Regulatory

AI Act enters into force

On 12 July 2024, Regulation (EU) 2024/1689 (AI Act) was published in the EU Official Journal. The AI Act entered into force on 1 August 2024 and will become applicable from 2 August 2026, with some exceptions. The AI Act will significantly impact the Life Sciences industry, as most medical devices consisting of or including AI systems will constitute “high-risk AI systems” subject to the rules of the AI Act in addition to the requirements of Regulation (EU) 2017/745 (MDR).

Regulation (EU) 2024/1860 enables gradual roll-out of EUDAMED

On 9 July 2024, Regulation (EU) 2024/1860 was published in the EU Official Journal, amending Regulation (EU) 2017/745 (MDR) and Regulation (EU) 2017/746 (IVDR). The regulation allows for the gradual roll-out of the European database on medical devices (EUDAMED) and introduces specific obligations in case of interruption or discontinuation of supply of certain devices. Finally, it amends the IVDR transitional provisions to ensure the continuity of supply of such products.

MDCG publishes updated guidance on classification rules for IVDs

On 8 July 2024, the Medical Device Coordination Group (MDCG) released updated guidance on the classification rules for in vitro diagnostic medical devices (IVDs) under Regulation (EU) 2017/746 (IVDR). The guidance clarifies the classification of IVDs and includes rules for devices put into service through distance sales. The document aims to assist manufacturers, notified bodies, and health institutions in classifying IVDs before they're marketed or put into service in the EU. It also helps regulators and stakeholders assess IVD classifications.

AIFA launches new database on authorised medicinal products

On 1 July 2024, the Italian Medicines Agency (AIFA) launched the new “AIFA Medicinali” database consultation service. The service allows for faster and more accurate searches of documents and information on medicines authorised in Italy. Users, including citizens, healthcare professionals, and companies, can view and download the package leaflet and summary of product characteristics. Users can also find information on medicines' reimbursement classification, supply regime, and shortages.

HERA publishes technical report on supply chain vulnerabilities

On 10 July 2024, the European Commission's Health Emergency Preparedness and Response Authority (HERA) shared a technical report with the Critical Medicines Alliance (CMA), highlighting supply chain vulnerabilities for 11 critical medicines. The report outlines steps to enhance supply security, including diversifying supply sources, increasing production capacity, and establishing robust risk management frameworks. These insights will assist the CMA, the European Medicines Agency (EMA), the European Commission, and EU Member States in managing and preventing shortages of these essential medicines.

AIFA publishes 2024 annual fee payment procedure for marketing authorisations

On 1 July 2024, the Italian Medicines Agency (AIFA) announced the payment procedures for the 2024 annual fee for marketing authorisations (MAs) valid as of 31 December 2023. According to Resolution 21/2012, an annual fee is charged for each MA. For homeopathic and traditional herbal medicines, the fee is 20% of the standard amount. The updated fees for 2024 are EUR 366.55 for homeopathic and traditional herbal medicines and EUR 1,832.77 for all other medicines. This fee structure does not apply to MAs issued via the centralized procedure.

AIFA publishes final balance on 2023 pharmaceutical expenditure

On 17 July 2024, the Italian Medicines Agency (AIFA) released the monthly monitoring documents for national and regional pharmaceutical expenditure for the period from January to December 2023 (final balance). At the national level, the total expenditure for the 2023 amounted to EUR 21,766 million. This represents an absolute deviation of 15.15% from the total available resources, which were EUR 19,329 million, indicating an increase of EUR 2,437 million.

WCC/Compliance

Nordio Decree rewrites corruptive offences repealing the abuse of office and reforming the trafficking in influences

On 10 July 2024, the Italian Parliament definitively approved a reform of the Italian Criminal Code (ICC), known as the Nordio Decree, which largely affects the offences against the public administration. With its most relevant innovations, the Nordio Decree:

• repealed the crime of abuse of office (Art. 323 ICC), which used to punish the conducts of the public officials who violate undiscretional specific rules of conduct provided for by law to procure an unfair economical advantage to him/her or third parties;
• reformed the offence of trafficking in influences (Art. 346-bis ICC), limiting its scope to the intentional use of existing relationships with public officials to unduly obtain any economic benefit, as remuneration for the unlawful mediation.

The strong impact of the Nordio Decree reform has been partially counterbalanced with the introduction of the new offence of wrongful destination of movable assets (indebita destinazione di denaro o cose mobili, Art. 314-bis ICC), by means of the “Prisons” Decree.

Six out of ten online ads for falsified medical products go unrecognised

On 3 July 2024, the Italian Medicines Agency (AIFA) published the results of a study conducted by the Transcrime Research Centre of the Università Cattolica del Sacro Cuore of Milan, with the support of AIFA and Michigan State University. The study aimed at investigating consumers' awareness towards the risks of purchasing substandard and falsified medical products, by involving a representative sample of regular internet users in Italy and Spain and exposing them to a combination of licit and illicit online ads for medical products. The study showed that, among the Italian sample, 57% of illicit ads went unrecognised; in addition, it proved that, in their lifetime, more than two-thirds of the users in the same sample (69%) had bought medical products online, and a large majority (85%) of the users had seen at least one online ad for medical products.

EU Commission reports on the implementation of the Whistleblowing Directive

On 3 July 2024, the European Commission published its report on the implementation and application of the Whistleblowing Directive (Directive (EU) 2019/1937). Having clarified that the majority of EU Member States have now implemented the Directive at national level, the European Commission examined the differences and similarities of legislative choices adopted by Member States, assessing their compatibility with the provisions of the Directive. The European Commission reiterated that the Directive grants the possibility of sharing the internal reporting channels only among entities up to 249 employees, deeming as inconsistent with the Whistleblowing Directive those national legislations which allowed for the establishment of reporting channels at group level.

Corporate Sustainability Due Diligence Directive published in the EU Official Journal

On 5 July 2024, Directive (EU) 2024/1760 on corporate sustainability due diligence (CSDD Directive) was published in the EU Official Journal. The CSDD Directive sets out a range of obligations for companies operating in any sectors with regards to the monitoring and preventing of the negative impacts on human rights and the environment that may come from their activities, also establishing forms of liability for individuals and entities that fail to comply with the obligations. The CSDD Directive, which entered into force on 25 July 2024, also provides the roadmap for its gradual implementation at national level starting from 2026.

CNDEC publishes a position paper on the synergies between ESG compliance and 231 Models

On 12 July 2024, the Italian National Council of Certified Accountants (Consiglio Nazionale dei Dottori Commercialisti ed Esperti Contabili, CNDEC) issued a position paper outlining the efficient synergies that may be drawn among corporate compliance obligations, sustaining that the adoption of the 231 Model for the prevention of corporate criminal liability may also be a useful tool for ensuring adherence to sustainable development goals (ESG). The paper highlights the opportunity for legal entities to coordinate their ESG risk management processes with the 231-related risk assessment activities.

IP

Unified Patent Court: The first decisions on the merits

On 4 July 2024, the Paris Local Division of the Unified Patent Court (UPC) issued its first decision on the merits in an action for infringement and a counterclaim for revocation of a patent relating to a technology for remote monitoring blood glucose levels in diabetic patients. The court upheld the defendant's counterclaim for revocation, holding that the patent was invalid for lack of inventive step; in view of the finding of invalidity, infringement was not assessed.

A few days later, on 16 July 2024, the Munich Central Division of the UPC issued its first decisions on the merits (available here and here) in two cases brought against the same defendant, in which it revoked the patent at issue entirely – relating to anti-PCSK9 antibodies for use in the treatment of diseases related to high cholesterol – in all the Contracting Member States in which the plaintiffs sought revocation.

Finally, on 19 July 2024 the Paris Central Division of the UPC rendered its first judgement in a revocation action and confirmed the defendant's patent protecting a system comprising a prosthetic heart-valve and a catheter.

Italian Supreme Court rules on Bolar exemption

On 5 July 2024, the Italian Supreme Court (Corte di Cassazione) issued an important decision on Bolar exemption in an infringement case between an Italian manufacturer of active pharmaceutical ingredients and a German pharmaceutical company. The patent in suit, which has now expired as well as the related Supplementary Protection Certificate (SPC), protected the active ingredient tiotropium bromide, a muscarinic receptor antagonist, also used in the manufacture of asthma drugs.

The Supreme Court confirmed the rulings of the two lower courts, which found that the patent had been infringed. The amount of damages that has to be paid by the Italian manufacturer and its parent company to the German pharmaceutical group is still in dispute and will be determined soon.

The focus of the litigation lay in the interpretation of the objective or subjective extension of the Bolar exception: the question is whether the manufacturing of active pharmaceutical ingredients (APIs) and the subsequent clinical trials can be considered lawful, because they are covered by the exception, only if they are carried out by the same entity who then applies for the marketing authorisation (MA), or whether the exception also applies to the same activities carried out by a third party who is not the applicant for the MA.

In this regard, the Supreme Court – which is now the first Supreme Court in Europe to provide clarity on this specific topic – decided in favour of a broad interpretation of the exemption, ruling that the Bolar exception can apply to those who manufacture the patented API not to obtain the MA itself, but to sell it to a third party (the generic manufacturer); however the court clarified that the exception could be invoked only if the Bolar purpose is clear and supported by unequivocal evidence from the outset.

Data, Privacy & Cybersecurity

Italian DPA publishes its 2023 enforcement activities report

On 3 July 2024, the Italian Data Protection Authority (Italian DPA) published its 2023 enforcement activities report. The report details the Italian DPA's engagements across various sectors, with a particular focus on healthcare in section 5. In 2023, the Italian DPA's healthcare interventions included responding to requests for opinions on regulatory acts and addressing reports and complaints. Key areas of operation were the reform of the Electronic Health Record (Fascicolo Sanitario Elettronico or FSE 2.0) and the processing of health data through information systems in public and private health facilities.

NRF publishes study paper on the protection of mental privacy in the area of neuroscience

On 24 July 2024, the Neurorights Foundation (NRF) published a study paper on the protection of mental privacy in the area of neuroscience. According to the NRF, neurotechnologies are crucial for clinical health but are increasingly used outside clinical settings, such as in work, education, and entertainment. Consumer-grade devices, freely available and often unsupervised, pose data security risks, especially since data is stored in business-owned clouds often outside the EU. This study addresses the NRF's claims and suggestions with reference to risks arising from neurotechnologies and evaluates the need for their proposed “neurorights”.

Italian Cybersecurity Law enters into force

On 17 July 2024, Law 90 of 28 June 2024 (Cybersecurity Law) entered into force. This law aims to enhance cyber resilience by imposing stringent requirements on both public administrations and private companies, including healthcare organisations, particularly those within the National Cybersecurity Perimeter and those subject to NIS1 Directive and the upcoming NIS2 Directive. The Cybersecurity Law mandates several key obligations. Companies have to promptly report security incidents, with the reporting approach varying based on the extent and type of assets involved. Additionally, companies have to adopt appropriate security measures in line with guidelines from the National Cybersecurity Agency (ACN) and the Italian Data Protection Authority, including protocols for encryption and password management. The law also sets specific criteria for public contracts involving IT goods and services to ensure data confidentiality, integrity, and availability, aligning with national strategic interests.

Cybersecurity Law also impacts on criminal aspects. With the aim of tackling cybercrime, the law introduces new criminal offences, that could also trigger corporate criminal liability under Legislative Decree 231/2001, and increases the existing penalties for both individuals and companies in relation to cybercrimes. For further details, see the previous issue of our Life Sciences newsletter here.

Public Procurement

Updates on the payback of medical devices: Constitutional Court publishes two rulings

On 22 July 2024, the Constitutional Court (Corte Costituzionale) published two rulings related to the payback issue for the period 2015-2018:

• With ruling no. 140/2024, the Constitutional Court declared “unfounded, with respect to the four-year period 2015-2018, the questions of constitutional legitimacy of Article 9 ter of Decree Law no. 78 of June 19, 2015”, raised by order of the Lazio Regional Administrative Court. In light of this ruling, the payback system is lawful.
• With ruling no. 139/2024, the Constitutional Court upheld the legitimacy question raised concerning Art. 8, par. 3, of Decree Law 34/2023. This article stipulated that medical device companies that had not initiated litigation against the payback measures, or that, despite initiating litigation, wished to waive it, would have to pay each region and autonomous province, by 30 November 2023, a share equal to 48% of the amount indicated in the relevant regional and provincial measures. The Constitutional Court ruled that this article is unconstitutional because the reduction to 48% of the quota is not applied uniformly to all medical device companies. The Constitutional Court determined that this reduction should not be contingent upon the choice to waive litigation and declared that the deadlines and procedures for payment outlined in the article are null and void.

Following this ruling, for the years 2015-2018, medical device companies will be required to pay 48% of the amounts required by the regional and provincial measures. To benefit from this reduced payment, they will not be required to waive any previously filed appeals.

Antitrust

Italian Competition Authority closes with no sanctions the proceedings for failure to comply with its order to interrupt abusive imposition of excessive pricing in orphan-medicines market

On 18 June 2024, the Italian Competition Authority (ICA) ruled that, by negotiating with the Italian Medicines Agency (AIFA) a new, lower price for the medicine to treat cerebrotendinous xanthomatosis, a group of undertakings complied with the ICA's ruling on the existence of an abuse of its dominant position – consisting in selling orphan medicines to the Italian national health system at excessive and unfair prices – and ICA's order to interrupt the unlawful conducts.

CJEU confirms the European Commission's ruling on the existence of anticompetitive pay-for delay agreements and of abuse of a dominant position on the perindopril market

On 27 June 2024, the Court of Justice of the European Union (CJEU) published several judgements in which it confirmed the European Commission's decision that certain pay-for-delay agreements concluded between the originator and certain generic companies with regard to the perindopril market were restrictive to competition. The Court also confirmed the European Commission's decision on the existence, on the same market, of an abuse of a dominant position by the originator, implemented through a foreclosure strategy.

Tax

Italian Supreme Court rules that services strictly connected to healthcare activities are VAT exempt

On 10 July 2024, the Italian Supreme Court (Corte di Cassazione) published the judgement no. 18910, according to which, for the purposes of VAT exemption under Art. 10, par. 18, of Presidential Decree 633/1972 (Italian VAT Decree), the term “medical services of diagnosis, treatment, and rehabilitation provided to individuals” should be interpreted as medical interventions exclusively aimed at a therapeutic purpose, even if this purpose is not strictly defined.

In fact, such interpretation must consider the social objective underlying the VAT preferential regime, which is to reduce medical services’ costs. Therefore, the VAT exemption should apply not only to direct medical services, but also to operations strictly connected to them, as long as these operations support a primary therapeutic service.

Italian Supreme Court rules that, in the transfer of a business, the right to recover VAT could be transferred

On 19 July 2024, the Italian Supreme Court (Corte di Cassazione) published the judgement no. 20011, stating that, with reference to tax credits, in principle, the contribution/transfer of a business entails, by (civil) law, the transfer of assets and liabilities, including tax credits owed by the transferor vis-à-vis the Treasury. Consequently, transferors themself cannot claim a refund of the VAT credit from the Treasury.

However, the general rule can be derogated by the parties, so that the VAT credit relating to the transferred business can be excluded from the transferred perimeter. In such a case, the transferor is entitled to recover or claim the refund of the VAT credit, provided that it can demonstrate that, at the time of the contribution in kind, the common intention of the parties was to derogate to the general rule.