Europe: Early Communications with Regulators is Essential for SMEs

With SMEs gaining wider recognition as the powerhouse of research and innovation in Europe, regulatory agencies are urging companies to engage with regulators early in the drug-development process, writes Sean Milmo.

Europe’s regulatory agencies have been stepping up their support for small- and medium-sized enterprises (SMEs), including micro companies, in an effort to stimulate more development of innovative medicines. The companies are being offered free or heavily discounted regulatory and administrative assistance, training sessions, evaluation, and above all, scientific advice that can raise the chances of a new medicine gaining marketing approval.

The importance of early dialogue with regulators
Companies are encouraged to contact the agencies as early as possible during the drug-development stage to ensure that their manufacturing processes, in particular, will not lead to regulatory difficulties. It is, however, hard work for the regulatory agencies because many small companies (a high proportion of which are startups founded by individual specialists or small groups of scientists) tend to delay contacting the regulators until product development is close to the preclinical or clinical-trial stage. For the agencies themselves, the promotion of innovation can be a new role with which they need to become more familiar with to bridge any communication gaps with entrepreneurs.

Nonetheless, they believe that having much closer ties between themselves and entrepreneur innovators is essential. With Big Pharma cutting down on research activities, they believe much of the impetus behind innovation in medicines–at least in the early stages of development–will come from the companies with low turnovers and few employees, for example micro companies with less than 10 employees and annual revenues of less than €2 million (approximately $2.7 million), SMEs with not more than 50 personnel and annual turnovers not exceeding €10 million, and medium enterprises of less than 250 employees and an annual turnover of not more than €50 million.

SMEs on the rise
The European Union is currently calling SMEs “the powerhouse” of its Innovation Union, a concept behind its new seven-year €77 billion research program called Horizon 2020, which starts next year. Approximately 10% of the program’s budget will be allocated to healthcare, demographic change, and well-being. A major objective is the elimination of fragmentation in the fields of scientific research and innovation. Among the EU’s regulatory agencies in pharmaceuticals, the most active in championing innovation has been the European Medicines Agency (EMA), which is responsible for centralized approvals of medicines, including those based on novel technologies and orphan medicines.

SMEs make up a growing proportion of companies applying to the EMA for an initial evaluation of a new medicine, including its manufacturing process. Almost 30% of applicants in 2012 were SMEs, which also accounted for 68% of evaluation applications for orphan medicines compared to 27% in the previous year

In 2012, the number of SMEs registered with the agency rose 62% to 1098 mainly because of fees reductions and also because companies could make electronic submissions of product information. This year, the rate of increase has slowed down with the total registrations by late November going up only a further 12% to 1234. Of this total, 43% were micro-sized companies, 12% were academic spin-offs, and 5% of registrated SME companies had been created since January 2012. The registered SMEs had a total of approximately 3000 products under development.

Fostering closer links with SMEs
To provide an incentive for more SMEs to develop advanced therapies, EMA has set up a scheme for the scientific evaluation and subsequent certification of the quality and, where necessary, non-clinical data of new products in the area. Certification should help ease the way to marketing authorization. Another attraction is that it should help companies obtain funding and license out their technologies. The quality data to be certified would include information on starting and raw materials, the manufacturing and characterization of the active substance, and the reproducibility of the manufacturing process for the medicinal product.

By early this year, however, there had been only two applicants for certification, which prompted the EMA to conduct a survey to find out the reasons for the apparent lack of interest. Survey results showed that nearly two thirds of SMEs who answered questions on certification-amounting to only 21% of those surveyed-considered it to have positive advantages. EMA concluded from the study that participants seemed confused about the scope of certification, which indicated a need for the agency to clarify its role in the regulatory process.

EMA stresses that in its efforts to forge closer ties with SMEs, it is not trying to undermine the position of consultants and other experts in the pharmaceutical industry. Its role is not “to substitute the industry’s responsibility for the development of their products,” says the agency.

A similar point is being made by national agencies for medicines regulation, which have been setting up innovation offices to liaise with SMEs. So far, out of the 28 EU member states, agencies in Germany, France, UK, Sweden, and Finland have created SME units that have already formed themselves into a network to exchange experiences and best practices.

In the UK, an Innovation Office, opened in March by the country’s Medicines and Healthcare Products Regulatory Agency (MHRA), is providing multi-disciplinary guidance on “novel development methodologies, manufacturing processes, or new materials that have not been previously used in either the pharmaceutical or device industries,” says Ian Hudson, the MHRA’s licensing division director.

The agencies are emphasizing that their units can be used by any SMEs developing an innovative product or process whatever regulatory procedure or route they intend to use. “We want to encourage SMEs to come to a regulator as soon as possible in the development work so that they get the production process right from a regulatory perspective early on,” explains Lars Dagerholt, head of the Innovation Office at the Swedish Medicinal Products Agency, Stockholm. “We also don’t mind them shopping around other agencies. These agencies can have different procedures and experts with different approaches.” The idea is to persuade SMEs that the regulatory mechanism is not as complex as it looks and above all, that the regulators are there to assist rather than hamper innovation.

Sean Milmo is a freelance writer based in the UK.