Medicinal Products

On 1 July 2024, Germany has enacted stricter requirements for the processing of health data when using cloud-computing services. The new Section 393 SGB V aims to establish a uniform standard for the use of cloud-computing services in the statutory healthcare system which covers around 90% of the German population. In this blog post, we describe the specific new requirements for the processing of health and social data using cloud-computing. We will also discuss whether the new rules may impact medical research and other projects that utilize cloud-computing for processing health data.

1. Scope and Background of Sec. 393 SGB V

The new Section 393 SGB V (Social Security Code – Book V) has been enacted with the recent “Digital Act” (see our earlier blog on the Digital Act). The title of Section 393 SGB V is “Cloud-Use in the Healthcare System“. Hence, it aims to impose specific requirements for healthcare service providers, statutory health insurances and their contract data processors when they process health data and social data using cloud-computing services. According to the German legislator, the provision aims at enabling the secure use of cloud services as a “modern, generally widespread technology in the healthcare sector and to create minimum technical standards for the use of IT systems based on cloud-computing”.

The new requirements apply to data processing using cloud-computing irrespective of whether the cloud-computing is offered by an external vendor or utilizes a tool that the healthcare providers or health insurance has developed on their own.

The term “cloud-computing service” is defined in the law as “a digital service that enables on-demand management and comprehensive remote access to a scalable and elastic pool of shared computing resources, even if these resources are distributed across multiple locations” (Section 384 Sentence 1 No. 5 SGB V). This reflects the corresponding definition of cloud-computing in Article 6 (30) of the NIS2-Directive (EU) 2022/2555 on cybersecurity measures. Services that fall under this definition include, inter alia, Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).Continue Reading Germany enacts stricter requirements for the processing of Health Data using Cloud-Computing – with potential side effects for Medical Research with Pharmaceuticals and Medical Devices

1.  Background

Gene and cell therapies are on the rise. On June 12, 2024, the German Federal Government was handed the strategy paper for a National Strategy for Gene and Cell Therapies. The paper is intended to serve as a basis for policymaking to give Germany a leading role in the field of gene and cell therapies (GCT) in Europe. The German Government recognizes that the age of GCT has started but that there are many legal, regulatory and practical shortcomings that impedes research and development of GCTs in Germany.

Back in the fall of 2022, the German Federal Ministry of Education and Research (BMBF) had commissioned the Berlin Institute of Health (BIH) to coordinate and moderate the development of a National Strategy for GCT. Eight working groups were created to develop the National GCT Strategy, with a total of about 150 experts from various stakeholder groups. The result of their work is a document divided into eight fields of action, in which various measures are proposed to achieve strategic goals in the field of GCT.

The National GCT Strategy is one of several highly targeted measures with which the German Government aims to make Germany more attractive as a location for pharmaceutical and healthcare innovation. Just six months ago, in December 2023, the Federal Ministry of Health (BMG) presented a strategy paper for the new National Pharma Strategy. We reported on this in detail in an earlier Covington blog.

Unlike the National Pharma Strategy, which was developed under the Social Democrat-led Federal Ministry of Health (BMG), the National Strategy for GCT is an initiative led by the Federal Ministry of Education and Research which is led by the liberal party FDP. The BMBF appears keen to play a leading role in the establishment of GCT in Germany. Industry stakeholders may welcome this as the BMBF is known to be a more industry-friendly part of the German Government than the BMG.

2.  The National Pharma Strategy as a possible role model

The example of the National Pharma Strategy and its rapid implementation already indicates what the next steps in the National GCT Strategy may be. Shortly after the National Pharma Strategy was agreed upon, the first draft of the “Medical Research Act” was presented on 26 January 2024 to implement key elements of the Pharma Strategy, including amendments in the areas of clinical trials, ATMPs and pharmaceutical pricing and reimbursement (AMNOG). We reported on this in two earlier blogs that discussed the proposed changes for clinical trials and drug pricing. The draft Medical Research Act is expected to come into force in the fall of 2024. Hence, the current German Government is keen to act fast to strengthen Germany as a place for pharmaceutical innovation and R&D.Continue Reading Germany prepares new National Strategy for Gene and Cell Therapies

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