During the recent EU Healthcare, Ethics & Regulation Compliance Program I attended and which was held last November by the University of Seton Hall in Paris, all the latest and important legal developments in the Medical Law field were discussed thoroughly and varying points were raised from major European and US Health Law firms.
FCPA’S consequences in Europe- EFPIA-EUCOMED
The provisions of FCPA (Foreign Corrupt Practices Act), which prohibits the bribery of foreign government officials and foresees the accountability of books, are beginning to get implemented, with the appropriate legal adjustments in the national laws of many countries, such as the UK, Russia, Mexico, France and India.
The relationship between pharmaceutical and medical device companies is being constantly investigated due to the high impact of these companies on national public health expenses. According to the latest statistics (October 2014) provided by the American Department of Justice, there are already over 120 ongoing FCPA investigations against 32 healthcare companies.
The special areas of investigation were:
- Value exchanges on behalf of healthcare companies to HCP (consulting arrangements, product development agreements, grants, gifts, product training, travel, samples, free goods)
- Clinical trials
- Services provided to third parties.
EFPIA made very clear that the pharmaceutical industry is obliged to function in a way that promotes its transparency, responsibility and ethics. Is has become nowadays a great necessity for all EFPIA members as well as non-members to comply with the Federation’s provisions and rules; any breach or disobedience towards its opinions will not be tolerated.
Moreover, EFPIA has set out member guidelines in order to ameliorate important issues such as the way of providing information, healthcare practitioners, medical samples, events and relationships between HCP and patients. The initiatives taken on behalf of EFPIA clearly promote transparency all around Europe.
Concerning EUCOMED, in addition to its Code of Ethical Business Practices, she has created a centralized decision-making system, the CVS Conference Vetting system, to approve member sponsorships of individual healthcare professionals to conferences. The purpose of this system, among others, is to review the compliance of third-party educational conferences with the EUCOMED Code of Ethical Business Practice (the “Code”) to determine the appropriateness for members of EUCOMED and the national associations affiliated with EUCOMED to sponsor Healthcare Professionals in order for them to participate in such conferences.
A new Medical Technology Code of Ethical Business Practice is also expected within 2015 in cooperation to EDMA and EUCOMED. Its purpose is the enforcement of high business ethical standards for healthcare professionals as well as the abolishment of sponsorships granted for educational seminars organized by third parties.
The implementation of compliance programs according to the special needs and requirements of each pharmaceutical company should be an important priority for every company inside the healthcare industry. These compliance programs should be based on four basic rules: 1) Patients should always be set as top priority 2) The support of Ethical Research and Innovation 3) The insurance of Independence and Ethical behavior 4) The promotion of Transparency and Responsibility.
The proposal for a new General Data Protection Regulation, made on March 2014, was extensively discussed. The new regulation will have as its purpose the replacement of the Data Protection Directive and the law harmonization across the EEA. It will install new obligations for organizations established in the EEA as well as for non- EEA organizations including tighter enforcement and higher financial penalties.
In particular, the proposal for the new General Data Protection Regulation includes the following:
- A broader, more detailed definition of personal information and broader territorial scope
- Consent must be explicit and obtained by clear affirmative action, unless collection is necessary for internal fraud, investigation, etc., but only for occasional transfers
- The processing of business contact details, direct marketing, and sharing of employee data with EU affiliates
- Profiling will be possible with consent
- There will be less prescriptive administrative obligations for controllers (one-stop shopping Mechanism)
- The review of current adequacy mechanisms (Safe Harbor) at the latest during the next five years.
On regulatory disclosure (anti-FISA clause), it must be approved by DPAs. Within the same context, sanctions are expected to rise ─ up to 5% of the annual global turnover.
The articles 101 and 102 of the TFEU (Treaty on the Functioning of the European Union) clearly forbid competition and the abuse of dominant position in a market. In particular, any anticompetitive agreements between pharmaceutical and/or medical device companies with the purpose of distorting the existing competition, or concerted practices between association members, as well as any information exchange, price fixing and discounts, may result to fines up to 10% of the total worldwide turnover, damage claims from third parties as well as reputation and legal defense burdens. For these reasons, the inspection of pharmaceutical companies (Dawn Raids) by national competition authorities and the European Commission has become essential in order to prevent any potential anticompetitive behavior. Patent settlement agreements also create problems as they are considered to delay the market entry of generic medicines.
Marketing & Advertising – Web & Social Media
According to articles 86-100 of the 2001/83/EC Directive as well as EFPIA’s codes, advertising is exclusively allowed for medicines that are authorized to circulate within Europe and under the condition that the advertising is in accordance with the product’s SPC and it does not concern OTCs or medicines containing drug substances.
As far as the advertising of medical devices is concerned, there is no specific European legislation regulating it. Nonetheless, the existence of a Regulation proposal as well as the revision of the EUCOMED code is expected to shed some light over the advertising of medical devices.
EFPIA’s guidelines regarding Internet advertising as well as FDA’s draft Directive for the social media were also mentioned in the context of preventing risks regarding the distribution of false and misguiding information through the Internet. At the same time, a “Green Paper” results on Mobile Health are expected to be published soon. Finally, cases in which HCP used social media such as Facebook and Twitter in order to advertise and promote certain OTCs were also discussed as they present great interest given the fact that there are no particular rules at EU level, with the exception of the EFPIA Guidelines for the internet websites.
Our Law Firm’s comment
The discussions and conclusions deducted from the EU Healthcare Compliance, Ethics & Regulation Program organized and held by Seton Hall University were very important for the adoption of new compliance programs. These conclusions work in tandem with FCPA, EFPIA, EUCOMED and intellectual property rules for healthcare companies to which we offer our legal advice. These developments mean that pharmaceutical and medical device companies should focus their attention on the following matters:
- The adoption of carefully designed Compliance Programs, appropriate to the needs and requirements of each company. These should be set as top priorities for all companies within the healthcare industry especially following the publication of recent Greek Law 4316/2014 in addition to which Ministerial Decisions or EOF Circulars are expected in order to facilitate its implementation.
- The gradual presence and consolidation of a national and European Personal Data Authority, which will insure privacy compliance in case of investigation (Whistleblowers-FCPA).
- Full corporate compliance to EU Competition legislation must be observed and the companies must take all necessary measures in case of Down Raids.
- Attention must be paid in setting up specific approval procedures ensuring transparent and ethical product Promotion and Advertising on Social Media channels and in communicating to their patients.
Published on Business Partners issue No. 77, March-April 2015