Payback for medical devices: is litigation on the horizon in Italy?
Published on 17th Oct 2022
Doubts linger about the system's legitimacy, retroactivity and application, particularly around calculation errors
Seven years since the entry into force of the medical device payback regulation and almost three years on from the preliminary implementing measures issued in 2019 – see our insight Payback for medical devices: the uncertainty persists –- in 2022 Italian legislator has ordered an acceleration of the procedure. The adoption of the ministerial guidelines – the last preparatory act for the payback requests that regions/provinces will send to medical device suppliers – is now imminent.
By the end of the year, supplier companies should receive the payback requests to cover the excess spending on medical devices, which was approximately € 2bn for 2015-2018. The payback requests will have a retroactive effect of up to seven years.
Questions relating to the orthodoxy of this procedure and the implementing measures are legion. Medical device companies are preparing to challenge these measures before the administrative courts and a massive amount of litigation is expected, in much the same way as with the many ongoing proceedings relating to payback for pharmaceuticals.
At the end of September 2022, three measures had been issued in Italy:
- a decree of the Ministry of Health in agreement with the Ministry of Economics and Finance, dated 6 July 2022 and published in the Official Gazette of 15 September 2022. This certifies the spending overrun for medical devices at a national and regional level for the years 2015 - 2018, by approximately € 2 billion.
- article 18 of Law Decree 115/2022, known as the "Aiuti bis" decree, converted into Law 142/2022, gave the starting signal for the payback procedure and set out its timeframe.
- the memorandum of understanding (MoU) adopted at a meeting of the state-regions permanent steering committee on 28 September 2022 (file 213/CSR) sanctioned the agreement on the Ministry of Health's draft decree for the adoption of the preparatory guidelines for the issuance of the regional and provincial measures for the 2015-2018 medical device payback rules.
Missing regulations and timings
Article 18 of the Aiuti bis decree provides that:
- the ministerial decree on the adoption of the guidelines and in preparation for the issuance of regional and provincial payback measures must be issued within 30 days of the publication of the decree certifying that the spending ceiling has been exceeded (the deadline for the publication of the guidelines was 15 October 2022 and to date these have not been published);
- the regions and autonomous provinces must also adopt measures to implement the payback requirements (that is, define the list of companies subject to the payback requirement for each year after verifying the accounting documentation also through the regional health service entities) within 90 days of the date of publication of the decree certifying that the spending ceiling has been exceeded (by 14 December 2022);
- the supplier companies must make the payments within 30 days of the publication of the regional and provincial measures;
- the regions and autonomous provinces must make the consequent entries in the 2022 health sector balance sheet;
- if the companies do not comply with their payback obligations, the debts for the purchase of medical devices owed by the individual regions and autonomous provinces to the defaulting companies are offset up to the full amount of each company's relevant payback obligation.
State and regions MoU
The MoU between the state and the regions demonstrates the concern on the part of the regions over the payback dispute. The document states that the understanding is conditional on the government's commitment:
- to identify, at the latest within the date confirming details of the 2019 payback, a central body or ministerial office that certifies the amounts due to each region (the role played by the Italian Medicines Agency (AIFA) for drug payback) in order to reduce the risk of litigation;
- to open a discussion with the Ministry of Economics and Finance for risk assessment and litigation management;
- to adopt the measures and regulatory changes to arrive at a similar method of repayment for both pharmaceuticals and medical devices.
Osborne Clarke comment
Given that there are strong doubts as to the legitimacy of the payback system for medical devices overall, especially in terms of the retroactivity of the measures, there are potentially numerous critical issues in the application of the rules and in relation to possible calculation errors.
The rules require that the calculations must be made using the regional income statement models, and the payback should only concern the cost of the medical devices and not that of the service. Since the obligation to indicate the cost of the device and of the service separately in electronic invoicing was only introduced in 2019, it may be extremely complicated to extrapolate this figure for previous years, without resorting to approximations and extremely uncertain numbers.
The only remedy for medical device companies wishing to protect themselves against payback claims is to challenge the measures/payback requests before the administrative court. However, the question arises as to whether it is sufficient to challenge directly the payback request, which is expected to arrive within the end of the year or, as a precautionary measure, to previously challenge both the 15 September ministerial decree certifying the expenditure overrun and the decree – which is soon to be issued – containing the guidelines for the procedure.
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