Tag Archives: pharmaceutical

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!

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!

An Update on the Latest Amendments to the Italian Pharma Industry Association’s Code of Ethics

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Amendments to the Italian pharmaceutical industry association’s (Farmindustria) Code of Ethics have been introduced on January 19, 2022 https://www.farmindustria.it/app/uploads/2018/06/2022-GENNAIO-19.pdf.

One of the most important changes concerns section 4.7, which defines Patient Support Programs (PSP) as initiatives implemented by pharmaceutical companies aimed at making available additional services for the direct benefit of patients. Such services are not intended to replace the services of hospitals and other healthcare organizations. For more information on PSP, check out our previous blog post https://lawhealthtech.com/2022/02/07/new-guidelines-on-patient-support-programs-adopted-by-italian-pharma-industry-association/ .

Besides, other important amendments have been introduced:

  • Training and Information to Non-Prescribers: new section 3.25 (i) allows pharmaceutical companies to carry out training and information activities aimed at healthcare professionals who are not authorized to prescribe medicines, but are involved in the treatment management, provided that such activities do not have any promotional purpose and that the information provided is linked to their roles in patients’ treatment management; and (ii) extends to such professionals the possibility to attend events, courses and congresses, as long as such events do not concern topics relating to medicines;
  • Information to the Public: new section 3.26 (i) allows pharmaceutical companies to provide unsolicited information to the public, through personnel not belonging to commercial or marketing areas, relating to products and diseases pertaining to the relevant therapeutical area, provided that such information does not have a commercial nature and matches the information set forth in the package leaflet or institutional information channels; and (ii) confirms that a full literal reproduction of the package leaflet information may be published on the companies’ websites available to the public;
  • Interactions Other than Medicines Promotion: new section 3.28 (i) allows pharmaceutical companies to provide information on medicines to various stakeholders such as institutions, professionals, organizations, etc., without this falling within the scope of medicines promotion; and (ii) specifically regulates the possibility to carry out, during the medicine’s life cycle, institutional and market access activities or other non-promotional interactions towards institutions and health care professionals, as well as account management activities aimed at ensuring the application of commercial policies through interactions with public or private counterparties involved in the medicines procurement processes and activities aimed at the mutual sharing of non-promotional information and data.

The above new provisions of the industry Code of Ethics undoubtedly aim at regulating several aspects of the day-to-day promotional and educational activities of pharmaceutical companies that have been so far ignored by the industry association regulations. However, the new previsions are quite vague in their scope and it remains to be seen whether they will have any meaningful impact on the market practices in the pharmaceutical sector.

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

New Transparency List For Generics And A Victory In Court

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On February 16, 2015 the Italian Medicines Agency (“AIFA”) has published the 2015 update to the so called “transparency list” (lista di trasparenza), i.e., a list of generic drugs authorized in Italy, along with their market price.

Following a number of changes in the legislation governing generics in the past few years, the National Health Service currently only reimburses the cost of the less expensive generic on the market. In fact, Section 7 of Law Decree 347/2001 sets forth the medicines having the same active ingredients composition, pharmaceutical form, way of administration, release modalities, number of tablets and dosage, are reimbursed by the National Health Service up to the price of the less expensive product on the market. The transparency list serves as a tool for reimbursement purposes: if the patient chooses to buy a branded product or a more expensive generic, the patient will need to cover the difference in price.

The publication of the transparency list comes shortly after a recent decision of the highest Italian administrative court, which stroke down past practices of AIFA on the reimbursement of new generics. In this case, the generic drug company EG S.p.A. claimed that AIFA issued a marketing authorization for gabapentin (a generic drug approved in a different EU member state) but unduly refused to recognize any reimbursement. The per-tablet dosage of the generic drug was in fact different from the branded product and other generics already included in the transparency list: therefore, according to AIFA, reimbursement was not warranted by Section 7 of Law Decree 347/2001. AIFA also argued that the new dosage, higher than other reimbursed products, entailed risks for the patients’ safety, as they would have to apportion the right dosage themselves (e.g., to split the drug tablets in half). The administrative court stated that such risk was ungrounded and had no impact on the reimbursement of the drug: if at all, it should have prevented AIFA from issuing a marketing authorization in the first place. Furthermore, the court stated that the National Health Service may reimburse a generic even if not included in the transparency list, striking down AIFA’s argument that dosages already reimbursed by the National Health Service sufficiently covered the needs of the patients, as such criterion was not set forth in applicable legislation.

The court decision comes as the latest victory for generics on the Italian market, adding to several regulatory and legislative changes prompted by budged restraints in the past few years, causing generics to continue gaining strength. In the meantime, proposed new legislation on the sale of generics outside of authorized pharmacies is stirring public debate.

Italian Competition Authority Targets Big Pharma, Triggers Expansion Of Off-Label Prescription

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I. ITALIAN COMPETITION AUTHORITY FINES ROCHE, NOVARTIS

On February 27, 2014, the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato, hereinafter “AGCM”), in an unprecedented decision concerning the pharmaceutical industry in Italy, issued fines in an amount of more than 180 million euro in the aggregate against F.Hoffman-La Roche Ltd. and Novartis AG, as well as their Italian affiliates. The two companies have been found to have restricted competition in connection with the commercialization of two drugs known by their brand name of Aventis and Lucentis.

The fines issued by AGCM, however, did not only affect Roche and Novartis. The AGCM decision triggered in fact, within a very few months, new legislation and case-law on off-label use of medicinal products, making it effectively easier for physicians to prescribe such products so long as their prices are lower than authorized alternatives.

Furthermore, the AGCM decision made painfully clear to the industry that mere compliance with the specific regulations applicable to pharmaceutical products will no longer shield companies from antitrust scrutiny.

II. PHARMACEUTICAL PRODUCTS, RELEVANT MARKET AND MARKETING AUTHORIZATIONS

Aventis and Lucentis have been employed in the treatment of several eye diseases, including in particular age related macular degeneration (“AMD”) and neovascular glaucoma. Both drugs have been approved by the European Medicines Agency (“EMA”) pursuant to the centralized authorization procedure. According to applicable legislation, medicines derived from biotechnology processes are subject to a single marketing authorization issued by EMA, which is valid in the entire territory of the European Union.

Avastin, a drug developed by Genentech (a fully owned subsidiary of Roche), has been approved by FDA and EMA, in 2004 and 2005 respectively, for the treatment of colon cancer. The marketing authorization has not been sought for the treatment of eye diseases. However, Avastin has been consistently employed off-label by ophthalmologists in the treatment of AMD. While Genentech has retained the rights to market Avastin in the US, it has assigned to Roche distribution rights in the rest of the world in exchange for royalties. Neither Genentech nor Roche have ever submitted a request for a marketing authorization for ophthalmological indications.

Lucentis has also been developed by Genentech and has been approved by FDA and EMA, in 2006 and 2007, for the treatment of AMD. Genentech has assigned the distribution of Lucentis (except in the US) to Novartis and sells to Novartis the active principle (ranibizumab).

III. OFF-LABEL PRESCRIPTION IN ITALY

In assessing the alleged restrictions on competition arising out of the marketing and commercialization of Avastin and Lucentis, AGCM extensively took into account the regulation of off-label prescription in Italy, which deeply affected the use of the concerned drugs by Italian healthcare professionals.

In the absence of any international regulation on off-label prescription of drugs, Italian legislation has developed through the adoption of a series of subsequent regulatory guidelines and ad hoc decisions. Law 648/1996 is the main legal instrument governing off-label prescription of drugs in Italy. Such law provides that, in the absence of a valid therapeutic alternative, the national health service may reimburse (i) innovative drugs that have been approved in other states but not in Italy; (ii) drugs that have not yet been authorized but are undergoing clinical trials; and (iii) drugs to be used for a therapeutic indication other than the approved one. The Italian pharmaceutical agency (Agenzia Italiana del Farmaco, hereinafter “AIFA”) holds, and periodically updates, a list of all the above drugs that may be reimbursed by the national health service, the so called “List 648”. Pursuant to such legislation, healthcare professionals may prescribe drugs included in the List 648 for off-label use and obtain reimbursement from the national health service. This legislation is peculiar to the Italian system, as in other countries off-label use is allowed but not reimbursed.

In 1998, the scope of the above provisions has been restricted, by providing that drugs may be prescribed for off-label use only if the healthcare professional is convinced, on the basis of documentable evidence, that the patient cannot be treated with approved drugs and such off-label use is in line with scientific works published on recognized international journals (Law 94/1998).

According to a brief submitted by EMA in the AGCM proceedings, the permissive legislation governing off-label use of drugs and their reimbursement has been beneficial to pharmaceutical companies, as it has allowed to sell products outside of the approved indications, while gathering at the same time scientific data to support future marketing authorizations at the expense of the national health service. The price of such products in most cases is also not established through negotiations with AIFA, as normally required for approved drugs used in accordance with their indications, thus generally yielding higher prices for reimbursement of off-label drugs. The unintended consequences of the above regulations led to a further crackdown on off-label prescriptions in 2006, when it was established that medicinal products cannot be prescribed and reimbursed unless they are at an advanced stage of clinical trials (at least in second phase) and scientific data from such trials are available (Law 296/2006).
In 2012 a change in the legislation concerning medical malpractice had the effect of further discouraging off-label prescription. Law Decree 158/2012, in fact, established that healthcare professionals are exempted from liability due to ordinary negligence if they comply with guidelines and good practices recognized by the scientific community. This has disincentivized healthcare professionals from prescribing drugs off-label, unless such practice is generally endorsed by the medical community.

IV. THE ANTICOMPETITIVE ARRANGEMENTS CONCERNING THE MARKETING OF AVASTIN AND LUCENTIS

Understanding off-label legislation and the possibility to obtain reimbursement from the national health service is essential to understanding how the Aventis-Lucentis case unfolded. The price of Lucentis is in fact significantly higher than the price of Avastin: as of November 2012 the price reimbursed by the national health service per injection was equal to €902. Avastin, on the other hand, had a price per treatment ranging from €15 to €81 and had been included in the List 648 for the treatment of AMD.

In line with then applicable legislation, the placement on the market of Lucentis triggered the cancellation of Avastin from List 648 for most of its off-label uses, since a valid alternative treatment, duly authorized for the same indication, was available on the market. AIFA definitely cancelled Avastin from the List 648 in October 2012 following a change in the summary of the product characteristics previously filed by Roche with EMA in order to account for certain adverse events in the ophthalmic use of Avastin as compared to Lucentis.

AGCM in its decision points to a concerted allocation of the market between Roche and Novartis, with this latter focusing on the ophthalmic sector and the first focusing on antitumoral drugs. In line with this shared marketing strategy, AGCM held that the two companies artificially restricted the use of Avastin, also by undertaking a variety of regulatory actions aimed at limiting its off-label use. Roche, on the other hand, claims that any such actions were in line with its pharmacovigilance duties, as they related to adverse events in connection with the use of Avastin in ophthalmic settings.

It is quite interesting to note that the actions undertaken by Roche regarding Avastin were on their face completely in line with the current regulatory framework. Roche, in fact, was under no obligation to seek a marketing authorization for the treatment of AMD and was actively (maybe too actively!) reporting any adverse events occurred in connection with the off-label use of Avastin. According to AGCM, however, all such actions in the aggregate had the specific goal of restricting competition and were instrumental to a restrictive agreement between competitors, even if they were formally in line with pharmaceutical regulations. The allegations of AGCM have been supported by the economic and contractual ties between Roche and Novartis and their common interest in the commercialization of the two products.

AGCM, in assessing whether the above practices had an impact on the market, also examined the higher costs borne by the national health service in connection with the prescription of Lucentis instead of Avastin and estimated such higher costs in the amount of €540 million in 2013 and €615 million in 2014. While such higher costs have not been taken into account by AGCM in defining applicable sanctions, but rather to show that the practice of Roche and Novartis had actual effects on competition, they quickly became the basis for a claim by the Italian Ministry of Health, who – soon after the AGCM decision – stated that it is willing to seek reimbursement for damages suffered as a consequence of the alleged anticompetitive arrangements.

V. NEW LEGISLATION AND CASE-LAW ON OFF-LABEL PRESCRIPTION

Following the decision of AGCM and the interest generated in the public opinion by the Avastin-Lucentis case, the Italian Government enacted a law decree (36/2014) significantly extending the possibilities for off-label prescription of drugs. The new legislation, in particular, provides that off-label prescription is allowed and reimbursement is warranted even if a valid alternative drug duly authorized for the concerned indication exists. The possibility to obtain reimbursement for such drugs is subject to their inclusion in the List 648, upon an assessment by AIFA that their use is appropriate and cost-effective. In addition, off-label use must be recognized by the scientific community and must be in line with Italian and international researches. Lastly, AIFA may also take appropriate monitoring measures to ensure patients’ safety, and is thus authorized to act independently in the event that the concerned pharmaceutical company fails to take action.

This new legislation appears to lessen the restrictions on off-label prescription previously introduced, and allows AIFA broad authority to expand the list of reimbursable off-label drugs. Contrary to past legislation, however, for the first time off-label regulations explicitly factor in the cost-effectiveness of off-label prescriptions in order to determine their reimbursement.

Only a few months after the AGCM decision and the enactment of new legislation, the Constitutional Court also decided a dispute regarding the prescription of Avastin. In fact, following the 2012 cancellation of Avastin from List 648, many Italian regions continued to recommend the use of Avastin in the treatment of AMD, giving rise to a dispute with Novartis. One of these disputes reached the Italian Constitutional Court, which on May 19, 2014 held that AIFA always had the power to conduct an independent assessment of valid alternative treatments, based not only on authorized indications but also on economic efficiency for the national health service, de facto authorizing AIFA to include products in the List 648 for off-label use and reimbursement, even if an alternative treatment is approved and marketed, but comes at a higher price.

VI. CONCLUSIONS

The AGCM decision already had the effect of triggering an independent investigation into this matter in France and, although still subject to judicial review, is likely to generate further litigation in the next months with the Italian Ministry of Health and other authorities abroad. In addition, the regulations enacted in the aftermath of the AGCM decision can be expected to trigger new actions from AIFA aimed at extending off-label use of drugs, to the extent that such use may serve the purpose of complying with budget restrictions.

Aside from the details of the Avastin-Lucentis case, however, the key takeaway for the pharmaceutical industry is that compliance with the regulatory framework no longer shields pharmaceutical companies from antitrust investigations. AGCM made it very clear that it will independently assess commercialization and marketing strategies of pharmaceutical companies, regardless of their formal compliance with regulatory requirements. Moreover, AGCM expressly stated that the marketing authorization is an entry barrier and cannot be used to determine the relevant market. If other authorities across the world are willing to follow this path, it might well be time for the industry to reassess their marketing strategies.