Recent developments in regulating the pharmaceutical business in the EU

The pharmaceutical business has long been a source of controversy, particularly the ability to market a drug for human consumption. The thalidomide disaster of the late 1950s and early 1960s invoked all nations in the 15 member states of the EU to require that a pharmaceutical product intended for human consumption have an official market licence before it is allowed onto the nation’s market. Until December 1994 each nation in the EU could decide itself what products came onto its market. From January 1995 the European Commission, facilitated by the European Medicines Evaluation Agency, has had the power to decide on applications for pan‐EU market licences. Explores the new EU licensing system, drawing from past and present experience, and argues that although complex at least four sets of motivations lie behind the construction of the EMEA system: the EU prisoners’ dilemma; four types of market failures; extensions of politico‐bureaucratic business and, finally, the inability of the pharmaceutical industry to nurture effectively any feasible alternative to the new system.