The Pharmaceutical Journal Vol 263 No 7076 p970
December 18/25, 1999 News

MCA licence fees to rise to level of two years ago

The Medicines Control Agency is proposing to increase medicines licence fees by more than 14 per cent from next April. This would restore fees to the level of two years ago, when they were reduced significantly to eat up surpluses built up by the agency. As a Government trading fund, the MCA is required to break even over a period of years. However, from 1992, when it was first funded entirely through fees, it made a surplus every year for six years despite reductions in fee levels. It attributes these surpluses to improvements in efficiency and high licence volumes. Following pressure from the Treasury, fees were reduced by 12.5 per cent for 1998-99, resulting in a deficit of £3.4m that year and a forecast deficit of £6.5m in the current year. In real terms the current fees are now 35 per cent lower than in 1992.

MCA: surpluses reduced

Arithmetically, a simple reversal of the 12.5 per cent decrease requires the current fee levels to rise by 14.2 per cent. Such an increase is the first of three options for 2000-01 set out by the agency in a consultation letter (MLX 257) dated December 6.
The agency makes it clear that this is its preferred option, enabling it to maintain its position as the world's most efficient medicines licensing agency. (Since the MCA was established in 1989, its average assessment time for new active substances has fallen from 110 days to 40 days.)
The MCA points out that, even with a 14 per cent increase, it expects to see a decrease in overall surplus of some £3m by March, 2001, mainly because of falling licence volumes. Further increases would therefore be required in subsequent years to redress the balance between fees and cost.
The MCA's second option for 2000-01 is a 10 per cent increase across the board, which would necessitate further significant increases in subsequent years. The agency favours this option less than Option 1 because it would rapidly reduce the residue of its surplus and leave it with little financial flexibility. It warns that, if it should encounter short-term financial difficulties, it might have to scale down some of its services.
Option 3 is to restrict the general increase to 3 per cent while introducing new targeted capital fees in three areas of activity that are currently not fully funded from the service fee. These are licence renewals, labels and leaflets, and outgoing mutual recognition applications. Licence renewals would be charged at £600, with a reduction for second and subsequent bulk applications; fees for labels and leaflets would be linked to those for standard variations for marketing authorisations. Outgoing mutual recognition fees would be charged at about 50 per cent of the national fee, with repeat wave applications charged at about 25 per cent.
The MCA is inviting comments on its proposals by January 21.