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Bringing Medicinal Products to the European Union Market
Introduction to the European Union
The European Union (EU) is a supranational and intergovernmental union of twenty-seven states in a category of its own. It was established in 1992 by the Treaty on European Union (The Maastricht Treaty), and is the de facto successor to the six-member European Economic Community founded in 1957. Since then new accessions have raised its number of member states, and competences have expanded.
The EU is one of the largest economic and political entities in the world, with 494 million people and a combined nominal gross domestic product (GDP) of EUR11.6 (US$14.5) trillion in 2006. The Union is a single market with a common trade policy, a Common Agricultural/Fisheries Policy, and a Regional policy to assist underdeveloped regions. It introduced a single currency, the Euro, adopted by 13 member states. The EU initiated a limited Common Foreign and Security Policy, and a limited Police and Judicial Co-operation in Criminal Matters.
On 23 July 1952 six founding members formed the European Coal and Steel Community (ECSC), which was transformed into the European Community, later renamed the European Union, in waves of accession.
Certain areas of the member countries were not part of the EU, like the Channel Islands, or the Faroe Islands. Areas that are far from Continental Europe on the other hand may be part of the EU: for instance, the Azores, and Madeira islands (Portugal), are represented by that country in EU affairs. Also the various French overseas departments are considered part of France, which is why areas as far from Europe as Martinique and French Guiana use the Euro.
Important EU institutions and bodies include the European Commission, the Council of the European Union, the European Council, the European Central Bank, the European Court of Justice, and the European Parliament. Citizens of EU member states are also EU citizens: they directly elect the European Parliament, once every five years. They can live, travel, work, and invest in other member states (with some restrictions on new member states). Passport control and customs checks at most internal borders were abolished by the Schengen Agreement.
A prominent policy goal of the European Union is the development and maintenance of an effective single market. Significant efforts have been made to create harmonized standards claimed by their proponents to bring economic benefits through creating larger, more efficient markets. Since the Treaty of Rome, policies have implemented free trade of goods and services among member states, and continue to do so. This policy goal was further extended to three of the four EFTA states by the European Economic Area, EEA. Common EU competition law restricts anti-competitive activities of companies (through antitrust law and merger control) and member states (through the State Aids regime). The EU promotes free movement of capital between member states (and other EEA states (Iceland, Norway and Liechtenstein)). The members have a common system of indirect taxation, the VAT, as well as common customs duties and excises on various products.
However, in light of the health benefits and associated risks that accompany medicinal products, the situation in the EU is much more complicated. Medicinal products are highly regulated in the EU and are subject to a separate, complicated system of approvals that governs how, when, where, and in what form such products will be allowed to be sold in there. Additionally, a number of important, strategic commercial and corporate considerations accompany this complex regulatory environment.
Introduction to the Regulatory Environment in the EU
The regulation of medicinal products is governed in the EU by Directive 2001/83/EC relating the medicinal products (the “Directive”). This Directive is also known as the Consolidated Directive as it brings many years of separate legislation together into one, detailed document. It was last updated in 2005 with some important additional regulations. The fundamental premise of the Directive is simple: no medicinal product may be placed on the market in the EU unless the relevant competent authority grants a marketing authorization.
It is also worth noting that the legislation has also been adopted by the members of the European Economic Area (EEA): Norway, Iceland, and Liechtenstein. The Swiss system also mirrors EU regulation. In addition to the requirements that must be met to obtain a marketing authorization, the Directive lays down rules relating to specific categories of medicines (e.g., homeopathic and herbal medicines), manufacture, importation and distribution, labeling and advertising, the classification of medicinal products, and pharmacovigilance.
Current existing procedures
At this moment we have 4 procedures in force that can be used for the submission of a registration dossier in order to obtain a Marketing Authorization in the EU:
1. National Procedure (NP)
2. Mutual Recognition Procedure (MRP)
3. Decentralized Procedure (DCP)
4. Centralized Procedure (CP)
The main legislation relevant to these European Procedures:
o Council Directive 2001/83/EC
o Council Directive 2004/27/EC
o The Notice to Applicants Volume 2A Procedures for marketing authorization
1. National Procedure
The National Procedure can be used if the product is not registered in any Member State and if the application is restricted to one Member State. The official time for granting a license is 210 days (without the clock stop) but in real life the average is about one year. The Marketing Authorization is then issued by the national agency.
2. Mutual Recognition Procedure (MRP)
The Mutual Recognition Procedure has to be used if the product is already registered in a Member State. The MRP can also be used for new products. The MRP starts with a National Procedure with the chosen Reference Member State (RMS).
Criteria for selecting a RMS:
o Importance/size of the market within the European Union (EU)
o Integrity and standing (credibility) of the RMS to enable defense of the product against other Concerned Member States (CMS)
o Long-term partnership
o Open to dialogue
o Respecting time lines
o Consideration of future variations
o Expertise in respective medical field
o Potential for specific up-front agreements
To run a MRP you need at least a RMS and one CMS. The amount of CMSs can be as big as 26. In an ideal world the MRP will take 420 days: 210 days for the National Procedure (license granted by the RMS) + 90 days for the assessment report from the RMS + 90 days for the MRP + 30 days for the national steps (translation of the SmPC, packaging materials and providing the license). The Marketing Authorization is issued by the national agency. The MRP can be repeated if you want to add additional member states at later dates – this is called repeat MRP second wave and so on. The RMS remains the same and the member states where the product was already registered through the MRP remain involved.
3. Decentralized Procedure (DCP)
The DCP can be used if the product is not registered yet in any Member State. You need at least a RMS and one CMS. The amount of CMSs can be as big as 26. The procedure starts without a National Procedure. The dossier will be submitted to all the involved Member States at the same time. The criteria of choice of the RMS are the same as for the MRP except the size of the market and respecting time lines as the license will be granted at the same time for all the involved Member States. It is possible to end the procedure at Day 105 if consensus is reached, at Day 120, at Day 150 and at Day 210 (followed in each case by 30 days for the national steps). The assessment report will be send from the RMS to the involved CMS at Day 70. The standard clock stop is 90 days. The Marketing Authorization is issued by the national agency.
The workload for the RMS in this procedure is heavy. The 3 most popular countries asked to be RMS (UK, Germany and France) are already booked for the year and some other countries simply refuse to act as the RMS because of a lack of staff. Other bottle necks in this procedure are the validation time and the short time to answer the questions. The validation time can be as long as 6 months (source TOPRA Annual Symposium 2006). The 90 days clock stop looks favorable compared to the 10 days time during the MRP, but keep in mind that the first filter for the questions does not exist. The questions come all at the same time (including those from the RMS). The dossier has not been assessed first as in the MRP but is sent as it is to all involved member states. Also here additional member states can be added, but based on the basic principle (not registered in any member state yet) the repeat MRP procedure must be used (second wave MRP).
4. Centralized Procedure (CP)
The centralized procedure is based on the granting of a single Marketing Authorization as a result of a single evaluation of an application by the Committee for Medicinal Products for Human use (CHMP) or for Veterinary use (CVMP). This authorization is then valid in all member states of the EU. The Centralized Procedure is typically used for Biotech, Cancer, HIV, Treatment of diabetes and Neuro-degenerative disorder products and Orphan drugs (Annex A-obligatory), High Tech and Innovative products (Annex B-optional). Approval time is officially 210 days. After this process has been completed it is time to translate the approved English SmPC and packaging material into all the national languages. For drugs that secured a positive opinion from the Committee for Medicinal Products for Human Use (CHMP), the average time in the assessment phase dropped to 171 days in 2006 from 203 days in 2005. The EMEA post-opinion phase – which incorporates agency processing and the time required by applicants and the EU member states to carry out post-opinion translation checks was down from 56 to 36 days, while the decision process took an average of 31 days compared with 41 in 2005. On top of this came a slight improvement in the ‘clock-stop’ time required by companies applying for marketing authorizations. This took up 164 days on average in 2005 and 161 days in 2006.
Turnaround times for orphan drugs cut
The EMEA also cut the turnaround times for its orphan designation and scientific advice procedures. The average time for an opinion on orphan designation fell from 60 days in 2005 to 57 last year, the fastest turnaround since the procedure started in 2000. The average time to a decision in the orphan-designation procedure was down from 50 to 25 days.
The Marketing Authorization is issued by the European Committee. The advantage of a single Marketing Authorization for the EU is that every time there is an expansion of the EU your product is automatically registered in that new member state. The only thing you have to do is the translation of the SmPC and packaging materials in the national language.
The outcome of the assessment is published in the public domain in the form of a European Public Assessment Report (EPAR). There is also an accelerated assessment procedure in place. The purpose is to meet the legitimate expectations of patients and to take into account increasingly rapid progress of science and therapies. The scientific opinion will be given in 150 days instead of the 210 days (without clock stop of course). Please keep in mind that an appointment with the EMEA has to be made 18 months prior to the submission date. It is no longer possible to apply for a rapporteur or co-rapporteur. Due to the increased complexity of the dossier, the EMEA will appoint the rapporteur and co-rapporteur for you.
Things to consider
Both general medicines legislation in the EU and the Clinical Trials Directive require the holder of an authorization for a medicinal product or a clinical trial in the EU to either be established itself in the EU or to have a legal representative who can act on its behalf.
In addition, for various activities that are conducted in the EU pertaining to medicines, such as manufacturing, wholesale dealing, and pharmacovigilance, EU medicines law also requires pharmaceutical companies to have a “Qualified Person” at their disposal to oversee certain functions. Qualified Persons must meet certain specific criteria in order to be classified in this way. It is generally accepted that such Qualified Persons need not be employed directly and may be engaged on a contract or consultancy basis, although depending on the circumstances, direct employment may present the most attractive option. Such considerations will also have an important impact on the choices such as country and corporate vehicle.
All manufacturers must be GMP compliance and must have been inspected by an EU inspector. All ingredients must be tested according to the Eur. Ph, unless it is an in-house monograph. USP is not acceptable. Patient Information Leaflets must undergo a Readability Test. This test needs only be performed in one EU member State.
How to obtain for a product licence (Marketing Authorisation)
In order to obtain a marketing authorization, applicants must submit a full dossier to the relevant competent authority that details, among other things, the common or scientific name, invented name, qualitative and quantitative particulars of the product, the proposed therapeutic indications, contra-indications and adverse reactions, as well as the results of pharmaceutical and pre-clinical tests and clinical trials.
The dossier must be submitted in CTD format:
Module 1: Administrative data including application form and packaging mock ups.
Module 2: Expert Summary and Overview related to the Modules 3 to 5
Module 3: Pharmaceutical
Module 4: Non-clinical
Module 5: Clinical
There are several different kinds of submissions possible (regardless which procedure you follow):
THIS APPLICATION IS SUBMITTED IN ACCORDANCE WITH THE FOLLOWING ARTICLE IN DIRECTIVE 2001/83/EC
Article 8(3) application, (i.e. dossier with administrative, quality, pre-clinical and clinical data*)
* New active substance
Note: constituent of a product not yet authorized by a competent authority or by the Community (for centralized procedure)
* Known active substance
Note: . constituent of a product already authorized by a competent authority or the Community
. same or different marketing authorization holder
* for extensions of complete applications, cross references can only be made to pre-clinical and clinical data
* Article 10(1) generic application
Note: . application for a generic medicinal product as defined in Article 10(2)(b) referring to a so-called reference medicinal product with a Marketing authorization granted in a Member State or in the Community.
. complete administrative and quality data, appropriate pre-clinical and clinical data when applicable
* Article 10(3) hybrid application
Note: . application for a medicinal product referring to a so-called reference medicinal product with a Marketing Authorization in a Member State or in the Community (e.g. different pharmaceutical form, different therapeutic use …..)
. complete administrative and quality data, appropriate preclinical and clinical data
* Article 10(4) similar biological application
Note: . application for a product referring to a reference biological product
. complete administrative and quality data , appropriate preclinical and clinical data
* Article 10a well-established use application
. for extensions of bibliographical applications, cross references can only be made to pre-clinical and clinical data
* Article 10b fixed combination application”
Note: . complete administrative and complete quality, pre-clinical and clinical data on the combination only
. for extensions of fixed combination applications, cross references can only be made to pre-clinical and clinical data
* Article 10c informed consent application
Note: . application for a medicinal product possessing the same qualitative and quantitative composition in terms of active substances and the same pharmaceutical form of an authorized product where consent has been given by the existing marketing authorization holder to use their data in support of this application
. complete administrative data should be provided with consent to pharmaceutical, pre-clinical and clinical data
. the authorized product and the informed consent application can have the same or different MAH
* Article 16a Traditional use registration for herbal medicinal product
Note: Complete application
Marketing authorizations are valid for an initial period of five years, after which they may be renewed for an undefined period provided they satisfy a re-evaluation of the risk-benefit balance. Periodic Safety Update Reports must be submitted every 3 years.
In 2005 the medicines legislation also introduced a new provision called the “sunset clause,” which provides that a marketing authorization will no longer be valid if a product has not actually been placed on the market in the first three years following grant of its authorization, or is no longer on the market for a consecutive period of three years.
Once a marketing authorization has been granted, the holder is under a continuous obligation to update the authorization in order to ensure that scientific progress and new regulatory requirements are respected, and in particular, any information which may influence the evaluation of the benefits and risks of the product. Accordingly,marketing authorization holders have a continuing duty to have in place stringent pharmacovigilance procedures and to keep abreast of developments and advances within the medicines arena.
What to do to become established?
There are a number of choices available for business to become established.
The principal corporate options are:
o a company (including a subsidiary of an overseas company);
o a branch; or
o a place of business.
For the purposes of this paper it is assumed that business operations will be established in the UK, but this can be any EU member state.
Companies (Including Subsidiaries of Overseas Companies)
One option for businesses wishing to establish in the UK is to form an UK company limited by shares. The usual choice for overseas companies is a private company subsidiary of the overseas company.
It is possible to establish both private and public companies in the UK-the main difference between the two is that a private company can not offer its shares to the public. In general, public companies are also more regulated than private companies, and there are additional requirements to be met when setting up a public company.
A company incorporated in the UK has a separate legal identity, distinct from its members (whether a parent company or individuals). As such, its members usually have no legal liability for the company’s acts and obligations, except for unpaid share capital and any guarantees given in the case of companies limited by shares.
Branch or Place of Business
A “branch” is part of an overseas limited company organized to conduct business through local representatives in the UK rather than referring it abroad. Companies House gives guidance on what level of activity is required to necessitate registration as a branch. Broadly speaking, if a person is able to deal directly with the UK office instead of the company in its home jurisdiction then the UK office is more than likely to be a branch.
A “place of business” is for companies who cannot register as a branch because their activities in the UK are not sufficient to constitute a branch. Such activities might include import of goods, warehousing, or simply a representative office. Essentially a characteristic of a place of business is that its activities tend to be incidental operations.
EU medicines legislation has created a protection mechanism for original products that is entirely separate from patent protection and allows innovative products a set period during which they enjoy exclusivity on the market.
Data exclusivity refers to the period in which generic product applicants cannot rely on the dossier of the original product (the “reference product”) for the purposes of obtaining a marketing authorization. Prior to changes to the legislation that came into force on October 30, 2005, this protection period was set at either six or ten years, depending on the country in question.
However, one of the changes made in 2005 was to introduce a new, uniform 8 + 2 + 1 protection period throughout the EU. It is important to note that this new protection period only applies to products granted after the changes came into force. Under the new system, the data protection period is now set at eight years, meaning that the marketing authorization holders of reference products enjoy a protected period of eight years before applicants may submit applications for generic products that rely on the original data in the reference product’s dossier. Following this initial eight years, even though generic applicants can begin preparing generic versions of an existing product by submitting their abbreviated applications, they must wait a further two years before being able to actually start selling generic versions of a reference product.
This ten year data and market protection period can be further extended by one year, if, during the first eight years, the reference product authorization holder seeks and obtains authorization for one or more new therapeutic indications that represent a significant clinical benefit when compared with existing therapies.
Consequently, authorization holders of reference products enjoy, under the recently updated system, a protection period of at least ten years.
As further incentive to innovator pharmaceutical manufacturers, the EU also allows such companies to apply for supplementary protection certificates (“SPCs”) in respect of new products.
SPCs can only be applied for once a patent and marketing authorization have been granted in respect of a particular product, and they cover the time lapse between the date of patent application and the grant of a marketing authorization up to a maximum of five years (resulting in a monopoly of up to 15 years on marketed drugs). They cover a combination of what was claimed in the patent in relation to the marketed drug and what is covered by the marketing authorization.
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