Life Sciences Regulatory

European Union

European Health Union (EHU): In October 2022, the EU Council adopted the Regulation on serious cross-border threats to health. Key initiatives include the establishment of the European Health Emergency Preparedness and Response Authority (HERA) and the European Health Data Space (EHDS). The EHDS intends to set up a consistent framework for the use of any kind of health data. Any legitimate stakeholders (institutions and private persons and companies) can receive -controlled- access the data: The idea is to utilize the full potential of such data for research and development and ultimately improving health services and products.

In November 2022, the EU Commission published its first State of Health Preparedness Report on HERA with countermeasures addressing health / supply threats. Further, the EU Commission adopted a new EU Global Health Strategy to improve global health security.

EU: Pharmaceuticals

• Update on GMP Annexes: In August 2022, the revision of the GMP Annex 1 was published by the EC to address changes in the regulatory and manufacturing environment for sterile medicinal products, integrating the ICH Guidelines Q9 (Quality Risk Management) and Q10 (Pharmaceutical Quality System). Also in September, a concept paper on revisions of GMP Annex 11 was published by EMA which is currently undergoing public consultation.

• Delay in adoption of legislation for medicines for children and rare diseases: Adoption has not yet taken place, but is planned for the first quarter of 2023.

• Delay in adoption of general EU pharmaceuticals legislation: Background is that the general EU pharmaceutical regulation (EC 726/2004 and Directive 2001/83) is being planned to be amended. Alongside it, the Regulations on Paediatrics and Orphan Medicinal Products are being reviewed as well. The idea is to change the incentive system for invitation system: Many regulatory data exclusivity/dossier protection and other exclusivity is planned to be shortened. Many details of proposed changes are unclear. 14 Member States expressed concerns in a non-paper prior to the meeting of the Employment, Social Policy, Health, and Consumer Affairs Council (EPSCO) on 9 December 2022. At the meeting, Commissioner Stella Kyriakides announced the submission of the proposal for the end of March 2023.

• Clinical Trials Information System (CTIS): As of 31 January 2023, the CTIS will be the single point of contact for sponsors and regulators for the submission and evaluation of all new clinical trials – after being launched on 31 January 2022.

• Upcoming initiative for changes to marketing authorisation: The initiative “Pharmaceuticals - Changes to marketing authorisations (review of EU rules)” is in preparation to make the lifecycle management of medicines more efficient. Adoption by the EC is planned for Q4 2023.

Authors: Joerg Schickert, Daniela Troeppner, Sarah Zucht.

EU: Medical Devices

• Proposal for a Regulation of the European Parliament and of the Council amending Regulations (EU) 2017/745 (MDR) and (EU) 2017/746 (IVDR) as regards the transitional provisions for certain medical devices and in vitro diagnostic medical devices: As announced in a meeting of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) on 9 December 2022 (see background note), the EC published on 6 January 2023 a legislative proposal to amend the MDR and IVDR. According to this proposal, medical devices for which manufacturers can demonstrate that they are safe and that the manufacturer has already taken steps to transition to the MDR will benefit from extended certificates and transitional periods until 26 May 2026 (Class III, custom-made implantable devices), 31 December 2027 (high risk) and 31 December 2028 (medium/low risk). The ‘sell-off’ provision will be removed from MDR and IVDR and notified body surveillance responsibilities during the transition period are clarified. After a one week public consultation with many comments the proposal will be subject to an accelerated co-decision procedure of the EP and the Council and apply from its day of publication which is expected to be in the coming months. According to MDCG 2022-18 on the application of Article 97 MDR to legacy devices, manufacturers could in the meantime request a written communication from a competent authority that allows them to further market the affected devices. By May 2027, the Commission plans to also undertake a comprehensive evaluation of the MDR.

• Recent MDCG Guidance documents: several guidance documents were published recently including MDCG 2023-1 on the exception under Article 5(5) of MDR/IVDR (in-house devices) and MDCG 2023-2 on publication of NB standard fees. There was and will be further MDCG guidance and other measures in particular to implement the actions from MDCG 2022-14 to increase NB capacity and manufacturer preparedness for MDR/IVDR transition. Please refer to Guidance – MDCG endorsed documents and other guidance for other guidance documents.

• Others: The first annual overview of devices subject to the clinical evaluation consultation procedure pursuant to Article 54(4) of the MDR (April 2021 to June 2022) was published.

Authors: Joerg Schickert, Fabien Roy, Daniela Troeppner, Sarah Zucht.

France

The French Social Security Financing Bill for 2023 aims to create a new accreditation system for companies performing teleconsultation services, facilitating the reimbursement system for procedures and encouraging the deployment of the health care offer in France. The primary objective of this new regime is to allow teleconsultation companies, under certain conditions, to perform teleconsultation acts reimbursed by the French SHI. To this end, companies will have to meet various conditions to obtain accreditation. The final adoption of the Social Security Financing Act for 2023, and therefore of this new regime, is imminent. Note that the entry into force of the new regime of teleconsultation companies will require the adoption of implementing texts, which will probably occur later in 2023.

Authors: Mikael Salmela, Josephine Pour.

Germany

• Update on German reimbursement landscape: On 20 October 2022, the German Parliament accepted the Act for the Financial Stabilization of the German Statutory Health Insurance System which entered into force on 12 November 2022. The new Act was subject to controversial discussions, containing numerous measures that directly affect pharmaceutical manufacturers, such as changes to the Pharmaceuticals Market Reorganisation Act (AMNOG) market access rules, stricter rules for orphan drugs, mandatory markdown payment of manufacturers, extension of a price moratorium.

• Updated guidance document on observational studies/NIS: On 15 December 2022, the German Federal health authorities Federal Institute for Drugs and Medical Devices (BfArM) and Paul-Ehrlich-Institut (PEI) issued a revised version of the guidance document on observational studies and non-interventional studies.

• Guidelines for legalizing of Cannabis: At the end of October 2022, the German Federal Ministry of Health issued guidelines on the legalization of sale of cannabis to adults as previously resolved by the coalition agreement of the new German government from November 2021. Under the proposal, Cannabis and tetrahydrocannabinol will no longer be legally classified as narcotics and no longer subject to the German Narcotics Act; the production, supply and distribution will be permitted within a licensed and government-controlled framework; and the acquisition and possession up to a maximum quantity of 20 to 30 grams of stimulant cannabis for personal consumption in private and public spaces will be allowed without penalty. It is not yet known when the German government will present a draft law implementing this.

Authors: Joerg Schickert, Daniela Troeppner, Sarah Zucht.

Italy

• Entry into force of the Legislative Decrees aimed at harmonizing MDR and IVDR with the Italian legal framework: On 28 September 28 2022, Legislative Decrees no. 137/2022 and 138/2022 (Decrees) entered into force which aim to adjust the Italian legal framework to the MDR and the IVDR (Regulations). The Decrees include rules on post-market surveillance of incidents and complaints, clinical investigations and performance studies, on commercialization and advertisement of medical devices as well as a sanctioning framework.

• Introduction of the payback mechanism for companies supplying medical devices: Through the Decree of the Ministry of Health published in the Italian Official Journal on 15 September 2022 (Ministerial Decree), the Italian Government has implemented the payback mechanism for medical devices. According to this mechanism, if Italian Regions exceed the annual spending cap for the purchase of medical devices, the overrunning shall be borne by companies supplying medical devices. As the spending cap for medical devices had been exceeded for the years 2015 – 2018, Italian Regions have sent communications to companies subject to payback. However, the industry association (and some member of the Italian Parliament) have widely contested the measure, and many companies have appealed to Italian administrative courts.

• Approval of the National Guidelines on Telemedicine: With the Decree of 21 September  2022, the Ministry of Health has adopted the “Guidelines for Telemedicine Services – Functional Requirements and Service Levels”. It sets forth technical and service standards that territorial authorities must implement to design their telemedicine services.

Authors: Christian di Mauro, Giuseppe Aminzade.

Spain

• The National Commission on Markets and Competition assessed the wholesale distribution market and identified areas for improvement. This addresses pricing & reimbursement for innovative medicinal products, reference price system, competition between original and generic medicinal products, and interchangeability of biological and biosimilar medicinal products in Spain.

• The Madrid Superior Court of Justice has recently confirmed a fine for advertising a medicinal product authorized but pending the decision on pricing & reimbursement.

Authors: Inmaculada Lorenzo, Álvaro Abad.

UK

• Push back of upcoming changes to the UK medical device legislation: The United Kingdom medical devices regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), has announced that the upcoming changes to UK medical device legislation aiming to align the UK legislation with the EU MDR and EU IVDR, will be pushed back from 1 July 2023 to 1 July 2024. The MHRA is still drafting the new legislation and has indicated that the new legislation will now be published in Spring 2023.

• Roadmap for AI as medical device: The MHRA has also recently published its Roadmap for regulating Artificial Intelligence (AI) as a medical device (AIaMD) and software as a medical device (SaMD), which forms part of the UK MDR reforms. The guidance will be released in tranches. The first tranche was expected by the end of 2022, but is now anticipated in Q1 of 2023.

Authors: Jane Summerfield, Bonella Ramsay.

Corporate Governance & CSR

European Union

The Corporate Sustainability Reporting Directive (CSRD) (EU 2022/2464) was adopted by EU Parliament on 10 November 2022, approved by European Council on 28 November 2022 and published on 16 December 2022. Undertakings in-scope will be subject to reporting requirements starting to apply between 2024 and 2029 on environment, human rights and social standards as well as sustainability aspects. The EU Parliament estimates that this will apply for nearly 50,000 companies. A review of the disclosures and assurance by a statutory auditor or audit firm regarding the compliance of the sustainability reporting with the requirements of the CSRD is mandatory.

Authors: Lutz Angerer, Thomas Weber.

Germany

Germany has implemented the German Act on the implementation of the EU Digitalisation Directive (Gesetz zur Umsetzung der Digitalisierungsrichtlinie – DiRUG) as of 1 August 2022. Following continuous criticism regarding the limited scope of the DiRUG, the legislator reacted shortly prior to the entering into force of the DiRUG and extended its scope to also cover, inter alia, online incorporation by way of contribution in kind, online notarisation of unanimous shareholder resolutions regarding amendments of the articles of association, including resolutions on capital increases in cash or in kind as well as specific shareholder meetings.

Authors: Lutz Angerer, Thomas Weber.

Italy

Telematic incorporation of limited liability companies: Legislative decree no. 183 enacted on 8 November 2021 allowed limited liability companies (società a responsabilità limitata) having their registered office in Italy to be incorporated by means of videoconference, i.e., with no need for the parties and the Italian Notary Public to be physically present in the same place. More recently, decree no. 155 of 26 July 2022 introduced a standard template of by-laws to be adopted by companies incorporated by means of videoconference for further smoothing the incorporation process and reducing connected paperwork.

Authors: Francesco Stella, Martina Di Nicola, Marina Massaro, Gianluca Ceci.

Spain

• Amendment of article 4 of the revised text of the Capital Companies Law which allows incorporation of private limited companies (sociedades de responsabilidad limitada) now possible starting from EUR 1 instead of the current amount of EUR 3,000. This is accompanied by two specific rules to safeguard the interest of creditors. Moreover, the incorporation of private limited liability companies is now entirely possible online.

• Spanish Insolvency Law is modified providing new opportunities for debt restructuring, sale of production units and insolvency proceedings.

Authors: Alex Dolmans, Eduardo Pérez.

UK

Corporate transparency and register reform sets out plans to reform Companies House and to increase the transparency of UK corporate entities. The Government has now published the Economic Crime and Corporate Transparency Bill for implementation, including measures to prevent the use of companies and partnerships for the purposes of economic crime including fraud, money laundering and terrorist financing, and ways for law enforcement to seize crypto-assets. Once in force, UK companies will need to comply with the numerous changes and reformed processes at Companies House.

Authors: Tom Brassington, Danette Antao.

Anti-Bribery and Anti-Corruption

EU

On 22 November 2022, the European Court of Justice (ECJ) ruled that the requirement set out by the EU Money Laundering Directive to provide EU-wide information on the ultimate beneficial owners (UBOs) of companies or other legal persons entered in the transparency register available to all members of the public in all cases is not valid. Many EU countries have subsequently blocked their transparency registers, including Austria, Luxembourg and the Netherlands. Companies should watch out for further developments regarding their UBOs and the transparency register.

Authors: Joerg Schickert, Daniela Troeppner, Sarah Zucht.

Germany

• FSA transparency reporting: In reporting year 2021, member companies of Germany’s major pharma industry association (FSA) provided services to physicians and other health care professionals and their institutions amounting to approximately EUR 630 million. Furthermore, they supported patient organisations with services amounting to around EUR 7.7 million. Compared to 2020, the pharmaceutical companies’ investments in cooperation with health care professionals increased by 13 per cent and with patient self-help organisations by 28 per cent.

• Access to German transparency register was temporarily suspended in response to a ruling by the EU Court of Justice (ECJ); however, from 12 December 2022, members of the public have again restricted access to the register. To take into account the ECJ ruling, it is now required to substantiate and justify any interest for insights.

• FSA – Update on Guidelines: With effect from 13 September 2022, the Federal Supervisory Authority for Financial Services (FSA) updated its guidelines. The major change is the increase of the upper limit for hospitality with regard to business meals and events from EUR 60 to EUR 75.

Authors: Joerg Schickert, Daniela Troeppner, Sarah Zucht.

Italy

On 9 December 2022, the Italian Government approved the draft legislative decree implementing the Whistleblowing Directive (2019/1937). The new provisions apply to both public and private sectors, and will create a single comprehensive legal framework for whistleblowing, providing greater protection to whistleblowers and encouraging the report of wrongdoings. Amongst other measures, the draft law includes provisions for the management of the whistleblowing “internal” channel; the Italian Anticorruption Authority is the external body responsible for receiving reports also for the private sector (so-called “external channel”). Further, the draft decree introduces sanctions for legal entities.

Authors: Christian di Mauro, Giuseppe Aminzade.

Competition and Antitrust

European Union

• The European Commission consults on its draft Market Definition Notice, which includes new and additional guidance on how the Commission will define markets in mergers and antitrust cases. The aim is to have the new Market Definition Notice in place om Q3 2023.

• Portuguese competition authority accused COVID laboratories of price-fixing and no poaching arrangements. Seven COVID-19 testing laboratory groups have received statements of objections. The investigation was launched in February 2022, following a leniency application.

Authors: Falk Schöning, May Lyn Yuen.

Data Privacy

European Union

• In November 2022, the European Data Protection Board (EDPB) adopted its recommendations on the application for approval of controller binding corporate rules (BCR). The draft recommendations comprise two main elements, namely: (1) an application form to be completed and submitted by the applicant to the relevant lead authority, and (2) a table overview of the elements and principles that specify the mandatory minimum content of BCR. Further, this also aligns the existing guidance with the CJEU’s Schrems II ruling. A second set of recommendations for processor BCR is currently being developed.

• In December 2022, the European Commission published its draft adequacy decision for data transfer to the United States recognizing the essential equivalence of U.S. data protection standards. If the adequacy decision is finalised and enacted, this would ease transfers of personal data from the European Union to the United States and other transfer mechanisms would no longer be necessary. However, there are already some critical voices.

Authors: Stefan Schuppert, Theresa Mengler.

Editors: Jörg Schickert (executive editor; Life Sciences, Compliance), Daniela Tröppner (Life Sciences, Compliance), Sarah Zucht (Life Sciences, Compliance); Thomas Weber (Corporate); Falk Schöning (Competition); Stefan Schuppert (Privacy)

Authors: Jörg Schickert, Daniela Tröppner, Sarah Zucht, Thomas Weber, Falk Schöning, Stefan Schuppert, Álvaro Abad, Giuseppe Aminzade, Lutz Angerer, Danette Antao, Tom Brassington, Christian Di Mauro, Martina Di Nicola, Alex Dolmans, Jean-Marc Franceschi, Carolin Gschwendtner, Immaculada Lorenzo, Theresa Mengler, Eduardo Pérez, Josephine Pour, Bonella Ramsay, Fabien Roy, Mikael Samela, Francesco Stella, Jane Summerfield, May Lyn Yuen, Bob Zeller.