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Further Reading
de Bienassis K, Esmail L, Lopert R, Klazinga N. The
Economics of Medication Safety: improving medication safety through collective, real-time learning.
OECD Health Working Papers No. 147; 2022.
Drummond MF, Sculpher MJ, Claxton K, Stoddart GL,
Torrance GW. Methods for the economic evaluation
of health care programmes. 4th ed. Oxford University
Press; 2015.
Elliott R, Putman K, Davies J, Annemans L.A review
of the methodological challenges in assessing the
cost effectiveness of pharmacist interventions.
Pharmacoeconomics. 2014;32:1–15.
Elliott RA, Putman KD, Franklin M, Annemans
L, Verhaeghe N, Eden M, et al. Cost effectiveness of a pharmacist-led information technology intervention for reducing rates of clinically
important errors in medicines management in general practices (PINCER). Pharmacoeconomics.
2014;32(6):573–90.
Hodgson TA. Costs of illness in cost-effective-
ness analysis. A review of the methodology.
Pharmacoeconomics. 1994;6(6):536–52.
Husereau D, Drummond M, Augustovski F, de Bekker-
Grob E, Briggs AH, Carswell C, etal. Consolidated
Health Economic Evaluation Reporting Standards
2022 (CHEERS 2022) statement: updated reporting guidance for health economic evaluations. BMJ.
2022;376:e067975.
Singh J, Lord J, Longworth L, Orr S, McGarry T, Sheldon
R, etal. Does responsibility affect the public’s valuation of health care interventions? A relative valuation approach to health care safety. Value Health.
2012;15(5):690–8.
Steuten L, Buxton M.Economic evaluation of healthcare
safety: which attributes of safety do healthcare professionals consider most important in resource allocation
decisions? Qual Saf Health Care. 2010;19(5):e6.
Tamblyn R, Abrahamowicz M, Buckeridge DL, Bustillo
M, Forster AJ, Girard N, etal. Effect of an electronic
medication reconciliation intervention on adverse
drug events: a cluster randomized trial. JAMA Netw
Open. 2019;2(9):e1910756.
Vemer P, Corro Ramos I, van Voorn GAK, Al MJ, Feenstra
TL.AdViSHE: a validation-assessment tool of healtheconomic models for decision makers and model
users. Pharmacoeconomics. 2016;34(4):349–61.

Principles ofPharmacovigilance
andDrug Regulation
LourensT.Bloem, MennoE.van der Elst,
andOlafH.Klungel
6
Abstract
This chapter aims to establish understanding
of the drug regulatory activities that take place
to ensure that a drug’s benets outweigh its
risks and appreciate how drug regulatory systems support safe and effective use of drugs in
clinical practice. First, it discusses the series
of historical events that led to the current complex drug regulatory systems. Specically, the
emergence of contemporary drug regulation
and pharmacovigilance in response to drug
safety crises and European and global drug
regulatory harmonisation are addressed.
Second, it discusses current principles of
L. T. Bloem (*)
Division of Pharmacoepidemiology and Clinical
Pharmacology, Utrecht Institute for Pharmaceutical
Sciences, Utrecht University,
Utrecht, The Netherlands
e-mail: l.t.bloem@uu.nl
M. E. van der Elst
Dutch Medicines Evaluation Board,
Utrecht, The Netherlands
O. H. Klungel
Division of Pharmacoepidemiology and Clinical
Pharmacology, Utrecht Institute for Pharmaceutical
Sciences, Utrecht University,
Utrecht, The Netherlands
Clinical Pharmacology, Pharmacy and Environmental
Medicine, Department of Public Health, University of
Southern Denmark, Odense, Denmark
pharmacovigilance and drug regulation.
Important aspects comprise pharmacovigilance as a drug lifecycle activity, risk management planning, routine pharmacovigilance
activities such as periodic safety updates and
additional pharmacovigilance activities such
as post-authorisation safety studies, as well as
post-authorisation efcacy studies and the
concept of expedited regulatory pathways.
Third, it discusses advanced pharmacoepidemiological approaches in drug regulatory
decision-making, including contemporary
approaches to signal detection, the use of
multi-database observational studies, the use
of external control groups to contextualise, for
example, single-arm studies, and the target
trial emulation approach to facilitate causal
inference from observational studies.
Although some sections of this chapter focus
mostly on the European drug regulatory system, connections to important global activities
and developments are made to put the contents
in a broad perspective.
Keywords
Pharmacovigilance · Drug regulation · Risk
management · Safety specication · Signal
detection · Periodic safety update reports ·
Post-authorisation studies ·
Pharmacoepidemiology · Multi-database
studies · Target trial
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024
J. Jose et al. (eds.), Principles and Practice of Pharmacovigilance and Drug Safety,
https://doi.org/10.1007/978-3-031-51089-2_6
135

136
Learning Objectives
• To appreciate how drug regulatory systems
aim to support safe and effective use of drugs
in clinical practice.
• To appreciate the gradual establishment of the
complex contemporary frameworks for pharmacovigilance and drug regulation.
• To understand the series of historical events
that led to the current drug regulatory
systems.
• To recognise efforts aimed at global harmoni-
sation of drug regulatory systems.
• To differentiate between important aspects of
pharmacovigilance such as risk management
planning, routine pharmacovigilance activities, and additional pharmacovigilance
activities.
• To understand the role of post-authorisation
efcacy studies and the associated concept of
expedited regulatory pathways.
• To appreciate advanced pharmacoepidemio-
logical approaches in drug regulatory
decision- making, including for signal detection, the use of multi-database observational
studies and external control groups, and the
target trial emulation approach for observational studies.
Key Points
• The current drug regulatory systems
have gradually evolved over time, often
because (series of) historical events
required a regulatory response.
• Before a drug can be used in clinical
practice, a marketing authorisation
needs to be granted by a drug regulator
based on sufcient evidence of its
quality, safety, and efcacy.
• Essentially, a drug’s benets need to
outweigh its risks, at the time of marketing authorisation but also throughout
the remainder of the drug’s lifecycle.
• Pharmacovigilance contributes importantly to maintaining a positive benet–
risk balance.
• Important aspects of pharmacovigilance
and other regulatory decision-making
L. T. Bloem et al.
comprise risk management planning,
pharmacovigilance activities, periodic
safety updates, post- authorisation safety
and efcacy studies, and expedited regulatory pathways.
• Advanced pharmacoepidemiological
approaches can contribute to drug regulatory decision-making, such as contemporary approaches to signal
detection, multi-database observational
studies, external control groups that
contextualise for example single-arm
studies, and the target trial emulation
approach that facilitates causal inference from observational studies.
1 Introduction
To provide assurance to society that a drug when
it enters the market and is used in daily clinical
practice does not cause more harm than it provides benet to the patients that use it, a marketing authorisation needs to be obtained. Marketing
authorisations are granted once a drug regulator
such as the European Medicines Agency (EMA)
in the European Union (EU), the United States
Food and Drug Administration (US FDA), or the
Medicines and Healthcare products Regulatory
Agency (MHRA) in the United Kingdom (UK)
considers that there is sufcient evidence to conclude that the quality aspects of a drug are
acceptable and that its benets outweigh its
risks. In other words, the drug’s benet–risk balance is positive. While the US FDA and the
MHRA grant marketing authorisations themselves, in the EU, the European Commission
(EC) formally grants marketing authorisations
after a positive opinion of the EMA for drugs in
the centralised authorisation procedure. Such
marketing authorisations apply to the entire EU,
as well as those in the European Economic Area
(EEA), namely, Iceland, Liechtenstein, and
Norway. In addition, national regulatory authorities in the EU can also grant national and multinational marketing authorisations through
mutual recognition and decentralised procedures. However, drug regulation does not end

6 Principles ofPharmacovigilance andDrug Regulation
137
when a marketing authorisation is granted but
extends throughout the entire lifecycle of a drug.
One of the most important drug regulatory activities that continues after marketing authorisation
is pharmacovigilance: “the science and activities
relating to the detection, assessment, understanding and prevention of adverse effects or any
other medicine/vaccinerelated problem” [1, 2].
Pharmacovigilance aims to ensure that the benet–risk balance of a drug continues to be positive throughout its lifecycle, starting with clinical
development and ending when the drug is taken
from the market.
This chapter aims to establish understanding
of the drug regulatory activities that take place
to ensure that a drug’s benets outweigh its
risks and appreciate how drug regulatory systems support safe and effective use of drugs in
clinical practice. First, it discusses the series of
events that led to the current drug regulatory
systems. Specically, the emergence of contemporary drug regulation and pharmacovigilance in response to drug safety crises and
European and global drug regulatory harmonisation are addressed. Second, it discusses current principles of pharmacovigilance and drug
regulation. Important aspects comprise pharmacovigilance as a drug lifecycle activity, risk
management planning, routine pharmacovigilance activities such as periodic safety updates
and additional pharmacovigilance activities
such as post- authorisation safety studies(PASS), as well as post-authorisation efcacy studies (PAES) and the concept of
expedited regulatory pathways. Third, it discusses advanced pharmacoepidemiological
approaches in drug regulatory decision- making,
including contemporary approaches to signal
detection, the use of multi-database observational studies, the use of external control groups
to contextualise, for example, single-arm studies, and the target trial emulation approach to
facilitate causal inference from observational
studies. Although some sections of this chapter
focus mostly on the European drug regulatory
system, connections to important global activities and developments are made to put the contents in a broad perspective.
2 The Evolution ofDrug
Regulation
This section explains the need for and important aspects of the complex contemporary
frameworks for pharmacovigilance specically
and drug regulation in general. In doing so, the
reader is taken along their gradual evolution
over time, often as a response to certain historical events in Europe and the US, which ultimately led to the current drug regulatory
systems. To illustrate, some compare drug regulatory frameworks with Christmas trees that
gradually become more and more decorated
with bulbs and other ornaments as years pass,
with new items added every year but old ones
seldomly removed. The section ends with the
establishment of the European Agency for the
Evaluation of Medicinal Products (EMEA) in
1995, now known as the EMA.
2.1 Industrial Production ofDrugs
andTheir Early Regulation
Until the nineteenth century, apothecaries were
the main discoverers and developers of new
drugs. However, when the knowledge of chemistry and pharmacology advanced in the nineteenth
century and the industrial revolution took place,
the pharmaceutical industry emerged and gradually replaced apothecaries in this role [3–6]. The
oldest pharmaceutical company—Merck—was
founded as an apothecary in Darmstadt, Germany,
in 1668 and was likely the rst company to move
towards the industrial production of drugs in the
rst half of the nineteenth century [7, 8]. In the
second half of the century, Felix Hoffman at
Bayer modied the molecular structure of salicylic acid to reduce its adverse effects. This
resulted in acetylsalicylic acid, which was marketed as aspirin in 1899. In 1904, aspirin became
available as a tablet rather than loose powder,
which allowed exact dosing and prevented adulteration [9]. Aspirin was the rst drug to undergo
mass advertising activities, with information distributed to over 30,000 physicians worldwide
[10]. Also, it received an enormous uptake in

138
L. T. Bloem et al.
daily life, including recognition in popular literature [9].
Increasing proportions of drugs were manufactured by pharmaceutical companies, but there
were no agreed methods of assessing clinical
efcacy, and these only started to be established
after World War II [11]. While (forerunners of)
many of our current drugs, including hypnotics,
anaesthetics, antipyretics, and analgesics, were
produced by those early pharmaceutical companies [5, 7], many other available drugs lacked
effectiveness, and some were mainly toxic.
Whether efcacious or not, most drugs were
commonly known as “patent drugs” (also named
“secret” or “proprietary” drugs) and were heavily advertised in medical journals and public
press both in Europe and the US [4, 12–15]. In
1905, the American Medical Association
(AMA) decided that its journal, the JAMA,
would only publish advertisements of drugs that
had been tested and approved by its newly inaugurated Council on Pharmacy and Chemistry [4,
15]. The Council’s tests comprised quality,
safety, and basic efcacy evaluations that were
published in the JAMA [15]—perhaps the earliest form of a more comprehensive and proactive
review of drugs. US legislation around that time
did not require any proactive review of safety or
efcacy, but mainly focused on quality control
[16] and aimed to prevent safety crises caused by
adulterated and misbranded drugs [15].
2.2 Drug Regulation in Response
toSafety Crises
The situation in the United States (US)changed
in 1937, when over 100 children and adults died
after taking the antibiotic Elixir Sulfanilamide
that was produced by S.E.Massengill Co. The
AMA received reports of these deaths and analysed samples of Elixir Sulfanilamide to discover
that it contained the poisonous liquid diethylene
glycol, otherwise used as an antifreeze. They
issued a widespread warning but lacked legal
authority for enforcement [15, 17–21]. In
response, the 1938 Food, Drug, and Cosmetic
Act required that for each drug, safety testing “by
all methods reasonably applicable” should be
performed and demonstrated to the US FDA [15,
18]. Thereby, regulatory control in the US shifted
from healthcare professionals to the state.
In most of Europe, regulation of drugs was still
focused on quality control by healthcare professionals—mainly pharmacists—apart from a few notable
exceptions [19, 22]. The German physician and scientist Paul Ehrlich had developed a hypothesis about
a “magic bullet” or “chemotherapy”—a drug that
could be specically targeted towards a microorganism and would not harm the human body.
These ideas led to his discovery of arsphenamine
(branded Salvarsan) as a treatment against syphilis
in 1907 [23]. However, during World War I, the
German arsphenamine became unavailable to many
countries including the UK.After patents and trademarks were suspended, UK companies noticed that
it was difcult to control impurities, causing safety
and efcacy issues. Considering the biological
mechanism of action, chemical tests proved inadequate to ensure a safe and efcacious drug, and clinical data were required. The UK Medical Research
Committee (later Medical Research Council) played
an important role in regulating arsphenamine in the
UK: it ensured clinical data were gathered and
approved for every batch before marketing [6, 23,
24]. Moreover, the UK Therapeutic Substances Act
1925 set standards for (testing of) quality, purity, and
potency and required a licence to manufacture drugs
“of which the purity or potency cannot be adequately
tested by chemical means” [20, 24, 25]. Furthermore,
Norway (from 1928) and Sweden (from 1934)
required that drugs were “medically justied” prior
to marketing [19, 26, 27]. France followed in 1946
by installing a committee that evaluated the therapeutic aim and safety of each drug before authorisation for marketing was granted by the Minister of
Public Health [28]. Interestingly, the Norwegian
regulatory agency only authorised drugs for which
there was an unmet need, in order to restrict the
number of authorised drugs [27].
However, it would require another major safety
crisis before the contours of current regulatory
systems were established in most countries. In
1956, thalidomide was rst marketed in the

6 Principles ofPharmacovigilance andDrug Regulation
139
Federal Republic of Germany and thereafter in
many other countries across the world, for a variety of indications and under various brand names
including Contergan, Softenon, Distaval, Talimol,
and Kevadon. Because a single injection did not
cause acute toxicity, it was claimed to be safe,
also during longer term use. However, in 1959,
cases of peripheral neuropathy after thalidomide
use were reported, followed in 1961 by cases of
infants with signicant malformations (“phocomelia”). These teratogenic effects seemed to have
occurred after maternal use of thalidomide during
pregnancy, often as a hypnotic or an antiemetic [6,
17, 18, 29]. Importantly, physicians that shared
their observations of these events and the suspected role of thalidomide helped to stop the tragedy [30, 31]. Worldwide withdrawal of
thalidomide-containing drugs followed. The US
was spared the disaster because the FDA had concerns about peripheral neuropathy, preventing
authorisation [18, 21]. In response to the crisis, in
the 1960s and 1970s, countries worldwide
founded or changed the mandate of existing regulatory agencies to require evidence of quality,
safety, and efcacy of a drug before it could be
authorised for marketing [18, 21]. Notably, the
US FDA also required such evidence for drugs
already on the market, which caused many pharmaceutical companies to withdraw them [32].
2.3 The Emergence of
Pharmacovigilance
The worldwide thalidomide tragedy did not only
result in the common requirement for preauthorisation evidence of quality, safety, and efcacy but also prompted regulatory follow-up
post-authorisation, especially concerning safety.
The evolution of clinical trials that aimed to provide robust evidence of efcacy still provided
limited evidence of safety. While restricted trial
populations allowed identication of adverse
drug reactions (ADRs) that occurred frequently
and early after a new drug was rst used, it lim-
ited identication of rare and late-onset ADRs, as
well as generalisability to the often-broader clinically interpreted indication, let alone other potential off-label indications [33, 34]. As of 1962, the
US FDA required companies to report adverse
events in order to establish frequencies of known
ADRs and identify new potential ADRs [35]. A
few years earlier, after chloramphenicol use had
appeared associated with various adverse events
including fatal aplastic anaemia, the FDA initiated a pilot study of adverse event reporting in
cooperation with, among others, the AMA and
the American Society of Hospital Pharmacists
that resulted in a spontaneous reporting system
with almost 200 participating hospitals [36, 37].
Shortly thereafter, in 1964, the UK started a similar system, the Yellow Card Scheme [38]. Its
Committee on Safety of Drugs clearly recognised
the need for post-authorisation follow-up: “No
drug which is pharmacologically effective is
entirely without hazard. The hazard may be insignicant or may be acceptable in relation to the
drug’s therapeutic action. Furthermore, not all
hazards can be known before a drug is marketed;
neither tests in animals nor clinical trials will
always reveal all the possible side effects of a
drug. These may only be known when the drug
has been administered to large numbers of
patients over considerable periods of time” [39].
In the late 1960s and early 1970s, the World
Health Organization (WHO) contributed substantially to the formation of and collaboration between
national and international systems for the spontaneous reporting of adverse events, through its
Programme for International Drug Monitoring [40].
The thalidomide tragedy was an important driver
for this programme since the lack of a worldwide
system to share adverse event information had prevented the early recognition of thalidomide-induced
phocomelia [41]. Over the years, the programme
has expanded extensively, from ten member countries at its inception to over 175 full and associate
members in 2023 [42]. Importantly, around the
inception of the programme, the use of the term
“pharmacovigilance” seems to have started [43].

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L. T. Bloem et al.
2.4 European Harmonisation
and the free movement of drugs. Many pieces of
legislation followed that ensured further har-
In 1965, the European Economic Community
(EEC) created by the Treaty of Rome in 1957
[44]) issued legislation to harmonise national
pharmaceutical legislation and facilitate the
establishment of a common European market
Table 6.1 Selection of important developments in the EEC/EU pharmaceutical legislation (1965–1995)
Legislation Contents
Directive 65/65/EEC [45] Denitions and requirements
“Safeguard public health … by means which will not hinder the development of the
pharmaceutical industry or trade in medicinal products within the Community”
– Denition of “medicinal product”
– Requirement for authorisation of drugs before placing on the market
– Requirement for submission of quality, pre-clinical and clinical data
– Refusal of MA in case of insufcient quality, safety, and efcacy
– Five-year validity of MA
– Options to revoke or suspend existing MA
– Labelling requirements
Directive 75/318/EEC [46] Standards and protocols
– Specication of quality, pre-clinical and clinical data required by Directive
65/65/EEC
– First mention that benets (“therapeutic advantages”) must outweigh risks
– First mention of “comprehensive data” as a requirement for MA
– New type of MA: to allow for non-comprehensive data in exceptional
circumstances, conditional on supply restrictions and provision of information
on lack of dataa. For drugs:
• For rare diseases
• For which a lack of scientic knowledge prevents the collection of
comprehensive data
• For which it is contrary to medical ethical principles to collect
comprehensive data
Directive 75/319/EEC [47] CPMP, CPMP procedure and further requirements
– Inception of the CPMP for arbitration and the CPMP procedure: mutual
recognition of an existing MA by at least ve other member states (CPMP
opinion not binding)
– Option to require additional data during the MA procedure
– Requirements for manufacturing, including authorisation and a qualied
person
– Need for inspections of manufacturers and option to withdraw drugs from the
market
– Need for a review of MAs granted before Directive 65/65/EEC, within
15years
Directive 83/570/EEC [48] SmPC, assessment reports and revised CPMP procedure
– Requirement for an SmPC, to be kept up to date after MA
– Requirement for authorities to draw up assessment reports for drugs containing
a “new active substance”
– Revised CPMP (“multistate”) procedure: at least two other member states
– First mention of a “balance” (“between effectiveness and risk”)
Directive 87/18/EEC [49] Requirement to comply with good laboratory practice
Directive 87/21/EEC [50] Abridged applications for MA
Exceptions for submission of quality, pre-clinical and clinical data
monisation and laid the basis for the current
European drug regulatory system, including
detailed evidence requirements and a slow but
steady progress towards EEC-wide regulatory
procedures (Table 6.1). The EEC’s Committee
b
c
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