European Regulatory Roundup: EMA’s Rent Bill at €448M (30 November 2017)

Posted 30 November 2017 | By Nick Paul Taylor 

European Regulatory Roundup: EMA’s Rent Bill at €448M (30 November 2017)

Welcome to our European Regulatory Roundup, our weekly overview of the top EU regulatory news.

New Calculation Puts EMA’s Ongoing London Rent Bill at €448M

The European Medicines Agency (EMA) faces a €448 million ($531 million) bill for the remaining years on its London rental contract. That new calculation of the cost of EMA’s failure to put a break clause into the contract is notably more than the €348 million estimate suggested by the European Parliament earlier this year.

EMA faces the bill because the rent contract for its current home in London runs to 2039 and lacks a break clause. Parliament brought up the problem in a report on EMA’s budget in March. At that time, the expectation was that the final bill could rise toward €400 million once business rates and service charges were factored in, Politico reported.

Now, the European Court of Auditors report on EMA’s 2016 accounts suggests even that inflated estimate may prove to be too conservative. An estimate EMA gave to the auditors puts the figure at €448 million. That is one of several ways the auditors foresee Brexit hurting EMA financially.

“Contingent liabilities in relation to other costs associated with a removal such as, for example the relocation of staff together with their families, actions to mitigate a potential loss of internal and UK based external expertise and consequent risk to business continuity, are yet to be determined,” the auditors wrote. “A future decrease of the agency’s revenue resulting from the UK’s decision to leave the EU is possible.”

The strain Brexit places on EMA’s finances and human resources could have long-lasting effects on its ability to deal with failings identified by the auditors. The report takes EMA to task for running an opaque IT accounting system despite repeatedly being told to make it more transparent. EMA’s failure to use a competitive procurement procedure for hotel accommodation or to systematically check prices charged by contractors came in for criticism, too.

In its response, EMA committed to introducing systematic checks on quotes above €135,000 starting next year and to revising its approach to hotel bookings. The agency also plans to continue to work to make its IT accounting system fully transparent. However, this is an “expensive and complicated” process and is being handled by the same team that is preparing EMA for Brexit, suggesting it may be put on the back burner over the next 18 months.

Brexit will put other strains on EMA staff, although the choice of Amsterdam as its new home should mean it retains most of its employees. That is important as, in the eyes of the auditors, EMA already faces organizational problems.

“The re-allocation of key staff in the area of IT and administration was not successful, causing material risk of instability to the agency and its operations. Moreover, there is no system in place to analyse skills availability, identify gaps and to recruit and allocate appropriate staff,” the auditors wrote.

EMA defended itself against the claims, stating “no instability was suffered.”

Annual Report, Parliament Report, Politico

Ombudsman Clears EMA of Wrongdoing in Rasi Conflict of Interest Case

The European ombudsman has cleared EMA of mishandling Guido Rasi’s declaration of interests. Ombudsman Emily O'Reilly looked into the case after receiving complaints that executive director Rasi failed to report his links to five patents.

O’Reilly’s investigation showed that, while Rasi was named as a co-inventor on the applications, he did not own intellectual property rights to the inventions when he took up the EMA post in 2011. In one case, Rasi transferred his share of the rights to the other co-inventors, without receiving any money in return, before joining EMA. Rasi never owned intellectual property rights to the other inventions.

As Rasi neither owned nor profited from the patents, O’Reilly concluded he had no obligation to declare his role in the inventions under EMA rules. O’Reilly went further by voicing support for the rules, stating it is “reasonable” to exclude inventions that are not tied to financial interests relevant to EMA from the reporting requirements.

The ombudsman took a tougher line on other aspects of EMA’s rules. Returning to a theme she has developed in previous rulings, O’Reilly made the case that it is not enough for EMA and its staff to be free from potential conflicts of interest. They also have to be seen to be free of conflicts. The Rasi situation left scope for people to perceive bias.

“Certain public records seemed, at first sight, to indicate that EMA’s executive director had been awarded a patent in 2012. In light of this limited information, it is understandable that members of the public can have certain concerns,” O'Reilly wrote in her assessment of the case.

O'Reilly’s answer is to call for EMA to change its rules so staff must declare “all patents relating to medicinal products or uses of such products which have been owned at some point during the five years” before joining the agency. One of Rasi’s patents would have been covered by this policy.

However, as O’Reilly notes, the case comes at a time when EMA is making its policies more liberal. EMA now only requires staff to declare ownership of a patent if the intellectual property is linked to a pharmaceutical company. The previous rules required the declaration of all medicinal patents. O’Reilly wants EMA to move back to a policy more akin to its previous position.

Press Release, Ombudsman Decision

Commission Adopts Guidelines on GMPs for Advanced Therapies

The European Commission has adopted good manufacturing practices (GMP) for advanced therapy medicinal products (ATMPs). Adoption of the guideline follows a contentious consultation period that exposed divisions in perceptions about how best to regulate production of ATMPs.

In the end, officials have settled on a risk-based approach to determine how to regulate cell and gene therapies and other products that fall under the ATMP umbrella. How the flexibility provided by the text is interpreted by inspectors and other regulatory officials will determine what the rules mean in practice for manufacturers.

EMA had tried to avoid over-regulating ATMPs, many of which are made at hospitals and academic centers, but its approach attracted the ire of PIC/S, which said the draft would lower standards and cause divergence from international norms. That intervention precipitated one of several holdups on the draft’s passage toward finalization.

The clearance of the last of these holdups means the guidelines will come into force on 22 May.

Press Release, GMP Guidelines

UK Clears Pfizer to Sell Viagra OTC to Curb Demand for Counterfeits

Pfizer has received approval to sell Viagra over the counter (OTC) in the UK. The decision to allow the sale of a 50mg version of the drug, called Viagra Connect, without a prescription stems from a belief it will reduce the number of people who resort to buying counterfeit copies online.

The Medicines and Healthcare products Regulatory Agency (MHRA) reached the position after assessing the safety of the drug and running a public consultation. That led MHRA to conclude pharmacists are equipped to discuss the drug with patients and refer them to doctors as needed.

Patients without certain comorbidities for whom the drug is appropriate will be able to complete the purchase at the pharmacy.

“We understand some men may avoid seeking support and treatment for this condition, so we believe giving them the option to talk to a pharmacist and buy Viagra Connect could be a real step forward in encouraging more men into the healthcare system,” Berkeley Phillips, Pfizer’s UK medical director, said.

MHRA Statement, Pfizer Statement


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