Learn · Biotech

FDA and EMA: How a Marketing Authorisation Works

Fortgeschritten

Kurz erklärtThe FDA (USA) and the EMA (EU) decide whether medicines may be placed on the market. A submitted application is not the same as a granted approval — months of review and a real risk of rejection lie between the two.

Definition

The Food and Drug Administration (FDA) is the US medicines regulator; the European Medicines Agency (EMA) is its European counterpart. Both review the clinical data submitted by a company and decide whether a product may be marketed.

The process in brief

The company submits the authorisation dossier. The regulator confirms that it has been accepted, carries out its review and reaches a decision within a set timeframe. During this period it may request additional data, which extends the process.

The Advisory Committee

The FDA may convene an external panel of experts that votes publicly and issues a recommendation. This recommendation is not legally binding — but the agency follows it more often than not. As a result, the market often treats an Advisory Committee (AdCom) vote as a preliminary decision, with correspondingly sharp price movements.

A rejection is not always the end

Instead of granting approval, the FDA may issue a Complete Response Letter: a rejection that sets out the reasons. Some deficiencies can be remedied — manufacturing issues, for example — while others require entirely new studies, with very different implications for the timeline and the company's funding needs.

Common mistakes

Reading 'application submitted' as a success story. Only the decision matters.
Assuming that US approval automatically carries over to Europe — the two processes are entirely separate.
Treating an AdCom vote as binding.

Clinical Trials: Phase I, II and III

Educational content only, not investment advice. Small caps are highly speculative and total loss is possible. All information without warranty.