United States General Accounting Office

GAO Report to the Chairman, Committee on

Labor and Human Resources,

U.S. Senate

April 1996 EUROPEAN UNION

DRUG APPROVAL

Overview of New

European Medicines

Evaluation Agency and

Approval Process

G O A

years

1921 - 1996

GAO/HEHS-96-71

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-261605 

April 5, 1996

The Honorable Nancy Landon Kassebaum

Chairman, Committee on Labor and

 Human Resources

United States Senate

Dear Madam Chairman:

The movement toward uniting individual European countries into a single

marketplace has made the European Union (EU) the largest

pharmaceutical market in the world.1

 With a population of about

370 million, the EU represents a consumer base that is one-third larger than

that of the United States. Moreover, the EU leads the world in the

consumption of pharmaceutical products, using $82.7 billion worth of

pharmaceutical products in 1992, while the United States used about

$54.8 billion.2

As part of its ongoing effort to establish a single European market for

pharmaceuticals, the EU recently modified its drug approval procedures

and created a new agency—the European Medicines Evaluation Agency

(EMEA)— to provide a faster and more efficient drug approval process that

would benefit consumers and industry.3

 Given the size of the EU market

and the recent regulatory changes, advocates of reforming the U.S. Food

and Drug Administration (FDA) have suggested that the new European

drug approval process may provide some alternative approaches for

improving the timeliness of FDA’s drug approvals.

To assist your Committee in considering various FDA reform proposals,

you asked that we (1) determine how the EU now reviews and approves

new drug applications (NDA)4

 and (2) explain why the EMEA was

established, how it operates, and how it is financed. Because this report

uses European terms that may not be familiar to U.S. readers, we have

defined these terms in a glossary at the end of this report.

1

The European Union, formerly referred to as the European Community, currently consists of 15

countries commonly referred to as Member States. The 15 Member States are Austria, Belgium,

Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,

Spain, Sweden, and the United Kingdom.

2

Eastern Research Group, Inc., Developments in International Pharmaceutical Regulation: Implications

for the United States (Lexington, Mass.: Eastern Research Group, Inc., Sept. 12, 1995), pp. 1-2.

3

The EMEA is also referred to as the European Agency for the Evaluation of Medicinal Products.

4

The EU refers to its NDAs as marketing authorization applications. However, for the purposes of

consistency, this report refers to both types of applications as NDAs.

Page 1 GAO/HEHS-96-71 European Drug Approval
B-261605 

To gather this information, we reviewed background documents,

legislation, and status reports on the EU drug approval process and

interviewed senior officials at the EMEA and the Commission of the

European Communities, which oversees the EMEA’s activities.5

 We also

interviewed representatives from two European-based pharmaceutical

companies and two pharmaceutical trade associations, as well as several

academics knowledgeable in European pharmaceutical policies. We

conducted this study between April 1995 and March 1996 in accordance

with generally accepted government auditing standards.

Results in Brief Previous EU regulatory efforts to allow pharmaceutical companies to

market their products throughout Europe were unsuccessful because the

Commission did not require all Member States to accept the drug approval

decisions made by the Commission or other Member States. As a result,

the EU enacted legislation in 1993 that created a new approval process. The

legislation also made Commission decisions binding on all Member States

for both marketing biotechnology and other high-technology products and

resolving disputes among Member States concerning drug approval

decisions.

The new drug approval process established two new procedures for

achieving EU-wide drug approvals—a centralized procedure and a

decentralized procedure. Pharmaceutical companies must now use the

centralized procedure to obtain approval for biotechnology products.6

Companies may choose either the centralized or decentralized procedure

for other high-technology and innovative products.7

At the same time that it established new approval procedures, the

Commission created the EMEA to improve the timeliness of new drug

approvals and to ensure that biotechnology and other high-technology

pharmaceutical products meet the highest standards of safety, efficacy,

and quality.

5

The Commission of the European Communities is the central regulatory body in the EU that drafts

legislation in the form of directives and regulations designed to foster a single market in Europe. The

Commission also enforces these rules.

6

According to Commission regulations, biotechnology products include those derived from

recombinant DNA technology, controlled expression of genes coding for biologically active proteins in

prokaryotes and eukaryotes, and monoclonal antibody methods.

7

According to Commission regulations, other high-technology and innovative products include new

delivery systems, new indications, new manufacturing processes that represent significant

innovations, and new active substances not previously approved for human use in the EU.

Page 2 GAO/HEHS-96-71 European Drug Approval
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The new EU drug approval process and the creation of the EMEA represent

an important step toward creating a single European marketplace for

prescription drugs. However, because the new system has been

operational for only a year, it is too soon to determine whether it will

enable pharmaceutical companies to more quickly market their products

throughout Europe.

Background Since its establishment by the Treaty of Rome in 1957, the EU has tried to

create a single market among its Member States to facilitate the free

movement of goods, services, capital, and people. As part of this effort, the

Commission has attempted to consolidate and harmonize many of the

pharmaceutical regulations that have existed among the Member States.

Specifically, the Commission established two methods, called the

multistate and concertation procedures, allowing pharmaceutical products

to be marketed in all the Member States if approved by one Member State.

The Commission believed that these methods would promote public

health, by making drugs available to patients in a more timely manner, and

advance industry interests, by stimulating investment in European

research and development activities. However, these initial efforts were

not successful because the Commission did not require Member States to

accept drug approval decisions made by the Commission or other Member

States.

In 1975, the Commission established a multistate procedure to allow a

pharmaceutical company to market a product in all Member States if just

one of them approved the product application—a procedure referred to as

“mutual recognition.” The Commission also created the Committee for

Proprietary Medicinal Products (CPMP)8

 to coordinate the Member States’

assessments of pharmaceutical products and arbitrate disputes among the

Member States regarding the marketing of pharmaceutical products.

However, the multistate procedure was unsuccessful in obtaining mutual

recognition of drug approval decisions because at least one Member State

raised an objection to every multistate application. Moreover, the CPMP

opinions were not legally binding and, as a result, did not resolve disputes

among the Member States.

In 1987, the Commission established another process—the concertation

procedure—designed to foster a single market. Under this procedure, the

CPMP reviewed all biotechnology and other high-technology

pharmaceutical products for approval across the EU. The EU decided to

8

The CPMP was composed of representatives from each Member State’s national marketing authority.

Page 3 GAO/HEHS-96-71 European Drug Approval
B-261605 

centralize the review process for biotechnology and other high-technology

products because many of the Member States did not have the scientific

expertise needed to review such products. However, only 5 of 30 product

applications reviewed under the concertation procedure and approved by

the CPMP were authorized for marketing by all the Member States.

Thus, neither the multistate nor concertation procedure achieved the goal

of free circulation of pharmaceuticals across all EU Member States because

these procedures did not compel the Member States to accept a majority

opinion of the CPMP. While the Member States professed allegiance to the

principles of mutual recognition, their national regulatory authorities

continued to review product applications and render their own opinions

before allowing the products to be marketed in their country. Because the

CPMP opinions were not binding, Member States issued different decisions

on drug approvals, which prevented pharmaceutical companies from

obtaining EU-wide approval for their products.

New EU System Uses

Two Drug Approval

Procedures

Under the new EU drug approval process, pharmaceutical companies may

use either a centralized or a decentralized procedure to obtain approval to

market their pharmaceutical products in more than one Member State

using one application.9

 These procedures modify the former multistate and

concertation procedures by (1) defining specific review steps and

establishing time limits for review processes and (2) requiring Member

States to accept as binding, decisions that are issued by the Commission.

In addition, the CPMP, which was formally an advisory arm of the

Commission, now serves as one of the EMEA’s scientific committees.10 The

CPMP, composed of two representatives from each Member State, renders

opinions about the safety, efficacy, and quality of human pharmaceutical

products that are binding on all the Member States.

Although the new EU drug approval process changes the method for

obtaining a marketing authorization, it does not affect drug pricing and

reimbursement policies, which remain the responsibility of each Member

State. Thus, in order to actually market a pharmaceutical product

approved under the new process, manufacturers must still negotiate a

product’s price with individual Member States.

9

Until 1998, pharmaceutical companies have a third option, called the national route, which allows

them to seek separate national approvals to market their products in selected Member State(s). This

report focuses only on the EU’s two primary procedures for drug approvals.

10The EMEA’s other scientific committee—the Committee for Veterinary Medicinal Products

(CVMP)—oversees the scientific evaluation of pharmaceutical products for veterinary use. This report

focuses only on the process for reviewing and approving new drugs for human use.

Page 4 GAO/HEHS-96-71 European Drug Approval
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The Centralized Procedure Pharmaceutical companies are now required to use the centralized

procedure for biotechnology products and have the option to use it for

other innovative products. Under the centralized procedure, Commission

approval of a new drug application allows a pharmaceutical company to

market its pharmaceutical product in all 15 Member States without having

to obtain separate approvals from each Member State.

Page 5 GAO/HEHS-96-71 European Drug Approval
B-261605 

Figure 1: EU Centralized Drug Approval Procedure

Biotech

Products

High-Tech and

Innovative

Products

(Mandatory) (Optional)

Application to the EMEA

Draft of the Measures to be

Taken Submitted to the Standing Committee

Within 30 Days, Distribution to the Commission,

the Member States, and the Applicant of the

• Opinion

• Assessment Report

• Summary of Product Characteristics

• Labeling and Package Leaflet

30 Days

28 Days

Draft Decision of the Commission

Member State(s)

Raise Important New

Scientific or Technical

Questions?

Refer Back to CPMP for

Reconsideration and

New Opinion Time Dependent

on Urgency

No Qualified

Majority for the Draft

Measures or

No Opinion

Qualified

Majority for the

Draft Measures

Qualified

Majority for the

Draft Measures

Council of

Ministers Renders

Decision

Simple Majority

Against the

Draft Measures

Publication in the Official Journal of the EC

Measures

Taken by the

Commission

90 Days

Y

N

Favorable

Opinion Given

by the

CPMP?

Appeal

by the

Applicant

60 Days

60 Days

Second

Opinion

• EMEA Validates Application

• CPMP Selects Two Rapporteurs to

Independently Assess Application

• CPMP Has 210 Days From Receipt of

Application to Render Its Decision but Time

Limit May Be Suspended if Rapporteurs

Request Additional Information From

Applicant

• Rapporteurs Present Their Evaluations to

CPMP

Y N

Page 6 GAO/HEHS-96-71 European Drug Approval
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As shown in figure 1, once the EMEA ensures that the application is

complete, the CPMP selects two of its members—known as rapporteurs—to

perform independent scientific evaluations of the safety, efficacy, and

quality of an application.11 The rapporteurs can draw on two sources of

EU-wide scientific expertise in forming their review teams—experts from

the national marketing authorities of Member States and any of the 1,200

outside experts located at universities and institutes throughout Europe.12

Once the rapporteurs have completed their respective evaluations, they

present the results to the CPMP, which then renders an opinion. The CPMP

must render its opinion within 210 days after the application was

submitted.13,14 If a CPMP opinion is favorable, it is transmitted to the

applicant, all Member States, and the Commission. The Commission uses

the CPMP’s opinion to prepare a draft decision. If the Member States raise

important new scientific or technical questions, the Commission may refer

the case back to the CPMP for further consideration. At this point in the

approval process, Member States may object to the decision only if they

believe the product poses a significant risk to public health in their

country. If no objections are raised by the Member States, the

Commission’s draft decision is submitted to its Standing Committee on

Medicinal Products for Human Use. The Standing Committee either agrees

with the Commission’s decision or, if there is no qualified majority,15 refers

the decision to the Council of Ministers for consideration.16 Upon request,

the EMEA will inform any concerned parties about the final decision, and

the public is notified when a marketing authorization is granted through

publication in the Official Journal of the European Communities.17

11The CPMP may also arrange tests to verify a manufacturer’s control methods described in the

application or inspect the manufacturing site.

12As of December 1995, the national marketing authorities were estimated to have approximately 1,250

staff available for the review of human pharmaceutical products.

13The clock can be temporarily stopped if the reviewers request additional information from the

applicant.

14In cases in which the CPMP cannot reach consensus, the opinion becomes the majority view;

divergent opinions may be recorded in the formal record of the opinion.

15The Standing Committee includes representatives from all 15 Member States. The number of votes

each Member State has depends on its population. Thus, the Member States with larger populations,

such as Germany, France, Italy, and the United Kingdom, have more votes than the less populated

Member States and therefore have greater influence over the decisions about new drug applications.

The Standing Committee currently has a total of 87 votes, 62 of which constitute a qualified majority.

16The Council of Ministers is composed of representatives from all the Member States. The Council

analyzes Commission proposals and enacts EU-wide legislation.

17A marketing authorization license is valid for 5 years and renewable for 5-year periods after

consideration by the EMEA.

Page 7 GAO/HEHS-96-71 European Drug Approval
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If, on the other hand, the CPMP renders an unfavorable opinion, the

applicant may appeal the decision to the EMEA. During the appeal process,

the CPMP may obtain the views of additional experts who were not involved

in the first consideration of the application. The CPMP’s final opinion is

processed in essentially the same manner as a favorable opinion; that is,

the final decision is made by the Commission or Council of Ministers. The

centralized procedure is expected to take between 298 and 448 days

depending on whether the applicant appeals an unfavorable CPMP opinion,

the Member States raise important new scientific or technical questions,

or the Standing Committee cannot reach consensus on a Commission draft

decision and refers the matter to the Council of Ministers.

According to an EMEA official, as of December 1995, almost 1 year after the

EMEA had become operational, pharmaceutical companies had filed or

intended to file 30 new applications under the centralized procedure, and

20 had started the evaluation process. In addition, the EMEA had received

18 applications submitted under the former concertation process. The

CPMP has given positive opinions on 8 of these 18 applications, and the

Commission has granted EU marketing authorizations for three of those

opinions.

The Decentralized

Procedure

For optional innovative products, pharmaceutical companies can either

use the EMEA’s centralized procedure or follow a decentralized procedure

to obtain mutual recognition of a new drug by the EU Member States.

Under the decentralized procedure (see fig. 2) an applicant can go directly

to a national marketing authority to obtain permission to market its

product in that Member State and then seek to have other Member States

accept the marketing approval of the first Member State.

Page 8 GAO/HEHS-96-71 European Drug Approval
B-261605 

Figure 2: EU Decentralized Drug Approval Procedure

Within 30 Days, Distribution to the

Commission, the Member States, and the

Applicant of the

• Opinion

• Assessment Report

• Assessment Report

• Summary of Product Characteristics

• Detailed Presentation of

Objections

Within 90 Days

Within 90 Days

210 Days

Application to First Member State

First Marketing Authorization

CPMP Arbitration

Application for Mutual Recognition (With

Identical Documentation, Assessment, and

Summary of Product Characteristics)

Minor or No Objections From

Other Member State(s)

Serious Objections From Other

Member State(s)

30 Days

60 Days

90 Days

Draft Decision of the Commission

Appeal by the Applicant

Second Opinion

60 Days

Y

N

Favorable

Opinion Given

by the

CPMP?

Draft of the Measures to be

Taken Submitted to the Standing Committee

28 Days

Member State(s)

Raise Important New

Scientific or Technical

Questions?

Refer Back to CPMP for

Reconsideration and

New Opinion Time Dependent

on Urgency

No Qualified

Majority for the Draft

Measures or

No Opinion

Qualified

Majority for the

Draft Measures

Qualified

Majority for the

Draft Measures

Council of

Ministers Renders

Decision

Simple Majority

Against the

Draft Measures

Publication in the Official Journal of the EC

Measures

Taken by the

Commission

90 Days

Y N

Page 9 GAO/HEHS-96-71 European Drug Approval
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Once an application has been submitted, a Member State’s national

marketing authority has 210 days to decide whether or not to grant an

authorization to market the product in the Member State.18 If a Member

State grants a marketing authorization, the applicant may seek to have one

or more other Member State(s) where the applicant wishes to market its

product recognize the authorization of the first Member State. Within 90

days of receiving the application, the other Member State(s) must decide

whether to recognize the approval.

If the other Member State(s) recognize the marketing authorization of the

first Member State, an applicant may market its product in each Member

State. If the other Member State(s) raise objections to mutual recognition

that cannot be resolved within 90 days, the case is referred to the CPMP for

arbitration. Once the CPMP gets involved in the process, the steps are the

same as those followed for the centralized procedure. CPMP opinions under

the decentralized procedure, once accepted by the Commission, are

binding on all the Member States.

The decentralized approval procedure is expected to take between 300

and 686 days depending on whether other Member States object to the

marketing authorization granted by the first Member State, objections lead

to a formal arbitration by the CPMP, the applicant appeals an unfavorable

opinion, the Member States raise important new scientific or technical

questions, or the Standing Committee cannot reach consensus on a

Commission draft decision and refers the matter to the Council of

Ministers. According to an EMEA official, as of December 1995, the EMEA

had not been involved in any arbitration proceedings relating to disputes

among the Member States under the decentralized procedure.

Industry Concerns Pharmaceutical industry officials acknowledge that filing NDAs under the

centralized procedure will allow a company to market its product(s) in all

Member States within a relatively short period of time at approximately

60 percent of the cost of obtaining 15 individual marketing authorizations.

However, some officials said they are hesitant to use the centralized

procedure in the short term to obtain approval for nonbiotechnology

pharmaceutical products for several reasons.

18Member States that receive an application for licensing a product that is already being assessed in

another Member State may proceed with an independent assessment or suspend their assessment until

the other Member State has decided to grant or refuse the license. If a Member State suspends its

assessment, it must so inform the applicant and the other Member State.

Page 10 GAO/HEHS-96-71 European Drug Approval
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First, under the centralized procedure, a company has less influence over

which rapporteurs will review its application than it does under the

decentralized procedure. While a company can request particular

rapporteurs, the CPMP will ultimately make the selection.19 According to

industry officials, firms want their preferred rapporteurs because of the

significant time and resources they have invested in establishing

relationships with certain national marketing authorities, particularly in

countries with large pharmaceutical markets. Under the centralized

procedure, drug sponsors are concerned that the EMEA may assign an

innovative product to a less experienced rapporteur who cannot

adequately review or convincingly support the product before the full

CPMP.

Regulatory and industry officials believe that this concern will be

somewhat mitigated by the new procedures’ use of two rapporteurs. They

expect that using two rapporteurs, rather than the one used under earlier

procedures, will improve the quality of the drug approval process in

several ways. First, by working independently, the two rapporteurs—and

the teams they assemble—should uncover most concerns that might be

raised at a meeting of the full CPMP. Second, being a rapporteur for an NDA

carries great prestige, and the CPMP and Member States will place pressure

on the review teams to prepare a thorough evaluation. Third, rapporteurs

will have access to the scientific expertise available across the EU.

Moreover, according to an EMEA official, the CPMP does consider drug

sponsor preferences in its selection of rapporteurs. In 1995, the CPMP was

able to give drug sponsors one of their rapporteur choices in every case.

However, the CPMP recognizes that this may not always be possible in the

future. Under the centralized procedure, in 1995, representatives from all

of the Member States except Greece were chosen as rapporteurs or

corapporteurs for at least two applications. The United Kingdom was

selected as a rapporteur or corapporteur most often (nine times) with

members from France and Germany involved in eight and seven

applications, respectively.

A second concern voiced by industry and regulatory officials is that the

new procedures will function as intended only if members of the CPMP and

the Standing Committee, who are appointed by their Member States on the

basis of their scientific or regulatory expertise, are able to look beyond

19According to industry officials, companies prefer rapporteurs who are willing to interact with them

throughout the drug development and approval processes, are knowledgeable about a firm’s clinical

trial procedures and products, have an open review process, share a common language, and have a

proven track record in approving pharmaceutical products quickly.

Page 11 GAO/HEHS-96-71 European Drug Approval
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their national identity to represent EU-wide interests. The members of

these committees have to accept an EU-based approval process and

EU-based decisions in order for the new procedures to successfully

expedite the drug approval process. According to a senior EMEA official,

the EMEA is doing all that it can to encourage the CPMP members to act in

the best interests of the EU, regardless of their national identities.

However, the EMEA official acknowledged that it will take time before the

members feel comfortable with one another and the new procedures.

Finally, pharmaceutical industry officials told us that, in the short term,

industry will monitor progress with the centralized procedure and may

delay using it for nonbiotechnology product approvals until the EMEA can

establish a track record for drug approvals. Industry likes the multiple

approval options for pharmaceutical products because they create

competition among the national marketing authorities and the EMEA,

encouraging them to be more efficient. Further, these options allow firms

to pursue different marketing strategies for their various pharmaceutical

products.

During the EMEA’s first year of operation, however, there were indications

that industry was using the centralized procedure for optional

nonbiotechnology products. According to EMEA status reports, two-thirds

of the 30 new centralized applications that industry filed or intended to file

could have been filed using the decentralized procedure. Nevertheless,

industry officials contend that future prospects for using the centralized

procedure are dependent on the EMEA’s success in expediting the drug

approval process.

EMEA Tasks,

Structure, Staffing,

and Financing

The EMEA was created by the Commission in 1993 to administer the new

centralized approval procedure, which is mandatory for biotechnology and

optional for other high-technology and innovative pharmaceutical

products.20 The EMEA also arbitrates disputes under the new decentralized

procedure in order to achieve mutual recognition of Member State

approvals for most other medicines.21 The EMEA is funded by the

Commission and industry application fees and has a small permanent staff

and two scientific committees that draw upon EU-wide scientific expertise.

20The EMEA did not become operational until February 1, 1995, after administrative and logistical

issues had been resolved.

21The EMEA’s CPMP also reviews products of EU-wide interest, such as treatments for AIDS, and

products identified through pharmacovigilance alerts.

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EMEA Tasks The EMEA provides administrative, technical, and scientific support for

both drug approval decisions under the centralized procedure and

disputed decisions under the decentralized procedure. Under the

centralized procedure, the EMEA is responsible for coordinating the

evaluation of the safety, efficacy, and quality of human pharmaceutical

products that will be marketed throughout the EU. Through its scientific

committee, the CPMP, the EMEA also evaluates assessment reports,

summaries of product characteristics, labels, and package inserts for

pharmaceutical products. Finally, the EMEA provides advice to drug

sponsors on issues relating to the conduct of tests and trials necessary to

demonstrate the safety, efficacy, and quality of pharmaceutical products.

In 1995, the CPMP received 20 requests for scientific advice from

pharmaceutical companies. According to EMEA and industry officials, this

interaction between the industry and the EMEA is beneficial to the

European pharmaceutical industry because it increases the industry’s

interaction with the European reviewers of its product applications.

In addition to coordinating the assessment of new drug applications and

resolving Member State disputes, the EMEA is responsible for monitoring

adverse drug reactions, an activity known as pharmacovigilance.22 The

EMEA also ensures that the public receives timely and accurate information

about the safe and effective use of these products. While national

pharmacovigilance systems have existed for some time in the EU, the

requirements and structure of those systems have varied considerably.

According to a recent report, these differences have made compliance

with all the regulatory requirements difficult for multinational

pharmaceutical companies, thereby endangering patients who may not

have received standard safety information about a particular product.23

The new EU regulations are intended to strengthen and coordinate existing

pharmacovigilance systems. As part of the new system, the EMEA is

responsible for creating a data-processing network for the rapid

transmission of information among the national marketing authorities in

the event of a pharmacovigilance alert.24 The EMEA is also responsible for

22Pharmacovigilance involves collecting information on adverse drug reactions at pre- and

postmarketing stages, scientifically evaluating these reports, and taking whatever regulatory actions

may be appropriate following the analysis of the reports.

23Developments in International Pharmaceutical Regulation: Implications for the United States, pp. 5-1,

5-2.

24In 1995, the Commission requested bids on a $2 million feasibility study to determine how to

establish an information network on adverse drug reactions and what resources would be necessary to

fund such a network. The European Community Joint Research Center in Ispra, Italy, was selected to

conduct the study.

Page 13 GAO/HEHS-96-71 European Drug Approval
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formulating, as necessary, opinions on measures to ensure the safe and

effective use of such pharmaceutical products.

The EMEA also performs several other functions. It coordinates

Commission and Member States’ responsibilities for verifying industry

compliance with good manufacturing, laboratory, and clinical practices. It

also provides technical assistance for maintaining a database on

pharmaceutical products for public use and assists the Commission and

Member States in providing information about pharmaceutical products to

the public. In addition, the EMEA is in the process of developing ways to

electronically transmit data between its administrative arm, the

secretariat, and the national marketing authorities to track the flow of

information during the review process.25 The EMEA also translates all

documents into the 11 languages used in the Member States. Finally, the

EMEA promotes technical cooperation among the Commission, Member

States, international organizations, and other countries regarding the

evaluation of pharmaceutical products.

EMEA Structure and

Staffing

The EMEA is composed of a Management Board, two scientific committees,

and a permanent secretariat. The Management Board is the EMEA’s

governing body and is responsible for budgetary and resource matters. It

consists of two representatives each from the European Commission, the

European Parliament, and the Member States, for a total of 34 members.

The scientific committees, the CPMP and the CVMP, each consist of 30

members—two from each Member State—who are primarily responsible

for acting as rapporteurs to coordinate the review of NDAs. The

rapporteurs have access to the staffs of national marketing authorities in

other Member States, as well as to any of the 1,200 outside experts on the

EMEA’s European experts list.

By the end of 1995, the permanent secretariat consisted of about 67 staff

but was expected to grow to 250 staff by the year 2000. The secretariat is

charged with providing general administrative and logistical support to the

scientific committees, as well as administering the day-to-day activities of

the EMEA. The permanent secretariat consists of four units:

25According to an EMEA official, a prototype Automated Tracking System is undergoing testing at the

EMEA. The information from the system will be available only to those inside the evaluation and

decision-making process.

Page 14 GAO/HEHS-96-71 European Drug Approval
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• the Administration and Logistical Unit, which is responsible for personnel,

administration, budget, accounting, and organization of and interpretation

for conferences and meetings;

• the Human Medicines Evaluation Unit, whose two sections support the

centralized and decentralized procedures for approval of pharmaceutical

products for human use;

• the Veterinary Medicines Evaluation Unit, which supports centralized and

decentralized procedures for approval of pharmaceutical products for

veterinary use and monitors the maximum residue levels in foodstuffs of

animal origin; and

• the Technical Coordination Unit, which is responsible for inspection,

pharmacovigilance, and technical documentation activities.

EMEA Financing Initially, the EMEA was expected to be financed equally by industry

application fees and Commission funds. However, the EMEA reported that

about one-third of its funding for 1995 actually came from industry fees,

while about two-thirds came from the Commission. The EMEA’s budget for

1995 was approximately $17 million.26

The application fee for authorizing a pharmaceutical product for human

use under the centralized procedure ranges from about $165,200 to

approximately $236,000, depending on how many different product

strengths and forms, such as tablet or liquid, are being considered. The

EMEA receives half of the fees to support its operations, and the other half

are split between the two review teams formed by the designated

rapporteurs. Other fees, which are detailed in Commission regulations, are

charged to process application variations, extensions, and renewals;

inspect manufacturers’ facilities; and arbitrate Member State disputes.

According to industry and regulatory officials, the Member States differ in

how they would like to see the EMEA funded. Some of the Member States,

particularly the United Kingdom, would like the EMEA to be fully financed

by industry fees. Other Member States have resisted a total fee-based

financing scheme because they view industry support of a public health

agency as a conflict of interest. Consequently, they want the Commission

to maintain oversight responsibility of the EMEA through its funding

mechanism. The Member States and Commission agree that the EMEA’s

financing should be reviewed in about 3 years, with the objective of

increasing the proportion of the budget financed by the industry. However,

according to a senior Commission official, the Commission is likely to

26Throughout this section, we use an exchange rate of $1.18 U.S. dollars per European Currency Unit.

Page 15 GAO/HEHS-96-71 European Drug Approval
B-261605 

retain its oversight control by funding at least 20 percent of the EMEA

budget in the future.

Agency Comments We obtained comments on a draft of this report from the EMEA, FDA,

representatives of the European-based pharmaceutical industry, and

experts in international drug regulatory policies. In general, they found the

report to be accurate and complete and provided specific technical

comments, which we incorporated into the report where appropriate.

This report was prepared by John C. Hansen, Assistant Director;

Thomas J. Laetz; and Mary W. Freeman. Please call Mr. Hansen at

(202) 512-7105 if you or your staff have any questions about this report.

Sincerely yours,

Sarah F. Jaggar

Director, Heath Financing and

 Public Health Issues

Page 16 GAO/HEHS-96-71 European Drug Approval
Page 17 GAO/HEHS-96-71 European Drug Approval
Contents

Letter 1

Glossary 20

Figures Figure 1: EU Centralized Drug Approval Procedure 6

Figure 2: EU Decentralized Drug Approval Procedure 9

Abbreviations

CPMP Committee for Proprietary Medicinal Products

CVMP Committee for Veterinary Medicinal Products

EMEA European Medicines Evaluation Agency

EU European Union

FDA Food and Drug Administration

NDA new drug application

Page 18 GAO/HEHS-96-71 European Drug Approval
Page 19 GAO/HEHS-96-71 European Drug Approval
Glossary

Commission of the

European Communities

The central regulatory body in the EU that (1) drafts legislation in the form

of directives and regulations designed to foster a single market in Europe

and (2) enforces EU rules. The Commission also prepares draft decisions,

on the basis of CPMP opinions, on the licensing of pharmaceutical products.

Committee for Proprietary

Medicinal Products

(CPMP)

Committee within the EMEA, composed of two representatives from each

Member State, that renders scientific opinions about the safety, efficacy,

and quality of new pharmaceutical products. The CPMP also has a role in

pharmacovigilance issues, developing guidelines, giving scientific advice

to companies developing pharmaceutical products, and providing quality

information to health professionals and patients.

Council of Ministers European Council composed of representatives from all the Member

States. The Council analyzes Commission proposals and enacts EU-wide

legislation.

European Medicines

Evaluation Agency

(EMEA)

Central agency within the EU that supports the CPMP in its scientific

evaluations of pharmaceutical products. The EMEA also verifies compliance

with EU good clinical practices and good manufacturing practices and

provides technical support to the Member States’ national marketing

authorities.

European Union (EU) Formerly known as the European Community, the EU was established by

treaty to create a single market. The EU currently consists of 15 countries

commonly referred to as Member States. The 15 Member States are

Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland,

Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the

United Kingdom.

National Marketing

Authority

The regulatory authority in each Member State that is responsible for the

approval of new human and veterinary pharmaceutical products in that

Member State. National marketing authorities also inspect manufacturing

facilities, monitor quality control, and perform pharmacovigilance

activities. The size and structure of each national marketing authority vary

among Member States.

Page 20 GAO/HEHS-96-71 European Drug Approval
Glossary

Pharmacovigilance The process of collecting information on adverse drug reactions at the preand postmarketing stages, scientifically evaluating these adverse drug

reaction reports, and making the regulatory decisions that result from this

analysis.

Rapporteur A CPMP member selected to lead the scientific evaluation of a new drug

application and discuss its merits and shortcomings before the CPMP.

Standing Committee on

Medicinal Products for

Human Use

Committee within the Commission, comprising representatives from all 15

Member States, that is responsible for approving draft licensing decisions

for pharmaceutical products on the basis of the Commission’s draft

decisions.

Summary of Product

Characteristics

The EU’s version of the full prescribing information for a product that is

supplied to physicians separately from the product.

(108235) Page 21 GAO/HEHS-96-71 European Drug Approval
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