Europe's Trust Gap

There seems to be something wrong with our bloody ships today," remarked a British admiral at the Battle of Jutland, as he witnessed his fleet being depleted one after another by enemy fire. Pharmaceutical regulators in Europe today might be forgiven for entertaining a similar thought about their institutions.

The latest and most dramatic blow—the abrupt departure of health commissioner John Dalli in highly controversial circumstances—comes on top of an extremely difficult year for the European Medicines Agency. The European Commission and the EMA are two principal arbiters of control on medicines in Europe—the twin pinnacles of the European Union's regulatory system. And they have both been severely shaken.

At the same time, one of the main supervisory bodies for all the European Union's institutions—the European Court of Auditors—has admitted to a crippling weakness: It announced this month that it ran a check last year on what was going on at the EMA, and found disturbing evidence of mismanagement, but it doesn't have a clue about what has happened since 2011.

This is not just a crisis for the regulators. It is a crisis for the drug industry too. At a time when the industry can scarcely afford to suffer any further loss of reputation, major weaknesses have been exposed in the very systems created to safeguard public health against any risks of industry irresponsibility or malpractice. The public is naturally inclined to worry about the risks that can arise when the appointed watchdogs are shown to be sleeping, or sick, or dead.

The Dalli débacle is disconcerting in many ways. The European Commission's mid-October announcement that he had stepped down from his post "with immediate effect" in the wake of an anti-fraud investigation sent shockwaves through Europe. The link that the commission made to suggestions of corruption in decision-making compounded the concern.

But on closer inspection, the announcement did more to provoke questions than to supply answers. It did not accuse Dalli of any evident misdemeanor, but merely alleged that he was aware of attempts by others to traffic influence (in relation to legislation to control tobacco rather than medicines). On top of that, it recognized that in any case no transaction was concluded and no payment was made. It did not say Dalli had been fired, but merely that he had "decided to resign in order to be able to defend his reputation and that of the commission."

Dalli, summarily stripped of office, immediately riposted through his own channels. He rejected any suggestions of guilt, and claimed that he had been forced to resign by commission president Jose Manuel Barroso. Worse, he went on, Barroso had presented no evidence of wrongdoing, but had merely shown him the summary of an investigation that had been secretly underway for five months.

The bizarre sequence of events inevitably prompted further speculation. If Dalli had merely been aware of a lobbying attempt by a vested interest (and the commission made no accusation beyond this), why should he be obliged to resign, it was asked. Lobbying of commissioners is an everyday routine in Brussels, and is considered a normal and indeed necessary part of the discussions that underpin the preparation of any legislation. Logically, every commissioner should be removed from office if they were to be treated in the same way as Dalli. So had Dalli transgressed in some way that the commission did not reveal? Or, if he had not, was there some other reason that determined Barroso to get rid of him? Or had the commission over-reacted and fallen into a trap set by business interests? Dalli's departure will delay progress on new tobacco-control legislation that is vigorously opposed by the tobacco industry.

The commission has done nothing to answer these questions, or to clarify the extraordinary procedure, and a cloud of suspicion consequently hangs not only over Dalli, but over the commission itself—and not just in relation to possible impropriety, but also over what looks dangerously like incompetence and mismanagement.

Much of the equally unedifying saga of the EMA's conflicts of interest has already been recounted at length in this column and elsewhere, since the equally abrupt departure (but in different circumstances) of its executive director, Thomas Lonngren, nearly two years ago. Lonngren's overnight switch from being head of Europe's drug regulatory agency to acting as a consultant to the pharmaceutical industry was shocking enough in itself. The insouciant complicity of the agency's management board in condoning this move was even more troubling. Inevitably, questions were raised over the agency's handling of conflicts of interest—and probes into its performance revealed deficiencies so evident that the European Parliament decided to refuse approval of the agency's accounts.

Throughout the whole of 2012, the EMA—now under new management—has battled to regain its credibility as a reliable defender of the public interest. It failed to do so in time for a crucial Parliament vote in the spring. "The agency did not apply the staff regulations properly, which in turn raises serious questions about their application of the rules in general," said the budgetary control committee, expressing dissatisfaction with checks on the completeness of declarations of interest. Monica Macovei, the MEP who was piloting the debate in the Parliament, noted concerns "over allegations that the agency's former executive director created his own consultancy firm while still in office" and spoke of "concerns on the actual independence of the agency."

Vigorous attempts by the agency to clean up its act did win back some support from the Parliament. By early September, the Parliament's health committee accepted that the changes made over the preceding months had eased concerns. By the end of the month, the budgetary control committee had also softened its stance, and was recommending approval of the accounts.

It was therefore all the more surprising that in early October the European Court of Auditors unveiled a highly critical report of its own investigation of the EMA. The agency had not "adequately managed conflict of interest situations," and it relied on experts with connections to the industry "in drafting scientific opinions which underpin vital decisions affecting the health and safety of consumers."

"Most scientific opinions and decisions prepared by the agency also use the research carried out or financed by industry," and the EMA "has to rely on trials conducted by organizations and companies that have vested interests in the products concerned," it thundered. "Conflict of interest policies and procedures do not cover national experts working on the tasks outsourced to the national authorities," and "the EMA does not perform any verification of the conflict of their interest policies and procedures."

What was the public expected to conclude from such a damning evaluation—and what was the public expected to infer about the rigour of the European Parliament's monitoring of the EMA's adjustments made during the year? Not a lot, perhaps, because the Court of Auditors admitted that its research was completed even before the end of last year —and, yet more seriously, it confessed that it was utterly incapable of offering any view at all on whether the failings it had identified persisted.

It will take months for the dust to settle from these episodes of confusion and these demonstrations of incompetence. The downside for industry is that it too suffers from additional suspicion, merely by association. It should not be tempted to seek to exploit the current weaknesses of authority. On the contrary, the potential upside of the situation is that it could encourage industry to redeem its own reputation. If it is smart, it will seize on this opportunity to present itself as responsible, and capable of a great deal of effective self-regulation, even when those who are supposed to regulate it are incapable of doing so adequately. But to do that effectively, the industry will not only have to present itself as responsible. It will have to be responsible—and that could prove a far greater challenge.

Reflector is Pharm Exec's anonymous European columnist, a commentator so close to the action in Europe that his identity must remain secret.