Tag Archives: payback

The Italian Government Fund for the Governance of Medical Devices

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With Ministerial Decree dated December 29, 2023, the Italian Ministry of Health has established criteria and methods for feeding the fund dedicated to the governance of medical devices, the so-called “Fondo per il governo dei dispositivi medici” (Fund for medical devices governance, “Fund”).

Key Features

  • Annual payment obligation.  Companies manufacturing or distributing medical devices, large medical equipment and in vitro diagnostic medical devices must pay a sum equal to 0.75% of the company’s previous year turnover from the sale of such devices to the National Health Service, net of VAT.
  • Annual Declaration Requirement.  Companies must submit an annual statement to the Ministry of Health regarding:
    • The estimated amount of 0.75% of the above-mentioned turnover.
    • The company’s previous year turnover to the National Health Service, net of VAT;
  • Use of the Fund. The Fund will be used for various activities related to Health Technology Assessment and governance of medical devices (including the management of the National Price Observatory, the vigilance system and the market surveillance system).
  • Deadlines and next steps. The first deadline for compliance with the fund regulations is set for December 31, 2024.

Companies are currently assessing whether the Fund can be challenged in court with arguments that may be similar to those raised in the so called “payback” litigation, which will see its day in Court (namely, the Italian Constitutional Court) on May 22, 2024.

Quick Guide on Legislation In Force and Legislation Stalled

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Just a quick blog post to align our readers on which legislation is in force and which is stalled at the moment:

  • The Ultimate Beneficial Owners register (discussed here), which companies strived to populate by December 11, 2023, is currently on hold due to administrative litigation that currently blocks the application of the register.
  • The European Regulation on Artificial Intelligence, which we already discussed here, is now final. It will enter into force in 2 years.
  • Legislation on payback for medical devices will be scrutinized by the Italian Constitutional Court thanks to decisions of the Lazio Administrative Court issued on November 24, 2023.
  • The Italian Sunshine Act (Law no. 62 of 2022), which we illustrated here, is in force but not yet applicable since the transparency website is not yet live.
  • Next week the Whistleblowing Law (analyzed here and here) will be mandatory for all companies in scope.
  • The Digital Services Act and the Digital Markets Act are in force.

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.

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.