November 16, 2021

Draft competition bill: New rules for the healthcare sector?

Thanks to Eleonora Vita for collaborating on this article

On November 5, 2021, the Council of Ministers approved the draft law on competition (the “Competition Bill”). The Competition Bill is now under review by Parliament, which will discuss the draft in the coming weeks.

The Competition Bill includes a package of measures to improve distribution and speed up the marketing of new drugs, in addition to new provisions concerning healthcare facilities. Please find below a summary of the main changes envisagedby the draft Competition Bill.

Review and transparency of accreditation and contracting of private facilities

The first article on this subject (Article 13) deals with facilitating access to accreditation for private healthcare facilities and introducing dynamic criteria for the periodic verification of private contracted facilities.

Under the current regulation (Legislative Decree 502/1992), in response to requests for accreditation of new facilities or new businesses started in pre-existing facilities, provisional accreditation may be granted for the time necessary to assess the volume and quality of business conducted; should this trial period result in a negative outcome, the provisional accreditation is automatically suspended.

The Competition Bill proposes that accreditation be granted on the basis of the quality and volume of the services to be provided, as well as on the results of any business already conducted.

In addition, the Competition Bill provides that facilities to be accredited shall be identified through transparent, fair, and non-discriminatory procedures, and the regions shall publish notices containing objective selection criteria that prioritize the quality of the specific healthcare services to be provided. Public and private facilities will be also required to publish on their websites budgets and data on the qualitative and quantitative aspects of the services provided and medical activities performed.

Drug distribution

Currently, drug distributors (i.e., wholesalers) are required to maintain stock of 90 percent or more of a drug with Marketing Authorization (“MA”) reimbursed by the National Health Service (“NHS”) to be ready to meet market needs. The Competition Bill (Article 14) removes this requirement, stipulating that distributors must stock an assortment that meets the needs of the geographical area covered by the distributor’s authorization (to be assessed by the relevant authority when issuing authorization on the basis of binding guidelines to be provided by the AIFA).

Reimbursement of equivalent drugs

Article 15 contains one of the most relevant and interesting provisions of the Competition Bill. Here, the draft provides for the removal of the “patent linkage” for reimbursability. The previous provision of the “Balduzzi Law,” (Law Decree No. 158/2021) under which equivalent drugs could not be reimbursed by the NHS before the expiration of the patent on the corresponding originator drug, would be removed with the aim of accelerating inclusion of generic drugs in the pool of those reimbursed by the NHS.

This means that the government has decided to listen to the EU Antitrust Authority, which has long reported Italy as the only European country to allow practices aimed at delaying the entry of equivalent drugs on the market. Currently, an equivalent drug can be included in the national pharmaceutical handbook only on the date of expiration of the originator’s patent.

In addition, various groups of experts have stressed that the repeal of “patent linkage” does not in any way affect the patent protection guaranteed by EU regulations but does allow producers of equivalents to carry out all the negotiation procedures for price and reimbursement to be ready to enter the market as soon as the patent expires, allowing fair and equitable competition.

Pending pricing drugs

The Competition Bill (Article 16) also incentivizes companies to undertake the price-reimbursement negotiation process as soon as possible. Currently, that procedure is often delayed by operators.

If the Competition Bill is approved by the Parliament, the MA holder will have to start the price negotiation process within 30 days of obtaining the MA; otherwise the product automatically will be benchmarked to the cheapest product on the market, and the opportunity to negotiate a greater margin will be lost.

Revision of the production system for blood-derived medicinal products from Italian plasma

There is also great news regarding the regulations governing the system of production of blood-derived medicinal products from Italian plasma, including amendments to the system of agreements with private producers of blood-derived medicinal products (Article 17).

Furthermore, there is intention to earmark 6 million euros per year for actions to improve the organization of the structures dedicated to the collection, assessment, and preservation of national plasma for the production of blood-derived medicinal products. The aim is to achieve self-sufficiency in the production of these products through voluntary, periodic, responsible, anonymous, and free donation.

Criteria and procedures to select directors of healthcare facilities

Changes have also been introduced to make the selection procedures for medical executives in the NHS more transparent.

Specifically, for the process of appointing medical directors of facilities, including university facilities, candidate selection shall be carried out by an ad hoc committee of physicians and other medical directors, possibly from other regions, and shall not be based on discretionary judgment.

The selection will be based on comparative analysis of CVs and past experience and qualifications, as well as the necessary organizational and managerial skills, the volume of activity performed, how well candidates fit the established profile, and the results of interviews. Ultimately, each candidate will be given an overall score based on criteria established in advance and then the candidates will be ranked.

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