Payback for medical devices: the uncertainty persists

The mandatory rule that requires pharma companies to cover a part of any excess spending, above the fixed ceiling, borne by the Regions for medical devices dates back to 2015 (N.B. the total spending ceiling is stated as a percentage of the national health service needs, the so-called FSN).

Only on 7 November 2019, more than four years after the entry into force of that rule, were the first implementing measures adopted: the individual regional spending ceilings were identified. The system is still waiting for the certification of any excess spending and the rules on the relevant payback procedure.

Surprisingly, it seems that neither the Legislator - which with the 2019 Budget Law changed the procedure without including any mention of the rule’s potential retroactive application to the 2015/2018 period - nor the competent Administrations (and in particular the Ministry of Health  which in-mid 2019 activated the procedure for expenditure reporting  by the Regions) ever posed the question of what it might mean in practical terms to retroactively  implement a payback mechanism, with more than 4 years’ delay.

What is certain is that now asking companies marketing medical devices to pay a retroactive payback raises serious questions about the legitimacy of the action and the measures that will be adopted. Obviously, if payback requests are made, it is easy to imagine a scenario similar to that in the case of the pharmaceutical payback, with the companies involved filing jurisdictional appeals.

In the meantime, however, the question as to whether and what sums to set aside in the financial statements is not an easy one to solve, especially given the lack of reliable, data and the many variables involved.

Background 

In summary the legal background is the following: 

• art. 17 of law decree 98/2011 had provided that the costs borne by the Italian National health service for the purchase of medical devices was subject to limits, both at national and at regional level, which were in line with the FSN and the regional standard, to be established by decrees issued by various Ministries (Ministry of Health/Ministry of Economy and Finance). It also provided that any payback obligation would have been borne by the regions that had contributed to the excess spending;
• the system was then changed by art. 9 ter of law decree 78/2015 that, save always the national spending ceiling provided by the law as 4.4% of the FSN, left the definition of the regional spending ceilings to an agreement to be reached in the ambit of a meeting between the State and the regions and which was to be adopted within 15 September 2015. Art. 9 also provided that a part of any excess spending would be borne by the medical device companies (i.e. 40% in 2015, 45% in 2016 and 50% from 2017 onwards);
• prior to the entry into force of the 2019 Budget Law, art.  9 ter, paragraph 8, of law decree 78/2015, provided that the definition of the excess regional spending had to be provisionally certified by a decree of the Ministry of Health in agreement with the Ministry of Economy and Finance within 30 September of each year, and then definitively certified within 30 September of the following year, on the basis of the information contained in the consolidated regional economic recognition forms of  the income statement (CE forms) [Decree of the Ministry of Health dated 15 June 2012];
• the 2019 Budget Law (art. 1, paragraph 557), again changed the procedure providing that the Ministry of Health, in agreement with the Ministry of Economy and Finance would, within 30 September of each year, adopt a decree in which they would certify the excess spending that had been calculated on the basis of each company’s turnover, gross of VAT, based on the data contained in the electronic invoices relating to the reference calendar year. The identification of excess spending above the spending ceiling for 2019 will have to be made within 31 July 2020 and, in subsequent years, within 30 April of the year following the reference year. The new art. 9 ter, paragraph 8, further provides that in performing the supply contracts, there is an obligation to indicate in the electronic invoices, as separate items, the cost of the device and the cost of the services.

Following four years’ silence, the first implementing provisions have now arrived on the market. 

• the Ministry of Health letter of instructions (prot. 22413 dated 29 July 2019) in which, in order to implement the above-mentioned rules, it required the public health entities to send it a summary of annual turnover for each supplier of medical devices registered in the CE forms, for the years 2015, 2016, 2017 and 2018.
• On 7 November 2019, two agreements were reached in the ambit of a meeting between the State and the regions that (i) defined the regional spending ceilings, retroactively, for the years 2015-2018 and for 2019 as 4.4% of each region’s share of the FSN (the so-called FSR) and (ii) left the completion of the procedure’s details to subsequent implementing measures.
• In particular, the above-mentioned agreements provide for two further regulations to be issued by the Ministry of Health and/or through agreements between the State and the regions, which will have to certify:

-    any excess spending for medical devices at national and regional level for the years 2015-2018 and 2019;
-    the payback procedure for 2015-2018 and for 2019.