Medical device payback: The Regional Administrative Court of Lazio rejects suppliers’ appeals

The Court upheld the legitimacy of the payback system on the grounds that it had been “substantially known” to the companies since 2015. The Court also referred to the reasoning set out in Constitutional Court judgment no. 140 of 24 July 2024.

Background

As part of broader efforts to contain public healthcare expenditure, the Italian legislature introduced a national and regional spending cap on the procurement of medical devices by National Health Service (NHS) entities as early as 2011. Initially, this cap was set – at national level – at 4.4% of the standard national healthcare budget^[1].

Subsequently, Article 9-ter of Decree-Law No. 78 of 2015 (converted into Law No. 125 of 2015) introduced the “payback mechanism”, which mirrored the model already in place for pharmaceuticals. Under this framework, suppliers of medical devices are required to contribute to reimbursing any overspending beyond the established cap.

Despite its legislative foundation, the mechanism remained dormant for several years. It was not until 2019 that regional spending thresholds were formally set at 4.4%^[2]. Subsequently, the Ministerial Decree of 6 July 2022 certified the overspending for the years 2015 to 2018, quantifying the excess on a regional basis. The Regions then proceeded to calculate the amounts payable to each supply company and issued payment requests in accordance with the criteria set out in the Ministerial Decree of 6 October 2022.

Numerous supplier companies subsequently filed appeals with the TAR Lazio, primarily challenging the constitutionality of the payback mechanism and its retroactive application to the 2015–2018 period. This is because the regional spending caps were only established in 2019. In particular, the suppliers argued that this retroactivity undermined their legitimate expectations, as they had supplied medical devices during those years under the assumption that pricing would be governed by standard market dynamics and public procurement rules.

The Court’s decision

In its rulings of May 2025, the TAR of Lazio fully rejected the companies’ appeals.

Regarding the alleged unconstitutionality of the payback mechanism, the Court referred to Constitutional Court judgment no. 140, issued on 24 July 2024, which dismissed the constitutional challenges and deemed the payback to be a reasonable and proportionate measure “within the complex balancing of interests carried out by the legislator”^[3].

As for the claim of unlawful retroactivity, the TAR emphasized that the cost-recovery mechanism had been “substantially known” to companies since its introduction in 2015. This applied both to the payback percentages imposed on suppliers (40% for 2015, 45% for 2016, and 50% for 2017 and subsequent years) and to the method for calculating each company’s share (based on the percentage of their turnover relative to the total regional expenditure on medical devices)^[4].

As for the regional spending cap, which was only formally established in 2019 – after the public procurement procedures for the 2015–2018 period had already been completed – the Court held that companies operating in the sector could, and indeed should, have relied on the national cap introduced in 2012 as a benchmark for their commercial planning. This was all the more reasonable given that the regional cap was ultimately aligned with the national threshold, set at 4.4% of the standard healthcare requirement.

In this regard, the obligation to contribute to the payback mechanism, and the resulting financial burden, were deemed to have been “foreseeable since 2015 in their essential features”, even if the precise financial impact on individual suppliers could not have been determined ex ante.

Implications for market operators

Following the dismissal of the appeals, the Regions are expected to proceed with recovering the outstanding payback amounts from medical device suppliers. Even after the partial relief introduced by Decree-Law No. 34/2023^[5], the total financial exposure exceeds one billion euros. This burden is expected to particularly affect small and medium-sized operators, potentially threatening the continuity of supply chains and regular provision of medical devices to NHS entities. Furthermore, the rulings handed down by the TAR Lazio set a significant precedent for future claims relating to financial years beyond 2018^[6].

Against this backdrop, it has been reported that the Ministry of Health has reconvened the technical working group established earlier in 2025, which includes representatives from the sector’s main trade associations. The aim is to identify viable solutions to this latest impasse arising from the implementation of the payback regime, which continues to generate significant legal, economic, and operational uncertainty throughout the industry.

[1] Article 15, par. 13, lett. f), Law Decree No. 95/2012.

[2] State-Regions Conference of 7 November 2019.

[3] The Constitutional Court specifically emphasized that the payback mechanism constitutes “a solidarity-based contribution justified by the need to ensure the availability of medical devices essential for the protection of public health, particularly in a context of severe economic and financial constraints, which prevent the budgets of the State and the Regions – funded by public resources – from fully covering the required expenditures”.

[4] Article 9-ter, par. 9, Law Decree no. 78/2015.

[5] Initially, the reduction to 48% of the original amounts due from suppliers was limited to companies that had not initiated legal proceedings, or were willing to withdraw them. However, following the Constitutional Court’s judgment no. 140/2024, this was extended to all suppliers of medical devices to NHS entities.

[6] The regions are currently calculating the charges owed by medical device suppliers for the three-year period from 2019 to 2021.