Safety, Quality, Efficacy: Regulating Medicines in the UK

SAFETY, QUALITY, EFFICACY: REGULATING MEDICINES IN THE UK
1.24 The Agency has identified that:
! a potential loss of business in new active substance
applications would affect income strongly, as this
work attracts the highest fees and brings continuing
income from follow-up work;
! loss of this high-profile scientific work coming into
the Agency could make it less attractive as an
employer for highly-qualified scientists;
! loss of expertise could diminish the Agency's ability
to protect UK public health through safety
monitoring and risk benefit assessment;
! loss of scientific expertise could also damage
the Agency's reputation and lead to further loss
of business.
1.25 The Agency is looking to improve the quality of the
services it provides to industry in order to attract more
business under the competitive mutual recognition
stream. It also aims to maintain a strong presence in
European centralised work, and considers that the
changes could bring opportunities to build on its
reputation as a European leader, for example through
the expanded inspection regime required by the Clinical
Trials Directive.
Volumes of work for the Medicines
Control Agency are unpredictable,
but generally increasing
1.26 The number of new active substance applications
submitted to the Agency and its overseas equivalents
has decreased over the last seven years, reflecting a
reduction in the number of major new discoveries ready
to be marketed. In other areas the number of
applications, particularly through the European system,
is increasing 3 , including:
! renewals of marketing authorisations, which are
granted for a period of five years. This process helps
ensure that the licence reflects current knowledge
about the balance of risks and benefits of the product.
The Agency is seeking to improve
its financial and operational
management, by tackling
financial pressures, human
resources issues and IT
(a) Financial Management
1.27 The Government established the Agency as a financially
self-sufficient Trading Fund in 1993, fully funded
through fees charged to industry. In 2001-02 income
amounted to £40 million. The Agency is required to
"break even, taking one year with the next, and to set its
fee levels to achieve this". It may hold reasonable cash
reserves, but by 1998, had accumulated a retained
surplus of some £17 million.
1.28 In 1998 Ministers approved a reduction of 12.5 per cent
in fees across the board to begin eliminating the surplus,
by generating a series of operating deficits. By 2001-02
the retained surplus had been reduced to less than
£2.5 million (Figure 6).
6
Medicines Control Agency annual and cumulative
surplus/deficit position
20000
15000
10000
! abridged licences, where the product uses an active
substance that has already been approved. These
increases reflect in part the increasing use of generic
medicines in the NHS;
! parallel import licences, which allow the
importation from elsewhere in the European Union
of medicines which are equivalent to medicines on
the UK market. A doubling in parallel import licence
applications over the last two years has come about
because of medicine price differentials between the
member states of the European Union;
! variations to existing marketing authorisations, such
as a change in use, dosage or pharmaceutical form.
The Agency can also require a variation to introduce
additional safety precautions;
£000
5000
0
-5000
-10000
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
surplus/deficit for the year
retained surplus/deficit carried forward
part one
Source: National Audit Office analysis
3 See Appendix 6 for supporting data.
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