PAYBACK ON MEDICAL DEVICES IN ITALY: LATEST UPDATES

The medical devices sector in Italy has been struggling for several months now as the Government is retroactively demanding that sellers of medical devices refund a quota of the excessive expenses sustained by the regional health systems during the years 2015-2018.

In fact, following a law decree enacted in August 2022, businesses and companies that won public tenders and provided Italian hospitals with medical devices from 2015 and onwards have been requested to turn back to the Regions part of the relating income, for a total amount of more than 2 billion euros.

In December 2022, Regions issued decrees ordering that the medical devices operators pay their respective quotas of the so-called “payback” contribution by the end of January 2023.

However, hundreds of claims were filed before the Administrative Court of Rome and the Government decided to postpone the payment deadline to 30 April 2023.

As the payment deadline draws closer, it appears that on yesterday’s Council of Ministers the Government issued a new law decree providing for a (still unspecified) discount in favour of businesses and companies that waive all claims and pay the discounted contribution by 30 June 2023.

While this new law decree is yet to be published on the Official Journal, it seems likely that the compromise reached at political level will not satisfy the expectations of several companies operating in the medical devices sector, meaning that the challenge is far from over.

Focus on Med-Tech Prices

A new body dedicated to reviewing prices of medical devices in Italy has been established by the January 23, 2023 decree of the Ministry of Health, which has been recently published (and you may find here). This new “Osservatorio nazionale dei prezzi dei dispositivi medici” will be aided by the Health Technology Assessment group and other entities within the national healthcare service.

The outcome of the Osservatorio’s analysis will be published in a dedicated section of the Ministry of Health website.

The med-tech industry association has welcomed a better focus on prices, but warned against confusion among the 1.5 million+ med-tech goods and related services offered in Italy, as well as pointed out that Italy does not suffer from a problem of overspending in medical devices (the prices of which are substantially lower than the EU average), but of underfunding of the national health service.

New Whistleblowing Legislation Adopted in Italy

Italy has implemented today the EU whistleblowing directive (UE) 2019/1937. The new legislative decree no. 24/2003 has in fact been published on the official journal and is scheduled to enter into force on March 30, 2023.

The final published version of the decree, which had been previously leaked in an unofficial draft, can be found here: https://www.gazzettaufficiale.it/eli/id/2023/03/15/23G00032/sg.

The new legislation is certain to affect private companies and public entities alike when it comes to managing whistleblowing reports and new measures may need to be adopted to comply with the new requirements.

For additional information on this subject, materials from our February webinar can be freely accessed here: https://lawhealthtech.com/2023/02/09/our-whistleblowing-webinar/.

Italian Transparency Act: the Opinion of the Italian Data Protection Authority

The Italian Data Protection Authority has issued its opinion on the data protection implications relating to the new information duties set forth on employers by legislative decree 104/2022.

On August 13, 2022, legislative decree 104/2022 (“Transparency Act”) has entered into force. It provides for a new set of mandatory information that the employer must communicate to its employees at the time of their onboarding. On January 24, 2023, the Italian Data Protection Authority (“Garante”) issued its opinion about compliance of such new information duties with the provisions of the relevant data protection legislation.

In particular, the focus of the Garante was centered on the mandatory communication that, according to section 4, paragraph 8 of the Transparency Act, the employer must give to the employees if any “decision or monitoring automated system is used for the sake of providing information which is relevant for the hiring, management or termination of the employment relationship, for the assignment of tasks and duties, or for the surveillance, evaluation and fulfillment of contractual duties by the employee”. The Garante has stated that:

  • GDPR Sanctions Apply in case of Breach.  The implementation of any decision or monitoring automated system must be made in compliance and within the limits set forth by the applicable labor law provisions, and in particular law 300/1970. Such labor law provisions, which allow the implementation of automated systems only if certain conditions occur, must be deemed as providing “more specific rules to ensure the protection of the rights and freedoms in respect of the processing of employees’ personal data in the employment context” (as per section 88, paragraph 2, of the GDPR), and thus non-compliance with them may lead to administrative fines pursuant to section 83 of the GDPR.
  • Data Processing Impact Analysis (“DPIA”).  The employer, who is subject to the duty of accountability, must assess beforehand if the relevant processing is likely to result “in a high risk to the rights and freedoms of natural persons responsibility”, and thus requires a preliminary data processing impact analysis under section 35 of the GDPR. In such regard, the Garante has clarified that data subjects (i.e., employees) should be deemed as “vulnerable”, and that the processing of their data with automated systems is very likely to meet the conditions that make the DPIA mandatory according to the guidelines on the DPIA issued by the WP 29 on April 4, 2017.
  • Compliance with the “privacy by default” and “privacy by design” principles.  Employers must implement appropriate technical and organizational measures and integrate the necessary safeguards into the processing so that to protect the rights of data subjects (privacy by design). Moreover, the controller shall ensure that, by default, only personal data which are necessary for the specific purpose of the processing are processed (privacy by default), and should then refrain from collecting personal data that are not strictly related to the specific purpose of the relevant processing.
  • Update of the register of processing activities (“ROPA”).  The employer must indicate the processing of data through automated systems within his/her ROPA.

Need any further assistance on the matter? Don’ hesitate to reach us out!

AI Liability Directive: Key Takeaways

We have already illustrated the new proposed rules for a product liability directive on this blog. We now analyze the proposal for a AI Liability Directive, which offers interesting insights on how liability rules will be tweaked when Artificial Intelligence is concerned. In fact, as noted by the Commission’s explanatory memorandum to the AI Liability Directive, “the ‘black box’ effect can make it difficult for the victim to prove fault and causality and there may be uncertainty as to how the courts will interpret and apply existing national liability rules in cases involving AI“.

These slides may help understanding the AI Liability Directive. If you have questions or doubts, do not hesitate to reach out to us.

New Rules On Whistleblowing

On December 9, 2022, a bill to implement Directive (EU) 2019/1937 on whistleblowing was submitted to the President of the Chamber of Deputies.

The draft envisages several obligations for entities of public and private sectors, including an obligation to activate a whistleblowing channel (internal or external) that guarantees the confidentiality of the identity of the reporting person, unless the reporting person gives express consent; of the person involved; of the person otherwise mentioned in the report; and of the content of the report and any related documentation.

Such reports may be made either in written or oral form, through telephone lines or voice messaging systems; the reporting person may request that a face-to-face meeting be scheduled.

The Italian Anti-Corruption Authority, after having heard the Italian Data Protection Authority, must adopt, within 3 months of the adoption of the legislation, specific guidelines on procedures for handling external reports.

To comply with personal data protection legislation, it will be necessary to:

  • Prepare adequate privacy notices regarding the processing of data collected within the reporting process;
  • Adopt appropriate technical and organizational measures to ensure an adequate level of confidentiality of the information of the reporting person and the person involved, as well as the content of the report and related documentation, to be identified on the basis of a data protection impact assessment;
  • Give an express authorization to the parties who will receive reports to process personal data;
  • Formally appoint all parties that process data related to the reports (i.e., external providers) as data processors.

The draft also provides that data related to internal and external reports, as well as related documentation, may be retained for up to a maximum of 5 years from the date of the communication of the final outcome of the reporting procedure.

Retaliation against reporting persons is prohibited and sanctions can be applied as a result.

Once approved, the whistleblowing legislation will take effect 4 months after the date of its entry into force, except for private-sector entities that have employed, over the past year, an average of not less than 50 and not more than 249 employees, with unlimited term or fixed-term employment contracts, for whom the provisions of the legislation will take effect as of December 17, 2023.

Product Liability Directive

The Proposal for a new Product Liability Directive of September 2022 is likely to be a game changer for manufacturers of products. Rules on the burden of proof are going to favor consumers more than before.

If you want to familiarize with the new rules, you will appreciate the following slides. Any questions? You know where to find us. Happy holidays!