Several countries impose fees for the evaluation of applications for new marketing authorizations. Some countries also impose retention fees (usually annual) after the authorization has been granted. As well as contributing to cost recovery and therefore to better drug regulation, application fees discourage applications that may never result in a marketed product (applications which “test the water”). The fees should be collected by the DRA and used to fund regulatory activities.

Fee income could allow for staff numbers to be adjusted to match the current workload. At times when the number of applications is high the income from fees will be higher and more staff can be employed. It takes time and resources to train the additional evaluators. When application numbers are low, therefore it is better to redeploy them (for example as GMP inspectors) rather than dismiss them, so that they are available for future periods of high work flow.

If fees are imposed, they should be high enough to contribute significantly to the efficient and effective functioning of the DRA. Application fees relate to the cost of the marketing authorization system, while retention fees relate to the other functions of the DRA, such as postmarketing activities. Whether fees are set high enough to recover all or only part of the DRA’s costs, should be determined by the government. If only part of the costs are recovered, the remainder is usually funded by the government from general revenue.

Some DRAs have been asked to generate their own income by undertaking activities which yield a profit, usually by means of consultancies. Examples of consultancy services for profit include acting as a commercial testing laboratory, providing advice to other governments and agencies, and providing advice during legal proceedings. Conducting such activities for profit is contrary to the purpose and ethic of a regulatory agency, distracts from the regulatory function and should be discouraged. However, provision of such services on a cost-recovery basis is acceptable, for example for training activities and the supply of publications.

Fees are usually set on the basis of the work that the application will generate, i.e. the nature and amount of data to be analysed. Fees for applications for multisource products are usually lower because they require less assessment work. Fees can also be adjusted to achieve national goals. For example, provision can be made for reducting or exempting fees for vital drugs with a limited market, and/or annual charges can be made proportional to gross annual sales. Application and retention fees should not normally be different for imported and locally produced pharmaceuticals. However, some countries with developing economies have reduced fees for local companies to promote local production.

The scale of fees should be published, including any variation applied to local products. Thus the fee structure should be transparent and fees should not vary in individual cases.