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EU Regulatory Roundup: EMA Hopes to Avoid €465M Brexit-Related Bill

Posted 26 July 2018 | By Nick Paul Taylor 

EU Regulatory Roundup: EMA Hopes to Avoid €465M Brexit-Related Bill

Welcome to our European Regulatory Roundup, our weekly overview of the top EU regulatory news.
 
EMA Hopes to Avoid €465M Brexit-Related Bill
 
The European Medicines Agency (EMA) has expressed hope that it will avoid the €465 million ($545 million) charge it could incur for terminating the contract on its London office. EMA is tied into the lease until 2039, but thinks the opportunity to sublet and the United Kingdom’s openness to helping with withdrawal costs will spare it from the brunt of the early-termination bill.
 
That thinking led EMA to opt against recognizing a provision related to the onerous lease contract in its annual accounts for 2017.
 
EMA noted that while the lease lacks an early-termination clause, it does permit subletting to third parties. The agency plans to “explore different exit scenarios and subleasing arrangements” before it needs to vacate the offices in March. Given the uncertainty about what, if any, termination fee EMA will need to pay in these scenarios, the agency opted against creating an onerous lease provision.
 
The agency also cited comments made by the UK in its reasoning against the need for a provision. In December, the UK offered “to discuss with Union Agencies located in London how they might facilitate their relocation, in particular as regards reducing the withdrawal costs.” These discussions are ongoing and their outcome is uncertain, but EMA thinks they suggest it would be premature to create an onerous lease provision.
 
Those comments from the UK feed into EMA’s third reason for not creating a provision. In EMA’s view, it cannot be held accountable for the early termination of the lease, as the Brexit vote that is forcing it to move was outside its control.
 
“The early termination of the lease is the consequence of events for which the agency is not responsible, which were unforeseen at the time the lease was signed. As a result, the agency as such
can ultimately not be financially impacted by such events,” EMA wrote in its annual accounts.
 
Collectively, the points mean EMA has doubts about whether it will be liable to pay a fee. Even if it is, EMA thinks it currently lacks the information needed to make an accurate estimate of the charge. As such, EMA held off on creating a provision in its annual accounts for the 2017 financial year.
 
If EMA is right, it will avoid paying a significant sum of money. The London lease runs for 20 years after EMA is due to leave the site in London. That puts the cost of early termination at up to €465 million. EMA’s budget in 2017 totaled €322 million.
 
Brexit has forced EMA to make other provisions, though. EMA’s accounts for 2017 include provisions of €18.6 million tied to the relocation of staff. More than 80% of the provision relates to long-term staff relocation costs. The rest covers short-term costs. EMA based the estimate on the outcomes of a staff survey that found 80% of its staff were willing to relocate to its new home in Amsterdam, the Netherlands.
 
EMA has already suffered some financial hardship as the result of the relocation. Staff costs rose by 9% in 2017, despite EMA’s headcount staying flat. EMA attributed the €10 million increase to the recognition of the relocation provision.
 
Annual Accounts
 
EMA Clarifies MAH Obligations to Record Adverse Events Accessed Via EudraVigilance
 
EMA has published a note to clarify the pharmacovigilance obligations of marketing authorization holders (MAHs). The note explains when MAHs must record information about adverse events they access via the EudraVigilance system.
 
If an MAH sees a suspected adverse event linked to one of its substances submitted by a national regulator to EudraVigilance from 22 November 2017 onward, EMA expects the company to record the details of the reaction. A different set of rules applies to events filed prior to 22 November, the day the new EudraVigilance system went live. EMA does not expect MAHs to retroactively screen the database for cases filed before 22 November that are missing from their own systems.
 
That clarification frees MAHs from a potentially-burdensome task, although some may still choose to add old cases to their own databases. EMA notes that its rules do not stop MAHs from reconciling or adding old cases in the context of a safety assessment, such as the identification of a new risk.
 
EMA’s note also clarifies the obligations a MAH faces when it sees a case uploaded to EudraVigilance by another manufacturer of a substance for which both companies hold a marketing authorization. In this situation, the MAH must decide whether it needs to record details of the adverse event. The decision rests on what the MAH needs to do to comply with its pharmacovigilance obligations.
 
MAHs requested clarification on these points after using the revised EudraVigilance system that went live late last year. The new system made it mandatory for MAHs and national competent authorities to report adverse events to EudraVigilance, not each other. This change should limit duplication, but it created confusion about the obligations of MAHs that EMA has now sought to clarify.
 
EMA Note
 
EMA Updates Biosimilar Guidelines to Stop Unnecessary Animal Research
 
EMA has updated its guidelines on similar medicinal products containing somatropin or recombinant erythropoietins. The updates to the biosimilar documents relate to the implementation of replace, reduce and refine approaches designed to prevent unnecessary use of animals in research.
 
In the previous versions of the guidelines, EMA recommended running in vivo studies on similar medicinal products containing somatropin or recombinant erythropoietins before initiating clinical development. That advice reflects the fact the most recent of the two documents was adopted more than eight years ago. EMA’s current position is to try to replace, reduce and refine animal testing.
 
EMA is now advising developers of somatropins and recombinant erythropoietins to run in vitro studies before deciding what, if any, in vivo work will be required. Typically, EMA thinks companies will not need to run studies in animals. Instead, EMA is recommending drug developers measure pharmacokinetic and pharmacodynamic parameters in clinical studies. 
 
In some cases, animal tests may be needed, though. EMA is referring people to its guideline on similar biological medicinal products containing biotechnology-derived proteins for advice on when it is necessary to gather data on toxicology or biosimilarity in animals.
 
As EMA sees the updates as minor and uncontroversial, it implemented them without going through a public consultation. The changes were agreed on internally at EMA over the past few months and will come into force at the start of next year.
 
Somatropin Guideline, Erythropoietin Guideline
 
Other News:
 
EMA has adopted two guidelines on human normal immunoglobulin for intravenous administration (IVIg). The texts cover the clinical investigation and summary of product characteristics (SmPC) of IVIg. In each case, EMA updated the text to include details about multifocal motor neuropathy and chronic inflammatory demyelinating polyradiculoneuropathy. Clinical Guideline, SmPC Guideline
 
EMA has warned its IT systems will be unavailable over the upcoming weekend. The systems are going offline to allow EMA to test them. EMA will continue to receive reports of suspected quality defects or product recalls via its emergency hotline while the IT systems are offline. EMA Notice
 
The UK Medicines and Healthcare products Regulatory Agency (MHRA) has issued an alert about a knee system made by Smith & Nephew. The device is at risk of early component loosening. MHRA is advising physicians to perform annual reviews for five years after implanting the devices. MHRA Notice
 

Categories: Regulatory News

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