EU to fine companies which flout MA obligations from July

The European Commission will from next month be able to impose financial penalties on pharmaceutical companies which fail to respect the obligations which accompany centralised European marketing authorisation.

Under a new regulation, the European Medicines Agency (EMEA) will be able to ask the Commission to impose financial sanctions - fines and periodic penalty payments - on marketing authorisation holders who infringe these obligations.

Companies will have to pay if they fail to respect measures such as those concerning pharmacovigilance and market monitoring.

The new rules, which are applicable both to medicines for human use and to veterinary drugs, come into effect on July 5.

Fines will not exceed 5% of the marketing authorisation holder's sales in the European Union in the preceding year. But if a company does not stop its infringement, the Commission will also be able to impose daily penalties of not more than 2.5% of average daily sales.

If a company does not cooperate with an inquiry into alleged infringements - for example by providing inaccurate or misleading information - it may be faced with a further fine of not more than 0.5% of sales.

The new legislation, published in the Official Journal of the European Union on June 15, comes in the wake of the 2004 regulation to reform European pharmaceutical legislation.

Penalties cannot be imposed unless the EU's interests are at stake - when the infringement takes place in more than one member state or when it could have serious consequences on public health throughout the Community.

The regulation also highlights the need for close cooperation between the EU and member states in order for this legislation to be effective, as they have parallel competences in this area.

These measures come under the EU's remit for medicines authorisation and monitoring and are intended to contribute to the objectives of public health protection and the establishing of an internal market for pharmaceuticals.

The EMEA will decide when to open infringement proceedings, after informing the Commission and member states. The Commission's decision whether or not to impose sanctions will be based on an EMEA inquiry and observations by the marketing authorisation holder.

The regulation lists the obligations whose infringement will give rise to financial penalties. It also details the procedure for an inquiry - initiation, notification, measures of inquiry, content and time limits for the EMEA's report and right of response.

(European Commission regulation number 658/2007 of June 14 2007, on line in English at eur-lex.europa.eu/LexUriServ/site/en/oj/2007/l_155/l_15520070615en00100019.pdf)