How the European Medicines Agency helps small and medium-sized enterprises (SMEs)

by | Jan 17, 2024 | European Medicines Agency, Regulatory Affairs

Highlights

  • Why SMEs are integral to pharmaceutical innovation.
  • The types of enterprises developing medicines in Europe.
  • The SME Regulation.
  • The European Medicines Agency’s (EMA’s) SME initiatives.

Why are SMEs important to medicine development?

Small and medium-sized enterprises (SMEs) are integral to drug development. Often, they sponsor the development of innovative medicines (particularly cell and gene therapies), medicines for rare diseases, and medicines in underrepresented therapeutic areas. In fact, in 2022 the European Medicines Agency (EMA) reported that 43%1 of all requests for qualification of novel methodologies came from SMEs. 

Additionally, a 2014 EMA publication included information about the types of enterprises developing orphan medicines for rare diseases. Of the 94 positive Marketing Authorisation Applications (MAAs), 18 were for orphan medicines and 61% of those orphan medicines originated from SMEs.2

How many medicines are developed by SMEs in Europe?

Between 2010 and 2019 the EMA reported a total of 777 MAAs received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP), of which 369 medicines were categorised as new and innovative.3

The EMA traced the profiles of each marketing authorisation holder (MAH) between 2010 and 2019 to identify the type of enterprise the new and innovative medicines originated from.

MAH holders:3

  • 50% were large pharmaceutical companies,
  • 38% were intermediated-sized pharmaceutical companies, and
  • 12% were SMEs.

Where approved products originated from:3

  • 25% were large pharmaceutical companies,
  • 29% were intermediated-sized pharmaceutical companies,
  • 23% were SMEs,
  • 15% were public bodies, public-private partnerships (PPPs) or from academia, and
  • 8% were from private-private collaborations.

The data above for the proportion of MAH holders masks the frequent transfer of sponsors during the development of a medicine.

Throughout the development of the 369 new and innovative medicines approved between 2010 and 2019, 227 (62%) of the medicines were transferred across different categories of developers.3 The greatest number of transfers were between large or intermediate-sized enterprises (86 products, 38%). However, 51 products (22%) were transferred from SMEs to large or intermediate-sized enterprises. Additionally, 44 products (19%) were transferred from academic/public bodies/public-private collaborations to large or intermediate-sized companies.3

Similarly, an older publication by the EMA in 2014 reviewed where new medicines originated from between 2010 and 2012. They reported the originators of the 94 MAAs that received a positive CHMP opinion were as follows:2

  • 49% originated from large or intermediate-sized enterprises,
  • 27% originated from SMEs, and
  • 17% originated from academic/public bodies/PPPs.  

Out of the 94 medicinal products approved between 2010-2012, a total of 18 products (33%) were transferred from SMEs to large or intermediate-sized enterprises. Additionally, none of the academic/public bodies/PPPs retained a medicinal product through to marketing authorisation as their products were out-licensed to either SMEs or large and intermediate-sized enterprises.2

So, although the number of SME marketing authorisation holders may seem relatively low, this could be due—at least in part—to the acquisition or transfer of medicine products to large and intermediate-sized enterprises.

The EMA summarised the effect of SMEs, academia and public bodies on pharmaceutical innovation brilliantly:

“SMEs, academic institutions, public bodies and PPPs represent an important source of innovation and enrich the product pipelines of larger companies. Notably, the data presented here highlight the important role of SMEs in the upstream phase of pharmaceutical innovation, especially for orphan drugs.”2

How are small and medium-sized enterprises defined?

The European Commission 2003/361/EC4 defines an SME as:

A company that employs less than 250 people and an annual turnover of no more than 250 million Euros or a balance sheet of no more than 43 million Euros.4

This definition can be further differentiated between micro, small and medium-sized enterprises.

Head Count4-5Annual turnover4-5Balance sheet4-5
Micro-sized<10 employees≤2million Euros≤2million Euros
Small<50 employees≤10million Euros≤10million Euros
Medium-sized<250 employees≤50million Euros≤43million Euros

Other aspects that make up the entirety of the SME definition, include the need for an organisation to be established in the European Union (EU)/ European Economic Area (EEA). However, an SME originating outside of the European Union can work with a service provider—such as a regulatory affairs consultancy—that is registered as an SME, to benefit from the EMA’s support and associated fee incentives.

Somerville Development Partners BV holds SME status. For our US clients, who do not have a legal entity based in Europe, partnering with us is invaluable to benefit from the additional support and fee reductions the EMA offers.

The SME Regulation

In 2005, the European Commission recognised the importance of SMEs for medicine development and as a result, developed the Commission Regulation (EC) No 2049/20055 (SME regulation). This regulation put forth specific provisions for the EMA to help SMEs bring medicines to patients, including:

  • Significantly reducing regulatory fees,
  • deferring regulatory fee payments,
  • offering special assistance to SMEs during development, and
  • creating a dedicated SME office within the European Medicines Agency (EMA) to assist SMEs.

How does the EMA support SMEs?

If your organisation qualifies for SME status—once your application is successful—you will be added to the SME register. With this, you will be granted access to the following assistance and benefits:

  • Financial fee incentives,
  • regulatory assistance services,
  • SME briefing meetings,
  • translations assistance,
  • training events,
  • guidance on clinical data publication,
  • support with the PRIority Medicines (PRIME) scheme,
  • a dedicated SME office to respond to regulatory, procedural and administrative questions, and
  • Advanced Therapy Medicinal Products (ATMP) incentives (certification).

Arguably, two of the most appealing SME benefits provided by the EMA are the regulatory fee incentives and the regulatory support offered by the EMA’s dedicated SME office.

Regulatory fee incentives

Regulatory procedureEMA fees7SME fee incentives8
Scientific advice€51,800 to €103,800Free for orphan designated products
  Free for PRIME designated products
  90% reduction for non-orphan products
Marketing Authorization Application (MAA)From €345,800Free for orphan designated products
  Conditional fee exemption if you take and follow scientific advice but your MAA isn’t successful
  Fee deferral until after MAA outcome
Pre-authorisation inspections Free for orphan designated products
  90% reduction and deferral for non-orphan products

Regulatory support from the EMA’s SME Office

The SME Office acts as a dedicated channel for communications between SMEs and the EMA. As well as offering guidance and answering administrative and regulatory questions, you can contact the SME Office to request briefing meetings with the EMA. Briefing meetings are extremely useful to open up a dialogue with the multidisciplinary teams within the EMA, find out about incentives and discuss regulatory strategy.

Navigating the required regulatory deliverables at the most appropriate times during pre-authorisation can be overwhelming, particularly for smaller companies without dedicated regulatory affairs departments. Therefore taking advantage of briefing meetings and Scientific Advice (at a 90% fee reduction)8 could be invaluable to shaping your regulatory strategy early in development, and avoiding unnecessary pitfalls during later stages.

Summary

Small and medium-sized enterprises (SMEs) are integral to medicine development. This is particularly true for innovative medicines and orphan medicines for rare diseases. The SME Regulation and its implementation by the EMA offers several important initiatives and benefits for SMEs, including:

  • a dedicated SME office,
  • regulatory fee incentives,
  • SME briefing meetings with the EMA, and
  • specific guidance and training for SMEs.

What might be surprising is how little people know about the SME Regulation and the EMA’s SME initiatives. In part two of this SME blog series, we will detail how effective the SME Regulation has been in practice.

How Somerville Development Partners can help

We are a registered SME in Europe.

This means we can access SME benefits and fee incentives on your behalf if your organisation is not established in the European Union (EU)/ European Economic Area (EEA).

We have decades of experience navigating regulatory agency interactions and regulatory submissions in Europe and can confidently guide you through your regulatory milestones, including;

Get in touch

We welcome the opportunity to discuss scientific advice and regulatory strategy with you!

Nicole

Author

Nicole Brooks, Regulatory Consultant / Copywriter
Nicole@somerville-partners.com

References

1. European Medicines Agency (2022). SME Office Annual Report. Available at: https://www.ema.europa.eu/en/documents/report/small-and-medium-sized-enterprise-sme-office-annual-report-2022_en.pdf

2. Lincker H, Ziogas C, Carr M, Porta N, Eichler HG. (2014). Where do new medicines originate from in the EU? Nature Reviews Drug Discovery [Internet]. (2):92–3. Available at: https://www.nature.com/articles/nrd4232

3. Provansal C, Dooley D, Ziogas C. Pharmaceutical innovation sourcing. (2022). Nature Reviews Drug Discovery; 21(9):627–627. Available at: https://www.nature.com/articles/d41573-022-00125-y

4. Commission Regulation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises. 2003/361/EC. Notifies under document number C(2003)1422). Official Journal of the European Union. L124/36-124/41. Available at: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:124:0036:0041:en:PDF

5. Commission Regulation (EC) No 2049/2005. Laying down, pursuant to Regulation (EC) No 726/2004 of the European Parliament and of the Council, rules regarding the payment of fees to, and the receipt of administrative assistance from, the European Medicines Agency by micro, small and medium-sized enterprises. Official Journal of the European Union. 329/4-329/7. Available at: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:329:0004:0007:EN:PDF

6. European Medicines Agency (2020). Outcome of SME Office survey on the implementation of the SME Regulation (EC) No 2049/2005. Regulatory Science and Innovation Task Force. EMA/277477/2020. Available at: https://www.ema.europa.eu/en/documents/report/outcome-sme-office-survey-implementation-sme-regulation-commission-regulation-ec-no-20492005_en.pdf

7. European Medicines Agency (2023). Fees Payable to the European Medicines Agency. Available at: https://www.ema.europa.eu/en/about-us/fees-payable-european-medicines-agency

8. European Medicines Agency (2023). Financial Advantages of SME Status. Available at: https://www.ema.europa.eu/en/about-us/support-smes/financial-advantages-sme-status