EU Commission Factsheet on MDR and IVDR

Still confused about the regulatory changes affecting medical devices and in vitro devices? The EU Commission has published a useful factsheet, which you can find here.

Through the factsheet, the Commission warns health institutions and healthcare professionals that the upcoming changes may have consequences on the availability of medical devices because manufacturers may decide to stop their production or because products may not get their certificates on time.

Some notified bodies have also decided to drop off and only two notified bodies have been MDR designated so far, so this will create additional bottlenecks. A short grace period until 2025 is granted, but it does not apply to class I devices.

The path to an enhanced regulatory framework will be complicated and manufacturers, healthcare institutions and healthcare professionals need to know what to expect.

Clinical Trial Regulation: Another Piece of the Puzzle

Another piece of the puzzle that will become the Italian clinical trials regulatory framework has been completed last week through the publication of Legislative Decree no. 52 of 2019. We had already talked about changes to clinical trials legislation in this previous post and some of the current changes had already been foreseen in such bill.

Here are the major changes:

  • The Italian pharmaceutical agency (AIFA) will be called to issue requirements for trial centers and specific weight will be given to the involvement of patients’ associations by the center in the protocol definition;
  • Patients associations will be involved also in the process of evaluation and authorization of clinical trials;
  • AIFA will publish data on authorized trial centers, along with curricula vitae of individuals involved in the conduct of the study;
  • AIFA will also need to set forth rules to guarantee the independence of the clinical trials and the absence of conflicts of interest in furtherance of section 9 of EU Regulation 536/2014;
  • In case of breach of terms and procedures relating to clinical trials, or of rules on independence and transparency, an ethical committee may be suspended;
  • New rules aimed at facilitating non-profit trials and observational studies (also post-market) will be introduced, which will allow the assignment of study data and their use for registration purposes.
  • Research methodologies and clinical trials conduct will be the subject matter of specific training courses offered, also as continuing medical education.

In conclusion, we need to wait for further rules before the puzzle is complete.

New Rules on Public Procurement

On June 12, following a confidence vote, the lower chamber of the Italian Parliament has approved a law that will bring quite a few changes to the Public Procurement Code.

The new law, which has not been published in the Italian Official Gazette yet, has been enthusiastically announced as a way to accelerate governmental contracts, in line with the nickname of the act (“Sblocca Cantieri“, which could be translated as “Unlocking Building Sites”).

By way of example, the act allows subcontracting up to 40% (the previous threshold was 30%) and sets forth that only three competing offers will be required for contracts with a value between 40 and 150 thousand Euros. It also includes rather odd provisions, such as the increase in spending for close circuit tv cameras in public structures’ premises where small children and old people are cared for (see section 5 septies). 

The law has been bitterly criticized by the head of the Italian Anti-Corruption Authority, who pointed out that the aggregate value of public procurement contracts is at its highest (139.5 billions in 2018) and that criminal infiltration in companies bidding for public works is also very significant. Many fear that de-regulation of the sector will not bring positive results.

Others simply point out that this body of law has been subject to too many changes in the past years, which makes it difficult for helpful case law to develop and confuses operators.

Why the European Union Whistleblower Laws Are All Doomed To Failure – BY GUEST BLOGGERS MARC RASPANTI AND PAM BRECHT

Today we are hosting a blog post by the US attorneys Marc Stephen Raspanti and Pamela Coyle Brecht.

Marc is the name partner of the US law firm Pietragallo Gordon Alfano Bosick & Raspanti, LLP located in Philadelphia, Pennsylvania, the founder of the firm’s White Collar Criminal Defense Practice Group, as well as the firm’s global Qui Tam/False Claims Act Practice Group (msr@pietragallo.com).

Pam serves as the firm’s Practice Chair for the firm’s global Qui Tam/False Claims Act Practice Group (pcb@pietragallo.com). Their firm websites are:  http://www.pietragallo.com and http://www.falseclaimsact.com

Member States of the European Union, over the last several years, have passed a series of so-called “Whistleblower Laws.”  These laws are being implemented allegedly to bolster anti-corruption efforts throughout Europe.  While corruption is no stranger to either side of the Atlantic, the European Union would advance their fraud fighting efforts exponentially by taking a focused look at the highly successful American False Claims Act.

France, Ireland, Italy, Greece, Germany, Netherlands, Sweden, Hungary, Lithuania, Malta, Slovakia, the United Kingdom, as well as others, have passed or amended some type of a putative whistleblower law.  Here is the issue.  None of these whistleblower statutes, in our opinion, contain the basic tenents of a strong and effective whistleblower program.  The development of the whistleblower statutes within the United States of America illustrates the bedrock elements of an effective and successful whistleblower law.

In 1986, the U.S. Congress amended the existing whistleblower statute, the False Claims Act, which was passed during the American Civil War by President Abraham Lincoln.  The 1986 Amendments to the False Claims Act included provisions that finally gave the law real fraud combatting teeth. Examining these 1986 Amendments (and even more recent Amendments) illustrates the changes needed in the European Union member States’ whistleblowing statutes.  Without such robust amendments the European Union laws will never have a real and palpable impact on fraud, waste and abuse.

The American statute, known as federal False Claims Act, or the Qui Tam Law, has at its heart the following key provisions:

  • The United States has what is known as a “qui tam[4] or whistleblower provision.
  • A whistleblower who comes forward and meets the statutory requirements is authorized by the statute to bring an action on behalf of the government and is entitled to receive a set amount of any settlement or judgment the government receives from the defendant from 15% to 30%. This strong financial incentive has, singlehandedly, made the American statute the most successful fraud, waste and abuse statute in the world.  Of this fact there is no debate.
  • The United States’ Congress has provided strong protections against professional retaliation against whistleblowers. In contrast, the European statutes contain weak non-existent or watered down versions of this protection.  In fact, some of the European laws actually put the whistleblower at risk if he or she is incorrect in their allegations. 
  • The American whistleblower statute attracts skilled lawyers who take these cases on a contingent-fee basis, award legal fees and costs to whistleblowers and their counsel, if they prevail in their claims against a defendant.
  • The American statute provides government attorneys with muscular investigative powers. For example, while the case is under seal, the government can issue document requests, written interrogatories, take depositions of key individuals, etc.  These broad investigative tools are lacking in most of the current European statutes.
  • As a result of the key amendments in 1986, the American whistleblower statute has returned more than $62 billion to the U.S. Treasury. No other whistleblower law in Europe (or anywhere) has had such success.

The European legislative bodies still do appear to be committed (culturally or legally) to the type of whistleblowing legislation that will not make a real difference for their respective countries.  Here are some of the reasons why the statutes in Europe shall continue to be as ineffective as the pre-1986 American Whistleblower Law:

  • The European statutes do not truly embrace the concept that whistleblowers need to be encouraged to come forward to expose corruption inside large, well regarded institutions. The majority of the European laws do not contain any financial reward for successful whistleblowers.  Most importantly, none of the European statutes have a strong financial reward that would balance the risks against the rewards.  The European laws seem to go through the motions of supporting, yet not incentivizing, whistleblowers.
  • There is no clear and distinct prosecutorial entity in charge of effectively enforcing the individual European statutes.
  • Many of the European statutes lack strong protections for whistleblowers who come forward and risk their careers and livelihood. While there is a lot of “lip service,” there is no economic insurance that they will be protected.

While Americans and Europeans have shared and adopted approaches to governance over the centuries, their differences in efforts to curtail fraud, waste and abuse through whistleblower statutes is considerable.  Europe need look no further than its young sister state across the Atlantic for lessons that may be worth billions of dollars in recoveries.

WHO Pushes towards Transparency of Prices of Health Products

Yesterday the World Health Organization announced a resolution encouraging Member States to “enhance public sharing of information on actual prices paid by governments and other buyers for health products, and greater transparency on pharmaceutical patents, clinical trial results and other determinants of pricing along the value chain from laboratory to patient.” The resolution also urged Member States to “work collaboratively to improve the reporting of information by suppliers on registered health products, such as reports on sales revenues, prices, units sold, marketing costs, and subsidies and incentives”.

The Italian Ministry of Health reported the adoption of this resolution with triumphant tones since the resolution was proposed by Italy and co-sponsored by Algeria, Andorra, Botswana, Brazil, Egypt, Eswatini, Greece, India, Indonesia, Kenya, Luxembourg, Malesia, Malta, Portugal, Russian Federation, Serbia, Slovenia, South Africa, Spain, Sri Lanka, Uganda and Uruguay.

Many hope that transparency of prices of health products will result in greater fairness in health systems and will ultimately drive prices down. On the other hand, representatives of the industry claim that the focus on price will not shed light on the complexities of costs linked to research and manufacturing of health products. Instead, Gaelle Krikorian of Medecins Sans Frontieres believes that the resolution marks only a first step and that more disclosure is necessary.

Ethics Guidelines for Trustworthy Artificial Intelligence

The perception of digital innovation is changing. The initial enthusiasm is now being replaced with a more cautious, at times skeptical, approach. If you are familiar with Shoshana Zuboff’s views on Surveillance Capitalism or, more locally, the concerns voiced by Antonello Soro, Chairman of the Italian Data Protection Authority, on the use of data, you may now be starting to question how much actual good will humanity derive from unbridled innovation.

The good news is that the European Union continues to be at the forefront of a human-centric approach to technology so that innovation can be responsible and sustainable. The GDPR, which came into force about a year ago, has brought the focus to the fundamental right to data privacy, reminding all stakeholders that the human being remains at the center of any digital innovation.

Last month the Independent High-Level Expert Group in Artificial Intelligence set up by the European Commission has issued interesting Ethics Guidelines for Trustworthy AI. The document clearly indicates that AI should lawful, ethical and robust in order to be trusted, and trustworthy. AI systems must be based on fundamental rights such as respect for human dignity, freedom of the individual, respect for democracy, justice and the rule of law, equality, non-discrimination and solidarity, and citizens’ rights. Ethical principles of respect for human autonomy, prevention of harm, fairness and explicability must be respected and any tensions between them must be duly balanced. Privacy and data governance, transparency, diversity, non-discrimination and fairness are also important requirements of the realization of trustworthy AI systems.

In conclusion, the guidelines state that “AI systems will continue to impact society and citizens in ways that we cannot yet imagine. […] Our goal is to create a culture of “Trustworthy AI for Europe whereby the benefits of AI can be reaped by all in a manner that ensures respect for our foundation values: fundamental rights, democracy and the rule of law.”

Takeaways from the EU Pharmaceutical Law Forum in Brussels

I really enjoyed attending and speaking at the EU Pharmaceutical Law Forum in Brussels this week. The event offered a number of insights into the legal challenges faced by the life sciences industry in an ever-evolving regulatory landscape. These are the main takeaways from the conference:

#1: Clearly, the political climate is not favorable to pharma and med-tech companies. A number of measures have been proposed at various levels that would significantly decrease the incentives to innovation that companies currently enjoy. Such proposed measures range from halving the term of protection for orphan drugs exclusivity to compulsory licensing of drug patents, from incentives to drug compounding by pharmacies to mandatory price reductions. The general public and the media continue to have a negative perception of the industry and the regulatory framework appears to be evolving in a restrictive way.

#2: Despite the uniform letter of GDPR throughout the Member States, interpretation of data protection rules continues to be very different throughout Europe. This is especially clear in the field of clinical trials, where there is a patchwork of legal solutions that makes it impossible to multinational corporations to adopt a consistent approach. The recent EDPB opinion on the legal basis for processing of data deriving from clinical trials has further shown that there has been a shift away from consent as the legal basis for the processing, but some countries (like Germany, Italy and Spain, for example) continue to find it hard to accept such a shift.

#3: EU harmonization is expected to occur in the coming years in a number of areas, such as off-label use, artificial intelligence and health technology assessment.

#4: Compliance efforts must be continued, but it is clear that formal compliance is not sufficient to shield a company from risks, especially reputational risks. Even when compliance safeguards are in place, the approach to reputational risks must be perfectionist, as pointed out by Ms. Alice Cabrio, compliance officer at Roche S.p.A.

Enjoy your weekend, and do not forget to celebrate the GDPR’s first birthday!

Paola Sangiovanni Will Speak in Paris on May 17

The Institut du Risk & Compliance is hosting a conference in Paris in mid May that promises to be very interesting for life sciences companies. The program will give an overview of the current legislation on anti-corruption and transparency per country.

Paola Sangiovanni will be leading a workshop titled “Ethical needs of life sciences: between statutory obligations and self-regulation“.

Have a great start of the week!

 

Clarifications on the Processing of Health Data by the Italian Data Protection Authority

The Italian Data Protection Authority has provided clarifications on the processing of health data by means of a note issued on March 7, 2019.

On the basis of section 9.2 letter h) and section 3 of GDPR, the Authority has indicated that healthcare professionals who are subject to a duty of confidentiality (or other professionals also subject to confidentiality obligations) will no longer require consent of the patient in order to process data for the purpose of providing healthcare services.

Processing of personal data beyond what is necessary to provide healthcare services will, instead, continue to require the patient’s express consent. Consent is required, for example, for the use of medical apps, for any use of personal data for marketing purposes and for the inclusion of data in electronic health records.

In any case, the patient must receive information about how her/his data will be processed (including the duration of the data processing). The Data Protection Authority clarified that such information must be concise, transparent, intelligible and easily accessible, using simple and clear language. For hospitals processing data in complex ways, the Authority suggests that information is given to interested data subjects and when necessary (mass information to all is not a good idea).

Lastly, the Authority notes that the appointment of a Data Protection Officer is required in case of large scale processing of health data, which occurs in hospitals (regardless of their public or private nature), but does not apply to individual medical professionals, pharmacies or orthopedic firms. The keeping of a register of processings, instead, remains a key requirement and a basic element of accountability and risk management in any case of health data processing.

A summary of the Authority’s clarifications can be found here.

New Grounds for Exclusion of Contractors from Public Tender Procedures

Italian Law Decree no. 135 of December 14, 2018, titled “Urgent provisions on support and simplification for businesses and public administration” (so called “Decreto Semplificazioni”), which this blog already discussed here, has also an impact on the Public Contracts Code (Legislative Decree No. 50/2016).

Inter alia, section 80 of the Public Contracts Code on “Grounds for exclusion” has been amended and three new type of circumstances triggering exclusion have been established:

  • exclusion from participation in the tender procedure when “the contracting authority demonstrates by appropriate means that the economic operator has been guilty of serious professional offenses, such as to make his integrity or reliability questionable “; (letter c)
  • exclusion from the tender when “the economic operator has attempted to unduly influence the decision-making process of the contracting authority or obtain confidential information for the purpose of its own benefit or provided, even by negligence, false or misleading information likely to influence the decisions on exclusion, selection or award, or omitted the information required for the proper conduct of the selection procedure“; (letter c-bis)
  • exclusion also in the further case where “the economic operator has demonstrated significant or persistent deficiencies in the execution of a previous public contract that have caused the termination of the contract due to non-compliance or a judgment ordering damages or other comparable sanctions ” (letter c-ter).

With specific reference to this latter c-ter), we note that it has modified the previous provision according to which among the serious professional offenses there are “significant deficiencies in the execution of a previous public contract that have caused the termination of the contract, not challenged in court, or confirmed as a result of a judgment (..)“.

Therefore, according to the new art. 80, par. 5, let. c-ter) of the Public Contract Code, a candidate may be excluded from the public tender in the presence of a previous contractual termination with a public authority, even if challenged in court and still pending before the judge. The point has also been recently confirmed by the sentence of the T.A.R. Marche-Ancona, January 15, 2019, n. 32.