the Directive 
established that all authorizations, as well as withdrawals or suspensions of 
authorization, could only be based on the evaluation of the safety, therapeutic 
efficacy and the quality of the pharmaceutical product. Economic or political 
reasons to deny authorization were no longer regarded as valid justifications (4).  
According to its preamble, the primary purpose of the directive was ‘to 
safeguard public health’. For the first time the EEC formulated goals that were 
not directly connected to its original aim: a market-oriented union based on the 
idea of economic cooperation. However, the EEC founding treaty – the Treaty of 
Rome (1957) – did not contain any provisions on health care, because nobody at 
the time thought the EEC should have any competence in this area. On the other 
hand, it did contain certain provisions that could be used as a ‘back door’ for the 
creation of a system of harmonized pharmaceutical law in Europe. In this case, 
the paragraphs concerning the freedom of movement of goods (trade in 
medicinal products) and the freedom to provide services (distribution of 
medicinal products and provision of health care services) were of particular 
importance. Legislation concerning market integration became the ‘available 
institution’ through which the EEC could address public health concerns. After 
all, medicinal products were commodities, and commodities had to be safe 
before they could be put on the market (5).  
The fact that the EEC used economic law to regulate a public health 
issue, would become a source of constant tension in European health policy 
(13). The promotion and protection of public health and economic integration did 
not necessarily rule each other out, but they did automatically support each 
other either. It was a difficult line to tread, as became clear in Directive 
65/65/EC. The Directive clearly stated that the introduction of a pharmaceutical 
regulatory regime should be ‘attained by means which will not hinder the 
development of the pharmaceutical industry or trade in medicinal products 
within the Community’. Public health should not hinder economic development, 
an opinion that was reflected by the fact that it was the Directorate-general of 
Industry (in its various incarnations) that set out the lines for European 
pharmaceutical policymaking. 
 
1 Not to be mistaken with the European Council/Council of the European Union. See: Glossary. 
2 Directive 65/65/EEC.

RIVM Report  
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The EEC took as active a stance as it possibly could in the debate on the 
safety of medicinal products. Yet, it took a considerable time before member 
states had implemented the new European rules. Pharmaceutical legislation was 
an integral part of health legislation and it needed to fit with the already existing 
national health systems. The scope of Directive 65/65/EEC was limited to 
proprietary medicinal products. What we now call generic medicines were 
excluded from mandatory authorization. Exemptions were also made for 
products which traditionally were not considered to be ‘medicinal product’, such 
as 
homeopathic 
medicines, 
radiopharmaceuticals, 
blood 
products 
and 
immunological medicinal products, like sera and vaccines (14).   
 
 
2.3 
Between fragmentation and centralization, 1975-1985 
With the safety of pharmaceuticals protected by mandatory pre-market 
authorization procedures, the EEC shifted its focus to two other aspects of 
pharmaceutical risk assessment: the quality and efficacy of medicinal products. 
The annex of Directive 75/318/EEC, issued in 1975, described the trials that had 
to be conducted to prove the safety and efficacy of a medicinal product. The 
Directive made compliance with the European Pharmacopoeia Monographs 
mandatory when requesting marketing authorization for medicines for human 
use, thus firmly integrating market authorization and quality control (9, 12). At 
the same time, the Second Directive on medicinal products (75/319/EC) 
introduced a compulsory authorization procedure for manufacturers of 
pharmaceuticals, in order to safeguard the quality of the production process 
(14).  
The underlying aim of market-integration was not forgotten. In 1975, 
the EEC also introduced a ‘community procedure’. If a medicinal product had 
received a positive authorization in one member state, the pharmaceutical 
company was allowed to apply for recognition of this authorization by at least 
five (and later two) other Member States. These Member States had to decide 
whether or not they accepted the positive verdict of the so called ‘reference 
member state’. In order to facilitate this ‘mutual recognition’-process an expert 
committee was set up, consisting of representatives of the regulatory agencies 
of all member states: the Committee for Proprietary Medicinal Product (CPMP). 
This committee only had an advisory role and could no issue binding resolutions. 
For advice regarding legislation and policy issues concerning medicinal products 
the 
European 
Commission 
established 
another 
advisory 
body: 
 
the 
Pharmaceutical Committee (4, 14). 
The main goal of the Community Procedure (later renamed to ‘Multi-
State Procedure’) was market integration. The procedure aimed to ease access 
for pharmaceutical products to the entire ECC-market. This did not work as 
planned. Most member states cherished the authority they had. The CPMP, 
lacking a clear regulatory mandate, could only voice its opinion, but could not 
force decisions. The vast majority of Multi-State applications were blocked by 
objections from one or more concerned member states, proving that cultural 
differences and economic considerations still played an important role in the 
assessment and evaluation of medicinal products, despite uniform EEC-law. The 
implicit call for interagency communication and cooperation on which the Multi-
State Procedure relied heavily, eventually led to little convergence concerning 
the final (national) authorization decisions (15, 16). 
The CPMP, however, did provide a platform for experts to meet on a 
regular basis. The influence of working groups, established by the CPMP for the 
development of uniform guidelines regarding the dossier-requirements, cannot 
be underestimated. From 1980 onwards, with the publication of the first ‘Notice 
to Applicants’, European guidelines concerning application dossiers and

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principles of Good Manufacturing, started to replace existing national procedures 
(17). 
Despite this success, the creation of a single European market for 
medicinal products seemed to have ground to halt during the first years of the 
1980s; not unlike the entire process of European integration. By the end of the 
1970s, the initial enthusiasm that had accompanied the founding of the EEC in 
1957, had turned into a form of ‘eurosclerosis’. Continuous economic stagnation 
and the (perceived) democratic deficit of EEC-institutions had led to an 
increasingly apathetic attitude towards a ‘united Europe’. The Single European 
Act of 1986 tried to revive European integration. The treaty, amongst other 
things, aimed to have established a single ‘common’ market in Europe by the 
end of 1992 (18).  
 
2.4 
Breaking the stalemate, 1985-1999 
The Single European Act also revived the idea of a single European market for 
medicinal products. In order to break the stalemate, the EEC established a new 
(more binding) procedure, the so-called Concertation Procedure in 1987.3 The 
directive stated that all applications concerning biotechnologically produced 
medicinal products in Europe had to go through the same centralized procedure, 
supervised by the CPMP. Even though the CPMP-decision was not legally binding, 
it was difficult for national agencies to deny authorization once the CPMP had 
approved it (14).  
 
It was not surprising that the EEC embraced ‘biotechs’ to break the 
impasse in the European debate on the regulation of medicinal products. The 
biotechnologically 
produced 
pharmaceuticals 
worked 
differently 
than 
conventional medicines and the production and development of these products 
were not comparable with the development and production of conventional 
pharmaceuticals. 
The 
growing 
market 
for 
biotechnologically 
produced 
pharmaceuticals forced all stakeholders to change their outlook on the topic of a 
uniformed 
European 
authorization 
procedure, 
especially 
the 
industry. 
Biotechnologically produced medicinal products were almost impossible to patent 
under the then existing patent-law, which varied widely between member 
states. Placing these products under specific EU-law would indirectly protect the 
producers of biotech pharmaceuticals from competition with cheaper generic 
equivalents (19).  
The Association of the British Pharmaceutical Industry (ABPI) seized the 
initiative by publishing its ‘Blueprint for Europe’ in 1988. The blueprint stressed 
the importance of a single authorization procedure in Europe and suggested to 
making ‘biotech’-medicines subject to a mandatory centralized procedure 
supervised by a single European agency, whereas other ‘innovative products’ 
should be able to be voluntarily subjected to the same procedure (20, 21). 
According to ABPI all generic products – and other ‘less innovative’ 
pharmaceuticals – should remain subjected to the procedure of mutual 
recognition. Still, if mutual recognition failed, the new European agency should 
be able to issue a binding decision.  
The European Commission realized that the creation of a single market 
also meant that the regulation of proprietary medicines alone was no longer 
sufficient. The scope of European legislation was extended to new categories of 
medicinal products that were unregulated before, such as generic medicines; 
immunological 
medicinal 
products 
(sera, 
vaccines, 
allergens)4; 
 
3 Directive 87/22/EEC.  
4 Directive 89/342/EEC.

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radiopharmaceuticals5; blood products6 and homeopathic products.7  Gradually, 
the European regulatory framework became a comprehensive system, which not 
only focused on risk assessment, but on risk management as well. With the 
introduction of the ‘Rational Use’-package8, aspects like the distribution of 
medicinal products, their classification, labeling and patient information leaflets 
(PILs), and advertising were brought under European jurisdiction. However, 
market integration was never out of sight. In 1989, the EEC took measures 
relating to the transparency of regulating the prices of medicinal products and 
their inclusion in the scope of national health insurance systems.9 It forced 
Member States to be more open when it came to question whether certain 
pharmaceutical products would be reimbursed or not, hoping this would prevent 
indirect market protection. 
During the 1990s, the creation of a truly ‘European’ market for 
pharmaceutical products gained more and more momentum. The EEC adopted 
the suggestions that the ABPI had made a few years earlier and planned to 
install a new regulatory agency in London, the European Agency for the 
Evaluation of Medicinal Products (EMEA). Furthermore, the existing European 
authorization procedures were to be replaced by a new mutual recognition 
procedure and a centralized procedure for biotechnologically produced (and 
other ‘innovative) medicinal products (4). The EMEA and the Centralized 
Procedure (CP) would come into force in 1995.10  
Though the Centralized Procedure was certainly more centralized than its 
predecessors were, individual member states did have influence. The producers 
of medicinal products filed their application with the EMEA, but the CPMP – now 
fully integrated within the EMEA framework – delivered its opinion based on 
scientific evaluation by national regulatory agencies. This decision was then 
forwarded to the European Commission, which would draft a European 
Marketing Authorization. This authorization could only come into force if the 
Standing Committee on Human Medicinal Products – also a member state 
committee – accepted it with a qualified majority. If this procedure failed, the 
European Council would make the final decision (17). The Mutual Recognition 
Procedure was similar to the old Multi-State procedure, but in case of a dispute, 
arbitration was compulsory and the decision of the CPMP was no longer 
noncommittal (4, 22).  
 
Though far-reaching in its consequences, the 1993 reform of the 
European regulatory system for medicinal products was primarily aimed at the 
procedural rules of the regime. Both the Centralized and Mutual Recognition 
Procedure still used the criteria for authorization that were laid down in 1965 
and 1975. Still, it was clear that the European Community wanted a more 
centralized ‘European’ approach when it came to certain public health issues. 
Contrary to the Treaty of Rome, the treaty of Maastricht (1992) explicitly 
mentioned health care as a field of European interest. The role of the EC would 
be complementary, encouraging cooperation between Member States and lend 
support when necessary (5).  
 
The more active stance of the EU in matters of public health also 
resulted in the decision of the European Commission to make the EU a full 
member of the European Pharmacopoeia. The EC signed a contract with the 
 
5 Directive 89/343/EEC. 
6 Directive 89/381/EEC. 
7 Directive 92/73/EEC. 
8 The ‘Rational-Use’-package consists of the following directives: Directive 92/25/EEC; Directive 92/26/EEC; 
Directive 92/27/EEC and Directive 92/28/EEC. 
9 Directive 89/105/EEC. 
10 Regulation 2309/93.

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Council of Europe's European Pharmacopoeia Secretariat to set up a European 
network of Official Medicines Control Laboratories (OMCLs). This network of 
‘national laboratories’ would function as a framework of quality control of 
marketed medicinal products for human and veterinary use. To set up and 
coordinate this new network, the European Directorate for the Quality of 
Medicines (EDQM) was created by the Council of Europe in 1995 (and partly 
financed by the EU). In 1997 the EDQM and the EMEA agreed to allow sampling 
and testing of centrally authorized products (CAP) by the OMCL’s, forging a 
more comprehensive system of the still separate institutions of quality control 
and market approval. 
 
2.5 
A more centralized regulatory system, 2000-2013 
As was stipulated in Regulation 2309/93, the European Commission conducted 
an evaluation of both the Centralized Procedure and the Mutual Recognition 
Procedure within six years of their operation. After an extensive survey among 
all concerned stakeholders, an evaluation-report was published in October 2000 
(15). Though the report demonstrated general contentment, especially with the 
Centralized Procedure, the industry regarded the ‘political phase’ after the initial 
verdict of the EMEA, as superfluous. It only delayed market access, since the 
Commission and Member States had not altered any authorization up to 2000.  
The dissatisfaction with the Mutual Recognition Procedure remained 
relatively high. The procedure did not achieve its main goal, the creation of a 
single European market for ‘less innovative’ pharmaceuticals. Arbitration 
procedures rarely started after the failure of a mutual recognition application, 
mainly because the applying companies withdrew their submissions from 
Member States that raised serious objections against the authorization of their 
products (23). Most patients’ and physicians’ organizations clearly favored the 
Centralized Procedure, since it rushed the availability of innovative medicinal 
products and removed regional differences between countries. 
The subsequent 2001 Review11 addressed these issues. The scope of 
both the compulsory and voluntary application to the Centralized Procedure was 
extended and the influence of individual Member States on the political phase of 
the authorization procedure was reduced. The cumbersome name of the 
European Agency for the Evaluation of Medicinal Products was changed to 
European Medicines Agency. The recruitment of the CPMP expert committee 
(renamed the Committee for Human Medicinal Products, CHMP) and the 
management board of the EMA was opened to independent experts and 
stakeholder 
representatives. 
The 
Mutual 
Recognition 
Procedure 
was 
strengthened by the introduction of compulsory arbitration, even if the company 
had decided to withdraw its application. Furthermore, national agencies were 
allowed to inform their international counterparts of their findings before they 
would issue authorization, hoping this would lead to more discussion (and less 
quarrelling) among national agencies (4, 14). 
In response to concerns – mostly voiced by the industry and scientists – 
that the introduction of truly effective and innovative pharmaceuticals was 
slowed down by European ‘red tape’, two new ‘accelerated’ procedures were 
introduced:  Conditional Approval (CA) and approval under Exceptional 
Circumstances (ECs). The authorization of Orphan Drugs was brought under the 
Centralized Procedure via separate legislation: Regulation 141/2000. With these 
new procedures, improved access to effective medication (mainly for unmet 
medical needs) seemed to overrule the pursuit of 100% safety (14). Risk 
 
11 More specifically Directive 2001/83/EC and Regulation 2001/20/EC.

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management became more and more important. In order to control post-
registration safety issues that might arise from earlier market access, the post-
market safety control needed to be bolstered. The somewhat noncommittal 
system of EU pharmacovigilance, installed in 1993, was strengthened. The 
European Commission gained the authority to take immediate Union-wide 
emergency measures – without the need for support of either the Council or the 
Member States – if medicinal products were deemed to be unsafe (24). 
 
The centralization process that was started in 2001 continued with the 
implementation of Regulation 726/2004 in 2004. The obligation to apply for 
authorization under the Centralized Procedure was extended to include all 
medicinal products meant for the treatment of Acquired immunodeficiency 
syndrome 
(AIDS), 
cancer, 
neurodegenerative 
disorders 
and 
diabetes. 
Simultaneously, a new multi-state authorization procedure was introduced: the 
Decentralized Procedure (DP). This procedure more or less worked like the 
Mutual Recognition Procedure, but it made it possible for a company to file an 
application for the marketing authorization in several Member States at the 
same time. It was no longer required to have authorization in one of the 
Member States prior to the submission of an application, which would speed up 
the authorization process. At the same time the legal position of the EDQM 
within the EU-framework was strengthened by allowing the EDQM to ask 
national inspection services to collaborate on inspections of manufacturing and 
distribution sites for raw materials for pharmaceutical use and by legally 
recognizing the role played by OMCLs in independent testing.12  
 
By the end of 2007, the year in which Regulation 1394/2007 brought all 
advanced therapy medicinal products (ATMP’s) under European supervision13, 
the institutional contours of the regulatory framework that is in place today was 
more or less finished. Furthermore, the economic emphasis that had always 
accompanied Europe’s pharmaceutical policymaking seemed to make place for a 
more public health oriented approach. In 2009, the EU transferred all control 
over pharmaceutical legislation, policymaking and regulation – with the EMA as 
its most visible figurehead – from the Directorate-general for Enterprise and 
Industry to the Directorate-general for Health and Consumers (25). The scope of 
pharmacovigilance (post-market safety controls) gradually expanded. After a 
high profile controversy between the Nordic Cochrane Centre and the EMA (13), 
complaints of a chronic lack of transparency – a recurrent reproach in virtually 
all European institutions – was addressed as well.14  
 
2.6 
Conclusions 
Looking back on a century of European pharmaceutical legislation, we can 
identify four major groups of actors that have shaped the regulatory framework:  
supranational organizations like the European Union (and it predecessors) and 
the Council of Europe, national governments, the pharmaceutical industry and 
experts. As we have seen, each group tried to steer the system according to 
their own specific needs.   
As the pharmaceutical industry gained in importance during the 
twentieth century, it became clear that the existing regulatory framework was 
not prepared to cope with this new actor. Pharmaceutical law was still primarily 
aimed at individual pharmacists and manual or small-scale production of 
medicinal products, and remained so for a long time. Various incidents – with 
the Thalidomide-scandal as its tragic climax – proved that the implicit reliance of 
 
12 Directives 2004/27/EC and 2004/28/EC. 
13 Regulation 1394/2007. 
14 Directive 2010/84/EU; Directive 2012/26/EU; Regulation 1027/2012.

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national governments, both in Europe and the US, on self-regulation of the 
industry was misplaced.  
 
These incidents formed the basis of regulatory interventions on both the 
national and the European level in the late 1950s and early 1960s. The Council 
of Europe focused its attention to quality control and launched the European 
Pharmacopoeia which would eventually evolve into the European Directorate for 
the Quality of Medicines. The European Economic Community tried to reinforce 
and canalize national regulatory interventions, yet the difference in perspective 
and available policy instruments between the EEC and national governments 
lead to two distinct fields of tensions: a. the tension between public health 
protection and market integration; b. the tension between supranational 
legislation and national sovereignty.  
While national governments established regulatory systems based on the 
principle of public health protection, the legal basis of European pharmaceutical 
law – Directive 65/65/EEC – was firmly grounded on principles of market 
freedom and market integration (and was therefore inherently more ‘industry-
friendly’). Despite their common goal – the distribution of safe medicinal 
products – both the national and the European regulatory frameworks had 
secondary goals, which did not necessarily agree with each other. The EEC for 
example had quite explicitly formulated its secondary goal: stimulate the 
European pharmaceutical industry. For national governments the main concern 
was to remain in control of their own national health system. These tensions still 
exist today.  
Up until the mid-1980s, the tension between supranational unification 
and national sovereignty more or less paralyzed the entire process of European 
integration. This also had its effects on the European regulatory system for 
medicinal products. Despite much effort, the authorization procedure for 
medicinal products largely remained in the hands of individual Member States. 
The true motor behind centralization were the individual expert-committees, 
since they could work in relative anonymity and focused their work on issues 
that were ‘politically safe’, such as guidelines for application-dossiers and 
manufacturing. 
Only after the decision was made that Europe should indeed become ‘an 
ever closer union’ – with the Single European Act of 1986, it was possible to 
fast-track the creation of a single European market for medicinal products and 
subsequently a single regulatory system. The industry welcomed the new drive 
towards market integration, since it could solve the problem of patenting 
biotechnologically produced pharmaceuticals. Driven by the EEC and the 
industry, Europe gradually extended its influence to almost every aspect of the 
market for pharmaceutical, except reimbursement.  With regard to quality 
control the relations between the EU and the EDQM and its network of Official 
Medicines Control Laboratories was intensified. 
Though the Thalidomide-disaster lies at the basis of the European 
Regulatory system, the regulations and directives that followed were – as we 
have seen – were not always a direct reaction to other safety-incidents. As of 
yet, the European pharmaceutical sector has not suffered from any crisis of 
consumer confidence as fundamental as the Thalidomide affair (26). It was the 
strive towards European integration that proved to be one of the strongest 
motors behind the expansion of regulation. This does not mean that the focus of 
the system did not change over time. While it began as a system that was 
primarily concentrated on the safety and quality of medicinal products, by the 
end of the 1970s the efficacy of pharmaceuticals had come to the fore. The 
focus gradually shifted from risk assessment towards risk management during 
the 1980s. With the recent complaints about the lack of transparency and

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accountability, one might ask if the regulatory system has yet to make another 
shift, towards risk communication.

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3 
Methods 
3.1 
Overview 
We have split this project, starting in May 2013, in three main activities:   
• 
Step 1, literature review; 
• 
Step 2, semi-structured interviewing of national key experts; 
• 
Step 3, identification of illustrative cases. 
The details of these steps are outlined below. For step 1, we identified potential 
vulnerabilities related to the EU pharmaceutical regulatory system. We used 
these potential vulnerabilities as input for step 2 and step 3.  
 
3.2 
Step 1, literature review 
The literature review consisted of two parts:  
 
snowball search 
 
scientific literature search (based on the search terms as identified in the 
snowball search) 
 
3.2.1 
Snowball search 
The aim of the snowball search was twofold; a) to define a list of search terms, 
to be used in the literature search and b) to collect all relevant information not 
available in literature databases.  
 
The snowball search started with a free internet search in engines, such as 
Google and Bing. We looked for any information related to the (dis)functioning 
of the current regulatory system for pharmaceuticals. Furthermore, websites of 
relevant national and international organizations were screened (see table 3.1) 
and information was included when it related directly to EU regulatory system 
for pharmaceuticals.   
 
Organisations 
Website 
European Medicines Agency 
http://www.ema.europa.eu 
World Health Organization 
http://www.who.int 
European Commission 
http://ec.europa.eu 
RAND Corporation 
http://www.rand.org 
European 
network 
of 
Health 
Technology 
Assessment 
http://www.eunethta.eu 
European 
Federation 
of 
Pharmaceutical 
Industries and Associates 
http://www.efpia.eu 
London 
School 
of 
Economics 
and 
Political 
Science 
www.lse.ac.uk 
Top Institute Pharma 
www.tipharma.com 
Innovative Medicines Initiative 
www.imi.europe.eu 
Heads of Medicines Agencies 
www.hma.eu 
Table 3.1 Websites screened 
 
In addition, national experts (n=14) were asked for information on additional 
relevant documents, such as dissertations and governmental reports, relevant 
websites, possible keywords or search terms and other experts in this area. This 
first snowball search resulted in 57 documents, ranging from reports, figures, 
conference papers, dissertations and opinions.

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3.2.2 
Scientific literature search   
We conducted a structured, rather than fully systematic literature search, 
designed efficiently to meet the functional requirements of this project. Relevant 
publications in the scientific literature were drawn from the electronic database 
Ovid-Medline up to August 2013. This database includes practically all references 
included in the databases Pubmed and Scopus. Based on the snowball search we 
defined search terms (see table 3.2) and inclusion- and exclusion criteria (see 
table 3.3). We used a combination of key words and synonyms to find as much 
relevant scientific publications as possible. 
 
Research topics 
Key words or synonyms 
European regulatory 
system for medicinal 
products 
Regulation, legislation, jurisprudence, guidelines, 
market authorization, registration, pre marketing 
stage, post marketing stage, pharmacovigilance, 
reimbursement, 
drug 
approval, 
organization, 
administration, market access, drug discovery 
European, Europe, EU, European Union 
Medicines, 
drugs, 
medicinal 
products, 
pharmaceuticals, pharmaceutical preparations 
Sustainability system 
Effectiveness, strengths, weaknesses, bottlenecks, 
cost effectiveness, health technology assessment 
(HTA), HTA, risk benefit analysis, risk assessment, 
evaluation, assessment, evidence based medicine, 
review, sustainability, quality assurance 
Safety, health protection, innovation, availability, 
access, costs, expenditures 
Table 3.2 Keywords used for literature search 
 
Inclusion criteria: 
Publications included met all of the following criteria: 
1. 
Describing 
the 
(dys)functioning 
of 
the 
EU 
regulatory 
system 
for 
pharmaceuticals or certain aspects of this system  
2. Belonging to one of the following publication categories: research articles 
(quantitative 
or 
qualitative 
research), 
editorial, 
opinions, 
commentary, 
perspectives, books, technical reports, working papers, scientific papers on the 
World Wide Web and dissertations 
Exclusion criteria 
Publications excluded were: 
1. Publications reporting on issues other than those related to the EU regulatory 
system for pharmaceuticals 
2. Publications in a language other than English or Dutch 
3. Publications with an inaccessible full text document  
4. Publications older than 2003 
Table 3.3 Inclusion and exclusion criteria 
 
3.2.3 
Study Selection 
The literature search resulted in a list of 162 publications. A single researcher 
selected 120 publications for analysis based on the information in the summary 
and the predefined inclusion criteria. Two researchers independently assessed 
these publications by using a one to five points rating system. A publication was 
given five points if it was judged as very important and one point if it was 
judged as not relevant. Publications were selected if they were assigned four of 
five points by both researchers and were removed if they were assigned only

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one or two points by both researchers. The relevance of all other publications 
were discussed between the two researchers. This resulted in the final selection 
of 54 articles.  
 
3.2.4 
Snowball search – collection of relevant information not available in scientific 
literature databases 
Throughout the course of the whole project, we added additional information 
(publications, reports, opinions etc.). We obtained these publications through 
meetings, conferences, information from experts (via interviews) and journals. 
This ‘search’ resulted in 64 additional publications. 
 
3.2.5 
Analysis 
We identified four major themes of the regulatory system for pharmaceuticals. 
In order to operationalize these themes for research, we defined them as 
follows:  
1. Safety & efficacy; safeguarding public health by denying market access 
of ineffective and/or harmful products and/or withdrawing them from the 
market; 
2. Innovation; the possibility to bring pharmaceuticals on the market, 
either with a new chemical entity (NCE) or a new formulation; 
3. Availability; the extent in which (new) pharmaceuticals are available for 
patients; 
4.  Costs; Financial expenditure for the development, regulation and 
monitoring of pharmaceuticals. 
Two researchers independently analysed all selected literature. In order to assist 
this analysis and to structure the findings, we used a heuristic tool consisting of 
the four major themes. The collected information was first analysed for each 
research theme separately. However, because of overlap, we also studied the 
interdependence between the themes (see figure 3.1 below).  
 
 
Figure 3.1 Heuristic tool, interdependence between themes 
 
The results of this literature review are shown in chapter 4.

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3.3 
Step 2, semi-structured interviewing of national experts 
As a second step, we interviewed nine national key persons who are active in 
the field of biomedical science and have expertise in/with the pharmaceutical 
regulatory system.  
 
Expert 
Professional Background 
1 
Hospital pharmacy, clinical pharmacology 
2 
Pharmacovigilance 
3 
Medical Ethics 
4 
Law and pharmaceutical science 
5 
Fast track treatments on a commercial basis 
6 
Health Economics and reimbursement 
7 
Oncology, clinical pharmacology 
8 
Biotechnology 
9 
Patient representation 
Table 3.4 Professional background interviewees 
 
In the interviews we discussed the findings of the literature review and asked for 
in their opinion, possibly other potential vulnerabilities within the (EU) 
pharmaceutical regulatory system. We applied a semi-structured interview 
approach with a topic list. This list was divided into two parts; a general part 
with questions ordered around the four major themes, and a part in which the 
questions were geared towards the interviewees’ expertise. All interviews were 
audio recorded. The audio recordings were transcribed. The transcription was 
crosschecked with the field notes of the second interviewer. We discussed any 
inconsistency and if necessary, went back to the original audio recording. The 
researchers invited respondents to react on the transcripts of the interviews 
 
The data analysis phase involved an inductive content analysis of the 
interviews, starting with a close line-by-line reading of the transcripts and 
developing a conceptual coding scheme based on the four major themes 
identified earlier (safety, innovation, costs, availability). We based the code list 
initially on the conceptual framework and completed it with inductive codes. 
While coding, researchers paid special attention to similarities and differences in 
opinion and perception between experts. The results were then clustered in 
descriptive themes (27). Actual quotes were translated into English and 
crosschecked with the respondents.  The results of the interviews are described 
in chapter 5. 
 
Based on both the literature review (Step 1) and the interview outcomes (Step 
2) we identified possible vulnerabilities in the pharmaceutical regulatory system. 
 
3.4 
Step 3, identification of illustrative cases 
In the third and last step of the project we identified cases to illustrate (some of 
the) identified potential vulnerabilities within the EU regulatory system in our 
literature review. The cases are taken up in chapter 4. 
We first searched for examples within the EMA website by analyzing medicinal 
products that were withdrawn post-approval, suspended or refused. We used 
EMA documentation, such as European public assessment reports (EPAR), but 
also public information on the internet on the specific product to get an 
impression of the encountered problems. We selected those products that 
envisaged problems in the pre-, post-, and/or registration phase related to the 
regulatory process (although not necessarily caused by the regulatory system). 
Finally, we completed our literature review with some cases to illustrate the 
potential vulnerabilities to the reader.

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4 
Literature review results 
4.1 
Introduction 
 
In this chapter we present the findings of the literature review, illustrated with 
case examples. The findings are grouped according to their major theme: Safety 
& efficacy, Innovation, Costs, Availability and Transparency & Accountability.  
The methodology behind the structured review and the selection process of the 
cases is explained in chapter 3: Methods.  
 
The following paragraphs are structured similarly. Each paragraph starts 
with a subparagraph ‘current issues’ in which we introduce the main problem(s) 
that were mentioned in the international literature in relation to the overarching 
theme. Subsequently we try to determine if these incidents are caused by 
potential vulnerabilities in the current regulatory regime or by factors not 
directly related to the system? This will be done in the subparagraph: ‘potential 
causes’. The question how regulators (and governments) address these 
problems is discussed in the subparagraph ‘government reactions’. The 
illustrative cases can be found throughout the whole chapter.  
 
 
4.2 
Safety & Efficacy 
 
4.2.1 
Current issues 
One of the most important aims of the European regulatory system for 
pharmaceuticals is to protect public health by guarding the safety and efficacy of 
pharmaceuticals (5, 28, 29). Initially motivated by the tragic events of the 
Thalidomide-catastrophe of the 1960s [see: historical background], the process 
for developing, manufacturing and marketing pharmaceuticals has become one 
of the most regulated – and safest – processes in the world (5, 28-31). 
However, during the last ten years the regulatory system suffers from a seeming 
decrease in public trust in its ability to guarantee the safety of pharmaceuticals. 
The press, the public and politicians seem to pay an increasing amount of 
attention to recalls and concerns regarding pharmaceuticals which have been 
granted market authorization (and were thus deemed to be ‘safe’), such as 
Baycol®, Vioxx®, Avandia® and, more recently, Diane-35® (19, 32).  
 
Adverse drug events, whether or not due to (in)correct use of 
pharmaceuticals, are estimated to be a leading cause of unplanned hospital 
admission (33, 34). Between 1 January 1999 to 31 December 2011, the amount 
of withdrawals of new active substances approved under the European 
Centralized Procedure was relatively low:  9 out of a total of 279. At the same 
time, the number of serious safety issues - defined as issues requiring a Direct 
Healthcare Professional Communication (DHPC) to alert individual healthcare 
professionals or a safety related drug withdrawals – amounted to 55 (53 first 
DHPCs and two safety-related withdrawals without a prior DHPC (the epoetins)) 
(35). 
 
  
4.2.2 
Potential causes 
 
Randomized Controlled Trials (RCT) & limited data 
At the time of approval of a new medicine, there are limited long-term data on 
the medicine’s benefit–risk balance (19). Clinical trials are designed to 
demonstrate efficacy, but have major limitations with regard to safety in terms

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of patient exposure and length of follow-up. A study by Duijnhoven et al. 
determined the number of patients who had been administered medicines at the 
time of medicine approval by the European Medicines Agency (see figure 4.1) 
and the number of patients studied long term for chronic medication use, and 
compared these numbers with the International Conference on Harmonisation’s 
(ICH) E1 guideline recommendations (36). They conclude that for medicines 
intended for chronic use, the number of patients studied before marketing, is 
insufficient to evaluate safety (and long-term efficacy). Although increasing the 
number of patients exposed to a medicine before approval can be justified, 
especially for medicines intended for long-term use, the requirement can delay 
new products entering the market (see: Innovation) (32). 
 
 
Figure 4.1 Boxplots with medians of the number of patients studied 
before approval. This figure includes all medicines containing new molecular entities 
approved between 2000 and 2010, including orphan medicines as a separate category. 
Results for standard (non-orphan) medicines are presented by intended length of use of 
the products (chronic, intermediate, or short-term) and as one group (sub-total). Boxplots 
present the 50th percentile, i.e., the median value is given, with the interquartile range 
(25th and 75th percentiles) indicated by the box, the 2nd and 98th percentiles indicated 
by the horizontal bars of the whiskers, and outliers indicated by individual circles. The total 
number of patients studied (y-axis) is plotted on a logarithmic scale. Source: (36). 
 
 
Another major problem is that data from clinical trials provide an 
incomplete and/or a too optimistic indication of the efficacy of pharmaceuticals 
in real life (31, 37). Randomized controlled trials are typically performed in 
carefully selected patient populations not fully representing ‘real world’ patients. 
The effectiveness may be lower in the population with specific comorbidities. 
After all, many factors influence the benefit-risk profile at an individual level. 
Therefore, it is difficult to predict how a product, proved to be safe and effective 
in a ‘standardized’ population, will respond in a given patient. This problem is 
called the ‘efficacy-effectiveness gap’. Efficacy is shown under controlled 
circumstances and effectiveness in clinical practice in daily care (32). The

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current regulatory framework does not reflect this unpredictability of the 
confounded real world populations.  
 
Stakeholders may therefore arrive at divergent conclusions when 
balancing the expected benefits of a pharmaceutical against the harms it might 
cause, once allowed on the market (38). For this reason, Lumpkin et al. 
mentioned that benefit-risk profile assessments should also involve an 
assessment of the tolerance for risk within the intended population. However, 
data gathered in randomized controlled trials do not provide information on this 
(31).  
 
Box 1; Tolcapone (Tasmar®) 
Tolcapone is used for the treatment of Parkinsons’s disease and marketed under the 
proprietary name Tasmar®. This medicinal product received an initial EU marketing 
authorization in 1997. However, due to three cases of fatal hepatotoxicity that emerged 
out of post-marketing surveillance studies, CHMP advised to suspend Tasmar’s EU 
marketing authorization in 1998. Due to the rare and unexpected adverse events, the 
patients who benefitted from Tasmar® had to deal with the sudden unavailability of the 
product. According to Eichler et al, patients and physicians pled for the right of patients to 
gain access to Tasmar® at their own risk. Some patients tried to obtain the medicinal 
product from sources outside the European Union. In 2004, based on new clinical data and 
ongoing monitoring of the use of Tasmar® in other countries, CHMP lifted the suspension 
of Tasmar® and the product became available again in the EU (38, 39).
 
Off-label use 
As explained above, clinical trials are performed in specific ‘standardized’ 
populations. Often these populations are not fully representative of the patients 
who may need the drug in daily practice, e.g. children, pregnant women and the 
elderly. This may lead to off-label use (19, 40). The term ‘off-label use’ refers to 
the prescription of a licensed pharmaceutical outside the terms agreed in its 
Summary of Product Characteristics (SPC), e.g. for an indication, patient group 
or dose for which the product is not officially licensed (41).   
 
Off-label use is a common phenomenon (19, 41). For some 
subpopulations, like children, pregnant women and elderly, there is usually no 
information available on the effectiveness and safety of pharmaceuticals, 
because they were not included in the standard population used in clinical trials 
(in the case of children mainly due to ethical concerns). From a governance 
perspective, off label use is a reason for concern: it could point out that the 
current regulatory system might not be functioning adequately with regard to 
the adding and/or alteration of indications of already licensed products (19). 
 
Although, the term off-label in itself indicates nothing about safety of 
use, it is often perceived that way. Stefansdottir et al. show that the off-label 
population does not differ much from the licensed domain regarding major 
characteristics hence, higher risk is not expected. When patients are more 
vulnerable to Type A15 adverse drug reactions (ADRs), higher risk can be 
expected. Type B ADRs will occur randomly, also in the off-label population. 
Hence, different steps out of the domain do not necessarily entail higher risk. 
However, they conclude that an exception can be pharmaceutical constituents 
which can introduce risk in neonates, and administration through an alternative 
 
15 Type A, in which the ADRs are generally dose dependent, predictable, and considered to be related to 
augmented pharmacologic effects, and Type B, which are atypical or idiosyncratic effects that are independent 
of dose and generally unpredictable. Source:  Rawlins, M. & Thompson, W. Mechanisms of adverse drug 
reactions. In: Davies D, ed. Textbook of Adverse Drug Reactions (Oxford University Press, New York, 1991).

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route (42). Furthermore, they conclude that lack of efficacy is the main concern, 
since the lack of evidence for other indications than registered will not be 
included in the PIL/SPC, whereas safety concerns are listed. 
 
Box 2; Phentermine/topiramate (Qsiva®) 
In 2013, CHMP confirmed its initial recommendation to refuse a marketing authorisation 
for Qsiva® after re-examination of its negative opinion on request of the applicant Vivus 
BV. Qsiva® contained appetite suppressants and was indicated for the treatment of 
obesity. Although treatment with Qsiva® induced clinically relevant weight loss in the 
pivotal studies, CHMP was very concerned about its possible side effects, such as long-
term coronary and psychiatric side effects. Furthermore, one component of Qsiva® was 
harmful to the unborn baby if taken during pregnancy. Since it can be expected that 
Qsiva® will be used off-label outside the intended patient group, the CHMP concluded that 
the Qsiva’s® benefits did not outweigh its risks (43).  
 
 
 
Figure 4.2 Proportion of new active substances authorized under 
Exceptional Circumstances/Conditional Approval (EC/CA) or standard 
conditions with a subsequent Direct Healthcare Provider Communication 
(44). NAS New active substances, DHPC Direct Healthcare Professional Communication, 
EC/CA Exceptional circumstances and Conditional Approval marketing authorizations. 
 
4.2.3 
Government reactions 
 
The ‘cautious regulator’-problem 
Acknowledging the limitations of clinical trials with regard to safety, regulatory 
authorities have increased their pre-approval requirements over time. For 
example, thorough QT studies have become part of many new drug applications 
since QT prolongation and associated life-threatening arrhythmias have led to 
several drugs being withdrawn from the market (45). More recently, the debate 
on Rosiglitazone (Avandia®) has triggered the FDA to step up its pre-approval

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requirements for new drugs for diabetes, to demonstrate absence of an excess 
risk of cardiovascular events (46). The negative consequences are that drug 
development times and costs (estimated upward of 800 million USD) may 
increase, limiting development of all but the most lucrative drugs (47). 
 
To some the regulation of medicines is seen as setting minimum safety 
standards, whereas others see them as ‘burdensome’ (28). Scannel et al. point 
out that each real or perceived sin by the industry, or genuine drug misfortune, 
leads to a tightening of the regulatory ratchet, and the ratchet is rarely 
loosened, even if it seems as though this could be achieved without causing 
significant risk to drug safety (48). The concern of regulators, politicians and the 
public, that drug companies can (and will) find legislative loopholes, has led to 
an audit-based approach to regulatory documentation. This approach is based 
on the philosophy that the more demanding the reporting requirements are, the 
harder it is to outfox the system without leaving some kind of error or 
inconsistency (48). 
 
This phenomenon – that once added, requirements are rarely removed 
from the regulatory framework – is called the ‘cautious regulator’-problem. Brian 
D. Smith suggests that risk-aversion by regulators may be a symptom of a 
broader, societal intolerance of risk that has emerged alongside increasing 
affluence combined with a culture that increasingly holds  companies  and 
regulators accountable when things go wrong (49). However, risk aversion itself 
is risky and does not serve public health well. Increasing demands and 
requirements by regulatory agencies may reduce the risk of false-positive 
decisions – i.e. to license a drug that causes more harm than good. They also 
may increase the risk of false-negative decision: i.e. to deny a drug a license 
that would have caused more good than harm. This risk-averse approach 
increases R&D-costs (see: innovation), reduce availability (see: availability) 
without necessarily resulting into better public health (38, 50).  
 
Box 3; Ramelteon (Rozerem®) 
In 2005, the FDA approved Rozerem®, a medicinal product containing ramelteon for the 
treatment of insomnia. Two years later, in 2007, the Japanese company Takeda applied 
for the EU marketing authorization of Rozerem®, at EMA. After an initial negative CHMP 
opinion, Takeda withdrew its application in 2008. The CHMP had the opinion that 
Rozerem’s®, effectiveness was insufficiently demonstrated and that the benefit risk 
balance was negative. In their withdrawal letter to EMA, the company mentioned their 
intention to seek scientific advice (SA) with respect to extending their clinical trial program 
for Rozerem® to address CHMP’s concerns.  In a press release in 2011, Takeda announced 
that they decided to discontinue the development of Rozerem® in Europe and not to re-
submit a new marketing authorization application that had to include new clinical data. 
Considerations for this decision were on one hand the European requirements for approval 
of medicinal products for the treatment of insomnia and on the other hand Takeda’s 
strategy to optimize their resources for research and development activities. The product 
Rozerem® is currently available in the USA and Japan(51, 52).
 
Emphasizing the benefit-risk balance of pharmaceuticals 
Partly as a reaction to the ‘cautious-regulator’-problem there is a shift in the way 
that regulators communicate about pharmaceuticals. The assessment of the 
benefit-risk balance has always been the basis for marketing authorization. 
However, in the communication towards the public regulators mainly used to 
emphasize the lack of risks of the pharmaceutical. (28, 37, 53), since exorbitant 
attention to the downside of medicines might reduce trust in medicinal products, 
and in the regulatory system as a whole (54).

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Recently the focus is shifting towards a more even approach of risk. The 
EMA, for example, ceased to use to the expression ‘ensuring safety of medicinal 
products’ and instead adopted the phrase: ‘ensuring a positive benefit-risk 
profile’, which implies a higher tolerability of risk. Pharmaceutical companies 
traditionally promote the benefits of pharmaceuticals, while regulators focused 
on the risks and safety.  Regulators should communicate about both the risks 
and benefits of pharmaceuticals in order to provide balanced information. This 
might reduce the spiral of increasing risk aversion and prevent further erosion of 
public trust (54).  
 
The life-cycle approach  
Emphasizing that pharmaceuticals have both benefits and risks, also leads to the 
acknowledgement that the information about the benefit-risk balance of a 
pharmaceutical is limited at the time of licensing and may change after 
approval. Regulators and scientists increasingly recognize the need for an 
ongoing assessment of the benefit-risk balance of new medicines. They agree 
that the point of approval should not be the last call for major regulatory action, 
but that the benefit-risk assessment is an ongoing activity, ideally spanning the 
full life cycle of a pharmaceutical (32, 37). Regulators therefore also focus their 
attention to the post-approval period of development of medicines including 
more attention for surveillance and post-marketing clinical trials (37).  
 
The proactive EU risk management strategy (2003) and the European 
legislation on the requirement of risk-management plans with commitments for 
post marketing pharmacovigilance (since 2005) are the results to calls for a 
greater focus on safety aspects of pharmaceuticals after licensing (32). 
Zomerdijk et al. show that since this new legislation, significantly more risk 
management 
activities 
took 
place 
and 
conclude 
that 
the 
proactive 
pharmacovigilance approach is evolving (55). However, the pharmacovigilance 
system also appears to show some weaknesses (30, 56). The frequency of 
reporting adverse effects in Europe is mainly based on spontaneous reporting 
from patients and doctors. Besides, there are concerns about the quality and 
completeness of the post marketing data and the straightforwardness of the 
interpretation of these studies. In addition, despite that companies are 
requested to submit risk management plans,  it seems difficult to conduct post 
marketing studies and post marketing data may never come available (30, 57).   
 
An illustration of the increasing attention to pharmacovigilance is the 
establishment of The Pharmacovigilance Risk Assessment Committee (PRAC) at 
the European Medicines Agency (July 2012). The PRAC is responsible for 
assessing and monitoring safety issues for human medicines. It also has 
responsibility for the design and evaluation of post-authorization safety studies 
and pharmacovigilance audit (58).

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Box 4; Rimonabant (Acomplia®) 
In 2006, Acomplia® was authorized in the EU for the treatment under certain conditions of 
obesity or overweight in adult patients. New data on both side effects and efficacy in daily 
life became available post marketing. Especially, psychiatric side effects raised concerns 
and CHMP recommended restricted use of Acomplia® in 2007. On request of the European 
Commission, CHMP assessed all available data from launch of Acomplia® until September 
2008 and advised to suspend the marketing authorization because of the elevated risk of 
developing psychiatric disorders when using Acomplia®. After suspension, Sanofi-Aventis 
voluntarily withdrew the marketing authorization of Acomplia® in December 2008, which 
was confirmed by the EU Commission in January 2009 (59, 60). 
 
Drotrecogin alfa (activated) (Xigris®) 
Xigris®, gained a marketing authorization under Exceptional Circumstances in 2002 for 
the treatment of adult patients with severe sepsis with multiple organ failure. In 2007, 
CHMP concluded that further clinical studies could not reproduce the initial efficacy of 
Xigris® and requested the company Ely Lilly to conduct a new placebo-controlled clinical 
study in patients with septic shock to collect data for reassessment of the benefit-risk 
balance of Xigris®. This new study failed to meet the primary endpoint of a statistically 
significant reduction of in 28-day all-cause mortality in patients treated with Xigris® 
compared to placebo. Eli Lily decided to withdraw Xigris® from the market worldwide in 
2011 (61). 
 
 
4.3 
Innovation 
 
4.3.1 
Current issues 
The relatively low number of new pharmaceuticals that have reached the market 
(and the patient) in recent years is a concern for both public health and for 
manufacturers of pharmaceuticals. Innovation is necessary in order to improve 
already existing therapies and to counter existing (and future) unmet medical 
needs. However, over the past two decades, increased spending on research and 
development did not lead to a corresponding increase in new pharmaceuticals 
(29, 32, 62, 63). On the contrary, there is an obvious downward trend (64, 65). 
The number of newly marketed chemical or biological entities in Europe declined 
from 89 in the period 1992-1996 to 52 in the period 2007-2011. 
 
Figure 4.3 shows the level of innovation of pharmaceuticals approved in 
Europe between 1999 and 2011 (35). Over time, there is no apparent pattern of 
more innovative drugs being approved, although it may be of some concern that 
the overall proportion of innovative drugs is lower than reported in 2006. 
However, it should be taken into account that these numbers refer to 
pharmaceuticals approved via the centralized procedure and does not cover all 
important new pharmaceutical approvals across the various European countries 
(62). This finding fits in the debate about the declining efficiency in drug 
development, drug approval success rates and lack of truly novel drug products 
(63, 66, 67) 
 
Between 1994 and 2004 the investments of the pharmaceutical industry 
rose with 70%, while output of new molecular entities decreased by 40% (68). 
Ongoing technological, scientific and managerial advantages should have raised 
the efficiency of commercial research of pharmaceuticals. However, according to 
some experts, the number of new products approved is not equivalent to the 
time and costs spend on research and development (48, 68, 69). Woodcock & 
Woosley are even suggesting that the pharmaceutical industry is suffering from 
a productivity crisis (69).

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Furthermore, the innovative products that are registered, do not 
necessarily meet the needs of the ‘end-user’:  the patient and his physician. The 
focus in drug innovation seems to lie on three main therapeutic areas:  
oncology, infectious and parasitic diseases, and blood and endocrine disorders. 
The most neglected conditions at the European level (based on their attributable 
health losses) are neuropsychiatric diseases, cardiovascular diseases, respiratory 
diseases, sense organ conditions, and digestive diseases, while globally, they 
are perinatal conditions, respiratory infections, sense organ conditions, 
respiratory diseases, and digestive diseases (70-72). 
 
 
Figure 4.3 Level of innovation of pharmaceuticals approved in Europe 
between 1999 and 2011. All pharmaceuticals are new active substances that are 
approved through the centralised procedure in Europe. Classification of innovation 
according to Motola (73) A) important, B) moderate, C) modest or as Pharm or Tech) 
merely pharmacological / technological innovations. Source: (35). 
 
4.3.2 
Potential causes 
 
Increasing regulatory requirements and attrition rates 
Many experts are of the opinion that one of the most important reasons for the 
decline in innovation in the pharmaceutical sector is the ever tightening 
regulatory ratchet (see: safety). In other words, the cautious regulator is 
hampering innovation (37, 48, 63, 74). Development of innovative medicines 
has become more challenging and more costly due to higher requirements for 
evidence regarding efficacy and safety. Manufacturers of pharmaceuticals have 
to carry out more and longer clinical trials, which are very time-consuming and 
expensive, especially in the later stages of pharmaceutical development.  
 
At the moment, the average time needed by the industry to bring a new 
pharmaceutical on the market is estimated between 10 and 15 years (64, 74-
76). According to the European Federation of Pharmaceutical Industries and 
Associations (EFPIA), only one or two of every 10.000 substances synthesized in 
laboratories will, on average, successfully pass all stages needed for market 
authorization (64). The Centre for Medicines Research also mentioned the high 
rate of clinical failure at global level, varying from 70% to 90% for all new 
chemical entities (75). Especially the high rate of late stage clinical failures, at 
the end of a full development program is of particular concern and raised

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questions about the efficiency of the development of pharmaceuticals and of the 
regulatory system (63, 77). 
 
In 2003 DiMasi et al. estimated that the overall clinical success rate of 
all new chemical entities tested in humans, was 21,5% (78). In 2008 this 
situation improved: for all new chemical entities tested in the most expensive 
phase-3 trials, the clinical failure rate was 50% (69). Still, between 2007 and 
2012 the attrition rate of phase-3 trials did not improve significantly (79, 80). 
Whether these attrition rates are primarily caused by increasing regulatory 
requirements is doubtful (see figure 4.4). Recent analyses of all marketing 
applications for new active substances for approval at the EMA in 2009, show 
that most negative outcomes are primarily caused by a failed development 
strategy and/or immature application (63, 77). Putzeist et al. also found that 
deficits in the initial learning phase are more strongly associated with non-
approval than deficits in any of the confirmatory studies. For this reason, they 
conclude that relevant learning phase studies are of great value to reduce the 
number of failed dossiers, to increase the quality of the design for phase 3 
studies and to speed up pharmaceutical innovation (77).   
 
 
Figure 4.4 Causes of non-approval Of the 148 failures between Phase II and 
submission in 2011 and 2012, reasons were reported for 105; the majority of failures were 
due to lack of efficacy, as shown on the left. On the right, the 105 reported failures are 
broken down according to therapeutic area. b | Comparison of the reasons for failures in 
Phase II and Phase III trials in 2011 and 2012 with those in earlier periods. Source: (80).

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Box 5; Drisapersen® 
The Dutch biopharmaceutical company Prosensa is developing Drisapersen®, an 
investigational antisense oligonucleotide for the treatment of Duchenne Muscular 
Dystrophy (DMD). For further phase III clinical development of Drisapersen®, Prosensa 
entered into a collaboration with GlaxoSmithKline (GSK), a global pharmaceutical company 
in 2009. Unfortunately, in 2013, a phase III placebo-controlled study of Drisapersen® 
could not meet its primary endpoint of a statistically significant improvement in the 6 
Minute Walking Distance test compared to placebo. Based on this outcome, GSK returned 
the rights Drisapersen® to Prosensa, which intends to continue its clinical development.  
Source: GSK website (www.GSK.com), Prosensa website (www.prosensa.eu)
 
Development strategy: ‘better than the Beatles’ 
The accumulation of regulatory requirements is not believed to be the only 
reason behind the decline in innovation. According to Lumpkin et al., another 
important reason is the current lack of ability of drug developers to translate 
scientific discoveries routinely into innovations (31). Unlike the 20th century, 
which showed many scientific breakthroughs, there is hardly any progress the 
last decades, even for some of the most widespread diseases.  
 
One of the underlying phenomena is – rather poetically – called the 
‘better than the Beatles’-problem. The pharmaceutical industry has to compete 
with its own successes: an ever-improving back catalogue of approved 
pharmaceuticals (yesterday’s blockbuster is today’s generic). This increases the 
complexity of the development process for new products, and raises the 
evidential hurdles for approval, adoption and reimbursement. Furthermore, it 
deters research and development in some areas, crowds research and 
development activity into hard-to-treat diseases and reduces the economic value 
of as-yet undiscovered pharmaceuticals (48, 53).  
 
Smits & Boon argue that the traditional linear model of innovation in 
pharmaceutical industry – ‘science finds, industry applies, man conforms’ – has 
lost its meaning. In this linear model, basic science findings will automatically 
translate into medicines that will reach the market. The context for innovation 
has changed, caused by rising costs, increased competition, new scientific and 
technological developments, but also by users that are more demanding. Since 
the development process of pharmaceuticals increasingly involves many 
stakeholders (like the industry, academia and patient organizations) who all 
have their own expectations and goals, they suggest that innovation would 
benefit from systematic stakeholder participation (72).  
 
Me too’s, generics and the lack of comparative evidence 
Several studies show that the degree of therapeutic innovation of new 
pharmaceuticals, submitted for approval through the Centralized Procedure, is 
low. Most products cover needs that are already met, without substantial 
improvement (62, 73, 81). A point of attention is that the EMA does not have a 
clear definition of ‘innovative medicinal products‘. The current definition of 
innovation, the number of new molecular entities entering the market, is 
controversial because it does not make a distinction between real innovative 
pharmaceuticals and products that are similar to existing ones (30, 71, 82).  
 
Market authorization of new medicines does not demand a systematic 
comparison of the new product with products that are already on the market. As 
a result, the marketplace is crowded with so-called ‘me too’-drugs that offer 
modest or no therapeutic benefits, compared to existing therapies (56). 
Furthermore, less data is required to apply for market approval of generic and 
biosimilar pharmaceuticals. Manufacturers of generics or biosimilars have to 
prove that their product is essentially similar to a pharmaceutical authorized in

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the Member State. This makes it more attractive for manufacturers to develop 
these kinds of products (19). 
 
Some experts, like Barbui & Garattini (2007), emphasize the importance 
of introducing the concept of ‘added value’ into the market authorization 
procedure. Comparison with reference products makes it possible to determine 
the relative benefit of a new pharmaceutical. They expect that the concept of 
‘added value’ will advance innovation, because a higher threshold for the entry 
of new medicines would force investigators towards the development of truly 
innovative products (56). However, the introduction of requirements for 
comparative evidence will make the approval of new pharmaceuticals more 
difficult and time-consuming. Not surprisingly, manufacturers claim that ‘added 
value’ would also discourage investment and hinder the development of new 
medicines (56, 82).  
 
Origins of innovation: large companies are falling behind 
Although large and intermediate-sized companies still represent the main engine 
for commercializing new pharmaceuticals, Small and Medium Enterprises 
(SMEs), academic institutions, public bodies and public-private partnerships 
(PPP) represent an important source of innovation and enrich the product 
pipelines of larger companies. A summary of the originator and the marketing 
authorization holder for all 94 approved products between 2009 and 2010 is 
shown below in figure 4.5. A regulatory framework under which new 
pharmaceuticals are supported throughout their development already exists for 
SMEs in the EU but it is recommend that new regulatory incentives are 
developed to facilitate engagement with academic institutions (83). 
 
Figure 4.5 Origin of new medicines in the European Union (2010–2012). 
a | Originator and the marketing authorization holder for all 94 approved products 
evaluated, divided according to organization type. b | Direction of product transfers 
between organization types during development; the size of the lozenges is representative 
of the proportion of transfers. PPP, public–private partnership; SME, small or medium-
sized enterprise. Source: (83).

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4.3.3 
Government reactions 
 
Regulations to stimulate innovation 
Traditionally, 
the 
main 
task 
of 
the 
European 
regulatory 
system 
for 
pharmaceuticals is the scientific evaluation of the safety, quality and efficacy of 
medicinal products. In recent years, regulators expanded their role as facilitators 
of public health by supporting and/or directing innovation, such as regulations 
on: 
 
Orphan Drugs 
 
ATMP’s 
 
Regulation on Orphan Drugs 
In 2000 the European Commission issued a Regulation on Orphan Drugs 
(Regulation 141/2000) which contains several economic and regulatory 
incentives (such as market exclusivity, EMA-fee reductions, etc.) to stimulate 
the development of pharmaceuticals for rare diseases (‘orphan diseases’) (84). 
The regulation addressed the complaint that the development of medicines for 
small populations is not financially viable for pharmaceutical companies because 
of a low return on investments. Recent studies show that this regulation is quite 
successful. More than half of the products that have been granted an Orphan 
Drug-designation seem to be real innovative products (85).  
 
Box 6; Taliglucerase alfa (Elelyso®) 
Elelyso® was designated as an orphan medicinal product intended for the treatment of 
type-I Gaucher disease in March 2010. When applying for a marketing authorization in 
November 2010, Pfizer Ltd submitted a critical report on the possible similarity of Elelyso® 
with two already authorized orphan medicinal products, Zavesca® and Vpriv®. After 
assessment of the application, the CHMP considered the risk- safety balance of Elelyso® 
favourable for the requested indication. However, CHMP also considered Elelyso® similar 
to Vpriv® and had to recommend refusal of granting MA because of Vpriv’s® orphan 
market exclusivity (86).  
 
Regulation of ATMP’s 
Advances in molecular genetics and molecular biology offer the possibility to 
identify new substances that have the potential to prevent, cure or treat 
diseases that are classified as an unmet medical need (31, 87, 88). At the same 
time, advanced therapies and new technologies challenge the current regulatory 
system. Most advanced therapies have difficulties to meet the criteria for market 
approval, mainly due to the fact that the obligatory clinical trials require a large 
population of patients to gain statistical significance. Advanced therapies, 
however, are based on the principle of adjusting treatment to a specific patient 
(88). These advanced therapies continue to get more complex and targeted and 
therefore ask for clearer guidelines and pathways by regulatory agencies (31, 
53, 88, 89). 
 
Regulation 1394/2007, issued by the European Commission in 2007, 
tries to address these concerns. The regulation states that products based on 
gene therapy, somatic cell therapy or tissue engineering product (or a product 
that combined one of these therapies with a medical device) will be eligible for 
classification as a ‘advanced therapy medicinal product’. The ATMP classification 
will help developers to clarify the applicable regulatory framework and offer 
some ‘fasttracking’. It is envisaged to function a useful tool for applicants to 
initiate an early dialogue on the product development with regulators (90).  The 
Regulation itself is supported by an amendment of the medical code (Directive

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2001/83/EC), which contains updated definitions of gene therapy medicinal 
products (GTMPs) and cell therapy medicinal products (CTMPs). 
 
There are some doubts as to whether the aim of the Regulation matches 
the practice of ATMP-production. At the end of 2013 there were only four ATMPs 
that had successfully applied for market approval. Several reasons have been 
put forward to explain this. The industry that produces ATMPs is still young and 
cell, gene and tissue based products are not easily suitable for industrial 
manufacturing. ATMPs cannot be controlled as precisely as chemically 
synthesized small-molecule products, especially when it comes to impurities. In 
addition, the mechanisms of action for most applications are not well established 
making pharmacokinetic studies less relevant (91). 
 
Early dialogue & scientific advice 
To stimulate innovation, regulators increasingly rely on early dialogue:  the 
possibility for companies to gather scientific advice from regulators at an early 
stage in drug development. This procedure has become an important regulatory 
tool for effective development of pharmaceuticals (53). It requires early dialogue 
like informal briefing meetings, qualification of novel methodologies and the 
support of new or small companies. Companies that make use of scientific 
advice seemed to be more likely to receive a successful registration (29, 53, 
92). Regnstrom et al. show that particularly smaller companies and those 
developing orphan drugs, are engaging in a dialogue with European regulators 
via the scientific advice-procedure. Factors related to compliance with scientific 
advice are company size and orphan drug status (25, 60 and 84% for small, 
medium-sized, and large companies, respectively; 77 and 38% for non-OD and 
OD status, respectively) (93).   
 
Compared with 2010, there was a significant increase (52%; from 33 to 
50 
applications) 
in 
the 
number 
of 
stand-alone 
(i.e. 
non-
generic/hybrid/biosimilar) initial marketing authorization applications with an 
outcome in 2011. The use of scientific advice among stand-alone applications 
increased to 76% (38/50) compared to the rather stable 55-60% reported 
during the previous three years. This analysis does not include the generic 
applications where scientific advice is generally lower than for applications with a 
more comprehensive development. The use of Scientific Advisory Group (SAG) 
or ad hoc expert group meetings was 20% (10/50 applications, vs 21% in 2010) 
(94). 
 
Box 7; Becaplermin (Gemesis®). 
Gemesis® is a product to regenerate tissue around the teeth with becaplermin, a 
recombinant human platelet-derived growth factor, as active substance. In the EU, the 
product is considered a medicinal product because of its claimed properties. However, 
Gemesis® is marketed as a medical device in the USA and Canada since 2005, resp. 2006. 
During product development, the company, BioMimetic Therapeutics Ltd, did not seek 
scientific advice at EMA. In 2008, they applied for marketing authorization through the 
centralized procedure. In July 2009, CHMP issued a negative opinion based on serious 
clinical and quality shortcomings. After re-examination of the opinion as requested by the 
applicant, the CHMP confirmed its negative opinion in November 2009 (95). 
 
Public-Private Partnerships  
In the 2004 WHO-Report Priority Medicine for Europe and the World, public-
private partnerships (PPPs) were identified as a promising solution for 
addressing challenges in pharmaceutical innovation (96). In the EU, public-
private partnerships are defined as: ‘partnerships where private sector partners, 
the Union and, where appropriate, other partners, commit to jointly support the

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development and implementation of a research and innovation programme or 
activities’ (97). 
 
PPPs are envisaged to play an important role as technology platforms in 
high priority disease areas. A few examples of such platforms are the Top 
Institute (TI) Pharma in the Netherlands, which was launched in 2006 with total 
funding of €260 million and which has used the 2004 Priority Medicines Report 
as the foundation for its research program (98), and the Innovative Medicines 
Initiative (IMI). The latter was founded in 2008 by the European Commission 
and EFPIA in order to boost the development of new medicines across Europe.  
 
Both of the IMI's founding members are equal in terms of their level of 
investment and their rights. With a total budget of 2 billion euro – to be spent 
over a 10-year period – the IMI is the largest public-private partnership in R&D 
in the field of the life sciences. It aims to create collaborative frameworks 
between large pharmaceutical companies, academic institutions, small and 
medium enterprises, patients, and regulatory agencies (99). The IMI has funded 
a large number of research projects, ranging in topic from antibiotic resistance 
and the development of new antibiotics to schizophrenia, diabetes and 
Alzheimer’s disease (99, 100).  
 
 
4.4 
Costs 
 
4.4.1 
Current issues  
Overall figures about the costs of research and development of pharmaceuticals 
in Europe show a significant increase. In absolute terms, the total R&D-
investments in 1990 in Europe alone amounted to 7.766 million euro, rising to 
17.849 million euro in 2000 and 27.796 million euro in 2010 (64). To what 
extent inflation plays a role in the increase is unclear. On the other hand, studies 
by DiMasi et al. and the Tufts Center of Drug Development (an independent non-
profit research group) show that this cost increase is not a purely European 
phenomenon. Both groups used samples of multinational pharmaceutical 
companies from both foreign and US-owned firms. The approach used to 
estimate development costs is similar for all studies (101).  
 
Estimates of average costs for research and development of a new 
pharmaceutical show an obvious increase over time. In the period 1963-1975, 
these costs - in real terms - were 137 million dollar, rising to 319 million dollar 
in the period 1970-1982 (both in year 2000 US$-rates). In the period 1983-
1994, the estimated costs increased to 802 million dollars (in year 2000 US$-
rates) (78, 101, 102). The most recent estimates show a further increase, 
namely 1.059 million dollar for the development of one pharmaceutical (in year 
2005 US$-rates). Although both the cost of preclinical and clinical studies have 
increased in real terms, the growth rate for clinical studies, was nearly twice as 
high as that of preclinical studies (78). At the same time, the figures mentioned 
above have to be interpreted with some caution. Differences in methods, data 
sources and periods, but also by a lack of transparency of data from 
pharmaceutical companies make it difficult to give accurate estimates of the cost 
for research and development of pharmaceuticals (78, 103). Morgan et al. 
further point that despite three decades of research in this area, no widely used 
standard is available for estimating the costs of the development of 
pharmaceuticals (103).

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4.4.2 
Potential causes 
 
Requirements for marketing authorization 
According to many experts, the increasing costs involved in research and 
development are directly related to compliance with regulatory requirements 
(see: safety) (37, 50, 76, 101). Especially the increasing demands and rules 
concerning clinical trials is seen as a driver of cost increase (19, 37, 50). 
Scannell calls this phenomenon ‘the multiple clinical trial problem’: the ‘cautious 
regulator’ is currently less prepared to assume that the safety and efficacy of 
new pharmaceuticals can be generalized across the heterogeneous and 
fragmented patient population, so more and costlier trials are needed (48). 
Breckenridge et al. mention that the high costs of performing large-scale 
randomized clinical trials have made this development model financially unstable 
(29).   
 
Not only have the demands concerning clinical trials made them costlier, 
it also extended the time it takes to get market approval (the so called ‘long 
cycle time problem’). Longer development and regulation processes lead to 
decrease of time that has to be used to maximize the return on investment 
before the patent expires. In previous decades, the regulator was less cautious 
and requirements for marketing authorization were lower, which resulted in 
faster innovation processes, resulting in lower costs for research and 
development (48).  
 
Development strategy 
Yet, the tightening of the regulatory ratchet is not the only reason behind the 
rising costs of research and development. There are some issues with the 
development strategy of pharmaceutical companies as well. The rejection of 
numerous products in a late stage of the development process – after the use of 
many economic resources and the exposure of thousands of subjects to 
investigational products – is driving up the R&D-costs as well. The need to 
compensate these financial losses partly explains the high costs of new 
pharmaceuticals (31). That makes the average investment costs of 800 or 1.059 
million dollars per pharmaceutical – as mentioned by DiMasi et al. – a somewhat 
misleading figure (76). It does not give a clear figure of the money involved to 
develop one single pharmaceutical. The money needed to recoup the losses of 
‘failed products’ is also included these investments figures (see also: 
innovation).  
 
Advanced therapies 
Technological advances and conceptual foresight gained from the life sciences 
have increased the quality of patient care, but at a considerable costs [see: 
innovation](88). Industry analysts have recently examined the impact of 
genomics and other new technologies on the research and development process. 
They suggest that these new approaches may lead to a significant rise of costs 
(78). Moreover, the growing discordance between costs and clinical benefits has 
led to increasing concerns. Most stakeholders agree that urgent improvements 
in cost to benefit ratios are required (88). The standard model of research and 
development of pharmaceuticals is becoming less financially viable owing to 
factors such as the unsupportable growth in the cost of development, a 
regulatory environment that does not yet reflect the latest scientific advances 
and uncertainties over price and reimbursement (104).  
 
Reimbursement requirements 
While the EU – through the EMA – has a well-established position in the field of 
market approval, drug pricing and reimbursement policies are considered to be

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an integral part of the national competence of EU-member states. This leads to a 
tension between market approval and reimbursement which has repercussions 
throughout 
the 
system, 
especially 
when 
it 
comes 
to 
the 
costs 
of 
pharmaceuticals. In daily practice, regulatory approval gets its true value to 
industry and patients after a pharmaceutical has passed the requirements for 
reimbursement. At the same time, rising healthcare costs have put restrictions 
on reimbursement of new pharmaceuticals (105). Health insurance authorities 
are increasingly turning towards health technology assessments, which provides 
them a more evidentiary approach to their decision making process (106). 
 
One of the effects is that, next to the requirements of regulatory 
agencies, like the EMA, national reimbursement authorities often require 
additional 
information 
on 
the 
added 
value 
of 
new 
pharmaceuticals. 
Pharmaceutical companies have to satisfy the sometimes divergent needs of 
both regulators and reimbursement agencies (105). According to Naci et al., 
manufacturers have expressed their concerns about the requirement of 
providing comparative evidence [see: innovation] (82). These additional 
requirements call for new trials that are expensive and time-consuming. Delays 
in launching new products may have a negative impact and increase costs, as 
companies lose exclusivity periods and receive potentially lower returns for 
research and development.  
 
Box 8; Lapatinib (Tyverb®).  
In the Netherlands, the pharmacotherapeutic report on lapatinib in combination with an 
aromatase inhibitor for the indication ‘metastatic HR+ HER2+ breast cancer’ concluded 
that primary care treatment with Tyverb® in combination with an aromatase inhibitor has 
a therapeutic value equal to that of trastuzumab in combination with an aromatase 
inhibitor in specific patients. However, including Tyverb® on list 1B (reimbursement list for 
medicines with an incremental therapeutic benefit) will lead to added costs at the expense 
of the pharmacy budget that could amount to €2 million per year. If Tyverb® is also used 
outside the indication for which the CFH has determined that it has an equivalent 
therapeutic value, i.e., for patients with the indication metastatic HER2-positive breast 
cancer after lack of success with trastuzumab, the additional costs could amount to €1.5 
million more. It was decided to reimburse Tyverb® only under strict conditions (107).   
 
4.4.3 
Government reactions 
 
Questioning the cost effectiveness of regulations 
EMA guidelines are expected to provide both the industry and the assessors with 
sufficient and appropriate guidance in order to guarantee good efficacy, quality 
and safety of pharmaceutical products at all stages of development as well as 
after their introduction on the market. They contribute both to the promotion of 
public health and to the harmonization of European evaluation and medicine 
development practices. Between January and December 2009, Ernst & Young 
conducted the evaluation of the EMA (108). In the questionnaire administered to 
national agencies, most respondents thought that the number of guidelines is 
appropriate (27 out of 37) and their topics fit the needs (34 out of 37), see 
figure 4.6. This opinion is generally shared by the industry. However, some 
interviewees stress that guidelines’ adequacy with needs may vary widely 
depending on the therapeutic area: there are for instance many guidelines in the 
central nervous system or cardio-vascular therapeutic area, but maybe less in 
other domains, like gastro-enterology, endocrinology or medicines for elderly 
people.

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Figure 4.6 Opinion members national agencies on appropriateness of 
the number of EMA guidelines (108) 
 
However, due to the high requirements for licensing and the high amount of 
applications that are not approved for marketing authorization, the efficiency of 
the regulatory system is increasingly questioned (63). According to Bouvy et al., 
the exponential cost increase of pharmaceutical research and development 
during the last four decades are directly related to compliance with regulatory 
requirements (50). Although the regulatory framework aims to strengthen public 
health by setting requirements for market authorization, ineffective and costly 
regulatory requirements can, at the same time, be seen as barriers (50).  
 
For example, the cost-effectiveness of mandatory QT/QTc-studies for all 
pharmaceuticals under development was doubtful. The incremental cost-
effectiveness ratios of regulation vs. no regulation were €2,4 million per sudden 
cardiac death prevented and €187,000 per QALY (quality-adjusted life year) 
gained in users of antipsychotic drugs (109). A similar study showed that the 
cost-effectiveness of all Periodic Safety Update Reports (PSURs), submitted for 
biologicals in Europe from 1995 to 2009, was relatively low.  During this period, 
PSUR reporting resulted in the detection of two out of 24 urgent safety issues for 
biologicals. The incremental cost-effectiveness ratio of full regulation (PSUR 
reporting) vs. limited regulation (no PSUR reporting) was €342,110 per QALY 
gained (110). 
 
It is likely that the withdrawal of certain guidelines would decrease total 
costs for research and development and reduce time for clinical development. 
Bouvy et al. furthermore showed that the general public was willing to accept a 
small increase of insurance premium in order to be protected from a risk caused 
by pharmaceuticals. For that reason, they emphasize the importance of an 
evaluation of the cost-effectiveness of the guidelines in order to determine 
whether adding a requirement to the development process of pharmaceuticals 
offers value for money. According to them, this would be an essential step 
toward a more sustainable regulatory system (50).    
 
Furthermore, according to the evaluation carried out by Ernst & Young, 
the production of EMA-guidelines is highly resource-consuming. It is the main 
activity of some Working Parties. Some Working Parties were responsible for less 
than 10 guidelines, but other dealt with dozens. In 2008, the CHMP Biosimilars 
Working Party managed 19 documents and guidelines, the Blood Products 
Working Party dealt with 26 and the Pharmacovigilance Working Party with 25. 
The CHMP Efficacy Working Party managed as many as 227 documents and 
guidelines. Maintaining, updating and creating new guidelines thus represent an 
important workload for the Agency (108).  
 
Convergence between market approval and reimbursement 
That independent assessment of one product by different authorities is not 
efficient, is a view that is shared by virtually all actors in the regulatory system.

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Therefore, more attention is given to the improvement of the interaction 
between health insurance and regulatory authorities (28, 53, 57). There’s an 
increasing agreement across sectors that improved communication and 
coordination could contribute to facilitating timely patient access to effective, 
affordable treatments that offer value to the health system (28). There is a need 
to align these evidence needs (82).  
 
Breckenridge et al. also argue that it would be desirable if regulation and 
health technology assessment complement to each other and work more closely 
together (29). However, as put forward by de Jong et al., regulatory authorities 
and health technology assessors work independently and have limited 
interaction on what evidence they consider appropriate for market authorization 
and reimbursement of new pharmaceuticals respectively. Because this is not 
efficient, they recommend these agencies to share information and make use of 
each other’s standards and methods (111). 
 
In 2010, the EMA undertook a pilot study to parallel scientific advice 
with HTA bodies that allowed developers to receive simultaneous feedback from 
both regulators and HTA bodies on their development plans for new medicines. 
The EMA has so far conducted 25 parallel scientific advice procedures, a further 
six procedures are expected to start in 2014. Based on the experience gained by 
all stakeholders, guidance for EMA-HTA parallel scientific advice will be 
developed and published for public consultation in early 2014 (112). 
 
Box 9; Prucalopride (Resolor ®) 
The CHMP recommended that Resolor® be given a marketing authorization based on three 
main studies in which Resolor® was compared with placebo (a dummy treatment) 
involving 1,999 patients with chronic constipation, 88% of whom were women. The 
patients had not responded well enough to previous treatment with laxatives. The Dutch 
CFH concluded that that the therapeutic value of Resolor® is lower for women in whom 
laxatives fail to provide adequate relief due to insufficient data on this group of patients. 
They stated that it is not clear whether the patients included in the phase 3 studies are 
refractory to optimum doses of the standard laxatives. For example, no data are available 
on the laxatives used, it is not clear whether different laxatives were used and/or whether 
the maximum doses of laxatives were given (113).  
Collagenase Clostridium histolyticum (Xiapex®) 
The condition ‘Dupuytren’s contracture’ causes the patient’s fingers to bend forward 
towards the palm, which means that the fingers cannot be straightened anymore. In 2011, 
Xiapex® received an EU marketing authorization for the treatment of Dupuytren’s 
contracture. The clinical efficacy of the product was demonstrated in phase 3 double blind, 
randomized, placebo-controlled studies. The company planned further clinical development 
to obtain data to compare Xiapex® treatment with currently available treatment options, 
i.e. surgery and percutaneous needle aponeurotomy (PNF). In The Netherlands, the 
National Health Care Institute advises the Minister of Health on the reimbursement of 
medicinal products by health insurances. In 2012, they concluded that the therapeutic 
value of Xiapex® treatment has to be established in comparison to treatment by surgery. 
Since no data were available yet, they issued a negative advice on the reimbursement of 
Xiapex®. As a result, Xiapex® is not included in the basic coverage of the health 
insurance in The Netherlands (114, 115). 
 
 
4.5 
Availability 
 
4.5.1 
Current issues 
The availability of medicines is dictated by supply and demand-side factors, such 
as levels of pharmaceutical use, overall expenditure on medicines, medicines

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prices, as well as more wide-ranging factors including market structure, 
regulatory policies, and cultural practices. As a result of variation in these 
factors, pharmaceutical availability varies between Member States. 
 
The supply of medicines is the responsibility of the pharmaceutical 
industry. Commercial interests play an important role in determining which 
choices are made. History shows that these choices are not automatically the 
choices that benefit public health or individual patients the most and may lead to 
limited access to medicines (19). There’s an unequal availability of new 
pharmaceuticals and some diseases seem to be neglected, i.e. become an 
‘unmet medical need’ (70). 
 
The Global Forum for Health Research reported that at global level less 
than 10% of the available resources is invested in studies for diseases that 
contribute to 90% of the global burden of disease and vice versa (116). In 
addition, Hoebert et al. show that innovative medicinal products are not equally 
available in the EU (117). One important reason for this inequality seems the 
different economic situations in the European countries and a lack interest of 
pharmaceutical industry to market approved EU products in low resourced 
markets.   
 
There’s broad consensus in the literature that the theme’s discussed in 
the previous paragraphs, such as increasing safety requirements, declining 
innovation and rising costs, all contribute to a decline in availability of new 
pharmaceuticals on the European market (53, 87).  Many believe that the main 
cause of limited availability is the current regulatory regime. According to this 
view, cautious regulators are hampering innovation, driving up costs and limiting 
the amount of products that can enter the market.  
 
 
 
Box 10; Alemtuzumab (MabCampath®) 
The marketing authorisation holder (MAH) responsible for MabCampath® was Genzyme 
Europe B.V. The European Commission was notified by letter of the MAH’s decision to 
voluntarily withdraw the marketing authorization for MabCampath® for commercial 
reasons as of august 2012. The MAH has committed to ensure that patients who need 
treatment with MabCampath® will continue to receive it through patient access 
programmes. The Dutch CFH stated that MabCampath® has a therapeutic benefit in 
patients with B-cell chronic lymphocytic leukaemia (BCLL) for whom fludarabine 
combination chemotherapy is not appropriate. Nevertheless, the MAH, now a unit of 
Sanofi, planned to market alemtuzumab for the indication Multiple Sclerosis that needs a 
much lower treatment dose of alemtuzumab than BCLL but could be priced higher based 
on the price of competitor products. By withdrawal of MabCampath®, Genzyme and 
prepared the way for the higher priced medicine Lemtrada® that is, essentially, 
MabCampath® by another name, but is indicated for the treatment of Multiple Sclerosis. 
Off label use of MabCampath®, which would be cheaper for the treatment of Multiple 
Sclerosis, was prevented by the withdrawal (118, 119).  
 
Somatropine (Valtropin®) 
The MAH responsible for Valtropin® was BioPartners GmbH. The European Commission 
was notified by a letter dated 31 October 2011 of the MAH’s decision to voluntarily 
withdraw the marketing authorisation for commercial reasons. Valtropin® was not 
marketed in any EU country. In 2012 Biopartners GmbH introduced Somatropin 
Biopartners®; identical active substance, other therapeutic area (120).

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4.5.2 
Potential causes 
 
European procedures versus national procedures  
The establishment and expansion of a common system for the evaluation and 
approval of new pharmaceuticals reaching the European market [see chapter 
‘Background’] had positive implications for both the industry and the patients. 
Drug developers only had to file a limited number of applications, shortening the 
time for EU-wide approval. For patients, the simultaneous approval in all EU 
member states reduced potential inequalities for patients in the availability of 
new pharmaceuticals (5, 30, 121) 
 
Still, centralized marketing authorization does not necessarily guarantee 
that medicines are actually marketed in all EU member states. Barbui & Garattini 
emphasize that some EMA rules also have a negative impact on the evaluation 
and availability of new pharmaceuticals (122). Despite harmonization, the 
central procedure is not compulsory for all pharmaceuticals. Companies still use 
the national procedures for market approval, for various reasons. This dual 
system creates competition between the EMA and national regulatory agencies 
and heterogeneity between countries in terms of approved indications and 
availability of pharmaceuticals (122).  
 
Despite being approved at European level, a pharmaceutical may not be 
available at national level, because of a negative reimbursement decision (5, 70, 
106, 121). Regulatory authorities look at the sufficient balance of benefit to 
risks, while health technology assessors look at the effects of the pharmaceutical 
in an unselected population, in which patients it works best, what the costs are 
and how it compares to alternatives (29). As we have seen in the previous 
paragraph on costs, the additional requirements for reimbursement make it 
more difficult for drug developers to bring new pharmaceuticals on the market 
(106). In some cases, there are even discrepancies in evidence requirements for 
market access versus reimbursement, which may result in conflicting decisions 
by regulatory agencies and health insurance authorities. These discrepancies 
also indicate lack of harmonized HTA requirements. 
 
Box 11; Drisapersen® 
EU Clinical Trials Directive 2001/20/EC aims to harmonize the requirements for the 
conduct of clinical trials with medicinal products in the EU. Nevertheless, requirements for 
conducting a clinical trial still may vary between EU member states. For example, clinical 
trials with minors are in principle forbidden in The Netherlands. The Medical Research 
Involving Human Subjects Act only makes an exemption for research of direct benefit to 
the research subject or research with negligible risk and minimal objections. The Dutch 
biopharmaceutical company Prosensa is developing Drisapersen®, an investigational 
antisense oligonucleotide for the treatment of Duchenne Muscular Dystrophy (DMD) 
patients. As the company experienced problems in getting approval for a phase I /II 
clinical trial due to this prohibition, they decided to conduct the trial in Belgium and 
Sweden (123).  
Source: CCMO website (www.ccmo.nl), Prosensa website (www.prosensa.eu) 
 
External reference pricing 
The way European countries handle the health policy objectives of sustainability, 
equity and quality of care can differ substantially between countries. There are 
several pricing and reimbursement policies used in the EU, such as external 
reference pricing (124). The impact of these policies on the price of medicines, 
the availability of and access to medicines, and pharmaceutical expenditure 
vary. In some cases, these policies can have adverse effects, such as creating 
shortages or inappropriate incentives. In other cases, more efficient allocation of

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resources can create “headroom for innovation” by allowing budget savings 
elsewhere to be invested in innovative medicines that address medical needs.  
 
Policies in one Member State can influence those in another. For 
example, pricing policies in one country can have an impact on parallel trade or 
external 
reference 
pricing. 
Therefore, 
there 
is 
limited 
incentive 
for 
pharmaceutical companies to offer lower prices to lower-income countries when 
this would subsequently decrease prices (through external reference pricing) or 
lost sales (through parallel trade) in other European markets. Companies 
frequently offer confidential discounts or rebates to get around this issue. The 
interaction between price referencing policies and marketing strategies of 
companies (and impact on patient access) should be recognized (125). 
 
Box 12; Effects between member states: example of Greece  
Greece is facing a serious shortage of medicines and claims that pharmaceutical 
multinationals have halted shipments to the country because of the economic crisis and 
concerns that the medicines will be sold by Greek wholesalers to other European countries 
because prices are higher in other European countries. Regulators in Athens have been 
trying to tackle the problem with fines and export bans (126). 
 
4.5.3 
Government reactions 
 
Steering innovation 
Catalá-López et al. recommend pharmaceutical industry leaders and policy 
makers to get more involved with the future priorities of drug development and 
steer towards a more public health oriented perspective and ‘unmet medical 
needs’ (70). Projects like ‘Priority Medicines’ carried out by the WHO have 
identified a number of pharmaceutical gaps, areas where pharmaceuticals are 
needed, but not developed yet (96, 125). As a result, these areas will have more 
attention in future research programs, partly sponsored by the European Union, 
like IMI [see: innovation] (19).  
 
Fast-tracking access: Conditional Approval and Exceptional Circumstances 
With regard to the availability of pharmaceuticals there are conflicting interests. 
On the one hand there is the societal pressure for safe pharmaceuticals. On the 
other had there is a group of patients that wants to have quick access to 
promising new products that are still under development. In order to find a 
balance between these two interests, new authorization models (often referred 
to as types of ‘adaptive licensing’ are being tested. Adaptive licensing entails a 
more flexible way of market authorization, in which stepwise approval stages 
replace the current one off marketing authorization (28, 32, 98). According to 
Eichler et al., adaptive licensing offers a more favourable alternative to the 
current 
licensing 
paradigm. It facilitates 
earlier 
access 
to 
innovative, 
pharmaceuticals and it reduces costs and time needed for initial market 
authorization (32). In response to the 2001 Review (see: background) two 
adaptive licensing procedures were installed: Exceptional Circumstances and 
Conditional Approval. Both procedures are meant to speed up access to 
innovative pharmaceuticals. 
 
On the other hands, both procedures also involve more uncertainties 
about the benefit-risk profiles of new products (71). These procedures require a 
different approach by regulators, which involves more focus on active 
surveillance and post marketing clinical trials and a continuous evaluation of the 
benefit risk balance over its entire life cycle (37, 44). A study by Arnardottir et 
al. looks at whether Exceptional Circumstances and Conditional Approval 
procedures resulted in more medicines with a post marketing safety alert or

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safety related withdrawals (see: figure 4.2, safety) (44). They concluded that 
this was not the case. At the same time, they argued that their findings do not 
mean that the accelerated procedures are appropriate for all pharmaceuticals. 
With respect to risk tolerance of society, different ways of risk management and 
enforcement of compliance may apply when introducing accelerated pathways 
for less serious diseases. 
 
Granting initial market authorization on reduced level of evidence, 
requires thorough insight into what an appropriate level of evidence should be. 
This will be difficult and challenging to determine. Good communication about 
benefit and risks by regulators and companies will be very important (111). 
However, according to Forda et al., there is not yet an agreement regarding 
suitable benefit-risk methodologies, its conclusions and outputs (104). A 
multiple benefit-risk assessment framework could be a solution, as opposed to 
applying a single approach in every situation. Advanced methods like modelling 
and simulation can improve the planning and interpretation of clinical trials and 
may have solutions for small patient populations with limited data available. 
However, flexibility of trial design also brings costs, requires time and gives 
additional complexity for regulators to assess the results and to perform health 
technology assessments for reimbursement (53). 
 
Box 13; Pralatrexate (Folotyn®) 
In November 2010, Allos Therapeutics Ltd submitted an application for a conditional 
marketing authorisation to EMA for its orphan medicinal product Folotyn®, indicated for 
the treatment of relapsed or refractory peripheral T-cell lymphoma (PTCL). The 
application was based on a pivotal clinical study designed as a single-arm trial with 
response rate as primary endpoint. However, CHMP considered a randomized, controlled 
trial design with overall survival as endpoint to be essential as was already advised during 
CHMP’s protocol assistance in 2008. During the assessment process, the applicant 
proposed to perform a randomized, controlled clinical trial post-approval. After re-
examination of its initial negative opinion, CHMP issued a majority recommendation to 
refuse the granting of a marketing authorization in January 2012. However, a CHMP 
minority had a divergent opinion and favoured a Conditional approval taking into account 
the high medical need for new medicines for the treatment of patients with PTCL and the 
ongoing clinical development program providing the required additional data within a 
reasonable period of time (127). 
 
 
Extrapolation: ‘learning’ studies and medicine classes 
A first form of optimizing evidence generation concerns extrapolation between 
medicines. This can be done within and between medicine classes. The Escher 
Project has shown this could be a valuable way to reduce uncertainty without 
requiring additional data generation (98). They showed in a study that focused 
on learning between same class medicines during marketing approval, that 
adverse drug reactions of first in class medicines were not always included in the 
Summaries of Product Characteristics of second in class medicines. 
 
Another example showed that for HIV medicines safety issues were 
taken into account in the approval process of other medicines in the same class. 
Improving this kind of learning could help to achieve a proper level of safety 
knowledge while requiring less data to be collected preapproval. A second form 
of extrapolation investigated within the same Escher Project concerns relying 
more 
on 
preclinical 
and 
early 
clinical 
data. One study 
distinguished 
’confirmatory’ studies (late-stage trials) and ‘learning-phase studies’ (e.g. mode 
of action, proof of concept, pharmacokinetics, dose finding and safety 
pharmacology), and found that both types of studies are important for

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marketing authorization. Analysis of the ‘learning-phase studies’ showed that in 
cases where outcomes of efficacy studies were problematic, sufficient evidence 
on the mode of action, proof of concept and dose finding studies were important 
factors for successful marketing authorization. The study suggests that 
assessors might rely more on extrapolation of the results of early clinical studies 
(in healthy individuals) to increase the degree of confidence about ‘real’ clinical 
effects in patients. This could be a way to optimize evidence generation in the 
confirmatory phase. 
 
 
4.6 
Transparency and Accountability 
 
4.6.1 
Current issues 
The European regulatory system for pharmaceuticals has been criticized for 
fostering an environment of insufficient transparency and accountability. In 2003 
Abraham argued that the secrecy involved in drug testing and regulation made it 
virtually impossible to assess how bad or good the system was in protecting 
public health. He concluded that ‘the current drug regulatory systems lack 
adequate public accountability, exhibit extensive conflict of interests and are 
dominated by drug testing at the service of commercial interests’ (128). His 
views were shared by others. According  researchers like Bassi, Wieringa, 
Garattini and other, the fact that CPMP opinions were kept secret in case of a 
withdrawn applications, was not in the interest of public health: information on 
the potential problems of new drugs is important for potential patients, 
physicians and interested parties and should be made public (40, 56, 121). The 
2010 evaluation of the European Medicines Agency by Ernst and Young showed 
that pharmaceutical companies were asking for more transparency of the work 
of Scientific Advisory Groups (108). 
 
Still, the EMA was not the only institution being criticized for a lack of 
transparency.  Taylor et al., for example, pointed towards an evident industry 
bias in the economic evaluation of pharmaceuticals. Studies funded by the 
pharmaceutical industry less likely to reach unfavourable qualitative conclusions 
as non-profit funded studies (106). Furthermore, the 2009 Seroxtat®-incident 
(in which GSK was accused of withholding unfavourable clinical trial data) 
showed there were significant gaps in the duty of candor which had been 
assumed to exist between pharmaceutical companies and regulators (129). 
 
Box 14; Oseltamivir (Tamiflu®) 
In 2009, there was widespread concern about a new flu pandemic (H1N1), and billions 
were being spent by governments around the world stockpiling Tamiflu®. Looking back, it 
seems that, faced with the sudden threat of pandemic flu, parties behaved 
opportunistically and irresponsibly. Pharmaceutical companies exploited a window for 
rapid sales. Regulators approved medicines with insufficient scrutiny (as exposed now by 
the forensic approach of Cochrane researchers) and politicians were desperate to act, to 
do something in the face of a perceived crisis, whether it was based on evidence or not. It 
seemed that patient welfare didn’t matter, although it was the excuse for these decisions. 
Roche, the pharmaceutical company behind Tamiflu®, withheld vital information on its 
clinical trials for half a decade. This example of Tamiflu® perfectly illustrates the need for 
full transparency around clinical trials (130, 131).

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4.6.2 
Potential causes 
 
Interdependency regulators and industry 
The inherent mutual dependency of regulators and the industry in the 
pharmaceutical chain, and the shroud of confidentiality that surrounds this 
relationship, has been a source of public concern for some time. Both the EMA 
and national regulatory agencies are mainly financed by fees charged from the 
pharmaceutical industry. In 2009, roughly 76% of the EMA’s 194 million euro 
budget was financed by fees. The national authorities of the involved European 
countries show a similar distribution (56, 132)  
 
According to some, this financial dependency affects the independence 
of the EMA and other regulators. In 2011, Gotzsche and Jorgensen of the Nordic 
Cochrane Centre (NCC) raised their concerns over the fact that the EMA 
unfailingly refused access to documents regarding authorization decisions, just 
because disclosure would threaten commercial interests of the pharmaceutical 
company (133). After a four year struggle, this high profile conflict was decided 
in favour of the NCC (13). As of 2014, the concerns about the ‘close ties’ 
between industry and regulators – for example in the with regard to early 
dialogues and/or scientific advice (see: innovation) – have not completely 
disappeared (134-136). 
 
Box 15; The case of Oseltamivir (Tamiflu®) 
In 2009, there was widespread concern about a new flu pandemic (H1N1), and billions 
were being spent by governments around the world stockpiling Tamiflu. Looking back, it 
seems that, faced with the sudden threat of pandemic flu, parties behaved 
opportunistically and irresponsibly. Pharmaceutical companies exploited a window for rapid 
sales. Regulators approved medicines with insufficient scrutiny (as exposed now by the 
forensic approach of Cochrane researchers) (131). And politicians were desperate to act, 
to do something in the face of a perceived crisis, whether it was based on evidence or not. 
It seemed that patient welfare didn’t matter, although it was the excuse for these 
decisions. Roche, the pharmaceutical company behind Tamiflu, withheld vital information 
on its clinical trials for half a decade. This example of Tamiflu perfectly illustrates the need 
for full transparency around clinical trials(137).
 
4.6.3 
Government reactions 
 
Increasing transparency 
These concerns did not go unnoticed by the EU. As a reaction to the concerns 
about transparency and accountability, Regulation 726/2004 introduced new 
rules. National authorities were obliged to make rules of procedure publicly 
accessible and after granting approval, authorities were required to make 
available, without delay, the marketing authorization, the Summary of Product 
Characteristics, the assessment report and reasons for the opinion. Furthermore, 
it was decided that the majority EMA documentation would fall under existing EU 
legislation governing public access to documents. (105). 
 
At the same time, the freedoms of the applicants were curtailed. Under 
decentralized procedure applicants were no longer permitted to withdraw an 
application. Information on serious adverse drug reactions and other 
pharmacovigilance data should be made publicly accessible. Therefore, the 
EudraVigilance, the common European electronic data reporting system of pre 
and post approval safety data, was made more accessible for the general public 
(30). 
 
Partially due to the ‘Cochrane affaire’, the Council of the European Union 
proposed a new regulation on clinical trials. It states that the clinical trial data

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submitted in support of a clinical trial application should be based only on clinical 
trials recorded in a publicly accessible and free of charge database (138). Yet 
while the quantity and quality of data that inform benefit to risk profile decisions 
is rising dramatically, the methodologies for synthesizing the information and 
balancing the good and the bad remain largely unchanged and poorly described. 
According to Lumpkin et al., ‘the transparency of public advisory committees 
and online availability of regulatory documents helps, but to many the 
regulatory thought process still remains a black box’ (31).

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5 
Interview results 
All values [safety & efficacy, innovation, costs and 
availability] are important, but they are not always 
compatible with each other. (…) It is of great importance to 
acknowledge the legitimacy of each of these values and the 
existence of tensions between them. - Expert 6  
5.1 
Introduction 
 
In this chapter we present the results of our interviews with national experts in 
the field of pharmaceutical regulation. These findings are grouped according to 
their major theme: Safety & efficacy, Innovation, Costs, Availability and 
Transparency & Accountability. The methodology behind the review is explained 
in chapter 3: Methods. The numbers in the text between square brackets […] 
refer to individual experts. 
 
 
5.2 
Safety & efficacy 
 
5.2.1 
Public trust and the perception of risks 
When asked about their opinion on how the current regulatory regime for 
pharmaceuticals performs in terms of safety, all respondents agreed that it 
functions well. Yet, at the same time they acknowledge the increasing public 
attention to incidents like those with Vioxx® or Diane 35®.  According to some 
interviewees, the commotion that these incidents caused, can be explained by 
the tension between the different way patients, regulators and society perceive 
risk. According to Expert 2, there are different ways to look at risks when 
dealing with pharmaceuticals. There’s risk on the level of the population. This is 
how producers and regulators think about risks. Yet, at the same time, there is 
risk on the individual level as well, and that’s a specific risk for an individual 
patient.  
 
Regulators try to fulfil society’s demand for safe pharmaceuticals. 
However, some interviewees question the viability of this aim, since there is – as 
Expert 5 put it: no such thing as a 100% safe pharmaceutical. Four out of nine 
interviewees stressed the fact that the willingness among patients to use 
pharmaceuticals which are not yet authorized is much higher than among non-
patients [2,4,5,6,9]. How should regulators address this tension? Three 
interviewees suggested that the choice whether or not to use ‘risky’ 
pharmaceuticals is something that should be left to patients and their physicians 
[2,4,5]. At the same time, the government and regulators should invest more in 
education and advice: make society aware of the fact that there is always risk 
involved when using pharmaceuticals [4,5].  
 
With the current focus on risk minimization, regulators seem to have lost 
touch with daily medical practice. Decisions are made by people who don’t see 
patients anymore. (…) This has changed the way of thinking and reasoning 
about pharmaceuticals. Compliance with regulations and guidelines has become 
more important. (…) It’s all about risk reduction, while risk reduction and good 
quality of care are not per definition compatible [Expert 2].

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5.2.2 
Cautious regulators 
Regulators have become more wary to accept even a limited amount of risk. 
More rules and guidelines are introduced, yet they are rarely abolished 
[2,4,5,8]. According to Expert 8, there are more than 600 guidelines. However, 
by increasingly intensifying the regulatory regime, governments may have 
assumed too much responsibility. Expert 2: when something goes wrong, all 
fingers point towards the government, even though the mistakes usually weren’t 
made by the government, but in the daily healthcare practice; for example due 
to wrong off-label use. It is therefore not surprising that regulators have become 
more careful. Accountability has shifted from the producer of a ‘faulty product’ 
and physicians who use the ‘wrong product’ to the regulator who has granted 
market authorization. Regulators are therefore also protecting themselves. 
Various new rules are introduced of which some protect public health and some 
only protect the regulator [Expert 8].  
 
However, most interviewees agree that the ‘cautious regulator’-problem 
is not easily solved. A clear division in responsibilities might help, according to 
Expert 2. He states that, when it comes to the safety of pharmaceuticals, there 
are several aspects one has to take into account. There is the quality of the 
product itself. That is the responsibility of the producer. There is the physician 
who prescribes and the pharmacist who’s responsible for the delivery of the 
product. How pharmaceuticals are ultimately used, is also the responsibility of 
the patient. Yet, at the same time, Expert 5 points out that the ‘cautious 
regulator’-problem is also rooted in the fact that some actors do not take their 
responsibility. The pharmaceutical industry has public trust issues and politicians 
have to address these issues, in this case by intensifying the regulatory regime 
[Expert 5].  
 
5.2.3 
Excessive regulations 
While the phenomenon of the ‘cautious regulator’ might be caused by the 
interplay of various factors, most interviewees agreed this does not mean that 
legislation should not be screened for excessive regulations. To illustrate the 
existence of ‘unreasonable legislation’ the respondents came up with three 
examples:  
 
1. Compulsory QT studies. There are serious doubts about the cost-
effectiveness of these studies [4,8]. These resources would have been 
better spent on innovation [Expert 4]. 
 
2. The regulations concerning the transmission of Creutzfeld-Jakob disease 
through the use of bovine materials in pharmaceuticals or other 
medicinal products. There are no indications this ever happened, 
according to Expert 8. Furthermore, studies have shown that the 
reduction of this already minimal risk with only 1% would cost about 46 
billion euros [8]. 
 
3. The 
rules 
regarding 
social 
media 
in 
the 
Guideline 
on 
good 
pharmacovigilance practices. These rules demand that the industry 
screens the internet and social media under their management or 
responsibility for potential reports of suspected adverse reactions. 
According to Expert 2, it is doubtful that this will indeed result in new 
information that is not picked up otherwise.  
 
5.2.4 
Post market approval: pharmacovigilance 
Pharmacovigilance – the collection, assessment, monitoring and prevention of 
adverse effects with pharmaceuticals – is divided over various stakeholders

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within the EU pharmaceutical chain, like regulators, pharmacovigilance agencies, 
the 
industry 
and 
medical 
professionals. 
All 
respondents 
agreed 
that 
pharmacovigilance plays an important role in minimizing the risk of adverse 
events. During the interviews, three aspects of pharmacovigilance were often 
highlighted: the division of responsibilities, underreporting and the use of 
pharmacovigilance data. 
 
With regard to the division of responsibilities, the case was made that 
pharmacovigilance and market authorization should remain in the hands of 
separate institutions. Like it is the case in the Netherlands, authorization is 
something best left to the government – as the guardian of the common good – 
while the detecting and monitoring adverse events is best guarded by health 
care professionals; they work with pharmaceuticals on a daily basis. According 
to Expert 2, there’s an inherent tension between market authorization and 
pharmacovigilance that just doesn’t work when they’re carried out by the same 
institution. Just imagine: if pharmaceuticals are withdrawn from the market, it 
would immediately appear as if mistakes were made during the authorization 
procedure, which doesn’t necessarily have to be the case. The role of the 
industry – which according the EU-legislation also has the obligation to collect 
reports on adverse events – should be abolished [2,8]. This data should be 
given to independent pharmacovigilance agencies that can assess this 
information and make it public to everyone, including the industry [2].  
 
In the literature (see: literature results) there is doubt whether or not 
the system of ‘spontaneous reporting’ on which most pharmacovigilance 
systems rely, is the most reliable system [8]. This concern seems to be valid, 
especially when looking at the (lack of) reports filed by hospitals and patients 
[2]. Expert 8 put forward that the relative underreporting from hospitals is 
probably caused by ‘red tape’. When a physician wants to report an adverse 
event with a biological, the producer immediately asks him to fill out a multitude 
of forms. This stimulates the fact that the second time this physician is 
confronted with an adverse effect he’ll probably pretend not to have seen it 
[Expert 8]. He suggests that hospitals should be obliged to hire someone whose 
sole job is to detect and report adverse events. This problem is acknowledged by 
Expert 2, but at the same time he claims that there’s no evidence that the 
system of ‘spontaneous reports’ has missed any of the important safety 
concerns of the past decades. Expert 2: As long as the system itself can 
differentiate between signals and ‘noise’ it doesn’t really matter (…) It’s not 
about the quantity, but the quality of the reports.   
 
His main concern lies with the way data collected by pharmacovigilance 
agencies is used. According to him, most safety signals reach the regulator, but 
do not reach the physician’s consultation room. Information that might benefit 
the quality of care is put in a European circuit and disappears in a fog of 
bureaucracy [2]. Similar concerns were raised by Expert 1 and Expert 5. Data 
collected through pharmacovigilance systems could be beneficial for innovation, 
but in order to use this data in a scientific way, it would be necessary to link 
these reports with biological material [Expert 1].  
 
5.2.5 
Premarket approval: the RCT and efficacy 
Several checks and balances are built into the development stage of a 
pharmaceutical. The core around which the assessment of the safety and 
efficacy of a pharmaceutical product is built, is the Randomized Controlled Trial. 
Regulators rely heavily on this data, since – as Expert 8 states you don’t learn a 
lot about safety from animal experiments.  
 
According to our respondents, the role of medical ethical research 
committees (MERCs) is paramount during the start-up phase. Both Expert 1 and 
Expert 3 agree that not every trial-proposal that reaches the MERC is up to par.

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Still, the share of proposals that has been rejected only lays around 7% (or 
less). That the compulsory review by the MERC is not always appreciated is 
understandable. Expert 1: it’s only logical that individual researchers think that 
the process is complicated, bureaucratic and unnecessarily time-consuming. 
They’ve already thought long and hard about their protocols and are – in this 
phase – eager to get to work.  
 
Still, there is room for improvement. Expert 3 state that researchers will 
benefit from more interaction between regulators and MERCs. This would 
prevent that, at the end of the authorization process, trials which have been 
approved by a MERC are rejected by the regulatory agency. On the other hand, 
MERCs and regulators should have distinct competences. The idea to separate 
the scientific and ethical review as has been laid down in the new European 
Regulation on Clinical Trials is not applauded, especially since the Medicines 
Evaluation Board claims the competency of scientific review. It would not be 
beneficial if ethical aspects of research trailed behind the scientific review 
[Expert 3]. This concern is shared by Expert 4. Furthermore, he states that this 
new Regulation is a threat to the legal position of patients that participate in an 
RCT. There’s no court or other institution of arbitration to which patients can 
turn in case of conflicts. 
 
There are concerns about the central place the RCT has in the 
authorization procedure. With regard to personalized medicines, the trial of the 
future might look different. Expert 1 states that in the current ‘state of the art’ 
in oncology pharmaceuticals are being developed on the basis of a certain 
genetic mutation. It would stand to reason to only include patients in a trial with 
that specific mutation. This means that the efficacy of a product can be proved 
much quicker and with fewer patients than in a standard RCT. According to 
Expert 5, regulators should investigate the possibility of using tissue sampling 
and other simulation techniques as a basis for new trials. Expert 5 has other 
concerns: trials are also very much focused on the production of scientific 
output. There are examples in which this bias has led to the continuation of 
RCTs with products of which it was known that they didn’t work [5]. Expert 4 
points out that by giving the RCT such a prominent position, other sources of 
information about the safety and efficacy of pharmaceuticals are not used. Such 
as data collected by pharmacovigilance agencies. This hampers our knowledge 
about the (off-label) use of pharmaceuticals and it ultimately obstructs 
innovation [4].  
 
When touching upon the point of innovation, the tension between the 
use of placebos versus comparators was mentioned by various respondents. 
Regarding this question, the interests of producers, regulators and health care 
professionals diverge. Health care would benefit more from comparator studies 
[1,4]. Regulators prefer placebo-controlled trials, since it (usually) provides 
them with a clear outcome [3, 4]. Furthermore, Expert 4 points out, when you 
look at the superiority of a certain new medicinal product, you also have to face 
the inferiority of the previous standard medication. That’s a difficult thing to do. 
 
 
5.3 
Innovation 
 
5.3.1 
Decreasing innovation 
That the pace of innovation is slowing down, is not contested by any of the 
respondents. When asked for the reasons behind this decrease, the term ‘return 
of investment’ often surfaced. Expert 8 and Expert 2 both pointed towards the 
commercial 
motive 
behind 
pharmaceutical 
development 
[2,8]. 
The 
pharmaceutical industry is particularly focused on shareholder value (…)

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Innovation has become less important, since it demands long term investments 
which don’t have an immediate effect on the short term profit that shareholders 
value so much [Expert 2]. 
 
Expert 5’s explanation differs slightly. According to him, innovation was 
initially slowed down by excessive regulations. The return of investment time 
became longer, especially in the innovative biotech sector. These companies 
relied heavily on venture capital. Due to the ‘credit crunch’, the suppliers of 
venture capital laid down stricter rules in order to shorten the return of 
investment time. As a result, biotech companies became less attractive for 
investment, etc. It’s a vicious circle that is slowly strangling the pharmaceutical 
sector [Expert 5].  
 
5.3.2 
Patents 
However, it’s not only about investments. The pharmaceutical industry strongly 
focuses on the protection of intellectual property rights, in which patents play an 
important role. According to Expert 8 and Expert 4, patents have a negative 
effect on the pace of innovation and the social behaviour of producers. The latter 
can be illustrated by the sluggish way AIDS-pharmaceuticals were made 
available to poor regions where AIDS was (and is) a major public health 
concern, such as Africa and Asia [4].  
 
Concerning the former, Expert 4  points out that innovation in the area 
of pharmaceuticals is a spasmodic process governed by ‘patent blindness’: if it 
cannot be patented, it is not worth the investment. Furthermore, once a 
chemical entity has been granted market authorization, the development 
process stops. Producers have little interest in improving an already authorized 
product, since: a. it would only help the producers of generics; b. it is not really 
necessary since physicians will use it ‘off-label’ if the product proves to be 
beneficial for something other than the original indication [4].  
 
Expert 5 endorses this viewpoint. Even though Expert 5 and Expert 1 
think there is a lot to say in support of the current patent system, the extent of 
protective measures on the pharmaceutical market is extreme [1,5]. A more 
open and transparent market – one that fosters competition – would be 
beneficial for innovation [5]. Expert 8 refers to an EU-investigation which 
analysed the way the pharmaceutical industry uses the system of patent 
protection (139). It’s mainly used to minimize competition (…). Several studies 
show that there’s a negative relation between the innovativeness of a company 
and the amount of patents it has [Expert 8]. 
 
Whether the current patent system is ready for the future, is doubtful. 
Expert 1 points out that the patenting of the body’s own mutations will probably 
raise serious ethical concerns. According to Expert 5  it is not unlikely that future 
treatments will consist of various pharmaceutical components, developed by 
different companies or institutes, which will make the question of ownership and 
value more pressing [5]. Expert 8: it would be wise to think about the way 
people get compensated for their intellectual properties. Maybe [financial] 
incentives aren’t always necessary. Real innovations come from the academic 
world: scientists are more concerned with publications than with patents. 
 
5.3.3 
Purchasing innovation  
Most interviewees agree that the era in which pharmaceutical innovation was 
driven by the pharmaceutical industry is over. To compensate the faltering R&D-
strategy, large pharmaceutical companies increasingly turn to academic 
institutions and small or medium sized biotech enterprises [1,2,4,5,8]. This does 
not mean large companies have no expertise. On the contrary, Expert 5 states: 
they have a tremendous amount of expertise, especially in the field of

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compliance, setting up phase 3 and 4 trials and marketing & sales. The function 
of large companies, however, has changed from a driver of innovation to 
something resembling bank and broker for smaller companies or research 
institutes. The focus on blockbuster-drugs is not entirely illogical, since the sheer 
size of most companies means that they need to turn over a lot of money just to 
function. 
 
Purchasing promising innovations is therefore extremely important for 
the survival of large companies. On the other hand, universities and small 
companies also need them. Expert 1: new products and concepts are being 
developed in (academic) hospitals. In a later stage, for example after completion 
of phase 1 and 2 trials, the patents of these products are sold to pharmaceutical 
companies, because the necessary phase 3 studies has become so expensive 
that it is an impassable road for hospitals. According to Expert 8 and Expert 1, 
this situation is far from ideal. While innovation is being ‘outsourced’ to public 
sectors like universities, hospitals or small private companies, the large 
companies reap the most financial benefits. In a sense, society pays twice: first 
by financing universities and secondly by paying the retail price of the product 
[1,4]. Expert 2 claims that this commercial aspect of this phenomenon is often 
(wrongfully) downplayed. In the interest of public health, the government 
demands cheap pharmaceuticals, while at the same time the government also 
wants to support the industry for economic reasons [2]. 
 
Expert 4, Expert 6 and Expert 8 are concerned about this development 
and want the government to take a more active role. Expert 4: if you pay for it, 
why wouldn’t you try to influence what you pay for? Expert 6, on the other 
hand, warns against direct government investments. It would create an equally 
flawed system. Some countries experiment with price funds, which more evenly 
distribute the costs and risks of return on investments. This lessens the need for 
all actors, including the industry, to build up a large amount of safeguards [6]. 
 
5.3.4 
Stimulating innovation 
There are several other ways to stimulate innovation. Firstly, there is the 
possibility of special legislation, like the EU-regulations on Orphan Drugs or 
Advanced Therapy Medicinal Products. Both offer certain financial or regulatory 
incentives. Expert 4 states that in the case of Orphan Drugs the promised 
market exclusivity is not really an incentive at all: it’s a guarantee of market 
exclusivity on an already extremely exclusive market. He has similar concerns 
about the Regulation on ATMPs. Traditionally, cell and gene therapy were 
treated as conventional pharmaceuticals. Since the introduction of the ATMP-
Regulation, only four products have been registered as an ATMP. All innovation 
in this area seems to have stopped [Expert 4]. 
 
Expert 5 suggests that the pharmaceutical sector could learn from the 
idea of ‘fast prototyping’, a common phenomenon in the world of ICT and 
consumer electronics. By testing and adapting the prototype in a limited but 
‘real life’-setting, fast prototyping allows companies to turn innovative ideas into 
successful end products more rapidly and efficiently. This would especially be 
beneficial for serious (orphan) disorders. However, it would mean that the 
regulatory regime should make a more clear distinction between ‘regular 
disorders’ and ‘serious disorders’. At the same time they should allow for a more 
adaptive form of market authorization and a less formalized way of gathering 
evidence [5].  
 
According to Expert 6, early dialogues between the industry and 
regulators could also stimulate innovation. It allows for producers to hear on 
which grounds market authorization or reimbursement decisions will probably be 
taken  at an early stage of development. This helps them to optimize their

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research strategy and choose the right set of end points. As a quid-pro-quo, the 
industry has to give some indication on the intended price of the product. Early 
dialogues create an instrument through which society can steer the activities of 
the industry [6].  
 
 
5.4 
Costs 
 
5.4.1 
Price setting: a black box 
The steadily increasing costs of pharmaceuticals during the last few decades are 
a source of worry, even though pharmaceuticals do not take up a large share of 
the total health care expenditure (yet). Medical technology, for example, has a 
much higher impact on the costs of health care, than medicines – according to 
Expert 1. When asked about the reasons behind the price increase, most 
respondents agree that this question is not easily answered. It is assumed that 
the growing amount of regulations is one of the main drivers [1,4,9]. The 
requirements that have to be met when conducting a clinical trial are so 
complicated, that most pharmaceutical companies hire specialized firms to set 
up their phase-3 trials, so called Contract Research Organizations (CROs). 
Expert 4: these companies can charge up to a 100% of the original trial budget.  
 
Though compliance with regulatory requirements probably plays an 
important role in the price setting of pharmaceuticals, this cannot be tested. 
Pharmaceutical companies are not transparent how they compile their prices. In 
some cases, high prices are understandable; for example with orphan drugs. 
With these products, the industry only has a small patient base out of which 
they have to recoup their investment (and make a profit). In other cases, it is 
unknown what share of the price of a single product is spent on marketing, R&D 
or profits. It’s more or less a black box, states Expert 2.  
 
Expert 8, Expert 1, Expert 9 and Expert 6 support this claim [1,6,8,9]. 
The major ‘consumers’ of pharmaceuticals are governments. Through health 
insurance schemes, governments pay for the majority of pharmaceuticals. 
Expert 6: It’s extremely difficult for governments to deny reimbursement of 
pharmaceuticals only on grounds of its price. Society would not accept it. This 
gives the industry a lot of leeway in their price setting. Expert 1 illustrates this 
with the example of a pharmaceutical (for a neurological disorder) developed by 
a university medical centre. We couldn’t register it due to the complexity of the 
registration process. As a result, the company that eventually licensed it as an 
orphan drug and marketed the product charged a much higher price: 30.000 
euro instead of a 1.000 [Expert 1]. Furthermore, he points out, once a product 
is ‘on the market’, health insurers do not reimburse a magistral preparation 
made in a pharmacy, even though it’s exactly the same and cheaper. Expert 8 
thinks this problem can only be tackled efficiently on the European level [8]. 
 
5.4.2 
Synergy between authorization and reimbursement  
In order to curb the rising costs of pharmaceuticals, the decision-making process 
concerning market authorization and reimbursement should become more 
closely intertwined. For producers, the decision about reimbursement is source 
of larger concern than the decision about market authorization [8]. Producers 
and regulators should pay attention to the cost-effectiveness of a product in an 
early stage of the authorization process [8]. Only products with a clear superior 
cost/benefit ratio should be registered. After all, once a product is on the 
market, it is virtually impossible to remove it [8]. Expert 4, on the other hand, 
warns against too much synergy. Reimbursement decisions are, and will remain, 
political decisions contrary to authorization decisions which are based on a

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scientific assessment. Both the government and politicians have to take that 
responsibility [Expert 4].   
 
According to Expert 6, there are several major differences between the 
requirements for market authorization and reimbursement that have to be taken 
into account. First of all, the indicators used to measure the clinical effect of a 
certain pharmaceutical – for example a decrease of cholesterol levels – are 
different than those used to judge its added value, such as its effects on the 
incidence of cardiovascular diseases, longevity, etc. Secondly, in the world of 
health insurance it is common to compare different products with each other 
based on performance and costs. Thirdly, there’s a fundamental difference 
between the contexts of both systems. Safety issues have direct consequences 
for the patient, while an unfavourable cost-effectiveness ratio is usually shifted 
on to those who pay the health insurance premiums. It’s a complicated clash of 
interests, in which one civilian – the payer – is placed against the other – the 
patient [6].  
 
It’s therefore doubtful that the EMA or other regulators will deny market 
authorization based on a lack of added value, when the efficacy and safety of a 
product are scientifically proven. It’s not their task. This does not mean that 
more harmonization would not be welcomed [6].  
 
 
5.5 
Availability 
 
5.5.1 
Risk minimization 
The availability of pharmaceuticals is a complex issue in which the industry plays 
an important role. If there are still patented products on the market, there is no 
incentive to continue the development of an alternative. Expert 5: the 
pharmaceutical industry does not always have the ambition to get products on 
the market as quickly as possible. 
 
On the other hand, Expert 4 observes that there is also a discrepancy 
between what people expect – both safe and available medicines – and what 
regulators and other authorities do [3]. The focus on risk minimization has led to 
a situation in which certain promising products and/or treatments are not 
entering the market, either because they failed the authorization procedure or 
because their development was stopped in an early phase, due to concerns 
about the outcome of the registration process (see: safety and innovation). 
Expert 9 underlines this observation: Currently, regulators are only held 
accountable when a product has gained market authorization and it turns out 
that there’s something wrong with it (…) However, there are no sanctions at all 
if a product is wrongfully withheld market authorization, whereas this is also a 
failure [Expert 9].  
 
The length of the authorization procedure is a point of concern as well. 
Expert 5 suggest that regulators should have an option to fast-track the 
procedure in the case of severe disorders. The fact that the average length of 
the procedure is 14,8 years is not a problem in itself. The real problem is, that 
people with, for example, Amyotrophic lateral sclerosis (ALS) cannot wait 14,8 
years [Expert 5]. For those patients a short cycle time is crucial. According to 
Expert 9, Expert 2 and Expert 8 the length of the authorization procedure is 
caused by an increasing bureaucracy. Expert 9: the sense of urgency is not 
always shared by people in important positions. This could be amended by 
giving patients a more actively role in the authorization procedure [2,4,5,9]. 
Expert 2 and Expert 5 both point to the example of HIV/AIDS in which patient 
organizations and the gay community played a crucial role by pressurizing both 
regulators and government [2].

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5.5.2 
Centralization of production sites 
Expert 1 on the other hand, is especially worried about the negative 
consequences of the ongoing centralization of pharmaceutical production sites 
on the availability of medicines. In previous years, if there was a problem with 
one production site, another site could take over. These days, if there’s a 
problem it’s getting more common that products cannot be delivered at all 
[Expert 1]. Furthermore, it is not easy for pharmacies to find out different ways 
to get the product. In the case of oncology, the consequences are even more 
severe, since most of the time there is no alternative and stopping treatment is 
not always an option. It would mean a great deal, if regulators and governments 
would set certain requirements concerning a guaranteed supply [Expert 1].  
 
5.5.3 
Compassionate Use 
Compassionate Use programs are aimed at patients that do not benefit from 
regular treatments and makes it possible to request permission to use an 
alternative treatment which is still in its experimental phase. However, there are 
two major issues with this program, according to our respondents. First of all, 
there’s no solid financial program to back up the Compassionate Use programs. 
In the Netherlands it usually depends on the goodwill of the health insurer [5,9]. 
Secondly, the program itself is complicated [9]. Patients have to undergo all 
available 
‘regular’ 
treatment 
options 
before 
they 
become 
eligible 
for 
compassionate use. In some cases, even when it is clear that the other options 
will not work either [5]. Furthermore, both Expert 5 and Expert 9 think the real 
strength of a program like Compassionate Use, lies in the gathering of data. 
Officially, it’s not allowed to use Compassionate Use programs to gather data. 
This should be altered. Most doctors and patients are willing to do so [Expert 5]. 
 
 
5.6 
Transparency and accountability 
 
5.6.1 
Culture of secrecy 
According to some respondents, the current regulatory regime is governed by a 
strong tradition of secrecy [2,4,5,8]. Expert 8: it’s a very tight-lipped system. 
Who is responsible for what is not always clear (…) The regulator who makes the 
rules is also responsible for their application and is – at the same time – the 
ultimate court of appeal. The lack of transparency leads to an unverifiable 
decision making process which makes regulators unaccountable, warns Expert 4.  
 
The claim that registration dossiers contain sensitive information about 
compounds, production processes and development strategies which could harm 
the producer if this information is openly available is contested by Expert 8: in 
the case of biotech products, most information in the dossier is really just 
stating the obvious, but it also contains information about silly slip-ups, for 
example labelling mistakes. Expert 5 states that more transparency not only 
enhances public trust, it might even benefit innovation. Failing is an integral part 
of the innovation process, as is learning from your mistakes (…) by being 
transparent about it, you force the industry to become more innovative [Expert 
5].  
 
In the case of regulators, Expert 4 and Expert 2 point out that the 
tradition of secrecy is rooted in their concern about being held accountable for 
‘mistakes’ made in the past. Dossiers sometimes hold information that in 
retrospect might indicate a certain adverse event, which would immediately 
suggest that errors were made during the authorization process. Based on what 
was known at that time, this does not necessarily have to be a mistake [2,4].

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On the other hand, being transparent might also show the arbitrariness of 
certain decisions. Expert 2 illustrates this with the example of the contraceptives 
Yasmin® and Diane-35®. Studies have shown that in the case of the (third 
generation) contraceptive Yasmin®, the risk of thrombosis is three times higher 
than that of any other second generation contraceptive, but it’s just as high as 
with Diane-35®. One is withdrawn as a contraceptive, the other one is still on 
the market. Maybe the EMA was worried about a potential ‘pill scare’. That’s 
understandable, but it doesn’t negate the fact that it is a rather arbitrary 
decision [Expert 2].  
 
While the secrecy seems reasonable from the viewpoint of regulators 
and the industry, it also fosters unnecessary distrust in the system as a whole 
[2,4,8]. Public distrust is furthermore fed by an appearance of conflicting 
interests within the regulatory system. The relation between regulators, 
governments and industry sometimes appears to be ‘warmer’ than it should be. 
One example of this, is the shroud of mystery surrounding risk management 
plans. Under current EU-legislation, pharmaceutical companies are obliged to 
draw up risk management plans that give an overview on the possible risks of a 
certain product. In order to prevent doing the same thing twice, Expert 2 says, 
pharmacovigilance agencies should have access to these plans as well. Yet, it 
proves to be extremely difficult to get these plans (which are officially openly 
available). It’s strange that a producer has more information on possible 
adverse effects than the pharmacovigilance agency, but it’s even stranger that 
the government has this information and refuses to share it with health care 
professionals and patients. The only reason not to share this information is to 
protect the economic interests of the industry [Expert 2]. 
 
The tension between economic interests and public health is a constant 
factor in policymaking process around pharmaceuticals.  The European Union 
wants to maintain a strong and innovative pharmaceutical industry vis-à-vis the 
United States of America. The output of this industry however, does not always 
serve the most pressing needs of public health. Expert 3: it’s a for-profit 
industry, which means that they put their money where they expect to gain the 
most. Usually this isn’t a product aimed at a small population of patients or 
antibiotics, but a product aimed at common chronic disorders like diabetes, high 
cholesterol, hypertension, etcetera. In order to steer money into those field, 
governments have to invest huge amounts of money themselves, as is the case 
with the Innovative Medicines Initiative [2]. By investing this money, the EU 
facilitates two aims: research in unmet medical needs and a strong position of 
Europe in the global pharmaceutical industry, but at the same time it also 
nurtures a system that is more ‘industry friendly’ than one solely based on the 
interests of public health. The real question is, whether it is possible to 
completely avoid this amalgamation of interests [2].

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6 
Discussion and conclusion 
6.1 
Key Questions 
This report is a data driven investigation of the sustainability of the European 
pharmaceutical regulatory system in relation to its objectives to minimize risk 
with respect to pharmaceuticals reaching/being on the market, while maximizing 
gains 
in 
public 
health 
by 
stimulating 
innovation 
and 
availability 
of 
pharmaceuticals. Over the past decade, regulators have often been criticized for 
being overly risk averse by requesting too much data or delaying decisions 
because of unwillingness to leave room for uncertainty (38). The current 
European regulatory system is for a large part driven by the societal demand for 
minimal risks. Incidents generally generate an abundance of media attention, 
which leads to an increasing distrust by society in the regulatory system (31, 32, 
48).   
Against this background, two questions became paramount during our 
study: first, how is the European regulatory system for pharmaceuticals 
performing in terms of protecting public health from harmful and ineffective 
medicines (through the scientific evaluation prior to the market authorization of 
medicines and post market supervision afterwards)? Second, is it possible to 
obtain an appropriate balance between costs, availability, innovation and safety, 
taking into account the divergent opinions of different stakeholders? In this 
discussion, we share our reflections about these two key questions. We examine 
the consequences of developments in- and outside the system and conclude with 
what should be taken into account when discussing the possibilities of 
improvements of the system. 
 
6.2 
Public health or economic interests: an ambivalent relationship?  
As we have seen in the historic background of the European regulatory regime, 
the system was built on  the pillars ‘public health’ and ‘economic interests’: 
guaranteeing the safety of medicines available on the market, but safeguarding 
the interest of the European pharmaceutical industry at the same time (5, 25). 
Both goals were not directly at odds with each other, but were not entirely 
compatible either. Various experts also highlighted this dual nature of the 
regulatory regime during the interviews. The tension between economic 
interests and public health is a constant factor in the policy making process 
around pharmaceuticals. Whether this amalgamation of interests is something 
that can be entirely avoided, remains to be seen.  
 Furthermore, recent developments also cast doubt as to whether it is 
possible to make a clear distinction between the European and the global market 
(and industry) for pharmaceutical products (140, 141). While currently, the top-
10 of the largest pharmaceutical developers in the world is equally divided 
between American and European companies, recent bids on EU-companies like 
AstraZeneca show that the market is continuously in motion (142). Medicines 
developers from India and China are on the rise, as well. How the European 
regulatory system has to react to these developments, is something that is still 
unclear.   
 
6.3 
Safety & efficacy: the root of all problems?  
Regulatory agencies are tasked to ensure that only those pharmaceuticals are 
licensed of which the benefits outweigh the risks. In our study, both the 
reviewed literature and the interviewed experts state that the existing regulatory

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system performs well in terms of safety and efficacy. Compared to the number 
of yearly authorized pharmaceuticals, the number of serious safety incidents is 
low (35). Yet, at the same time, this is not how it is perceived in ‘the outside 
world’, as has been shown by the increasing public attention to incidents like 
those with Vioxx® or Diane 35® (19, 32). The different way patients, regulators 
and society define acceptable risks, explains some part of the commotion that 
these incidents cause (31).  
The classic response of regulators to public commotion is an increasing emphasis 
on medicines safety (48). Our study shows that this has negative effects on 
innovation, availability and costs. Demanding larger or more sophisticated 
studies increases costs, which makes innovative research in many therapeutic 
areas commercially unattractive. At the same time, it is doubtful whether larger 
and more extensive trials will generate better knowledge of all possible adverse 
effects. Moreover, the advantages of all safety requirements at the time of 
registration are often undone in daily clinical practice, e.g. by means of 
polypharmacy, off label use and/or non-compliance (19, 31, 40, 89). This 
explains the broad support for focussing more on the post-approval period 
within the lifecycle of a product by putting more emphasis on post-marketing 
safety monitoring.  
Addressing these issues probably requires changes on several fronts. First, 
there’s a growing need to rethink the balance between ensuring medicines 
safety on the one hand and the need to promote innovation, ensure availability 
and limit costs on the other. This rethinking should take into consideration risks 
perceived by society and patients, benefit-risk communication needs, medical 
needs and expected risks related to use in daily practice. Second, all experts and 
decision makers in the marketing approval process should be aware of the 
balance between the gain in safety versus the feasibility and costs of requesting 
additional information or data. Third, a continuous dialogue between regulators, 
the public at large, patients, healthcare professionals and pharmaceutical 
industry is needed to address both balances and to aim for development of 
products with greater efficacy benefits for patients. Regulation should keep pace 
with (fast) changes in society and adopt societal dynamics.   
 
6.4 
The less flourishing side of innovation  
During the last decades, many innovation-enabling technologies have been 
developed. We have witnessed impressive innovations in treatment of numerous 
diseases and there are several (biotech) products in development for serious 
unmet medical needs (e.g. Alzheimer‘s disease, cancer, depression, stroke, 
schizophrenia) (32, 48). However, there are also less flourishing sides to 
pharmaceutical innovation. Last decennia, fewer new chemical entities reached 
the market, while there is a still growing need for new products (62, 63). Total 
R&D expenditure rose sharply as did the costs for a new chemical entity, there is 
stagnation/decline of output and worsening of attrition rates (64, 65).  
The findings in this report show that some of these developments can be 
attributed to factors triggered by the regulatory system, such as higher 
regulatory requirements and the fact that more hurdles need to be taken; e.g. 
cost-effectiveness required by reimbursement agencies or head-to-head 
comparisons (37, 74, 82). However, these developments can also be attributed 
to factors outside the regulatory system, such as patent expirations, 
development strategy of pharmaceutical developers, increasing amount of 
generic products and me too’s, the ‘better than The Beatles’-problem and the 
‘return of investment’-time (30, 48, 73, 81).  
The regulatory system does respond to these factors by stimulating 
innovation and availability through specific procedures, for example adaptive

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licensing procedures or guidance to facilitate early dialogue between regulators, 
health-technology-assessment bodies and medicines developers (29, 31, 32, 
53). Despite the awareness and system responds, the lack of real innovation 
remains difficult to resolve. The results of the experts’ interviews underline this 
complexity, as various opinions were voiced when touching upon possible 
solutions to stimulate innovation. Progression within this area remains a 
challenge.   
 
6.5 
Costs: the black box 
The steadily increasing costs of pharmaceuticals during the last few decades are 
a source of worry (64, 101). Both the literature and the interviews highlight that 
the growing amount of guidelines (including a.o. the demands for expensive 
phase 
III 
trials), 
and 
the 
additional 
requirements 
for 
reimbursement 
(pharmaceutical companies must also show that their products provide “value,” 
both therapeutic and economic) are the important drivers of this development 
(29, 48, 50). Ultimately, long development times coupled with low success rates 
translate into high overall R&D costs, which are compensated through higher 
prices (31, 76).  
However, a part of the cost increase is also a response to the vastly 
expanded research opportunities created by advances in basic science (78, 88). 
Just how much the compliance with existing and new regulations is costing 
pharmaceutical companies is hard to point out. Most producers are not 
transparent about how they compile the prices of their products (78, 103). As 
stated by one of the interviewees: it’s more or less a black box. This 
development is not without consequences. Increasing costs lead to an increasing 
tension between those who pay for expensive medicines through their insurance 
premiums – the collective – and the individual patient. Transparency on the 
amounts of money spent on the various elements that determine the product 
price (e.g. compliance with regulations, marketing, earlier development failures, 
scientific progress, and etcetera) may provide insight into the role of regulation 
in rising costs. 
 
6.6 
Availability: a complex issue 
The availability of pharmaceuticals is a complex issue in which many 
stakeholders play an important role. In addition, both system factors and 
external factors can be linked to variation in availability between products 
and/or countries. When discussing causes of non-availability, distinction should 
be made between actual non-availability of medicines; e.g. due to stagnation of 
scientific discoveries or unmet medical needs; and limited or no access to 
available medicines, e.g. due to problems at the production site or national 
policy issues (5, 19, 70, 117, 121).  
Policy-makers have vast range of tools to improve medicine availability 
and affordability for their citizens. Various pricing policies and strategies exist 
(124, 125). However, it is not easy to determine which to implement. All have 
strengths and weaknesses, just as all countries/patients have unique medicine 
needs and challenges. Each country/regulatory agency must therefore assess its 
own medicines situation and implement different combinations of policies and 
interventions. Next to this, collaboration and coordination between countries is 
necessary to avoid situations as illustrated by the example of Greece; serious 
shortage of medicines due to the economic crisis and price differences between 
countries (126).

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6.7 
Transparency and accountability: a culture of secrecy? 
The findings in this report furthermore show that insufficient transparency and 
accountability of the system are inextricably bound up with the four identified 
goals of the system; safety & efficacy, innovation, costs and availability (106, 
121, 129, 133). During the course of the twentieth century, freedom of 
information has become the cornerstone of democratic societies and the culture 
of secrecy of the pharmaceutical industry and/or medicines regulatory 
authorities, leads to an unnecessary distrust in the system as a whole (128). 
Furthermore, it hinders innovation, raises costs and restricts the availability of 
necessary pharmaceuticals. This problem is widely recognized. Recent legislation 
by the European Union, as for example the higher transparency of clinical trial 
results, is addressing this issue (138). Nevertheless, it would be beneficial to 
rethink the way in which essential information can be mobilized best from 
pharmaceutical industry and/or medicines regulatory agencies without injuring 
any valid interest (141, 143). Accountability is intertwined with transparency; as 
an interviewee pointed out: in the case of regulators, the tradition of secrecy is 
rooted in their concern about being held accountable for ‘mistakes’ made in the 
past. Increased transparency is therefore not expected to be a panacea against 
distrust. This should be at least supplement with strategic communication on 
responsibilities of all stakeholders. 
 
6.8 
Pharmaceutical regulation: an intricate system of wheels and gears 
In the previous section, we have discussed potential vulnerabilities of the 
pharmaceutical regulatory system. However, we can’t ignore the fact that the 
selected 
themes 
are 
strongly 
interrelated 
and 
cannot 
be 
separated. 
Interventions in one theme will have an effect on another theme or even on 
multiple themes; e.g. more attention to safety and efficacy will affect costs, 
innovation and availability of pharmaceuticals. One could present the four major 
themes as a four gearwheels. When one wheel is being turned, the others are 
also set in motion (see figure 6.1). In addition, all four themes are influenced by  
transparency and accountability.  
 
 
Figure 6.1: Interrelatedness between the four major themes of the 
regulatory system for pharmaceuticals

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6.9 
Strengths and weaknesses of this study 
Inherent to this topic, there are many (different) views and opinions. However, 
we have tried to give this report a scientific basis by collecting additional 
quantitative evidence. The several sources of information used in this report 
were very useful, with the qualitative findings strongly supporting the 
quantitative results found or vice versa. The interviewees were Dutch experts. 
We do not expect that this has any influence on our discussion about the 
potential vulnerabilities of the European pharmaceutical regulatory system as all 
interviewees are strongly involved both in the national and European regulatory 
system.  
This project has been commissioned by the organizations that form the 
Dutch 
medicines 
chain; 
the 
Dutch 
Ministry 
of 
Health, 
Welfare 
and 
Sport/Department Pharmaceutical Affairs and Medical Technology (VWS/GMT), 
the Medicines Evaluation Board (CBG-MEB), the Health Care Inspectorate (IGZ), 
the Central Committee on Research Involving Human Subjects (CCMO) and the 
Dutch Pharmacovigilance Center (Lareb). These parties have in common that 
they should have the ability to think on an abstract level (not a patient level). 
Our results are in line with this ability and presented on a high abstraction level. 
The pharmaceutical industry has been excluded in our interviews. Not because 
we are of the opinion that they should not be heard, but because we have 
primarily looked at the regulatory system from a governmental perspective. 
Besides, concurrently to the timing of this project, EFPIA commissioned the 
Escher project to conduct a review of the regulatory system for marketing 
authorization and the developments in its drivers based from an industry 
perspective. The Escher project review runs simultaneously with the project as 
described in this report. 
 
6.10 
Conclusions 
Although the European regulatory system for pharmaceuticals seems to perform 
well in terms of protecting public health from harmful and ineffective medicines, 
a mixture of factors, internal and external to the system, combined with a slow-
moving organizational structure, gives reasons to believe that the current 
regulatory system for pharmaceuticals is not sustainable in the future. The 
internal factors, such as the system’s current focus on safety and efficacy and 
the ever expanding requirements, and external factors – e.g. patent legislation, 
reimbursement decisions, commercial strategies concerning investment and 
drug development – have an adverse effect on development of other areas, such 
as innovation, costs and availability.  
Health care professionals and/or patients react to this by choosing 
alternative routes to increase access to certain pharmaceuticals, e.g. 
MyTommorows or off-label use of medicines. The system attempts to respond to 
these vulnerabilities, largely by expanding the regulatory network and/or 
corresponding legislation. Although these attempts are mostly aimed at one 
theme, they affect all themes simultaneously, as these themes are interrelated 
to each other. 
This interrelatedness makes adjustments to the system complex and 
should always be kept in mind when discussing possible solutions for 
improvement of the pharmaceutical regulatory system. Thereby, progress can 
only occur with coordinated (inter)national effort by all relevant stakeholders,  
including EMA, national regulatory agencies, patient organizations, health care 
providers, pharmaceutical industry, SMEs, academia, member states as interests 
differ between various stakeholders. Any future changes to the regulatory 
system should be made as robust as possible towards plausible national and

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international scenarios. Finally, establishing a robust baseline of transparency 
and accountability is a prerequisite for success. 
 
[I can‘t say whether it will become better if it will change, but I can 
definitely say that it must change if it shall come to a good end.]   
- 
Georg Lichtenberg, German scientist and philospher

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7 
Acknowledgements 
During this project, we have spoken to various people from different 
organisations. We would like to express our gratitude to all people who have 
shared their valuable insights with us. Our gratitude extends to the members of 
the Advisory Committee; dr. AP. Meijler (IGZ), dr. A.C. Kant (LAREB), dr. C.C. 
Gispen-de Wied  (MEB), dr. R. Bos (CCMO), mr. T.S Goldhoorn (VWS), dr. W.G. 
Goettsch (Zorginstituut Nederland). Finally, special thanks go to prof. H.G.M. 
Leufkens, drs. H.R. Hurts, dr. B.J. van Zwieten and drs. J.M.M. Hansen (experts) 
and R. van Spronsen (information specialist RIVM).

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8 
List of abbreviations 
ABPI 
Association of the British Pharmaceutical Industry 
ADR 
Adverse Drug Reactions 
AIDS 
Acquired Immunodeficiency Syndrome 
ALS 
Amyotrophic Lateral Sclerosis 
ATMP 
Advanced Therapy Medicinal Products 
CA 
Conditional Approval 
CAP 
Centrally Authorized Products 
CFH 
Medicinal Products Reimbursement Committee 
CHMP 
Committee for Human Medicinal Products 
CP 
Centralized Procedure 
CRO 
Contract Research Organizations 
CTMP 
Cell therapy medicinal products 
DHPC 
Direct Healthcare Professional Communication 
DP 
Decentralized Procedure 
EC 
European Commission 
ECs 
Exceptional Circumstances 
EDQM 
European Directorate for the Quality of Medicines 
EFPIA 
European Federation of Pharmaceutical Industries and Associates 
EMA 
European Medicines Agency 
EMEA 
European Agency for the Evaluation of Medicinal Products 
EPAR 
European public assessment report 
ERP 
External Reference Pricing 
EU 
European Union 
EUnetHTA 
European network of Health Technology Assessment 
HIV 
Human Immunodeficiency Virus 
HTA 
Health Technology Assessment 
GTMP 
Gene Therapy Medicinal Products 
GSK 
GlaxoSmithKline 
ICH 
International Conference on Harmonisation 
IMI 
Innovative Medicines Initiative 
LSE 
London School of Economics and Political Science 
MERC 
Medical Ethical Research Committees 
NCC 
Nordic Cochrane Centre 
OMCL 
PIL 
Official Medicines Control Laboratories 
Patient Information Leaflet 
PPP 
Public-Private Partnerships 
PRAC 
Pharmacovigilance Risk Assessment Committee  
PSUR 
Periodic Safety Update Reports 
RAND 
Research ANd Development 
RCT 
Randomized Controlled Trials 
SA 
Scientific Advice 
SAG 
Scientific Advisory Group 
SME 
Small and medium enterprises 
SPC 
Summary of Product Characteristics 
TiPharma 
Top Institute Pharma 
QALY 
Quality-adjusted life year 
WHO 
World Health Organization

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9 
Glossary 
Adaptive Licensing: Adaptive licensing is a prospectively planned, flexible 
approach to regulation of drugs and biologics. Through iterative phases of 
evidence gathering to reduce uncertainties followed by regulatory evaluation and 
license adaptation, Adaptive Licensing seeks to maximize the positive impact of 
new drugs on public health by balancing timely access for patients with the need 
to assess and to provide adequate evolving information on benefits and harms 
so that better-informed patient-care decisions can be made (32). 
 
Applicants: parties (e.g. pharmaceutical companies or academic groups) that 
intend to submit or have submitted a marketing authorization application. 
 
Benefit-Risk assessment: evaluation of benefits (favourable effects) and risks 
(unfavourable effects) of a medicinal product. 
 
Committee for Medicinal Products for Human Use (CHMP): committee of 
the European Medicines Agency responsible for conducting the initial assessment 
of medicines for which an EU-wide marketing authorization is sought. The CHMP 
is also responsible for several post-authorization and maintenance activities, 
including the assessment of any modifications or extensions (‘variations’) to an 
existing marketing authorization. 
 
Conditional approval: procedure to grant marketing authorization - even 
though comprehensive clinical data have not (yet) been provided - to (i) 
medicinal products for treatment, prevention or medical diagnosis of seriously 
debilitating or life-threatening diseases, or (ii) to medicinal products to be used 
in emergency situations or (iii) orphan medicinal products, on the basis of less 
complete data than is normally the case and subject to specific post-approval 
obligations. 
 
The following requirements are mandatory: 1. The Benefit/Risk balance 
of the product is positive; 2. It is likely that comprehensive clinical data will be 
provided; 3. Unmet medical needs will be fulfilled; 4. Benefit to public health of 
immediate availability outweighs risks. A Conditional Approval is valid for one 
year (renewable) and is subjected to specific obligations to complete ongoing 
studies, or to conduct new studies with a view to confirming the positive 
Benefit/Risk balance. 
 
Council of Europe: is an international organization promoting co-operation 
between all countries of Europe in the areas of legal standards, human rights, 
democratic development, the rule of law and cultural co-operation. It was 
founded in 1949. The best known bodies of the Council of Europe are the 
European Court of Human Rights and the European Pharmacopoeia Commission. 
Not to be mistaken with the European Council/Council of the European Union. 
 
European Medicines Agency (EMA): The European Union regulatory authority 
committed to the recommendation about marketing authorization of medicinal 
products. 
 
Exceptional Circumstances: Authorization under ‘Exceptional Circumstances’ 
can only be granted if the applicant is unable to provide comprehensive clinical 
data because of: 1.rarity of the disease; 2. present state of scientific knowledge; 
3. ethical constraints. There is an obligation to focus on safety studies. The

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approval is valid for 5 years (renewable), but there will be an annual re-
assessment of the benefit/risk balance by the CHMP. 
 
Food and Drug Administration (FDA): The United States regulatory authority 
committed to the recommendation about marketing approval of medicinal 
products. 
 
Health 
Technology 
Assessment 
(HTA) 
bodies: 
Health 
Technology 
Assessment bodies provide recommendations on medicinal products and other 
health interventions that can be paid for or reimbursed by the healthcare system 
in a particular Member State. Their recommendations are based on comparing 
the ‘relative effectiveness’ of medicines and taking into account their financial 
costs. 
 
Marketing authorization: the (first) approval of a medicinal product by a 
regulatory authority, leading to access to the market. 
 
Marketing authorization application: the submission of a dossier for 
marketing authorization.  
 
Medicinal products: Any substance or combination of substances presented for 
treating or preventing disease in human beings. Any substance or combination 
of substances which may be administered to human beings with a view to 
making a medical diagnosis or to restoring, correcting or modifying physiological 
functions in human beings is likewise considered a medicinal product. (Directive 
2001/83/EC). 
 
Orphan Drugs: Orphan medicinal products are intended for the diagnosis, 
prevention or treatment of life-threatening or very serious conditions that affect 
no more than 5 in 10,000 persons in the European Union. 
 
Pharmaceuticals: See medicinal products. 
 
Pharmacovigilance regulation: regulation aimed at the protection of public 
health in order to prevent, detect and assess adverse reactions to medicinal 
products for human use after they have been placed on the market. 
 
Regulatory authorities: authorities committed to the marketing authorization 
of medicines on a European or a national level; also called competent 
authorities or regulatory agencies. 
 
Regulatory system: the system that regulates the development, marketing 
authorization and market access of medicines. 
 
Scientific advice: the opportunity for applicants to discuss scientific and 
regulatory aspects of the marketing authorization application with a regulatory 
authority. 
 
Scientific guidelines: guidelines on the studies of a medicinal product to 
demonstrate a product’s quality, safety and efficacy.

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