Tag Archives: medical devices

It’s “Pay Back Time” for Medical Devices’ Companies

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Medical devices’ companies who sell to the Public Administration face the prospect of imminent stellar payments due to Italian Regions.

Learn about the legislative journey that led to this, and what can be done about it, in our latest Client Alert published here:

https://www.linkedin.com/feed/update/urn:li:activity:6992883980693827584

Contact us if you need assistance in reacting against pay-back obligations or if you simply want to understand more about this issue and its impact on your business.

Can the Medical Device and Pharma Italian Sectors Be “Influenced”?

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Influencers are everywhere these days. Are they allowed to influence patients and doctors in the healthcare sector?

Pharmaceuticals. With regard to pharmaceutical products, the answer appears to be no. In fact, according to section 117 of Legislative Decree No. 219/2006, advertising of medicinal products must not include recommendations from scientists, healthcare professionals or persons widely known to the public.

A minor and partial derogation was allowed by the administrative court of the Lazio Region, which stated that the sole presence of a well-known person, who does not show any preference for a certain medicine nor gives advice, in an advertising message, does not per se trigger the violation of the legislative prohibition.

Medical Devices. A different conclusion can be reached in connection with medical devices.

In fact, the guidelines issued in connection with advertising of medical devices, expressly allow the use of testimonials, provided that (i) the advertisement is authorized by the Italian Ministry of Health, and (ii) the influencer does not express any advice or recommendation, also implicitly, in connection with the device itself.

But what about an influencer, who shares details of a health treatment by posting photos or videos? Is that advertising or freedom of expression?

The IAP (Institution of Advertising Self-Discipline) is starting to reflect upon the borders between advertising messages and private user’s content. A case-by-case analysis should be carried out, taking into account the context, the form of the presentation and the absence of commercial elements, such as trademarks.

Our conclusion. While our entire life seems to be easily influenced, the Italian legislation and case law is committed to shield us from such influence, at least in connection with our health.

Valeria Ramponi / Giulia Titola

MDR: the Postponement to 2021 is Official

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On April 24, 2020 the new Regulation (EU) 2020/561 officially entered into force, postponing the date of application of most Medical Devices Regulation (MDR) provisions to May 26, 2021. The final text of the regulation can be found here: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32020R0561&from=EN.

The postponement was approved unanimously and was considered unavoidable since the outbreak of the covid-19 pandemic in early 2020 made it very clear that businesses, notified bodies and regulators would not be ready in time for the entry into force of the MDR requirements in May 2020.

The European Commission noted, with some relief, that  “this postponement takes the pressure off national authorities, notified bodies, manufacturers and other actors so they can focus fully on urgent priorities related to the coronavirus crisis” (https://ec.europa.eu/growth/sectors/medical-devices_nn).

While the postponement might have been triggered by the covid-19 pandemic, there is no doubt it now gives regulators and the industry alike the chance to remedy the delays that have accumulated over the past few years, with the hope that they will come prepared to the new deadline of May 2021.

Interview with Diana Saraceni of Panakés Partners

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This post features an interview with Diana Saraceni, founder and managing partner of PANAKÈS PARTNERS , a venture capital investor that finances medical companies, early stage startup and SMEs in Europe and Israel.

Why does Panakés Partners focus on Med-Tech?

Life sciences, especially Med-Tech, have always been an innovative and growing sector. Improving health conditions is one of the goal of developed countries, and new challenges will always face us. Considering this highly changing environment, start-ups and small companies appears to have the best structure to generate innovative solutions. In Europe there are several areas of excellence in technology and chemistry, the ideal environment where promising Med-Tech start-ups can develop. Moreover, European regulatory system has faster and easier protocols for companies to get CE mark and go to market, especially compared to the American system, where FDA approval requires more efforts, both in economic and clinical terms, to enter the market. Lastly, if we consider that western countries invest, on average, 10% of GDP every year on health services and that medical and pharmaceutical enterprises are the most active in acquiring start-ups, the great opportunity Med-Tech represent for us becomes evident.

What are the specific areas where you expect more growth in the future?

Considering the ageing of population and the need of hospitals to optimize their resources and reduce costs, we expect a great demand for technologies designed for home healthcare and chronic pathologies management. These new solutions will allow patients to receive their treatment directly at their own home, letting hospitals to focus their resources on acute pathologies treatment. Furthermore, we are confident that there will be a significant growth in all technologies aimed to a minimally invasive medicine. We are talking about in vitro diagnostics systems or robot-assisted surgery, which will substitute, or at least reduce, tissue biopsies and traditional surgery. Lastly, we expect a great increase in solutions for personalized therapies. These technologies, which combine genetic profiling to Big Data algorithms, will help physicians in the definition of therapies specifically tailored for every patients, increasing the probability of success.

Which countries appears to have the best factors (in terms of legislation, culture, access to funding and applied research) that helps fostering innovation?

By tradition, Anglo-Saxons countries are the ones with a more innovation-oriented policy. Everyone who has interesting ideas is encouraged in developing them, entrepreneurs never stop to look for new opportunities and skip from one project to another, as if they have not realized anything yet, legislation offers benefits to support the creation of new companies. These are the reasons why realities such as incubators and venture capital funds were born and are widespread in these countries. Regarding the specific case of Italy, we can state that the presence of top-class engineers and the excellence of Italy in clinical research in several areas, combined with lower costs than the other developed countries, are the main factors for the success of many Italian start-ups.

Which challenges lay ahead of you?

We received hundreds of requests of funding from companies all over Europe. Now, our main challenge will be to select the most promising ones, both in terms of proposed technology and feasibility of the project. Furthermore, we need to enlarge our network, in order to reach more companies and to find those ones whith the potentiality to change the status of medicine and build up more success stories out of Europe. We like to think of Panakés as a highly entrepreneurial start-up from a certain point of view, with great opportunities and successes just waiting for us!

 

Another September, Another Spending Review.

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This is almost becoming a tradition for the national healthcare service in Italy. Comes September… and a new spending review hits the pharmaceutical and medical device industry.

On August 4, 2015 a law decree has been approved by lawmakers, which introduces a number of new mechanisms for monitoring and reining in public spending in the healthcare sector. In particular, the new legislation has introduced several measures:

  • Negotiations with current suppliers of the national healthcare service in order to achieve a 5% reduction in current spending for general supplies;
  • Negotiations with current suppliers of medical devices in order to comply with the spending thresholds agreed upon between the central government and regional authorities;
  • Centralized negotiations with pharmaceutical companies in order to decrease the reimbursement price of products currently reimbursed by the national healthcare service.

While measures aimed at cutting spending in connection with general supplies and medical devices have been entrusted in principle to local authorities and healthcare providers, the national pharmaceutical agency (“AIFA”) plays a central role in the envisaged mechanism to achieve savings for pharmaceutical products. In accordance with the provisions of the new decree, AIFA has indeed conducted negotiations throughout the month of September 2015, with the aim of decreasing overall spending. The new legislation provides the grouping of products in several “clusters” that include therapeutically similar products, regardless of their active principles. The lowest price in each cluster is then used as the reference price for direct negotiations between AIFA and manufacturers.

The new measures also provide that, in case of failure to reach an agreement, reimbursement by the national healthcare service may be withdrawn. However, it is also expressly provided that generic products are not admitted to reimbursement until any patents and supplementary protection certificates of branded products are definitely expired, thus providing the industry with assurances in connection with their protected drugs.

The reiterated attempts by public authorities to renegotiate prices with suppliers appear to clash not only with basic contractual principles (“pacta sunt servanda”), but also with fundamental rules of public procurement legislation. As the government (in fact, almost yearly) demands discounts on existing contracts, reliance on such contracts is affected, along with transparency and open competition in public procurement procedures. The truth is that the need to cut public expenditures is increasingly overriding basic tenets of contracts and public procurement law.

Med Tech and Pharma industry associations have voiced their concerns, while suggesting that efficiency and savings may be obtained by the national healthcare service through internal reorganization processes rather than by demanding additional discounts to suppliers. In fact, if we step aside from the conflicting commercial interests of suppliers (who want to maximize their revenues) and purchasers (who need to minimize their costs), we cannot but note that, again, the government appears to use cost cutting tools that focus on quantity rather than quality. On the contrary, we would expect that more emphasis should be given to Health Technology Assessment and innovation. We surely need to spend less money, but also to spend it more wisely.

Defective Medical Devices: an Interesting Decision by the ECJ

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On March 5, 2015 the European Court of Justice (“ECJ”) delivered a ruling on product liability that could have consequences for manufacturers of medical devices.

FACTS OF THE CASE. The quality control system of a company selling pacemakers and implantable defibrillators in Germany found that a component utilized to hermetically seal pacemakers may experience a gradual degradation. That defect could lead to premature battery depletion, resulting in loss of telemetry and/or loss of pacing output without warning. In light of such circumstances, the manufacturer issued a warning recommending physicians to replace the implanted pacemakers with others provided free of charge. At the same time, the manufacturer also recommended physicians to turn off a switch in the defibrillators.

PROCEEDINGS. The insurance companies, covering patients whose pacemakers or defibrillators had been replaced, instituted legal proceedings to obtain reimbursement of costs relating to such replacements. The German High Court raised a preliminary question before the ECJ asking whether the devices that had been replaced may be classified as defective, despite lack of evidence that the actual product implanted was defective, on the basis of the corrective measures recommended by the manufacturer. Moreover, the German Court asked whether costs of replacing those pacemakers and defibrillators could be classified as damages, for which the manufacturer may be liable pursuant to the Product Liability Directive[1].

ECJ RULING. In its ruling, the ECJ stated that, in order to determine whether or not the manufacturer was liable, (i) the function of such products, (ii) the vulnerability of patients utilizing them, (iii) the costs borne to replace them, and (iv) the costs relating to turning off the switch of defibrillators had to be taken into account and balanced. In this respect, the ECJ observed that even the potential lack of safety of those products gave rise to the manufacturer’s liability, in light of safety standards that patients could expect from that kind of products and the abnormal possibility of damages to patients, who would be at risk of death. In addition, and in more general terms, the ECJ affirmed that costs borne to replace potential defective devices may constitute damages inasmuch as the expenses incurred are necessary to remedy the defect. However, such a judgment, as pointed out by the ECJ, pertained to the merits of the claim, and must therefore be ascertained by a national Court.

CONSEQUENCES OF THE RULING. Under the Product Liability Directive claimants must produce evidence of the defect, damages arising therefrom and a causation link between the two. By contrast, the ECJ’s decision establishes that even potential defects may be considered as defects. As a consequence, consumers appear to be relieved from the burden of proof that products are actually defective. By the same token, manufacturers’ right of defense seems to be compressed, as – when there are corrective measures recommended by them – the ruling does not leave any room for proof of lack of liability.

WHAT WILL BE THE IMPACT OF THE RULING.  The ECJ’s approach to product liability adopted in the ruling at hand appears to be skewed towards consumers’ protection. A cynical reading of the ECJ’s judgment may even prompt manufacturers to be reluctant to “admit their own mistakes” and issue safety warnings regarding their products! As often happens with legal issues affecting innovation and health policies, balancing of interests is key.

[1] Council Directive 85/374/EEC of July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products. According to the Directive, the producer is liable for damages caused by a defect in his product.