Tag Archives: italy

Implementation of the “231” Compliance Model in the Pharma Industry: New Guidelines issued by the Italian Association of Pharmaceutical Companies

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On September 5, 2023, the Italian Association of Pharmaceutical Companies (“Farmindustria” – https://www.farmindustria.it/) has issued guidelines to design an organizational model pursuant to the Legislative Decree 231/2001 in the pharmaceutical sector (“Guidelines”).

In particular, the Guidelines, by taking into account the main peculiarities of the pharma industry, seek to identify the typical activities that are most at risk for the commission of criminal offences, and provide detailed guidance about the main policies and preventive actions that should be carried out by companies in order to prevent their commission.

As expected, the highest risks concern relationships with public officials, which may lead to crimes such as corruption or fraud against the State, with significant advantages for pharma companies.

The Guidelines seek to drive the attention of companies involved in the pharma sector on the risks that are latent in the following areas:

  • Relationships with healthcare professionals (“HCP”) and healthcare organizations (“HCO”): compliance programs should regulate activities of the key account managers and their bonuses, sponsorship of congresses, grants and donations to HCOs, gifts to HCPs, as well as other sponsorship or advertisement activities;
  • Relationships with Public Authorities: many interactions with public officials may entail corruptions risks, such as, e.g., obtainment of Market Authorizations, price reimbursement negotiations with the Italian drug regulatory agency (AIFA – https://www.aifa.gov.it/), management of site visits and inspections, participation and execution of public tenders for the supply of drugs to HCOs;
  • Relationships with private entities: relationships with suppliers providing services in the context of clinical studies, pharmacies, patient advocacy organizations, patients and “expert patients”, or management of patient support programs also need to be regulated.

The Guidelines also offer a complete set of policies and other preventive remedies that may be sufficient to prevent the envisaged criminal risks.

The Guidelines are a useful tool for pharma companies and no similar initiatives have been taken by other associations with regard to different industries and sectors. The Guidelines also constitute a benchmark for best practices that will be difficult to ignore.

Do you need help in designing or updating your company’s “231” compliance model? Do not hesitate to reach out!

Italy – At Last – Implemented the Registry of UBOs (Ultimate Beneficial Owners)

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All legal entities established in Italy are affected by the new regulation, which provides for a December 11, 2023 deadline.

The register of ultimate beneficial owners has been established and has become
operational also in Italy, after several extensions and delays. In fact, on October 9,
2023, the decree certifying the operation of the system for the communication of
data and information on beneficial ownership was published in the Official Gazette.

This last decree, which completes the implementation of anti-money laundering
legislation, triggers the obligation for all companies, private legal entities
(associations, foundations and other institutions of a private nature with legal
personality) and trusts to communicate data and information relating to their
beneficial ownership.

The communication on beneficial ownership must be made to the Companies’
Registry at the territorially competent Chamber of Commerce by and no later than
December 11, 2023, using exclusively electronic methods. With regard to
companies, the communication must be digitally signed by a director, without the
possibility to delegate such task. Therefore, directors who do not yet have a digital
signature device will need to obtain one.

Subsequently, legal entities shall notify any change in their beneficial ownership
within 30 days of the occurrence of the change. In addition, on an annual basis (and
in any case within 12 months from the first communication), the beneficial
ownership shall be confirmed: for companies this may take place on the occasion
of the annual filing of the financial statements.

For more information on the new requirements, check out our Client Alert here or reach out to us directly.

Excellent, Again!

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We are very proud to share that our practice has been recognized once again for its “excellent” work in the 2023 rankings of Leaders’ League for the Healthcare, Pharmaceutical and Biotech sector in Italy.

Striving for excellence is our goal and we are thankful to our clients and colleagues who have made all of this possible and continue to trust us.

The full rankings are accessible here: https://www.leadersleague.com/en/rankings/healthcare-pharmaceuticals-biotech-sector-health-pharmaceutical-industry-ranking-2023-law-firm-italy

Looking forward to many more future achievements!

GARANTE VS. CHATGPT: LATEST DEVELOPMENTS

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1. An Order to Stop ChatGPT

On March 30, 2023 the Italian Data Protection Authority (“Garante”) issued an order by which it temporarily banned the ChatGPT platform (“ChatGPT”) operated by OpenAI LLC (“OpenAI”). The Garante in fact regards ChatGPT as infringing Articles 5, 6, 8, 13 and 25 of the GDPR. In particular:

  • No Information.  OpenAI does not provide any information to users, whose data is collected by OpenAI and processed via ChatGPT;
  • No Legal Basis.  There is no appropriate legal basis in relation to the collection of personal data and their processing for the purpose of training the algorithms underlying the operation of ChatGPT;
  • No Check of User’s Age.  OpenAI does not foresee any verification of users’ age in relation to the ChatGPT service, nor any filters prohibiting the use for users aged under 13.

Given that, the Garante has immediately banned the use of ChatGPT, and OpenAI has blocked the access to ChatGPT to the Italian people.

2. Measures Offered by OpenAI

On April 11, 2023, in light of the willingness expressed by OpenAI to put in place measures to protect the rights and the freedom of the users of ChatGPT, the Garante issued a new order, which opened the possibly to re-assess ChatGPT if OpenAI adopts the following measures:

  1. to draft and publish an information notice to data subjects, which should be linked so that it can be read before the registration;
  2. to make available, at least to data subjects who are connected from Italy, a tool to exercise their right to (i) object, (ii) obtain a rectification, insofar as such data have been obtained from third parties, or (iii) the erasure of their personal data;
  3. to change the legal basis of the processing of users’ personal data for the purpose of algorithmic training, by removing any reference to contract and instead relying on consent or legitimate interest;
  4. to include a request to all users connecting from Italy to go through an “age gate” and to submit a plan for the deployment of age verification tools; and
  5. to promote a non-marketing-oriented information campaign by May 15, 2023 on all the main Italian mass media, the content of which shall be agreed upon with the Italian Authority.

OpenAI has until April 30, 2023 to comply (until May 31, 2023 to prepare a plan for age verification tools). The objections by the Garante have been echoed by other European Union data protection authorities. The European Data Protection Board will be attempting to solve the dispute within two months and launched a dedicated task force on ChatGPT “to exchange information on possible enforcement actions conducted by data protection authorities”

PAYBACK ON MEDICAL DEVICES IN ITALY: LATEST UPDATES

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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.

New Whistleblowing Legislation Adopted in Italy

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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

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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!

Abuse of Economic Dependence: Digital Platforms with a Key Role

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Italian law now includes a new provision on abuse of economic dependence with a special focus on digital space. Abuse of economic dependence is prohibited and triggers nullity of the agreement concerned and, if the abuse is considered to be affecting competition on the market, additional administrative sanctions issued by the Italian antitrust authority.

The Italian annual bill on competition modified Article 9 of Italian law no. 192/1998 and introduced a presumption of economic dependence applicable to contractual relationships where digital platforms play a “key role” in reaching end users and/or suppliers. The presumption shifts to digital platform operators the burden of proving the absence of economic dependence.

The law does not offer a specific definition of “digital platform”, therefore a wide range of entities, including marketplaces and search engines, can be included in the scope of the rule. For the provision to apply, however, a “key role” of the digital platform in reaching end users or suppliers must be proven. “Key role” is a concept that lends itself to multiple interpretations, but some commentators suggested that said criterion could be referring to the gatekeepers as defined by the Digital Markets Act (Regulation (EU) 2022/1925), even if it does not seem to exclude other “minor” operators.

The newly introduced provisions are expected to have a huge impact on relationships between digital platforms operators and their business partners.