For a SPC to be obtained, certain requirements must be fulfilled. One of them is that the substance for which a SPC is requested must have previously obtained a MA as medicinal product intended for the use claimed in the basic patent that the SPC aims to extend.

Substances in medical devices

There are substances which are an integral part of a medical device and act upon the body in a manner ancillary to such device. Thus, they have been evaluated and authorized for a particular use in accordance with the medical devices’ regulations. This is what happens in this case. The substance is paclitaxel and its use for “inhibiting or reducing the proliferation and migration of cells in the blood vessel wall” is protected by the basic patent. Boston Scientific integrated such substance in a medical  device named TAXUS®(a paclitaxel-coated stent) with the objective to prevent blood vessels mechanically expanded by the stent from plugging again. The substance Paclitaxel for such specific use, forms an integral part of the medical device TAXUS® and acts upon the body in a manner ancillary to such device. Thus, in this specific case, Paclitaxel was evaluated and authorized in accordance with the regulations on medical devices (and not the regulations on medicinal products). However, it is well-known that Paclitaxel is commonly used in the treatment of certain types of cancer and, to such effect, it has been authorized as medicinal product.

Under these circumstances, it possible for a substance evaluated and authorized for a specific use only under the regulations on medical devices, to benefit from a SCP?

Position of the CJEU

The CJEU, in the context of a preliminary ruling from the German Federal Patents Court, has had the opportunity to position itself on this matter. Its view is clear: if a substance is evaluated and authorized for a specific use only according to the regulations on medical devices, then such substance (in respect of this specific use) cannot benefit from a SPC. The reason of the foregoing is that such substance has not been subject -as a medicinal product intended for the use claimed in the basic patent- to a formal authorization procedure under the regulations on medicinal products. This is regardless of whether the quality, safety and efficacy of the particular use of the substance has been verified by methods analog to those that would have been used if such substance was evaluated independently as a medicinal product.

La entrada Is it possible for a substance evaluated under the medical devices’ rules to benefit from a SPC? aparece primero en Faus Moliner.

The future Royal Decree comes to implement the provisions on these matters contained in the Consolidated Text of the Law on Guarantees and Rational Use of Medicinal Products and Medical Devices and, therefore, it will regulate the procedure for the inclusion, review and exclusion of medical devices from the pharmaceutical provision of the National Health System (NHS) for non-hospitalized patients, when such medical devices are dispensed in Spain using an official prescription. Moreover, this new regulation includes the acquisition, supply and dispensation regime for these medical devices in the NHS, as well as their distribution and dispensation margins.

Once it comes into force, this new Royal Decree, will repeal Royal Decree 9/1996, of 15 January, regulating the selection of products and accessories, their public funding and their supply and dispensation regime for non-hospitalized patients.

The public audience and information period for this draft will end on 7 September. Until then, those having legitimate rights and interests affected by such draft are entitled to provide their opinion about it and to obtain information about the inputs made by other persons or companies.

Which medical devices can be publicly funded?

Medical devices for non-hospitalized patients which can be included in the pharmaceutical provision of the NHS must meet all the following requirements:

– Be serially manufactured, bear the CE Marking and comply with the regulation applicable to medical devices;

– Belong to one of the following categories: curing materials; medical devices for the collection of excretions and secretions; utensils aimed for the protection or reduction of internal injuries or malformations;

– Belong to one of the groups of medical devices having normal or reduced contribution, as contemplated in Annexes I and II of the new Royal Decree;

– Comply with the technical specifications and contrasted features set by the Ministry of Health, Consumer Affairs and Social Wellbeing based on general criteria which is objective and has been published, in particular: (i) the seriousness, duration and consequences for the pathologies for which such medical devices are intended; (ii) the specific needs of certain groups of people; (iii) the value of diagnosis, control, treatment, prevention, disability relief or compensation; (iv) the social value of the medical device and its incremental clinical benefit, taking into account its cost-effectiveness relationship; and (v) the existence of medical devices or other therapeutic alternatives for the same conditions, having a lower price or treatment cost; and

– Comply with the requirements and technical specifications set by the Ministry of Health, Consumer Affairs and Social Wellbeing, providing the corresponding certificates, if any, showing the compliance of the medical device with such technical specifications.

Prices and margins

The Ministry of Health, Consumer Affairs and Social Wellbeing will decide about the inclusion of medical devices for non-hospitalized patients in the pharmaceutical provision of the NHS by means of an express pronouncement. Such decision will include the funding conditions of the relevant medical device and its maximum ex-factory price in consideration for which companies would be entitled to sell such medical device when its dispensation is aimed to be paid with public funds.

The retail price of these products will result from adding the corresponding distribution and dispensation margins to the maximum ex-factory price. Such margins are also regulated in this draft, as follows:

– The distribution margin will be set based on the maximum ex-factory price. To such effect, if the maximum ex-factory price is set at or below 59 Eur, the distribution margin would be 6% of the wholesaler price without taxes. If the maximum ex-factory price is higher than 59 Eur, the distribution margin would be fixed at 3,77 Eur/pack.

– The dispensation margin which the pharmacies would have for these medical devices will also be set on the basis of the maximum ex-factory price. It would be 21% of the retail price if the maximum ex-factory price is set at or below 59 Eur. If the maximum ex-factory price is higher than that, the dispensation margin would be fixed at 16,69 Eur/pack.

On the other hand, if the company marketing medical devices which are funded by the NHS decides to commercialize such product at a price which is lower than the maximum ex-factory price set by the Ministry of Health, Consumer Affairs and Social Wellbeing, such company must communicate so to this Ministry. Also, in this case, the lower marketing price would become the new authorized maximum ex-factory price.

Funding inclusion and exclusion

According to this draft, the procedure for including a medical device in the pharmaceutical provision of the NHS and the procedure to set its maximum ex-factory price will be unified in a single procedure. Therefore, both matters will be subject of a single decision. This is what currently happens with medicinal products.

The funding procedure for medicinal products, which although can be initiated upon request of the interested party, is usually initiated ex officio. Contrary to this, according to the new Royal Decree, the funding procedure for medical devices can only be initiated upon request of the company who wishes to have its products included in the pharmaceutical provision of the NHS.

Along with such request, the company must provide documentation regarding the situation and price of the relevant product in other Member States of the EU in which it is being marketed. Also, if available, the company must provide information on the prices of other medical devices which have similar characteristics, and which are marketed by such company.

The procedure to exclude a medical device from the pharmaceutical provision of the NHS can, according to this draft, be initiated either ex officio or upon the request of the company. The exclusion procedure initiated by the company can only be triggered after the period of 1 year (at least) has elapsed, counted from the date on which the medical device was included in the Nomenclator, which official list of funded products. The exclusion can be approved if it does not result in a therapeutic gap and provided that it does not entail a cost increase in the pharmaceutical provision of the NHS.

Finally, this draft includes the criteria that the competent authority must consider when the exclusion procedure is initiated due to the existence of other alternatives having a lower price or the same or lower cost. The criteria to be considered by the authorities in this case are the following:

– The alternative medical device must at least have the same quality, safety and efficacy, and an equivalent effect.

– The comparison of the maximum ex-factory prices will be made only between medical devices which are comparable.

– The comparison of the cost of use will be made only between medical devices having an equivalent effect.

Special conditions

Another possibility allowed by this new regulation is that it implements the procedure for imposing special conditions to the prescription, dispensation and/or funding of medical devices within the NHS. Such special conditions will be included in the Nomenclator and can be any of the following measures:

– Requiring a prior approval for the prescription and dispensation conditions;

– Limiting the funding to certain indications of the medical device;

– Reviewing the ex-factory Price and/or the funding conditions;

– Sustainability agreements, such as agreements regarding the price-volume, maximum expenditure limits; maximum cost per patient and period; risk sharing and any other system which is similar or combines any of the previous possibilities; and

– Any other mean which is considered to be appropriate in order to assure the correct use of the medical device.

Homogeneous groups

The homogeneous groups are a system created by the NHS, according to which certain kind of products (in this case, medical devices) which are publicly funded and have the same characteristics are included in the same group. Products belonging to the same group can have different retail prices and the pharmacist dispensing the prescribed product must sell the product having the lower price of the group, instead of the prescribed one if the price of the latter is higher.

As regards the homogeneous groups system for medical devices which are funded by the NHS for non-hospitalized patients, there is a reference to the provisions of Royal Decree 177/2014 which regulates the homogeneous groups of medicinal products. Thus, the provisions applicable to medicinal product will also be deemed to be applicable to medical devices, but considering the particularities of the devices.

To such effect, the draft contemplates that each homogeneous group of medical devices will include the presentations of medical devices which are funded by the NHS and have the same characteristics, type, size and contents, for the purposes of their replacement by the pharmacist upon dispensation.

The draft also foresees that the voluntary request of the company to lower the prices of medical devices will be done in the same way as for medicinal products, as regulated in article 9 of Royal Decree 177/2014.

Replacement regime

The main rule stated in the draft of Royal Decree is that the pharmacist must dispense the medical device which have been prescribed, indicated or authorized, according to the official prescription.

If the prescribed, indicated or authorized product, according to the official prescription, has a price which is higher than the lower price of another product included in the group, the pharmacist will replace such product with the product having the lowest price of the group. Furthermore, in exceptional cases when due to shortages or urgent reasons, the prescribed, indicated or authorized medical device is not available, the pharmacist can replace the product with another one having similar characteristics and the same or lower price.

Price review

As regards the price review regime, the draft states that the company offering its medical device to the NHS, can request a review to increase the maximum ex-factory price. Such increase request can only be made if there are justifying financial, technical or health-related circumstances. The maximum ex-factory price can also be reviewed ex officio if there are financial, technical or health-related reasons or in case there are grounds to reassess its therapeutic value and, in any case, as long as at least one year has elapsed, counted from its inclusion in the pharmaceutical provision of the NHS or from the last price review procedure, as the case may be.

Transitional regime

According to the draft, those medical devices which are publicly funded when the new Royal Decree comes into force will continue to be funded by the NHS in the conditions contemplated therein, as long as such medical devices are included in the Annexes of the new Royal Decree.

In this regard, it is important to consider the first transitional provision of the draft, according to which those medical devices which are already included in the pharmaceutical provision of the NHS will have maximum ex-factory price resulting from the retail price without taxes, deducting the distribution and dispensation margins. This means that, although the retail price will not be affected by this new regulation, the maximum ex-factory price which is currently being applied by companies could be reduced because of the specific distribution and dispensation margins contemplated in the new Royal Decree. This arises doubts about the opportunity of a measure that affects the companies’ rights which have been consolidated through time.

The draft also states that those medical devices which are included the pharmaceutical provision of the NHS, but which are not being marketed on the date of entry into force of this new regulation and continue having such non-marketing condition in 6 months from such date, will be excluded from the NHS.

La entrada The public audience and information period for the draft of Royal Decree on the funding and pricing of medical devices is open aparece primero en Faus Moliner.

In 1993, two companies entered into an oral contract regarding the distribution of medical devices, specifically maxillo-facial surgery related devices. The duration of the contract was indefinite and the parties did not agree on a termination notice period.

In 2011, the manufacturer communicated his decision to unilaterally terminate the contract, by giving two months’ notice to the distributor. The distributor sued the manufacturer claiming various compensations arising from the contract’s termination and, after exhausting the corresponding judicial stages, the matter reached the Supreme Court (the Court).

Compensation for clientele

The distributor requested a compensation for clientele based on the provisions contained in the Law on Agency Agreements (Law). The manufacturer argued that the Law should not be applied by analogy to this case, since the clients were public hospitals obtaining supplies via tenders and because when dealing with medical devices, subject to specific regulation, customer attraction and loyalty practices are proscribed.

The Court expressed that the fact that medical devices have specific regulation was not an obstacle to apply the Law by analogy, because the manufacturer will continue to benefit from the customers gained during the distributor’s performance. Moreover, the Court stated that there was not enough evidence to prove that the clients were exclusively public hospitals contracted via tenders and, therefore, the possibility to contract directly with the hospital management could not be excluded.

Termination notice and stocks

The Court’s case-law consistently interprets that, based on the good faith principle of contractual relations, the termination notice must be adequate and reasonable, in the sense that it must allow the distributor to redirect his professional activity.

In this case, the Court expressed that the termination notice should have been for at least six months, according to the Law which, although not directly applicable, could be used as a reference to determine if the termination notice is reasonable and adequate.

As regards the obligation of the manufacturer to re-purchase the stock of products of the distributor, the Court said that that was not an essential obligation of this kind of contracts. Therefore, unless there is a specific pact, the obligation to re-purchase the distributor’s stock can only be required under the good faith principle and taking into consideration the applicable circumstances. In this case, it was confirmed that the distributor had the obligation to keep certain stock of products in the hospitals. Considering that and the short termination notice provided, the Court considered that the distributor was entitled to require the manufacturer to re-purchase the stocks, as it has been done during the agreement.

La entrada The Spanish law on agency agreements can be applicable to the distribution of medical devices having specific regulation aparece primero en Faus Moliner.

The judgement in question concerns a claim brought by Mrs. Schmitt against TÜV Rheinland, a notified private body which is qualified in Germany for the conformity assessment of medical devices.

Mrs Schmitt had to remove the breast implants that had been subject to a conformity assessment by the notified body, after the competent French authority established that the breast implants did not comply with the quality standards. Given the fact that the manufacturer was insolvent, Mrs. Schmitt claimed compensation for non-material damages from that notified body, arguing that it did not carry out unannounced visits, final inspections of the products and that it did not check the delivery notes and invoices which evidenced that the manufacturer did not use an approved form of silicone.

The Court of first instance rejected the contractual and non-contractual liability of the notified body since Mrs. Schmitt was not part of the contract concluded between such body and the manufacturer and since the notified body did not act negligently in carrying out visits announced in advance to the manufacturers. This decision was appealed and the appeal court referred the question to the Court of Justice for a preliminary ruling asking whether such notified bodies are obliged, under European law, to undertake unannounced inspections, to examine the design of the products and/or to examine the manufacturer’s business records.

Court of Justice conclusions

The Court of Justice starts by reminding that European law confers wide inspection and control powers to these notified bodies, but it does not impose a general obligation to carry out unannounced inspections, to examine devices nor to examine the manufacturer’s business records.

However, the Court also reminds that the purpose of the Directive 93/42 is to protect the safety of persons and that although these notified bodies are provided with an adequate degree of discretion, they are subject to a general surveillance obligation. Such obligation implies that the body must take appropriate measures if it gets evidence indicating that a medical device may not comply with the requirements laid down in the European law. For that reason, the eventual liability of such bodies cannot be excluded.

Considering that the purpose of the Directive is not to govern the conditions under which the end users of medical devices may be able to obtain compensation for culpable failure by those bodies, the Court concludes that the conditions under which culpable failure by that body to fulfil its obligations under the directive may give rise to liability on its part are governed by the national law of each member state.

La entrada Liability of the notified body towards end users as a consequence of the conformity assessment procedure of medical devices aparece primero en Faus Moliner.

On 21 December 2016, the general assembly of Fenin approved the new Code of Ethics for the Healthcare Technology Sector in Spain, transposing the current “Code of Ethical Business Practice” of MedTech Europe, the European association of the health technology industry.

The main objective of the new Code, which will come into force on 1 January 2018, is to ensure that certain relationships between companies associated to Fenin and healthcare professionals and/or healthcare organisations are based on criteria of transparency and independence and, in general, that they are carried out within the framework of an ethical conduct.

As may be noted, these objectives are no different from those pursued by the Fenin Code of Ethics currently in force. However, the new Code significantly changes the conditions that must be fulfilled in order for companies to engage in certain relationships and even prohibits healthcare professionals or healthcare organisations certain activities that are permitted under the current Code.

Sponsorship of third-party educational events

The new Code forbids Fenin members to directly sponsor healthcare professionals to attend educational events organised by third parties, unless the events relate to training on clinical procedures and techniques. Thus, once the new Code comes into force, companies may not extend invitations to healthcare professionals for their attendance to this type of events and it will not be permitted for companies to bear the costs to be incurred by a specific professional for his/her attendance to such events.

The sole exception to this prohibition is for healthcare professionals participating as speakers at a satellite symposium. In such case, pursuant to a consultancy agreement with the speaker in question, companies may directly bear travel and accommodation costs, in addition to those corresponding to his/her registration at the event at which the symposium is taking place.

On the other hand, companies may continue to sponsor third-party events by making contributions to the organizer of the event; however, only when certain criteria are met, namely: (a) that the event, including the nature of the venue, is approved under the MedTech or Fenin events validation systems, (b) that the sponsorship is duly formalized in a contract; and (c) that the event organiser is solely responsible for the selection of attendees.

Transparency obligations

There has been an increase in the transparency obligations that companies associated to Fenin must comply with. In this regard, from 2018 onwards, each company associated to Fenin must publish, on an annual basis and via publication on the MedTech website the grants for training and the support it has provided to third-party educational events during the previous year. This information must be published within the first six months of each year and must include, in addition to identifying the organisations and institutions receiving grant or support, the aggregate amount that has been paid to each entity.

Furthermore, the new Code also establishes that when a company covers the costs of a healthcare professional attending an event, whether organised by the company itself or a third-party, to receive training on clinical procedures or techniques, in addition to when a company signs a consultancy agreement with a healthcare professional, the company must previously notify the manager of the healthcare institution where the healthcare professional carries out his/her activity regarding the nature of the relationship with said professional.

Charitable donations

The situations in which companies associated to Fenin may make donations have been limited and the requirements that have been satisfied in order to carry out such donations increased. Thus, donations may only be made when charitable or philanthropic in nature, if the recipient is a non-profit entity and on the condition that the company making the donation does not control the final use of the funds donated.

In this regard, it is important to note that the new Code expressly forbids making donations, whether directly or through foundations or other entities, to support the general running of a hospital or another health organisation. The sole exception of this prohibition is the possibility of making donations of a limited value that solely benefit patients when the hospital receiving the donation is undergoing a verifiable situation of financial hardship difficulties that adversely affect patient care.

Entry into force of the new Code

Although the new Code does not come into force until 1 January 2018, companies associated to Fenin must start adapting to certain provisions during 2017. For instance, in 2017, companies must gather information on grants and support offered throughout 2017, (as indicated in the transparency section above) as they will have to publish such information during the first six months of 2018, and refrain from entering into or renewing agreements that will remain in force after 2017 if their corresponding terms will be prohibited when the new Code comes into force.

Moreover, given that MedTech member companies must comply with the “Code of Ethical Business Practice” from 1 January 2017 onwards, Fenin members that are also MedTech members are subject to the MedTech Code, the contents of which are largely similar to the new Fenin Code from the aforementioned date.

La entrada Main features of the new Fenin Code of Ethics aparece primero en Faus Moliner.

In accordance with article 82 of the Spanish Constitution and by virtue of the delegation that was granted under Law 10/2013, the Government has approved the consolidated text of Law 29/2006 on Guarantees and Rational Use of Medicinal Products and Medical Devices.

This “new” law aims to consolidate in one text the various provisions of Law 29/2006, which have been subject to various amendments; and at the same time, it clarifies and harmonizes some of the provisions in the Law.

In our CAPSULAS No. 159 of March 2015, we provided some ideas on the draft consolidated text that the Ministry of Health was discussing at the time. In this newsletter, we shall discuss the most relevant aspects of the text that has finally been approved.

Definition of active substance and reference price system

In the project that the Government presented in March, it was suggested that for the purposes of the Law, in particular in relation with the reference price system, the definition of active principle would be linked to the level 5 ATC of the anatomical-therapeutical-chemical classification. This proposal, that we criticized at that time, has not been finally included in the text.

We cannot exclude that this idea comes up again in the new Royal Decree on prices of medicines, but this would be a mistake. In connection with this matter, we think that it is important to recall the view of the WHO, which states the following on its website: “basing detailed reimbursement, therapeutic group reference pricing and other specific pricing decisions on the ATC and DDD assignments is a misuse of the system”.

In the same way that the WHO strongly opposes to the fact that companies use the ATC system for promotional or commercial purposes, it is also clearly against administrative decisions regarding the reference price system being based on the ATC system.

Generic medicinal products (EFG) and non -replaceable medicinal products

The draft from March contemplated adding, to article 14 of the Law, that the identification of certain medicinal products with the acronym EFG would be without prejudice of the abilities of the Ministry to exclude them as replaceable products. It is fortunate that this wording was not included in the final text. The law continues stating that medicinal products can be identified as EFG (i. e. as generics) on the basis of the determination made by the Spanish Medicines Agency regarding its interchangeability.

Free prices

The draft presented in March contemplated adding to the Law that, for the purposes provid- ed in  the Law, medicinal products that are not publicly funded would be covered by the free prices
regime. At the time, we criticized this because in our legislation a “regime of free prices” does not really exist. Free prices are the general rule and this may only be restricted through a law. This is clearly indicated in Law 7/1996. Therefore, we think that it makes sense to state that the prices of the products reimbursed are subject to a special price regime rather than saying that products which are not reimbursed are subject to a free price regime.

Price modifications

In our last CAPSULAS we mentioned it would be good to clarify in article 97 that the modification of prices of medicinal products must be made in a reasoned way and according to objective criteria. The reference to motivation and transparency, as required by Directive 89/101, is already included in section 5 of article 94 on the initial price fixing, and we thought this was a good time to clarify that this also applies to the modification of prices. Although this has not been included in the Law, Directive 89/101 still obliges Member States to use objective criteria in all price review processes.

Substitution of medicinal products

Once again, a good occasion has been lost to clarify that the prohibition of substitution of medicines which are classified as nonreplaceable, without having the prior approval of the prescribing doctor, applies to both pharmacy offices and hospital pharmacies.

In our opinion, guaranteeing that substitution shall not take place in these cases, both in pharmacy offices and in hospitals, is an issue related to the protection of the public health, and it should be carefully considered.

Homogenous groups and biosimilars

The opportunity has also been lost to correct the provision that says that when prescription is written using the name of active ingredient the pharmacist must dispense the product with the lowest price within its homogenous group and if all prices are equal, the generic or biosimilar product. Biosimilar drugs cannot be substituted when dispensed and therefore they should not be included in any homogenous group. A recent Judgment of the Supreme Court of 19 June 2015 ratifies this idea.

Which discounts are forbidden?

The Law continues to classify as a very serious infringement to offer bonuses, gifts, awards, contests, discounts or similar initiatives as ways to promote or sell to the public the products regulated in the Law. The consolidated text has not clarified that this should only apply in respect of discounts or other commercial practices that are prohibited by the Law itself.

This clarification would be convenient because the scope of application of the Law is very wide and includes cosmetic products and also nonreimbursed products. Given that all of these products are covered by the Law, it would make sense to clarify that the infringements will apply only to situations where the Law prohibits any such practices.

La entrada The “new” law on guarantees and rational use of medicinal products and medical devices aparece primero en Faus Moliner.

In this Judgment the European Court of Justice has expressed its position on the interpretation of the definition of “medical device”, in a reference for a preliminary ruling from a German Court, in the proceedings between Brain Products and BioSemi.

The dispute between the above mentioned companies occurred in connection with BioSemi’s marketing of a system called “ActiveTwo” which, according to this company, enables human brain activity to be recorded. Brain Products considered that the marketing of such product should fall within the scope of the regulations on medical devices and that “ActiveTwo” could only be marketed once the requirements for bearing the CE mark were fulfilled.

On the other hand, BioSemi claimed that “ActiveTwo” is not intended for medical use and, thus, it cannot be classified as a “medical device”. Furthermore, BioSemi claimed that the fact that the system “ActiveTwo” can be transformed into a diagnostic device does not imply that it should be classified as a medical device.

BioSemi concluded by claiming that obligatory CE marking would be contrary to the principle of free movement of goods.

The position of the ECJ

The Court analyzes this issue by reminding that Directive 93/42/EEC considers as “medical devices” those products intended by the manufacturer to be used on human beings for certain purposes, among which are the diagnosis, prevention, monitoring, treatment or alleviation of a disease; as well as for the purposes of investigation.

As regards software, Directive 2007/47/EC included it within the definition of “medical device” as long as it is intended specifically for diagnostic and/or therapeutic purposes. The interpretation of this provision that the ECJ makes on the basis of its Preamble is that software shall only be considered as a medical device if its intended purpose, as defined by its manufacturer, is specifically medical.

Consequently, the Court indicates that when a product is not conceived by its manufacturer to be used for medical purposes, its certification as a medical device cannot be required, even though such object enables the investigation of a physiological process as well as to measure, without any medical use, the functioning of certain organs in the human body. The ECJ points out that if such articles were to be classified as medical devices, they would be subject to a certification procedure without any justification for that requirement.

La entrada Regulations applicable to medical devices apply when the device is intended for medical purposes aparece primero en Faus Moliner.