Health Issues

Germany’s hospital system is reported to be of high quality but is also very expensive by international standards. Hospitals and healthcare payers such as health insurances are exposed to increasing economic constraints. One particular point of criticism is, for example, the current system of Diagnosis Related Group (DRG)-based fees.

Patient treatments are compensated based on the DRGs which effectively leads to a lump-sum payment system per diagnosis (with certain exemptions). This system has pros and cons. As a downside, it is reported to create incentives for over-treatments to generate DRG-based fees per patient.

At the same time, many hospitals in Germany are at risk of closure and insolvency due to financial challenges. The German federal states have thus asked the federal government for financial support to finance the restructuring of the hospital system and prevent hospitals from bankruptcy.

German federal and state governments have been discussing an intended hospital reform for months. Provided that no additional money flows into the healthcare system, the principle for this reform is “outpatient care before inpatient care”. The financial volume incentive shall therefore be minimised and a concentration on larger hospitals and medical institutions shall optimise or at least improve the current structures and quality of medical care in Germany. This shall also be accompanied by a reduction of the general number of hospitals in Germany.

On 10 July 2023, the key objectives of the envisaged hospital reform plans (Eckpunktepapier: Krankenhausreform) have been agreed on: (1) Ensuring security of supply (in particular public responsibility for ensuring the provision of healthcare, so-called “Daseinsvorsorge”), (2) securing and increasing the quality of treatment, and (3) reducing bureaucracy. Particularly, this is to be reflected in the following key measures:…

Continue Reading Germany plans significant hospital reform with broad impact on life sciences companies

Following the COVID-19 pandemic and the relatively slow approval of vaccines in the EU versus other key jurisdictions, as part of the EU’s General Pharmaceutical Legislation amendment proposal, published on 26 April 2023, the European Commission has proposed to introduce temporary emergency marketing authorizations (“TEMAs”) for use when there is a “public health emergency.”  The TEMA will be an “agile, fast and streamlined” process to allow products to be developed and made available as soon as possible in emergency situations.  However, it remains to be seen whether in practice the TEMA process will provide a faster procedure than existing routes for early and expedited approval of medicinal products, such as conditional marketing authorizations (“CMAs”) or Member State procedures for temporary approval.

Reason to Introduce the TEMA

The EU took a coordinated approach to approval and procurement of vaccines during the COVID-19 pandemic.  In the EU, COVID-19 vaccines were approved using the CMA procedure combined with a rolling expedited review.  According to the European Medicines Agency (“EMA”), CMAs were the “the most appropriate tool to grant access to COVID-19 vaccines to all EU citizens at the same time and to underpin mass vaccination campaigns.”  Vaccines approved with a CMA included Comirnaty, Nuvaxovid and Spikevax (amongst others).

However, the approval of COVID-19 vaccines in the EU was slower than in other jurisdictions.  For example, the UK MHRA granted Comirnaty a temporary authorization on December 2, 2020.  The US FDA gave the vaccine an Emergency Use Authorization on December 11, 2020.  Whereas, the Commission did not grant a CMA for the vaccine until December 21, 2020.…

Continue Reading EU Pharma Legislation Review Series: Temporary Emergency Marketing Authorizations

As part of the EU’s General Pharmaceutical Legislation amendment proposal, published on 26 April 2023 (“theProposal”), the European Commission (“Commission”) has introduced a series of measures aimed at securing the supply of critical medicinal products across the EU and at preventing shortages.  In particular, there are new obligations for Marketing Authorization Holders (“MAH”) and competent authorities are given more power to better monitor and control the availability of medicines on the market.

As we have discussed previously, these measures aim to tackle the broader problem of security and robustness of pharmaceutical supply chains, which became especially prominent during the COVID-19 pandemic.  In this blog, we briefly explore some of the changes introduced by the Proposal.

Preventing Supply Disruptions and Shortages

Critical Medicinal Products

The Proposal expands the monitoring of “critical medicinal products” beyond emergency situations.  Now, medicinal products “for which insufficient supply results in serious harm or risk of serious harm to patients” will be included in the “Union list of critical medicinal products” (“Union list”), and the Commission will have the power to implement measures such as stockpiling of active pharmaceutical ingredients or finished dosage forms.  …

Continue Reading EU Pharma Legislation Review Series: Supply Security and Shortages Control

By Libbie Canter, Anna D. Kraus, Olivia Vega, Elizabeth Brim & Jorge Ortiz on April 14, 2023

On April 11, the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) announced that four Notifications of Enforcement Discretion (“Notifications”) that were issued under the Health Insurance Portability and Accountability Act…

On 24 January 2023, the Italian Supervisory Authority (“Garante”) announced it fined three hospitals in the amount of 55,000 EUR each for their unlawful use an artificial intelligence (“AI”) system for risk stratification purposes, i.e., to systematically categorize patients based on their health status. The Garante also ordered the hospitals to erase all the data…

On February 1, the Federal Trade Commission (“FTC”) announced its first-ever enforcement action under its Health Breach Notification Rule (“HBNR”) against digital health platform GoodRx Holdings Inc. (“GoodRx”) for failing to notify consumers and others of its unauthorized disclosures of consumers’ personal health information to third-party advertisers.  According to the proposed order, GoodRx will pay a $1.5 million civil penalty and be prohibited from sharing users’ sensitive health data with third-party advertisers in order to resolve the FTC’s complaint. 

This announcement marks the first instance in which the FTC has sought enforcement under the HBNR, which was promulgated in 2009 under the Health Information Technology for Economic and Clinical Health (“HITECH”) Act, and comes just sixteen months after the FTC published a policy statement expanding its interpretation of who is subject to the HBNR and what triggers the HBNR’s notification requirement.  Below is a discussion of the complaint and proposed order, as well as key takeaways from the case.

The Complaint

As described in the complaint, GoodRx is a digital healthcare platform that advertises, distributes, and sells health-related products and services directly to consumers.  As part of these services, GoodRx collects both personal and health information from its consumers.  According to the complaint, GoodRx “promised its users that it would share their personal information, including their personal health information, with limited third parties and only for limited purposes; that it would restrict third parties’ use of such information; and that it would never share personal health information with advertisers or other third parties.”  The complaint further alleged that GoodRx disclosed its consumers’ personal health information to various third parties, including advertisers, in violation of its own policies.  This personal health information included users’ prescription medications and personal health conditions, personal contact information, and unique advertising and persistent identifiers.…

Continue Reading FTC Announces First Enforcement Action Under Health Breach Notification Rule

Recent legislation allows employers to continue offering first-dollar telehealth coverage without jeopardizing the ability to contribute to a health savings account (“HSA”), but only through the end of the 2024 plan year.

Background – HSA Eligibility

Employees can make and receive pre-tax contributions to HSAs to use for qualified medical expenses. To be “eligible” to make or receive contributions to an HSA, you (a) must be covered by a high deductible health plan (“HDHP”), and (b) may not have other non-HDHP coverage that covers benefits before the HDHP deductible has been met.

Certain types of coverage, like dental and vision care, is disregarded in determining whether an individual is “eligible” to contribute to an HSA. Disregarded coverage does not have to be coordinated with HDHPs. This means that participants can receive “first-dollar” coverage for disregarded coverage and still be eligible to make or receive contributions to an HSA.

Telehealth is Disregarded Coverage Through 2024

Under prior legislation, telehealth coverage provided (i) during plan years beginning before December 31, 2021; and (ii) during the period beginning April 1, 2022 and ending December 31, 2022, is disregarded coverage under the HSA rules. See the CARES Act and the Consolidated Appropriations Act, 2022. …

Continue Reading Employers Can Continue to Cover Telehealth Benefits Before HDHP Deductible Is Met

On December 20, 2022, the Federal Trade Commission (“FTC”) announced its issuance of Health Products Compliance Guidance, which updates and replaces its previous 1998 guidance, Dietary Supplements: An Advertising Guide for Industry.  While the FTC notes that the basic content of the guide is largely left unchanged, this guidance expands the scope of the previous guidance beyond dietary supplements to broadly include claims made about all health-related products, such as foods, over-the-counter drugs, devices, health apps, and diagnostic tests.  This updated guidance emphasizes “key compliance points” drawn from the numerous enforcement actions brought by the FTC since 1998, and discusses associated examples related to topics such as claim interpretation, substantiation, and other advertising issues.

Identifying Claims and Interpreting Advertisement Meaning

The updated guidance first discusses how claims are identified and interpreted, including the difference between express and implied claims.  The updated guidance emphasizes that the phrasing and context of an advertisement may imply that the product is beneficial to the treatment of a disease, which in turn would require that the advertiser be able to substantiate the implied claim with competent and reliable scientific evidence, even if the advertisement contains no express reference to the disease.

In addition, the updated guidance provides examples of when advertisers are expected to disclose qualifying information, such as when a product is targeted to a small percentage of the population or contains potentially serious risks.  When the qualifying information is necessary to avoid deception, the updated guidance contains a discussion of what constitutes a clear and conspicuous disclosure of that qualifying information.  Specifically, the guidance states that a disclosure is required to be provided in the same manner as the claim (i.e., if the claim is made visually, the disclosure is required to be made visually).  A visual claim should stand out, and based on its size, contract, location, and length of time is appears, must be easily noticed, read, and understood.  An audible disclosure should be at a volume, speed, and cadence so as to be easily heard and understood.  On social media, the guidance states a disclosure should be “unavoidable,” which the FTC clarifies does not include hyperlinks.  The qualifying information should not include vague qualifying terms, such as that a product “may” have benefits or “helps” achieve a benefit.…

Continue Reading FTC Issues New Guidance Regarding Health Products

On December 28, 2022, the Spanish Data Protection Authority (“AEPD”) published a statement on the interplay between its recently approved Spanish code of conduct for the pharmaceutical industry and the European Federation of Pharmaceutical Industries and Associations’ (“EFPIA”) proposal for an EU code of conduct on clinical trials and pharmacovigilance.  The statement relates specifically to…

The German regulation of pricing and reimbursement of pharmaceuticals is probably one of the most complicated legal areas in the entire world of life sciences laws. Now, the German government is adding another layer of complexity to the existing rules.

On 20 October 2022, the German Parliament has accepted the draft Act for the Financial Stabilization of the German Statutory Health Insurance System („GKV-FinStG“). The new act was subject to month-long controversial discussions within and outside of the Parliament and affected stakeholders. This was due to the fact that the new rules will affect almost all players within the healthcare system, including the health insurers, doctors, hospitals, pharmacies and, especially, the pharmaceutical industry. The new law encompasses significant cost-containment measures as the German healthcare system faces increased costs while, at the same time, the system suffers from a reduced inflow of funds.

According to the explanatory memorandum of the GKV-FinStG, the cost increase is particularly due to the disproportionate increase of expenditures for medicinal products. Correspondingly, a number of new rules specifically target the pricing and reimbursement of pharmaceuticals. Key elements of the GKV-FinStG that apply to the pharmaceutical industry include the following measures:…

Continue Reading Germany significantly tightens Drug Pricing and Reimbursement Laws