What you need to know about the status of the proposed EMA fees regulation
The European Commission has proposed a regulation to revise the fees regulation governing the cost of compensating the European Medicines Agency (EMA) for its regulatory activities, with the aim of streamlining the fee structure and increasing fees in line with the cost of services and inflation. The still-pending agreement seems likely to soon be adopted, which would trigger an application date of January 1, 2025.
Regulatory Background on EMA fees
- Since it became operational in 1995 as the European Medicines Evaluation Agency, the EMA has depended on fees. The adoption of a “fees payable” regulation, Council Regulation (EC) No 297/95, permitted (and continues to permit) the regulator to assess fees for many of the services it provides to medicines developers. The 1995 regulation contains a list of EMA’s activities and services, as well as the corresponding fees that EMA may charge, along with permitted fee reductions.
- There are other fee-related regulations as well. Regulation (EU) No 658/2014 permits EMA To collect fees for pharmacovigilance activities such as periodic safety update reports and post-authorization safety studies. Finally, a third regulation, Regulation (EC) No 2049/2005, provides for reduced fees for small and medium-sized businesses (SMEs).
- Fees are used to offset costs incurred by the EMA and national competent authorities, which assist the EMA in assessments. The 1995 regulation on fees recognizes 23 different basic procedural fees, according to a European Commission working document assembled as part of an evaluation of EMA’s fee system. Services incurring fees include marketing authorization applications, variations, scientific advice, and inspections. Fees supplemental to the basic fees can be collected for authorization of additional strengths and pharmaceutical forms. However, fees collected for pharmacovigilance activities should only cover EMA’s “horizontal tasks” (e.g., literature monitoring), since national regulators charge their own fees.
- The regulation on fees has been amended twice, and fees are adjusted for inflation every year. Amendments in 1999 and 2005 aimed to ensure that EMA’s costs for the services it provides were adequately covered. New tasks and amendments to existing tasks through the adoption of the 2004 Founding Regulation for the European Medicines Agency (EMA) increased fee amounts as well. Fees increase annually to adjust for inflation, with the last adjustment having been published in April 2022. The fee changes, introduced on April 1, 2022, increased the fee level by 0.3% for 2020 and 5.3% for 2021. [See AgencyIQ’s analysis of the fees explanatory note correction.]
EMA’s fee structure has been subject to recent debate and changes
- First, a quick background: An evaluation of the EMA’s user fee system conducted in 2019 by the European Commission identified four main problems: First, some fees were misaligned with the underlying activity cost; Second, national competent authorities’ remunerations for their regulatory activities were misaligned with some underlying costs; Third, the fee system was not perceived to be flexible enough to adjust to innovation; and Fourth, the fee system was identified as being too complex.
- “The problems are a challenge to the financial sustainability of the EMA going forward,” according to the Commission’s impact assessment. Drivers for the issues include fees and remuneration not being fully cost-based and fees not necessarily being equitably divided between EMA and national authorities (e.g., SME fee reductions). In addition, EMA lacked any ability to adjust its fees based on new responsibilities.
- The European Commission released a proposal to update EMA’s regulation on December 11, 2022. The proposed regulation would repeal the current fees regulations, including Regulation (EC) No 297/95 and the regulation for fees associated with pharmacovigilance activities, Regulation (EC) No 658/2014. It would also be consistent with existing regulations and their respective exemptions, including those established by the SME regulation (Commission Regulation (EC) No 2049/2005), the pediatric regulation (Regulation (EC) No 1901/2006), the orphan drug regulation (Regulation (EC) No 141/2000) and advanced therapies regulation (Regulation (EC) No 1394/2007). [See AgencyIQ’s analysis of the fees proposal.]
- A Council Presidency Steering Note explained that the Presidency had identified two issues from the examination of the user fee proposal that had been conducted by the Working Party on Pharmaceuticals and Medical Devices. These issues and the proposed fixes were subsequently discussed in the Committee for the Employment, Social Policy, Health and Consumer Affairs (EPSCO) in March 2023: [See AgencyIQ’s analysis of the European Council discussion.]
- The first issue: The working party saw the proposed fees and remuneration to National Competent Authorities (NCAs) as insufficient to cover the NCA’s cost for the services they provide. To fix this, “many delegations” reportedly favored a “targeted approach” for adjusting fees, or at least adjusting them to better account for inflation. Fees targeted for adjustment include those for scientific advice, assessment of generics, Type II variations, referrals, periodic safety reports, and inspections. A new fee and remuneration would be required for Pharmacovigilance Risk Assessment Committee (PRAC) rapporteurship. These procedures were of greatest concern since they can be lengthy and may vary on a case-by-case basis.
- The second issue: Flexibility in adjusting fees should ensure that NCAs, the EMA’s Management Board and the EC play equal roles. Member States and the Management Board should be involved in the approval of a “special report” implemented by Article 10(6) of the proposed regulation. The EMA’s Management Board may request that EMA prepare the report, and could then approve it. Secondly, the Management Board would need to approve “changes to the description of activities that qualify for the operational work of the Agency.”
What has happened to the proposal since?
- An updated version of the proposed fees legislation implements the suggested revisions. The Council’s document, 9674/1/23 Rev 1, implements the targeted approach to adjusting fees and providing additional flexibility. Additionally, further discussions by the Working Party on Pharmaceuticals and Medical Devices and the Permanent Representative Committees led to minor small adjustments.
- The council implemented a two-step inflation on some fees and a targeted adjustment for seven procedures: The revised document notes that a 13% increase based on inflation rates for 2021 and 2022 has been applied to all fees. Additionally, the remuneration for NCAs has been increased an additional 7%, for a 20% boost in NCA fees. The overall fee chargeable has been adjusted to take this into account. The procedures receiving a targeted adjustment include: Scientific advice, generics, Type II variations, referrals, periodic safety assessment reports, inspections and Pharmacovigilance Risk Assessment Committee (PRAC) rapporteurship. The text for the agreed general approach was published on June 15, 2023. [See AgencyIQ’s analysis of the EPSCO discussion for details on updates.]
- The European Commission published an inflation adjustment to the current regulation on pharmacovigilance fees as a proposed delegated regulation on July 3, 2023. Article 15(6) of Regulation (EC) No 658/2014 enables the commission to adopt delegated acts to adjust fees based on inflation monitored over time. The delegated act proposes a 10.4% inflation adjustment across the fees EMA collects. Fees last adjusted in 2022 will be adjusted to account for this inflation. For example, the fee for the assessment of periodic safety update report will increase from 21.940 Euros to 24.220 Euros after entry into force. [See AgencyIQ’s analysis of the fees increase.]
- The European Council developed a working document that compares the European Commission text with proposed amendments on September 6, 2023. The table lists the European Commission text with the amendment voted on by the Parliament on July 12, 2023. It also lists the text agreed by the and he Council on June 13, 2023. The last column lists the tentatively agreed text, compromise proposals and comments. However, the text as published doesn’t contain any agreed text. Council adjustments seem more copious than amendments suggested by the Parliament.
- A political agreement on the fees regulation between the European Parliament and Council was announced on September 25, 2023. The agreement was subsequently subject to formal review and approval by the two legislative bodies.
- Subsequently, the European Council formally “endorsed the compromise text with a view to agreement.” The Permanent Representatives Committee approved the text during its meeting on October 11, 2023. The council sent a letter to the Chair of the Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI) noting the formal approval of the compromise text during informal negotiations between the three institutions (i.e., European Commission, European Parliament and European Council). If further states, that if the European Parliament adopts the text as provided in the Annex to the letter during the first reading, then the council would approve the parliament’s position which would mean the act would be adopted as provided in the letter.
- ENVI voted to adopt amendments at its October 24, 2023 meeting. The committee voted on and supported the final agreement. The parliament amendments, report and the letter from the council were among the meeting documents.
What is the current status and the remaining steps?
- The Commission Delegated Regulation (EU) 2023/1766 on EMA fees for pharmacovigilance activities became applicable on October 4, 2023. The adopted text was published in the Official Journal of the European Union on September 14, 2023.
- The EMA fees regulation will become applicable on January 1, 2025, if the European Parliament’s adopts the agreed text at the first reading. Should the text be accepted by the parliament at the first reading, then the act will be fully adopted, but would still need to be published in the Official Journal of the European Union. The regulation would enter into force the day after that publication and apply from January 1, 2025.
- The reading of the EMA fees regulation is currently not on the agenda of parliament meetings for November. There are two plenary meetings: November 8 – 9 and November 20 – 23, 2023. The current agenda and deadline trackers do not mention the fees regulation. The subsequent plenary sitting would be December 11 to December 14, 2023.
- It’s likely that a vote on this regulation will be conducted during the current mandate before the next parliament elections in June 2024. Notably, the text of the regulation stipulates the date of application (1 January 2025) regardless of when the parliament adopts the text or when it is published in the Official Journal of the European Union.
- The new fees regulation will likely have significant impact on companies’ regulatory affairs department budgets due to the implemented fee hikes. Current fee-payers should consider reviewing the fees as proposed since the regulation would implement significant changes to the fees structure and amounts. In addition, the inflation rate was adjusted to more closely resemble actual rates of inflation. (The language notes that fees would be adjusted based on inflation “at the earliest, on 1 January of the calendar year following the calendar year in which the monitoring exercise took place.”)
Key Documents and Dates
- European Council communication on the proposed regulation on fees and charges payable to the European Medicines Agency, October 11, 2023
- Commission Delegated Regulation (EU) 2023/1766, published September 14, 2023, applies from October 4, 2023