Michelle Mulherin (Mayo, Fine Gael)
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I appreciate the opportunity to debate this critical issue. From the information I have garnered it appears that if the matter is not addressed it will seriously and adversely impact on our current and emerging indigenous clinical research industry and our ability to grow the sector. That will, in turn, affect our ability to engage in research and development for veterinary medicines, medical devices and human pharmaceuticals. We are a big player in the latter area given the number of multinational pharmaceutical companies in this country.

I congratulate the new Minister for Health, Deputy Varadkar, on his appointment. I wish him a fruitful tenure. I think this might be his first time in the Chamber in his new position. There is an urgent need for a review of the new authorisation procedure, which commenced on 1 January this year, for the conduct of clinical trials on animals being operated by the Health Products Regulatory Authority, HPRA, formerly the Irish Medicines Board, which arises from the transposition of EU Directive 2010/63 into Irish law.

The European Union (Protection of Animals Used for Scientific Purposes) Regulations 2012, which give effect to the directive, will severely impede the ability of existing Irish companies to compete for such work internationally, as licences which they hold for this activity under the previous regime expire. As we speak, it is crushing the ability of fledgling and start-up companies to get business at all.

Affected individuals and companies explained to me that the physical care and treatment they give to the animals will not change under the new regulations so there will not be any changes affecting animal welfare. They already operate to the highest animal welfare standards and under the previous licensing regime companies conducting such clinical trials were regularly inspected by the Department of Agriculture, Food and the Marine. In fact, from the point of view of standards, Ireland is a very desirable place to have the necessary clinical trials conducted. In a recent interview with The Irish Times, Mr. Pat O’Mahony, chief executive of the Health Products Regulatory Agency set out his belief that we should "ramp up Ireland’s presence in clinical trials where we should be running about four times our current level". He said we should be big players in the sector.

The problems with the new authorisation process are excessive and inappropriate costs and difficulties with the timelines for processing applications and paperwork. In effect, what is at issue is additional red tape and bureaucracy on an existing system of checks and monitoring for animal welfare. The regime does not appear to be implemented in such a burdensome manner on business in other EU jurisdictions. The business conducted by Irish companies is now beginning to go to eastern Europe and further afield.

The issues of concern which are affecting competitiveness include the fees which became operative on 1 January - €1,000 to process an application, €2,000 for an ethical review and a further €2,000 to fast-track an application. When the Minister hears the timelines involved he will understand the need to fast-track applications. Every job requires authorisation, regardless of size, and the same cost applies. Let us contrast that with the previous regime in which companies operated where no fees applied and a five-year licence was issued. Regular inspections were part of the system. The new regime involves major additional expense that companies must pass on to customers, and it is disproportionate for small projects. For a job worth €800 a company would have to potentially add €5,000. Companies have said work is going abroad as a result. The timeframe of 54 days can be reduced to 21 days on payment of an additional €2,000 but that is still not fast enough. One company described to me how it lost out to a company in the Czech Republic which can do the work in two weeks. Therefore, we seem to be out of synch.

The HPRA requires an ethical review is provided. That, in itself, is acceptable but eight people are required to perform it, which is not feasible for small companies. Such an approach is not prescribed in the directive. While, in theory, such work could be farmed out, due to the sensitive nature of the information companies do not wish to engage the services of a third party. There also appears to be a disparity between the approach being taken in this country and what is required by the EU Commission. The Commission says one thing and we appear to have interpreted matters in another way.

Leo Varadkar (Dublin West, Fine Gael)
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Deputy Mulherin is correct that this is my first appearance in the Chamber as Minister for Health. I am at a disadvantage as she knows much more about the matter than I do at this stage. I thank the Deputy for raising this matter as it provides me with an opportunity to outline to the House the position in regard to this matter.

Directive 2010/63/EU on the protection of animals used for scientific purposes introduced a significant change in the systems for authorisation and conduct of scientific procedures on animals. The introduction of the legislation into Irish law will significantly enhance the welfare of animals used for scientific purposes. My Department has designated the Health Products Regulatory Authority, formerly the Irish Medicines Board, as the competent authority for the purposes of this legislation. This includes ensuring the application of the 3Rs. These are replacement, reduction and refinement. The HPRA has the relevant expertise in relation to both human and veterinary medicine to undertake this regulatory work. Given that many of the additional requirements under the above directive are of a highly specialised nature, the HPRA has put in place a small but expert cadre of officials well versed and experienced in this area. In preparing for its role as competent authority in this area, the HPRA undertook extensive engagement with the industry on implementation of the directive and I am informed that it continues to do so.

In transferring the functions involved to the HPRA in 2013, the Department agreed to provide it with the necessary funding for the setting up and provision of the service involved in 2012 and 2013 - the provision of further Exchequer funding for 2014, 2015 and 2016 being gradually scaled back so that the HPRA will ultimately regulate the sector from within its own funding. Accordingly, the HPRA consulted with the sector on the application of an appropriate funding model during 2013. Based on the feedback from the consultation the HPRA proposed a fee regimen and my Department sanctioned certain fees for the provision of HPRA services in 2014. The fees are included in the Irish Medicines Board (Fees) Regulations 2013, SI No. 501 of 2013. A similar process will be undertaken during 2014 on the fees for 2015.

The introduction of this legislation into Irish law will significantly enhance the welfare of animals used for scientific purposes. In this regard, the HPRA is obliged to verify compliance with the requirements of the directive in as practical a manner as possible and by so doing assist the industry in its development. Finally, we are mindful of the importance of research to the Irish economy . However, we also need to be cognisant of the potential implications of any changes made in this area for the regulation of other research undertaken by the HPRA.

Michelle Mulherin (Mayo, Fine Gael)
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First and foremost, my concern relates to the disparity between the transposition of the directive into Irish law and its transposition in other member states with the result that others areas are put at more of an advantage. I am told the British system is similar to ours but the sheer volume of applications means that it can be more readily self-financing compared to the small number of companies engaged in such activity in this country. Difficulties arise for small companies. Multinationals in this country require the service to develop pharmaceutical products and medical devices but we now face the possibility that such work will be sourced outside this jurisdiction. Certain individuals have told me their company will go out of business. They have gone from being up and coming, thriving businesses dealing with Enterprise Ireland and they expected to grow. However, the new authorisation procedure is crippling them. I referred to a potential cost of €5,000 being added to a job worth €800, for example, or for any other value. That is not feasible. The situation is not tenable. The current one-size-fits-all approach to fees will not work.

I do not argue against the need for animal welfare. I believe we are to the fore in that regard in this country, rightly so. We must continue to take such an approach. The issues I raise relate more to competitiveness than animal welfare. It is untenable to ask the companies involved to carry the entire burden. We will choke them. The Minister is a pragmatic person who is known for his no-nonsense approach.

We must cut through red tape to revive the floundering research and development sector. A great deal of hard work has been done to bring multi-national companies here and spin-off companies could carry out their research and development but they cannot do so at the moment due to cost and excessive red tape. This matter must be addressed or we will fail to adhere to our action plan for jobs. The Taoiseach said the 2014 action plan has a strong focus on the domestic economy, improving competitiveness and supporting entrepreneurs and small businesses. There can be no lessening of our efforts until we have full employment. I hope the Minister supports this.

Leo Varadkar (Dublin West, Fine Gael)
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This relates to a European directive the purpose of which is to advance animal welfare and ensure it is upheld even where animals are used for scientific purposes. As a general point it is appropriate that businesses pay for the cost of their own regulation as this is a principle that applies across the economy. This is a good thing because if businesses do not pay for their own regulation the cost will fall to the taxpayer and taxpayers' money should be used for better things.

I think the essence of Deputy Mulherin's point is the regulation is being interpreted differently in Ireland than in other European countries and as a result the fees are higher with more administrative delays. This may be a cause for concern because Irish research businesses should not be at a disadvantage when compared to European competitors that are bound by the same laws. I can arrange for the Deputy to meet the lead official on this in the coming weeks to see if something can be done to modify fees or change the system for future years.

Michelle Mulherin (Mayo, Fine Gael)
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I thank the Minister.