16 Similar to the United States, the various phases of preclinical and clinical research in the European Union are subj u ect to significant regulatory r controls. Although the EU Clinical Trials Directive 2001/20/EC has sought to harmonize the EU clinical trials regulatory r framework, setting out common rules for the control and authorization of clinical trials in the EU, the EU Member States have transposed and applied the provisions of the Directive differently. This has led to significant variations in the member state regimes. Under the current regime, before a clinical trial can be initiated it must be approved in each of the EU countries where the trial is to be conducted by two distinct bodies: the National Competent Authority, or NCA, and one or more Ethics Committees, or ECs. Under the current regime all suspected unexpected serious adverse reactions to the investigated drug r that occur during the clinical trial have to be reported to the NCA and ECs of the Member State where they occurred. The EU clinical trials legislation currently is undergoing a transition process mainly aimed at harmonizing and streamlining clinical-trial authorization, simplifyi f ng adverse-event reporting procedur d es, improving the supe u rvision of clinical trials and increasing their transparency. Recently enacted Clinical Trials Regulation EU No 536/2014 ensures that the rules for conducting clinical trials in the EU will be identical. In the meantime, Clinical Trials Directive 2001/20/EC continues to govern all clinical trials performed in the EU. Europe o an Union Drug Review and Appr p oval In the European Economic Area, or EEA, which is comprised of the 27 Member States of the European Union (including Norway and excluding Croatia), Iceland and Liechtenstein, medicinal products can only be commercialized afte f r obtaining a Marketing Authorization, or MA. There are two types of marketing authorizations. • The Community MA is issued by the European Commission through the Centralized Procedur d e, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, and is valid throughout the entire territory of the EEA. The Centralized Procedur d e is mandatory for certain types of products, such as biotechnology medicinal products, orpha r n medicinal products, advanced-therapy a medicines such as gene-therapy, a somatic cell-therapy or tissue-engineered medicines and medicinal products containing a new active subs u tance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions and viral diseases. The Centralized Procedur d e is optional for products containing a new active subs u tance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific f or technical innovation or which are in the interest of public health in the EU. • National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are availabl a e for products not falling within the mandatory scope of the Centralized Procedur d e. Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member States through the Mutual Recognition Procedur d e. If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedur d e. Under the Decentralized Procedur d e an identical dossier is subm u itted to the competent authorities of each of the Member States in which the MA is sought, one of which is selected by the applicant as the Reference Member State, or RMS. The competent authority of the RMS prepares a draftf assessment report, a draftf summary of the product characteristics, or SPC, and a draftf of the labe a ling and package leafle f t, which are sent to the other Member States (referred to as the Member States Concerned) for their approval. If the Member States Concerned raise no objections, based on a potential serious risk to public health, to the assessment, SPC, labe a ling, or packaging proposed by the RMS, the product is subs u equently granted a national MA in all the Member States (i.e., in the RMS and the Member States Concerned). Under the above described procedur d es, before granting the MA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit f balance of the product on the basis of scientific f criteria concerning its quality, safety and effi f cacy. Coverage and Reimbursement Sales of our products will depend, in part, on the extent to which our products will be covered by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. In the United States no uniform policy of coverage and reimbursement for drug r or biological products exists. Accordingly, decisions regarding the extent of coverage and amount of reimbursement to be provided for any of our products will be made on a payor-by-payor basis. As a result, the coverage determination process is ofte f n a time-consuming and costly process that will require us to provide scientific f and clinical suppor u t for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.