I INTRODUCTION

i Competent authorities

The Italian life sciences sector is governed by two main regulatory authorities: the Ministry of Health (Ministry), which is responsible for the governance of the Italian health system and has specific competencies in relation to medical devices, and the Italian Agency of Medicines (AIFA), which is in charge of regulations, oversight and enforcement concerning the manufacture and distribution of medicines.

ii Legislative framework

The legislative framework applicable to the marketing of medicines and medical devices in Italy mainly consists of:

  1. Legislative Decree No. 219/2006 (Code of Medicines), which implemented Directive 2001/83/EC;
  2. Legislative Decree No. 46/1997, implementing Directive 93/42/CEE; and
  3. Legislative Decrees No. 507/1992 and No. 332/2000, which implemented, respectively, Directive 90/385/CEE on active implantable medical devices and Directive 98/79/CE on in vitro diagnostic medical devices.

National legislation on medical devices will be replaced by Regulation (EU) 2017/745 on medical devices and Regulation 2017/746 on in vitro diagnostic medical devices, when they become fully applicable.

II THE REGULATORY REGIME

i Classification

Italian legislation does not address the issue of the distinction between medicines, medical devices and other regulated products (e.g., foods, cosmetics, chemicals and general consumer products). However, Italy applies the guideline documents issued by the European Commission to support manufacturers of medical devices in the classification of products, such as, for instance, the Manual on Borderline Classification of Medical Devices, Version 1.18 (12-2017) and the MEDDEV documents. In addition, the Ministry occasionally issues guidelines to address specific products and clarify their classification criteria (e.g., surgical gloves).

Pursuant to the Code of Medicines, if there is any doubt about the classification of a product as a medicine, the Code of Medicines itself shall apply.

ii Non-clinical studies

Annex 1 of the Code of Medicines states that non-clinical (pharmaco-toxicological) studies shall be carried out in conformity with the good laboratory practice (GLP) laid down in Directive 87/18/EEC (now replaced by Directive 2004/10). Directive 2004/10 was implemented by Legislative Decree No. 50/2007, which regulates the application of GLP to non-clinical tests aimed at assessing the effects on human beings, animals and environment of all chemical products, including cosmetics and medicinal products. Pursuant to this decree, the Ministry, following inspection, issues the GLP certification to the relevant laboratory and includes it in a public list of the GLP-compliant centres.2 ICH3 rules are also applied in Italy.

No specific legislation governs non-clinical studies concerning medical devices. This matter is regulated by the vertical rules ISO, CEN and UNI (at national level), which specify, for each category of devices, the modalities to conduct such studies, analyse the results and draft the relevant reports to be attached to the technical file and included in the investigator's dossier.

In addition, any non-clinical research that involves human samples (and related personal data) that can be referred to identified persons shall be approved by the competent ethics committee and be subject to data protection legislation.

Trials on animals are subject to the Ministry's authorisation, to be filed by the committee responsible for the animal welfare, established at the scientific entity where the research is carried out, pursuant to Legislative Decree No. 26/2014.

iii Clinical trials

Medicines

Legislative framework

Clinical trials of medicines are mainly regulated under Legislative Decree No. 211/ 2003, which transposed Directive 2001/20/EC on good clinical practice (GCP) in the conduct of clinical trials, and Legislative Decree No. 200 of 6 November 2007, implementing Directive 2005/28/EC on GCP as regards investigational medicinal products. Non-interventional clinical studies (observational studies) are regulated by the AIFA's resolution dated 20 March 2008.

The new Law No. 3 of 11 January 2018 (the Delegation Law) gives the government the power to issue, within the next 12 months, legislative decrees to prepare the application in Italy of the Clinical Trials Regulation (EU) No. 536/2014 (CTR). This law provides for, among other things:

  1. a reduction in the current number of ethics committees and a reorganisation of their functioning with particular regard to their involvement in the clinical trials authorisation procedure, to ensure alignment with the AIFA's assessment and compliance with the timing required by the CTR; to that end, a central committee for the coordination of local ethics committees is provided for in Article 2. This provision was implemented by the Ministerial Decree of 19 April 2018 setting up such coordination committee;
  2. the identification of the centres authorised to conduct clinical trials from Phase I to Phase IV, including the setting of the minimum requirements for centres dedicated to Phase I trials; and
  3. the identification of minimum common contents of clinical trial agreements on a national basis.
Application and authorisation

Any clinical trial shall be authorised by the AIFA and receive approval by the competent ethics committee. Until the application of the CTR, the authorisation procedure is established by Legislative Decree No. 211/2003, as detailed by Ministerial Decree of 21 December 2007, which also sets out rules for communicating amendments, declaring the end of the trial, requesting opinions to the ethics committee, and so on.

The request for authorisation shall be submitted by the sponsor (which must be established in the European Union or have appointed a legal representative in the European Union) to AIFA through the national database of clinical trials.4 AIFA can authorise the trial within 60 days and, in the event of there being no answer within the same term, the authorisation shall be considered as granted (except for certain trials), provided that the competent ethics committee has issued an approval. The time frame is reduced to 35 days for the approval of any substantial amendment to the protocol.

Other main requirements

Informed consent

Clinical trials shall be conducted in strict compliance with the informed consent principle, which is assessed by ethics committees. In this regard, the Delegation Law provides for a simplification of the procedures to use biological materials residual from previous diagnostic or therapeutic activities for clinical research purposes, subject to the collection of patients' informed consent.

From a data protection perspective, participants must give their informed consent to the processing of their personal data for specific research purposes. Further processing of health data (but not genetic data) without the data subjects' consent can be authorised by the Italian Data Protection Authority for scientific and statistical purposes only if appropriate measures are taken to protect data subject's rights and freedoms, such as the anonymisation of data (Article 110 bis of Legislative Decree No. 196/2003, as introduced by Legislative Decree No. 101/2018).

Insurance policy

Sponsors shall hold a specific insurance to protect participants in clinical trials, which is assessed by ethics committees. According to the Ministerial Decree 14 July 2009, the insurance policy should include specific cover for reimbursement of any damages caused to the participants, any civil liability of the investigator and sponsor, without excluding any damage that may be unintentionally caused by accident or be attributed to negligence, imprudence or inexperience (provided that certain time limits to claim damages are met).

Safety reporting

Under Legislative Decree No. 211/2003, the investigator shall immediately inform the sponsor of any suspected unexpected serious adverse reactions that have either proved to be lethal or endangered the life of a patient; the sponsor shall register and notify them to the Ministry, as well as to the ethics committees concerned, as soon as possible and in any case within seven calendar days of being aware of the incident, while any additional information shall be notified within the following eight days. All other suspected unexpected serious adverse reactions are reported to the Ministry and the ethics committees concerned as soon as possible within 15 days.

Investigator-initiated studies

Investigator-initiated studies (i.e., not-for-profit studies) are governed under the Ministerial Decree of 17 December 2004, which set outs the following main conditions, to be assessed by the competent ethics committees, for a study being considered 'not for profit' and enjoy the related benefits:

  1. the sponsor is a public entity or scientific association or non-profit research organisation;
  2. the sponsor does not own the medicine patent or the marketing authorisation;
  3. the collected data, including trial results, is owned by the sponsor;
  4. the trial is neither finalised nor used for industrial development of the medicine; and
  5. the trial is aimed at improving clinical practice (an exception to this requirement applies to those studies that are not suitable to have an immediate impact on the improvement of clinical practice, for instance because they are still in Phase I).

The Delegation Law provides that the requirement under point (d) above shall be amended by future decrees to allow the transfer of the clinical trial data to pharmaceutical companies and its use for the industrial development of medicines, under the condition that the companies concerned reimburse all direct and indirect costs of the trial, as well as all the missed outcomes deriving from the classification of the trial as 'not for profit'.

Medical devices

Pre-market studies shall be notified to the Ministry, with all relevant documentation, and, if the studies concern Class III or IIa or IIb invasive devices, they cannot start before the Ministry gives its clearance or before the 60-day term of the notification has expired. Conversely, post-market studies only need to be communicated to the Ministry. In any case, both pre- and post-market clinical trials concerning any class of device require the approval of the competent ethics committee. Clinical studies concerning medical devices are also subject to the GCP principles set out by UNI EN ISO 14155 of January 2012 and to the MEDDEV documents.

iv Named-patient and compassionate use procedures

Medicines

The supply of non-authorised medicines can occur under one of the following methods:

  1. through a compassionate use (CU), that allows the free supply by companies of medicines not yet available on the market;
  2. on a named-patient basis; or
  3. through the application of Law No. 648/1996.
Compassionate use

On 7 September 2017, the Ministry issued a new decree on CU of medicines that replaced the Ministerial Decree of 8 May 2003. Under this decree, CU can apply with regard to:

  1. non-authorised medicines, under clinical trials at Phase III or, in exceptional cases, Phase II (in the case of rare diseases or cancers, results of completed Phase I trials are also accepted, and this is one of the key new aspects of this decree);
  2. authorised medicines to be used 'off-label'; and
  3. authorised medicines not yet available in Italy.5

Patients who can benefit from CU are those:

  1. suffering from very serious diseases who have no valid therapeutic alternatives;
  2. already being treated with clinical benefit in a closed clinical trial to assure therapeutic continuity;
  3. who cannot be included in a clinical trial.
Named-patient basis

Another option for the supply of non-authorised medicines is the named-patient basis, that is, in response to a physician's written unsolicited request for the supply of the unauthorised medicine to a patient under the personal responsibility of the physician.

Law No. 648/1996

Finally, pursuant to Law No. 648/1996, a medicine that is not authorised in Italy may be provided to patients and fully reimbursed by the National Health System (NHS) if:

  1. there is no valid authorised therapeutic alternative; or
  2. a valid authorised therapeutic alternative does exist but the medicine is intended to be used 'off-label' (i.e., for a therapeutic indication different from the authorised one), on the condition that the off-label indication is consistent with national and international medical research, and that the off-label marketing is 'appropriate' and economically viable.6

If the AIFA assesses that these conditions are satisfied, the medicine is included in a specific list and can thereafter be supplied to patients at the NHS's expense.

Medical devices

The Ministry may authorise CU of medical devices for which conformity assessment procedures have not been completed, for the treatment of individual patients, in exceptional cases of need and urgency. The relevant request may be submitted by public or private healthcare facilities, by providing a report from the doctor, justifying the request for a specific patient, and the approval of the competent ethics committee (or, in the case of urgency, evidence of the filing of the request).

v Pre-market clearance

Medicines

Ordinary procedure

No medicines may be placed on the Italian market without having obtained a marketing authorisation (MA) from the AIFA or the EMA, according to the centralised procedure provided for by Regulation (EC) No. 726/2004. To get an MA in Italy, the applicant shall be established in the European Union and have appointed a representative in Italy.

In the case of national procedure, the AIFA shall issue its decision on the authorisation within 210 days of the application being filed (but this term is suspended if additional documents are required).

In exceptional circumstances, the authorisation may be granted on condition that the applicant fulfils certain obligations, in particular related to the safety of the medicine, which are assessed annually.

Procedures for special category of products and follow-on products

For certain categories of products, such as homeopathic medicines, herbal medicines and follow-on products (generic and biosimilar medicinal products), the authorisation procedure is simplified.

In particular, if the request for MA concerns a generic medicine of a reference medicine which has been authorised for at least eight years in Italy or in the European Union, the applicant is not required to provide the results of the preclinical and clinical trials. In the case of biosimilar medicines, the applicant is required to provide the results of preclinical or clinical trials related to those aspects that, for the peculiar characteristics of these products, vary compared to the reference medicine (e.g., raw materials or production processes). The results of other tests contained in the reference medicine's dossier are not required.

Validity

The MA is valid for five years from its publication in the Official Gazette and can be renewed following a re-evaluation of the risk-benefit balance. After the first renewal, the MA is valid for an unlimited period, unless the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. The MA can lose its efficacy when the medicine is not placed on the market within three years as of the issuance of the MA, and in any event when it is no longer marketed for three consecutive years (sunset clause).

Medical devices

The placing on the market of medical devices in Italy is permitted only for devices bearing the CE mark (except for custom-made devices). The procedure and the requirements for obtaining the CE mark vary depending on the class of the device, in compliance with EU legislation.

In addition, all medical devices to be placed on the Italian market should be notified to the Ministry and registered in a dedicated register of medical devices, which is publicly available.7 Finally, to be purchased by public entities (i.e., at the NHS's expense), medical devices should also be included in another register, governed under Ministerial Decrees 21 December 2009 and 23 December 2013 (respectively for medical devices and IVD medical devices).8

vi Regulatory incentives

The Code of Medicines provides for the same regulatory incentives for originators as those set out under EU legislation, such as market and data exclusivity.

No patent linkage is specifically provided under Italian law, except for the provision of Law Decree No. 158/2012 (Article 11),9 according to which generic medicines cannot be included among the medicines reimbursed by the NHS before the expiry date of the patent or supplementary protection certificate of the corresponding originators' product. The AIFA considers this provision to be applicable only to patents and supplementary protection certificates covering active ingredients, and not to second-use patents. The Regional Administrative Court of the Lazio Region (Decision No. 6739, dated 26 June 2014) held this provision not to be applicable in relation to process patents. The Administrative Supreme Court (Decision No. 4394, dated 27 August 2014) stated that Article 11 is applicable only if the active ingredient claimed by the patent of the originator has a different and additional therapeutic effect to those of the medicines already on the market.

Incentives for innovative medicines

To encourage development of products for rare diseases and innovative medicines, Italian law provides for certain advantages, especially relating to the establishment of a fund to finance the expenses incurred by the NHS in purchasing innovative medicines (new criteria for the classification of a medicine as innovative was established by the AIFA's resolution of 31 March 2017).

Moreover, Italy was one of the first European countries to put in place managed entry agreements and conditional reimbursement agreements to support the marketing of innovative medicines that meet a therapeutic need, although their benefit is not yet entirely proven.

vii Post-approval controls

Medicines

Infrastructure and staffing requirements for MA holders

Any MA holder in Italy shall:

  1. appoint a qualified person, responsible for pharmacovigilance activities, and notify his or her name to the AIFA; and
  2. set up a scientific service that shall be independent from the marketing department and managed by a person with specific qualifications: if the actual commercialisation of the medicine in Italy is carried out by a distributor, this requirement shall be met by both the MA holder and the distributor.
Pharmacovigilance and safety reporting

Pharmacovigilance duties are set out by the Ministerial Decree of 30 April 2015, according to which the MA holder, in addition to the appointment of a person responsible for pharmacovigilance, must, inter alia:

  1. maintain detailed records of suspected adverse events;
  2. submit periodic reports on product safety to the AIFA; and
  3. adopt a risk management system for each medicine.

No significant country-specific obligations are provided for by Italian law.

Suspension or revocation of product approvals

Any MA can be both suspended and revoked by the AIFA, if the Agency assesses that the requirements on the basis of which the authorisation was granted are no longer met.

In particular, revocation, which triggers the definitive withdrawal of the medicine from the market, is ordered by AIFA when:

  1. the medicine is harmful under normal conditions of use;
  2. the medicine does not enable the user to obtain the required therapeutic effect;
  3. the risk-benefit ratio is not favourable; and
  4. the medicine does not have the same qualitative and quantitative composition as declared.

If, in the same cases listed above, it is advisable to request further information (or in the case of slight irregularities, which can be remedied within a reasonable period of time), the AIFA suspends the MA, which entails a temporary prohibition to sell the medicine. In place of revocation or suspension, the AIFA may amend an MA, specifying the period within which the unmodified packaging must be removed from the market.

Variations and transfer of ownership of product approvals

Variations of MAs issued by the AIFA are also subject to Regulation (EU) No. 1234/2008, which classifies variations on the basis of their impact on the safety and efficacy of the medicine.

The process for transferring an MA starts with filing the relevant request and the transfer agreement with the AIFA, and is completed with publication of the AIFA's decision in the Official Gazette. The transferee must include in its application a declaration of the qualified person at the manufacturing site for the medicines concerned to continue manufacturing after the MA transfer. According to the AIFA internal regulations, this process takes 90 days but it can be longer and it is advisable that the parties regulate their relationships during this period, especially in the context of asset deals.

Medical devices

Manufacturers of medical devices must report to the Ministry any 'incident', defined as any malfunction, failure or deterioration in the characteristics of a device that could lead to the serious deterioration of a patient's state of health or to his or her death, as well as technical or health reasons that are grounds for any decision to recall a certain category of products from the market.

viii Manufacturing controls

The manufacture of medicines requires an authorisation to be issued by the AIFA after verification that the applicant hires qualified staff, including the qualified person responsible for manufacturing, and possesses the appropriate technical facilities and equipment. Authorisation is also required for the execution of specific operations only, such as packaging, quality control and batches release, and shall specify the medicines and the pharmaceutical forms that are intended to be manufactured.

The authorisation should be granted within 90 days of receipt of the application, but this term is suspended if the AIFA requires supplementary information. Amendments to the authorisation shall also be approved by the AIFA within 30 days of the application being made, except if they are classified as not essential under the AIFA's guidelines: in this case, they only need to be notified. Administrative amendments to the authorisation are generally classified as non-essential and, thus, they do not require a specific approval.

To obtain and maintain the authorisation, the manufacturing site must also hold the GMP certification, which is issued by the AIFA following inspection. The list of authorised manufacturing plants is published on the AIFA website.

No specific authorisation is required by the law to manufacture medical devices.

ix Advertising and promotion

Borders between information and advertising

The definition of advertising in the Code of Medicines is very broad and focuses on the purpose of the information, namely the promotion of the product.

A recent ruling of the Civil Court of Milan (No. 8240 of 24 July 2017) addressed the issue of the border between information and advertising of medicines, stating that the publication of certain information (on the internet and in printed journals) is to be intended as advertising, although it does not include any promotional message, if the information published has been (1) selected and (even minimally) manipulated (e.g., by indicating the excipients) compared to the scientific information available on the AIFA website, and (2) disseminated with techniques that do not require any active research by the users.

Conditions and requirements for advertising medicines and medical devices to the public

Advertising to the public of both medicines and medical devices that can be purchased only with a prescription from a healthcare provider (HCP) or can be used only with the assistance of an HCP, as well as of medicines to be (even partially) reimbursed by the NHS is forbidden. Advertising to the public of other medicines and medical devices is allowed subject to prior authorisation from the Ministry. This authorisation is considered to be granted if the Ministry does not raise any objection within 45 days of the request being filed.

More detailed instructions on advertising of medicines and medical devices through different communication channels, with particular regard to the internet, SMS/MMS and, more recently, social networks, are set out under guidelines issued by the Ministry, such as those issued on 6 February 2017 and 25 July 2017 for over-the-counter (OTC) medicines and on 20 December 2017 for medical devices; the most recent were issued on 25 July 2018 for advertising of OTC medicines on Facebook, and 7 May 2018 with regard to advertising of medicines without prescription other than OTCs (see Section II.xi).

Conditions and requirements for advertising medicines and medical devices to HCPs

Advertising of medicines to HCPs is regulated under the Code of Medicines, with particular regard to the role and the qualification of medical sales representatives, the requirements of the advertising materials to be provided to HCPs, etc. Certain general principles set out under the Code of Medicines are also applied to the medical devices sector.

Advertising addressed to HCPs is also governed under guidelines of the Ministry that clarify that it does not need to be previously authorised, on the condition that the message is strictly addressed only to HCPs (e.g., with regard to advertising on the internet, advertising to HCPs shall be separated from the remaining content of the website and protected with a password, in the case of medicines, or a disclaimer, in the case of medical devices).

The advertising of both medicines and medical devices to HCPs is also regulated by codes of conduct, especially the Farmindustria Code, applied by the companies who are members of the Farmindustria association, and the Assobiomedica Code, issued by the Italian association of medical devices companies. The advertising of medicines to HCPs is also subject to the guidelines issued by the committee of the representatives of the government and the Italian regions on 20 April 2006, and guidelines issued by single Italian regions, some of which are also applicable to medical devices.

A draft guideline on the advertising of medicinal products to HCPs was issued by AIFA on 16 March 2018 and is currently undergoing consultations by stakeholders. This is an important document, which had been anticipated for a long time, that will provide for the first time a complete framework on the modalities of advertising medicines to HCPs.

Financial duties connected with advertising activity

Companies are required by law to pay an annual contribution equal to 5.5 per cent of the costs for the promotion of medical devices and 5 per cent of the costs for the promotion of medicines borne in the previous year, as declared to the Ministry and the AIFA, respectively.

x Distributors and wholesalers

Italian legislation does not provide for any specific regulation applicable to the distribution of medical devices. Therefore, the sections below refer only to the distribution chain of medicines.

Distributors

The MA holder (MAH) can appoint a sales agent10 for the exclusive distribution of its medicines within the Italian territory. These distributors are generally entitled to carry out promotional activities addressed to both the general public and HCPs, according to an agreement executed with the MAH. Conversely, pharmacovigilance obligations remain with the MAHs. The appointment of a sales agent must be notified to the AIFA by the relevant MAH. The name and the address of the sales agent may appear on the outer packaging of medicines and on the package leaflet.

Wholesalers and depositaries

The distribution chain of medicines sold to patients includes wholesalers, depositaries and pharmacies. Wholesalers and depositaries must be authorised by the competent regional government, after an inspection of the relevant facilities.

Wholesalers purchase medicines direct from MAHs with the purpose of selling them to pharmacies, while depositaries merely store medicines, pursuant to deposit agreements with the MAH, which remains their owner. Consequently, only wholesalers are responsible for complying with the public service obligation under the Code of Medicines that consists of a duty to ensure availability of a wide range of medicines to promptly supply pharmacies located in a given area.

xi Classification of products

Medicines

Classes of medicines for the purpose of their reimbursement

For the purpose of their reimbursement by the NHS, medicines are classified as follows:

  1. Class A, which includes medicines for essential and chronic diseases that are entirely reimbursed by the NHS;
  2. Class H, which includes medicines provided in hospitals, fully reimbursed by the NHS; and
  3. Class C, which includes all other medicinal products that are not reimbursed by the NHS.

The price of reimbursed medicines is set through mandatory negotiations between the MAH and the AIFA, as provided for by Law No. 326/2003 and according to the economic criteria set out in the CIPE11 Resolution of 1 February 2001 (CIPE Resolution). Conversely, for Class C medicines, the MAH is free to set the price at its own discretion (though certain statutory limitations on price increases still apply).

According to Law No. 189/2012, medicines that have been granted an MA are automatically classified under Class C-nn (i.e., Class C not-negotiated), which includes all medicines not yet assessed for reimbursement purposes. This provisional classification allows medicines to be placed on the Italian market as soon as they have been granted an MA, even if price negotiations are continuing.

Classes of medicines from a supply regime perspective

Medicines are also classified on the basis of their supply regime, depending on whether they can or cannot be sold to patients without medical prescription. The latter category of medicines (called SOPs) includes over-the-counter medicines (OTCs).

This classification is particularly relevant for its impact on distribution and advertising. In fact, prescription medicines can be purchased only in authorised pharmacies, while non-prescription medicines can also be purchased in para-pharmacies and online, from authorised websites, owned by pharmacies or para-pharmacies.12 As regards the advertising regime, until very recently, only OTCs could be advertised to the general public (see Section II.ix). However, the Italian Supreme Administrative Court clarified that advertising to the public is allowed for all SOPs (Ruling No. 2217 of 12 May 2017).

Medical devices

Medical devices are classified on the basis of their risk in four classes, in compliance with the European criteria. In addition, from a supply regime perspective, some devices can be sold only on medical prescription or used only with the assistance of an HCP; this classification has an important effect on the advertising regime (see Section II.ix).

xii Imports and exports

Medicines

Import from countries outside the European Union of medicines to be placed on the Italian market (i.e., registered in Italy) requires a manufacturing authorisation from the AIFA that shall include, at least, the batches release activity.

Moreover, imports of medicines not registered in Italy from countries where they are legitimately marketed for the purpose of being supplied to Italian patients is governed by a Ministerial Decree of 11 February 1997. This decree provides for the following main conditions: (1) its use is for the same therapeutic indication as authorised in the country of origin; (2) there is no possibility of using any other medicines available in Italy; and (3) there is a maximum quantity of purchase (90 days of therapy).

According to this decree, only purchases made by hospitals can be borne by the NHS.

Medical devices

The import of medical devices is subject to a health clearance by the border authorities of the Ministry, to be issued after having assessed that certain conditions are met, including, in particular, the CE mark and registration within the Ministry's database.

Certificates of free sale for export purposes can be requested from the Ministry by Italian manufacturers.

xiii Controlled substances

Narcotics and psychotropic substances are governed by Presidential Decree No. 309/1990. Under this decree, the manufacture, use, trade by wholesalers and depositaries and use for scientific research and clinical trials of these substances are subject to authorisation by the Ministry.

Authorisations are subject to specific conditions, including moral requirements of the legal representatives of the companies. They are valid for two years and can be renewed but they cannot be transferred to other subjects. The Ministry also issues specific import and export permits to companies authorised to manufacture, use or trade narcotics.

xiv Enforcement

Enforcement is assured by the Ministry and the AIFA by means of (1) inspections (both planned and unexpected), aimed at checking compliance with GLP, GCP or GMP, the pharmacovigilance system, etc., or (2) other forms of documentary control.

For certain activities, the Ministry is supported by the NAS, the anti-adulteration unit of the Carabinieri Corps. For instance, the NAS is very active in the search for counterfeit medicines and illegal sales of medicines on the internet. In addition, the Maritime, Aviation and Border Health Offices can perform inspections and check goods being imported into Italy.

On 19 January 2017, the AIFA entered into a cooperation agreement with the Italian Competition Authority (ICA), setting out a protocol to exchange information on current investigations to foster each other's monitoring and enforcement activity.

Enforcement activity may lead to an order to stop illegal activities and administrative sanctions. If the illegal activities have criminal relevance, the competent authorities for criminal prosecution are also informed.

III PRICING AND REIMBURSEMENT

i Medicines

Price negotiations

As stated in Section II.xi, if a medicine is reimbursed by the NHS, its price is determined following negotiations between the MAH and the AIFA, which should be conducted having regard to the criteria set out in the CIPE Resolution, which include, inter alia, cost-effectiveness and the risk-benefit ratio of the new medicine compared to those already distributed for the same indication.

Pursuant to the CIPE Resolution, the price agreement is valid for 24 months and may be tacitly renewed but also renegotiated early if the conditions relating to the level of use of the medicine are different from those originally estimated.

The CIPE Resolution also stipulates that the AIFA and the MAH may agree that the price is subject to the condition that certain sale volumes are not exceeded (i.e., the brand-specific budget) and that if it happens, certain consequences occur (e.g., reimbursement by the MAH, reduction of the price, termination of the agreement, exclusion of that medicine from the reimbursement by the NHS).

According to the budget law for 2019 approved at the end of December by Law No. 145/2018 (Budget Law 2019), a ministerial decree will have to update the criteria for setting the price of medicines reimbursed by the NHS by 15 March 2019. Moreover, the Budget Law 2019 provides that AIFA can open new negotiations on the price of medicines even before the expiration of the agreement with the MAH if market variations have occurred that may lead to an increase of the use of that medicine or a different (and less favourable) cost-benefit assessment compared to the other alternative medicines available on the market.

The price agreed between the company and the AIFA is called the 'ex-fabrica price' and represents 66.65 per cent of the final price to the public. For medicines distributed through the retail chain, the final price is then determined by adding margins for the distribution chain – wholesalers and pharmacies – which are fixed by law, and the VAT amount (10 per cent). When medicines are sold to local health authorities and hospitals, the final price is subject to rebates and discounts connected with the performance of tenders.

Cost containment measures

The main measures adopted as of 2006 to contain the public pharmaceutical expenditure are:

  1. the discounts mechanism, which entails a mandatory 5 per cent discount on the final price of any Class A medicine, with the faculty for MAHs to request the AIFA to be exempted from applying this price reduction by undertaking to pay the corresponding amount directly to the regions (an additional amount of 1.83 per cent of the final price of medicines supplied by the NHS is also required); and
  2. the payback system, under which if, each year, the total pharmaceutical expenditure incurred by the NHS exceeds certain thresholds, MAHs of reimbursed medicines shall contribute to refund the NHS in proportion to their market share (which is calculated by AIFA on the basis of the company's turnover generated by the sale of medicines to the NHS, taking into account the data of the electronic invoices issued in the reference calendar year).

ii Medical devices

There is no a specific legislation on price and reimbursement of medical devices. They are paid for by the NHS when they are purchased by hospitals and other facilities belonging to the NHS by means of public tender procedures. A national programme for the health technology assessment of medical devices, managed by a dedicated committee, was launched in 2015 and, in September 2017, this committee published a document reporting a list of actions and priorities.

According to the Budget Law 2019, the payback system will operate for medical devices starting from 2019. To calculate if a public over-expenditure for the purchase of medical devices actually occurs, the Budget Law 2019 provides that the turnovers of the companies selling devices to the NHS shall be added and any over-expenditure shall be declared by the Ministry by 30 September of each year. The first calculation will be made in 2020 to assess any over-expenditure occurred in 2019. If, each year, the public expenditure incurred by the NHS exceeds certain thresholds, medical devices companies shall contribute to refund the NHS in proportion to their contribution to the over-expenditure.

IV ADMINISTRATIVE AND JUDICIAL REMEDIES

All final decisions issued by public authorities, including the Ministry and the AIFA, may be disputed in administrative courts.

In particular, decisions can be challenged, within (normally) 60 days of their notification to (or knowledge by) the interested party, on condition that the claimant is able to prove a concrete interest that is directly affected by that decision.

Administrative decisions are challenged in the first instance before the regional administrative courts (TAR) and, in the second (and last) instance, before the Supreme Administrative Court.13 For decisions issued by the Ministry and AIFA, the competent TAR is that of the Lazio Region, located in Rome. Litigations before the TAR and the Supreme Administrative Court are governed by the Code of Administrative Proceedings (Legislative Decree No. 104/2010).

Alternatively, an administrative decision can be challenged before the President of Italy within 120 days of the notification or knowledge of the decision.

V FINANCIAL RELATIONSHIPS WITH PRESCRIBERS AND PAYERS

Financial relationships between companies and HCPs are governed under both the Code of Medicines and the codes of conduct of the associations of pharmaceutical and medical devices companies (e.g., Farmindustria, Assobiomedica). These provisions mainly concern:

  1. the supply of gifts to HCPs (which is allowed on the condition that they have a negligible value and are job-related);
  2. the sponsorship of congresses and the rules on payments of HCPs' travel and accommodation expenses; and
  3. the options for companies to execute consultancy agreements with HCPs, which are subject to strict transparency rules.

Italian companies also apply the EFPIA Code.

Financial relationships that do not meet these requirements are subject to criminal sanctions (for corruption or comparaggio, which is a similar crime applied exclusively in the context of relationships with HCPs) and may expose the company to the risk of administrative liability for crimes committed by its employees under Legislative Decree No. 231 of 8 June 2001.

VI SPECIAL LIABILITY OR COMPENSATION SYSTEMS

Compensation of persons injured by medicines or medical devices is subject to the general provisions of the Italian Civil Code on tort liability (i.e., Sections 2043 and 2050) and the Italian Consumer Code (i.e., Section 120 on damage caused by defective products). Special systems are established by the law only in very specific cases, such as to compensate persons injured by compulsory or recommended vaccinations, or by infected plasma transfusions (Law No. 210/1992 and Law No. 299/2005).

Furthermore, compulsory insurance is required for healthcare facilities and operators by Law No. 24 of 8 March 2017 and for sponsors of clinical trials (see Section II.iii).

VII TRANSACTIONAL AND COMPETITION ISSUES

i Competition law

During the past few years, the ICA has carried out several investigations and issued steep fines against pharmaceutical companies for abusive conducts and anticompetitive agreements.

A common issue underlying these investigations is whether the way pharmaceutical companies use (or allegedly 'misuse') the regulatory framework or patent protection regime can infringe national or EU competition law. Indeed, any misuse of regulatory provisions, as well as of regulatory gaps, by a dominant manufacturer or MAHs to artificially extend market or data exclusivity protections and resulting in the exclusion or delay of competition, or in the exploitation of market power to escalate prices without justification, may be deemed abusive by the ICA (being the result of an 'abuse' or 'misuse' of rights).

For instance, in Case I760 of 27 February 2014 (Roche-Novartis/Farmaci Avastin and Lucentis), the ICA found that the parties infringed Article 101 TFEU by concerting activities aimed at artificially differentiating potentially competing drugs through a speculative interpretation of the regulation on the off-label use of drugs and pharmacovigilance duties, with a view to manipulating the demand and sharing monopolistic profits (this decision was confirmed by the judgment of the ECJ in Case C-179/16 of 23 January 2018. In Case A480 (price increase of Aspen's pharmaceuticals), the ICA has maintained that the way Aspen renegotiated the price of a reimbursable, life-saving drug for a rare disease with the AIFA constituted an abuse of dominance by means of the imposition of excessive pricing conditions and ordered that the conduct be ceased. Subsequently, in March 2017, the ICA initiated proceedings for non-compliance with the decision, alleging that Aspen was not effectively and in a timely manner renegotiating the drugs' prices with AIFA to cease the abusive conduct. To avoid a further fine, Aspen accepted reaching an interim agreement with AIFA to temporarily apply retroactive discounts pending the procedure for re-negotiation of the drug's prices. In June 2018, Aspen and AIFA finally reached a conclusive agreement on lower prices for the drugs and the ICA closed the non-compliance proceedings without a finding of infringement.

Further, the ICA has been particularly active in pursuing anticompetitive agreements in the public sector, all the more so where they occur in the context of the supply of reimbursable drugs to the NHS or in relation to public tenders (Case I639 of 26 April 2006 – Disinfectants; Case I770 and Case I792 of 21 December 2016 – Tenders for oxygen and ventilation therapies). This is confirmed by the public cooperation agreement entered into with the AIFA on 19 January 2017 (see Section II.xiv).

In 2018, the ICA initiated two investigations for breach of competition law in the life sciences sector, one of which is pending, while the other one was closed without a finding of infringement because of lack of evidence. In February 2018, following complaints by independent medical instruments maintenance providers, the ICA opened proceedings against three manufacturers (including the Italian subsidiaries and their foreign parent companies) of diagnostic imaging devices for an alleged abuse of dominance in the after-market for the maintenance of the original equipment, on the grounds that the manufacturers hindered independent maintenance firms by providing only limited access to software and not handing out the necessary passwords, refusing to supply original spare parts and by denigrating the services offered by independent providers (pending). In January 2018, the ICA started investigations against firms collecting human-blood plasma for suspected collusion by participating in a public tender through a joint venture, but dropped the probe in December 2018 after finding that economic evidence submitted by the firms substantiated plausible efficiencies or pro-competitive effects in participating as a joint venture rather than individually as competitors.

ii Transactional issues

In life sciences mergers and acquisitions deals, the peculiarities of the industry should be properly addressed from a contractual standpoint. These peculiarities usually affect the purchase price mechanisms (especially earn-out), representations and warranties and closing and post-closing covenants. Depending on the business of the target company and the life cycle of its products, the parties may need to add specific closing conditions (e.g., obtaining an MA, successful outcome of a certain clinical trial phase, issuance of the CE mark) and post-closing covenants (e.g., 'commercially reasonable efforts' standard to achieve milestones triggering the payment of earn-outs).

The parties should pay particular attention to and properly address any issues and potential liabilities connected with the payback and the company budget system as well as the transfer of MAs (in the context of an asset deal), also regulating the interim period between the closing and publication in the official gazette of the AIFA's transfer decisions (see Section II.vii (Medicines)).

VIIi CURRENT DEVELOPMENTS

The main recent changes in policy and legislation focus on:

  1. the clinical trials sector, for the implementation of the Delegation Law that is still largely incomplete (see Section II.iii on 'Medicines');
  2. the scientific research sector, since certain recent amendments to the Italian data protection code may have a significant impact on the use of health and genetic data for research purposes; and
  3. the governance of medicines and medical devices, since the Budget Law 2019 provides for several measures that will have to be implemented in the next months and will have a significant impact on the governance of the pharmaceutical and medical devices sector (see Section III).

Footnotes

1 Marco Blei is a counsel, Luca Gambini is a partner, Enzo Marasà is a counsel and Elisa Stefanini is a counsel at Portolano Cavallo.

2 This procedure was updated by Ministerial Decree of 13 January 2016.

3 The International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use.

4 Osservatorio Nazionale della Sperimentazione Clinica.

5 This provision is to be read in connection with the procedure introduced by Law No. 189/2012 to allow the placing on the market of medicines, as soon as they get the marketing authorisation and while the price and reimbursement negotiations are still ongoing, under a 'not negotiated class' (C-nn). Under the Ministerial Decree of 8 May 2003, after the inclusion of a medicine in Class C-nn, new patients could no longer benefit from CU, even if the medicine was not yet available on the Italian market. AIFA established a system to avoid this consequence, which was endorsed by the Supreme Administrative Court (Consiglio di Stato's Opinion No. 2356 of 14 November 2016). This issue was finally clarified by the new Ministerial Decree.

6 This hypothesis was added by Law No. 79/2014, following the famous Roche-Novartis/Farmaci Avastin and Lucentis case (see Section VII.i).

7 Banca dati dei dispositivi medici.

8 Repertorio generale dei dispositivi medici.

9 Converted into Law No. 189/2012.

10 Concessionari di vendita.

11 The Interministerial Committee on Economic Planning.

12 Para-pharmacies are stores that are not authorised as pharmacies, and are only allowed to sell non-prescription drugs (Law Decree No. 223/2006). They are subject to the fulfilment of the structural, organisational and technological requirements provided for by a Ministerial Decree of 8 March 2012.

13 Consiglio di Stato.