European Pharmaceutical Regulation

In recent years, The European Medicines Agency (EMEA) has made significant efforts to control Europe’s pharmaceutical regulation systems. The EU’s independent agency for pharmaceutical control administers the process by which new drugs are authorized to enter into the European market based on the safety and efficacy standards established in 1965. Moreover, the primary objective of the agency’s inauguration was to create a more efficient approval process so that new medicines could reach the market within a shorter amount of time. However, the traditional, diverse regulation methods of member states undermine the European Commission’s efforts in establishing a harmonious regulatory regime for medicines.

It has been contended that because pharmaceutical regulation is so varied among EU countries, it is near impossible to establish a homogenous national pharmaceutical system under EU law. Not only are European pharmaceutical sectors very different, but so too are the state health regimes. Further, divergences in the rate of integration between domestic markets would generate disparities in access to pharmaceuticals as well as price variations. On this account, member states have each established its own procedures to preserve a regulatory balance between public healthcare and commercial interests. However, in a time of rising healthcare costs the disparity has greatly intensified, and this has made it even more difficult for policy-makers to limit Community influence and autonomy.

There are many reasons as to why member states are reluctant to yield to the harmonious approach that the EU particularly has in mind, but the most predominant issue that the Community has is the EU’s primary interest in industrial priorities. This is premised on the inherent convergence between commercial interests and the EU’s commercial policy priorities. Naturally, this ignites major concern within member states whose primary objective has always been to protect the health of the patients rather than fulfill industrial obligations.

Although the EU claims that its system and policies for the pharmaceutical sector are designed to benefit the public health, this end has not actually been met. The Commission’s assumption that quicker access to new drugs inevitably leads to a healthier population is fundamentally flawed. The greater availability of drugs does not necessarily result in better health. In fact, there is no supporting evidence for the Commission’s claim that a more efficient flow and greater availability of new drugs have improved patients’ wellbeing. It is safe to conclude that public health within the European community is undermined by the Commission’s predominant interest in industrial concerns.

Another unique aspect of the pharmaceutical market structure that remains controversial is that while commercial yields are exceptionally high there are not many players. In 2003, only ten large companies made up nearly half of the international market. The structure of the pharmaceutical market is characterized as monopolistic because the limited number of players makes it so uncompetitive. It is also evident that some large companies hold monopoly positions in certain pharmaceutical sectors. Although the level of competition between products in a specific category is high, the marketplace itself is not nearly as competitive. The highest competitors have inherent product differentiation benefits that allow them to set high values and retain large shares within the marketplace. Because less profitable companies do not bear as much influence, the cartel of large-scale companies predominates. Keeping in mind the relatively monopolistic market framework, the Commission must see to it that industry management are facilitating good financial functioning.

As noted, European pharmaceutical regulation procedures vary amongst member states, and so balancing policy goals is a very complex process. There are three requirements that medicines must fulfill in order to be allowed to enter into the market. First, the safety, efficacy and quality of the product must be confirmed. Second, regulatory officials must evaluate the dossier, which includes the testing results, specifics about the drug’s uses, and the demographic. The last step is setting the price and reimbursement. This is the most debatable topic amongst regulatory authorities because, more often than not, health policy aims clash with industrial objectives.

Because nearly every EU state has a different regulatory regime, health spending and government quotas of total pharmaceutical costs contrast significantly. This may also be due to the fact that the approval of drugs to enter into the market is ultimately a subjective process because every country has a different system for medical training and practice. There are many other cultural and ethnic influences that contribute to the development of such varied procedures. It has become even more difficult for the Commission to establish a harmonious pharmaceutical regulation system because national differences have only been intensifying over recent years.

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