Regulatory, Pricing and Reimbursement Overview
Regulatory, pricing and reimbursement overview in Italy – a legal guide. Prepared in association with DLA Piper, a leading law firm in Italy, this is an extract from The Pharma Legal Handbook: Italy, available to purchase here for USD 99.
1. What are the regulatory authorities with jurisdiction over drugs, biological, and medical devices in your country?
The Italian Medicines Agency (Agenzia Italiana del Farmaco – “AIFA”) is the national authority vested with jurisdiction over medicinal products (including biologics).
The Ministry of Health (Ministero della Salute) is responsible for the regulation and monitoring of medical devices and has jurisdiction in relation to certain aspects pertaining to the regulation of non-prescription medicines (e.g., promotion).
2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biological, and medical devices?
Italian legislative decree 219/2006 on medicinal products for human use (“Italian Medicines Code”), implementing Directive 2001/83/EC, and Regulation (EC) 726/2004 set forth the main regulatory framework for the authorization of medicinal products (including biologics) in Italy.
Legislative decree 46/1997 on medical devices, legislative decree 507/1992 on active implantable medical devices, and legislative decree 332/2000 on in vitro diagnostic medical devices, respectively implementing Directive 93/42/EEC, Directive 90/385/EEC and Directive 98/79/EC, establish the main regulatory framework for the authorization of medical devices in Italy.
The aforementioned legislative framework for medical devices will soon be replaced by the new Regulation (EU) 2017/745 on medical devices and Regulation (EU) 2017/746 on in vitro diagnostic medical devices, which will become fully applicable on 26 May 2020 and 26 May 2022 respectively.
b. Pricing and reimbursement
All medicinal products available on the Italian market are classified into one of the following four reimbursement categories:
- Class A: includes essential medicines and medicines for chronic diseases. Class A medicines are generally fully reimbursed by the Italian National Health Service (Servizio Sanitario Nazionale) (“SSN”).
- Class H: includes hospital-use only medicinal products. These are also reimbursed by the SSN.
- Class C: not reimbursed by the SSN.
- Class C(nn): separate class for centrally approved medicinal products which pricing and reimbursement decision in Italy has not yet been taken. These are not reimbursed by the SSN.
The price of Class A and Class H medicinal products is negotiated between the marketing authorization holder and AIFA (Italian law 326/2003). Prices are negotiated on the basis of the criteria set out by Resolution 3/2001 of the Inter-ministerial Committee for Economic Planning. (“CIPE’s Resolution 3/2001”). CIPE’s Resolution 3/2001 will be lifted pursuant to a decree adopted by the Ministry of Health and Ministry of Economy and Finance in July 2019. However, as such decree has not yet been published in the Official Journal (as of October 2019), CIPE’s Resolution 3/2001 is still valid and in force.
The price of Class C medicines is freely set by the marketing authorization holder. The marketing authorization holder may only increase the price of Class C products every two years (in January of each odd-numbered year).
For medicinal products belonging to classes A and H, the price negotiation involves a two-phase procedure. Phase I requires the marketing authorization holder to submit to AIFA the following information:
- a risk / benefit assessment;
- an evaluation of the economic impact on the NHS;
- a comparison with the price and consumption of the medicine in other EU member states.
Phase II involves negotiations with AIFA, with the support of the prices and reimbursements committee (Comitato Prezzi e Rimborso) and the national observatory for the use of medicinal products (Osservatorio Nazionale sull’Impiego dei Medicinali).
The above provisions do not apply to medical devices.
3. What are the steps to obtain authorization to develop, test, and market a product?
a. Medicinal products
New medicinal products must undergo an evaluation of their quality, safety and efficacy before being placed on the Italian market. The process is mainly regulated by the Italian Medicines Code and legislative decree 211/2003 on clinical trials, implementing Directive 2001/20/EC, and monitored by AIFA.
The main steps are the following:
- Pre-clinical tests: not regulated under the medicinal product regulatory framework.
- Clinical trials: the investigational medicinal product is tested on human beings. This is subject to regulatory and ethical review in accordance with legislative decree 211/2003.
- Marketing authorization application: once the pharmaceutical company has gathered sufficient quality, safety and efficacy data, it can include all such data in a dossier and apply for a marketing authorization to either AIFA or the European Medicines Agency (“EMA”).
The marketing authorization holder may place the new medicinal product on the market once it has (i) obtained a marketing authorization from either AIFA or the European Commission, and (ii) the product has been included in one of the reimbursement categories and a price has been set.
b. Medical devices
Medical devices do not require a prior authorization from the Ministry of Health to be placed on the market in Italy. However, the manufacturer is responsible for ensuring that the medical device complies with the essential requirements set forth by legislative decree 46/1997 and it has been subject to appropriate tests to verify such conformity.
All medical devices require a “CE mark” to be placed on the market. In order to affix the CE mark, the manufacturer must follow a conformity assessment procedure. For Class I devices, the manufacturer draws up the EC declaration of conformity after having verified compliance with the applicable requirements. For Class IIa, IIb, or III devices, the manufacturer must involve a Notified Body – i.e., a private legal entity designated by the competent regulatory authority to exercise conformity assessment procedures. The Notified Body issues the declaration of conformity required for the manufacturer to affix the CE mark.
If the manufacturer (or its EU authorized representative) is established in Italy, it must register with the Ministry of Health and communicate a description of the medical devices before it may lawfully place the devices on the Italian market.
In respect of Class II and III medical devices, Italian law requires the manufacturer (or its EU authorized representative) to inform the Ministry of Health of certain data allowing the identification of such devices when they are put into service in Italy, including the labels and instructions for use.
4. What are the approximate fees for each authorization?
The fees to apply for a marketing authorization of a medicinal product vary depending on the procedure, the pharmaceutical form and the presentation, among other factors. The fees for marketing authorization application are published on AIFA website and, according to the latest update (March 2019), they amount approximately to:
- 67,000.00 euros in case of national procedure, decentralized procedure or mutual recognition procedure where Italy acts as Concerned member state;
- 80,000.00 euros in case of decentralized procedure or mutual recognition procedure where Italy acts as Reference member state;
- 40,000.00 – 50,000.00 euros for homeopathic medicinal products;
- 20,000.00 – 30,000.00 euros for herbal medicinal products.
Once an authorization is obtained from AIFA, an annual fee of Euro 1,000.00 applies to each marketing authorization (AIFA Order No. 21 of 30 May 2012).
In relation to Class IIa, IIb and III medical devices, each Notified Body sets its own fees system for the conformity assessment procedure.
5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?
The initial marketing authorization for a medicinal product has a duration of five years. The holder of the marketing authorization may apply for a renewal by submitting to AIFA an application at least six months before the expiry of the marketing authorization. The application must contain an updated version of the dossier filed with the original application in order to enable a new assessment of the risk/benefit ratio. If AIFA grants a renewal, the marketing authorization is valid for an unlimited period of time unless AIFA decides, on justified grounds relating to pharmacovigilance, to proceed with a renewal limited to a period of five years.
For medical devices, once the manufacturer has obtained the “CE mark” and, if established in Italy, has registered with the Ministry of Health, it may place the device on the market. The declaration of conformity issued by the Notified Body for the CE mark has a maximum validity of five years, which may be renewed.
6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?
Originator medicinal products must be approved through a so-called “full application” procedure, which is regulated by Article 8 of the Italian Medicines Code. A full application requires the marketing authorization holder to submit, among other things, full quality, safety and efficacy data (pre-clinical test data and clinical trial data).
A company may obtain a marketing authorization for a generic medicinal product through an abridged procedure regulated by Article 10 of the Italian Medicines Code. To obtain such a generic marketing authorization, the applicant must show that the medicinal product has the same qualitative and quantitative composition in active substances and the same pharmaceutical form as (i.e., it is a generic of) a reference medicinal product that has been authorized in the EU for at least eight years. In such cases, the applicant is not required to submit any preclinical test or clinical trial data, but it may refer to the data included in the reference product’s dossier, and demonstrate that the generic product and the reference product are bioequivalent through appropriate bioavailability studies. Notwithstanding the granting of the marketing authorization, the generic product may only be placed on the market after ten years have passed since the initial authorization of the reference medicinal product (unless an extension of such period of market protection has been granted on the basis of one of the grounds foreseen by law).
In case of biological medicinal products that are similar to a reference biological product, but cannot meet the definition of a ‘generic’ set forth above due to differences in raw materials or in production processes with the reference product (so-called “biosimilar”), the applicant may integrate the date of the reference product referred to in its application by providing the results of appropriate pre-clinical tests or clinical trials.
The procedure to obtain a marketing authorization does not differ between Italian and foreign applicants. However, only entities established within the EU may be granted a marketing authorization by AIFA or the European Commission.
7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?
Fixed combinations of already authorized medicinal products may be approved in accordance with a specific procedure regulated by Article 12 of the Italian Medicines Code (implementing Article 10b of Directive 2001/83/EC). The applicant for a fixed-dose combination medicinal product is only required to submit pre-clinical and clinical data relating to the combination, but does not need to provide data concerning each individual active substance.
Medicine-medical device combinations may be regulated either as medicinal products or as medical devices. The Italian medical device rules provide that a combination of a medicine and a medical device intended for drug delivery is regulated as a medicinal product provided that the components form an integrated part. Conversely, a combination of a medicinal product and a medical device where the latter is presented as a separate unit must follow the regulatory regime of medical devices. Generally, Italy follows the guidance on borderline products made available by the European Commission.
8. How is compliance with regulation monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?
AIFA is the authority entitled to monitor compliance with all legal requirements pertaining to medicinal products, including compliance with GCPs, GMPs, and pharmacovigilance. AIFA may carry out site inspections and examine product samples. Furthermore, AIFA manages the pharmacovigilance system to ensure that all data are promptly received, recorder and circulated to healthcare institutions, healthcare professionals (“HCPs”) and patients.
The medicinal product regulatory regime in Italy is run in cooperation with the EMA and in accordance with its guidelines.
The Ministry of Health is the authority entitled to monitor compliance with the regulatory regime for medical devices by performing inspections at manufacturing sites, recording incidents and monitoring importation, exportation and advertising. The activity of the Ministry of Health is performed in cooperation with the European Commission and all data on incidents relating to medical devices are shared with the EU authorities through the EU medical device database.
Furthermore, the Italian police may also cooperate with the competent regulatory authorities in the enforcement of pharmaceutical or medical device regulation.
9. What is the potential range of penalties for noncompliance?
AIFA has broad enforcement powers and may issue administrative fines as well as revoke or suspend authorizations or licenses, suspend the reimbursement of a medicine by the SSN, and shut down facilities. In case a medicinal product is found not compliant with the regulatory requirements pursuant to inspections, AIFA may revoke or suspend a manufacturing authorization or decide to close down a manufacturing site. Furthermore, following the evaluation of pharmacovigilance data, AIFA may suspend, revoke or amend a marketing authorization. In case a marketing authorization is revoked, AIFA orders the withdrawal from the market of the medicinal product. Failure to comply with the medicinal product regulatory regime may also entail criminal or administrative penalties for the manufacturer or the marketing authorization holder.
The Ministry of Health may order the withdrawal from the market or prohibit, restrict and impose conditions on the placing on the market of a medical device when such are measures required to ensure the protection of health and safety and compliance with regulatory requirements. Failure to comply with the regulatory regime of medical devices also entails criminal and administrative penalties for the manufacturer.
10. Is there a national healthcare system? If so, how is it administered and funded?
The Italian Constitution grants a fundamental right to healthcare. Law 833/1978 established the SSN and legislative decree 502/1992 defines its organization and functioning. Pursuant to a constitutional reform in 2001, the healthcare system operates through a “concurrent” system where the Ministry of Health, acting as central body, establishes the general principles and essential levels for assistance (“LEA”) that Italian regions must implement. In this regard, the Regions have the power to organize and manage healthcare delivery through their Local Health Administrations (“ASL”) provided that they comply with the guidelines of the Ministry of Health.
As per the funding of the healthcare system, a national law annually sets the budget for healthcare services. The SSN is supported by public funding, which comes from the following main sources:
- Income from the SSN, such as the single patient access tax (“ticket”) and revenues from in-hospital activities by hospital employees, in an amount defined within agreement between the State and the regions;
- Regional taxation;
- State financial budget which covers financial health needs not covered by other sources and includes income from value added tax, excise tax on fuels and the National Health Fund.
11. How does the government (or public) healthcare system function with private sector healthcare?
Both public and private healthcare providers must comply with specific requirements laid down by Italian law. In general, hospitals belonging to the SSN are part of the public sector and fall under the jurisdiction of the Ministry of Health. Conversely, private hospitals are run by their own management organization. However, in some cases, private providers may charge their service costs on the SSN. In such cases, private organizations need to be accredited with the SSN.
12. Are prices of drugs and devices regulated and, if so, how?
The price of medicinal products reimbursed by the SSN (i.e., Class A and Class H products) are regulated by Italian law 326/2003, according to which the relevant prices are determined through negotiations between AIFA and marketing authorization holders in accordance with the criteria defined by CIPE’s Resolution 3/2001.
The price of non-reimbursed medicinal products is freely set by the marketing authorization holder, who may only increase the price of these products every two years (in January of each odd-numbered year).
Conversely, the price of medical devices is not regulated and, for reimbursed devices, it is determined by negotiations between the manufacturer (or its representative) and the SSN. In this regard, law 289/2002 established the Single Commission on Medical Devices (Commissione Unica sui Dispositivi Medici) (CUD), an advisory body of the Ministry of Health with the task of defining and updating the directory of medical devices, to classify all products into classes and specific subclasses indicating the reference price. As a consequence, the price fixed between companies and the SSN is determined taking into account the specific reference prices provided for in the national directory.
13. How are drugs and devices used by patients paid for? What roles do public and private payers play?
The SSN only reimburses medicines included in Class A or in Class H, which include medicinal products used for serious and/or chronic disease and medicines used exclusively in hospitals, respectively. Medicine included in Class H are reimbursed by the SSN provided that they are used exclusively in hospitals. Some medicines included in Class A are reimbursable by the SSN only if prescribed for specific therapeutic reasons that the treating physician must verify and certify; otherwise the burden of the expense is borne by the citizen. Furthermore, AIFA periodically draws up and updates the so-called “transparency list” (Lista di trasparenza), which contains all generic medicinal products currently available on the Italian market. Such list establishes the maximum price reimbursed by the SSN for each group of medicines with the same composition in terms of active ingredients, pharmaceutical form, route of administration, posology, release and unit dosage. A patient who chooses a medicine with a higher price needs to bear the difference in cost.
Conversely, the costs of medicines included in Class C are fully borne by the patient.
In order to ensure the sustainability of the SSN, a particular system for the coverage of the pharmaceutical expenditure is currently in force in Italy. This system – called “payback” – was introduced in 2007 and extended in 2012 and requires pharmaceutical companies to participate to the funding of the SSN when the related expenditure exceeds the maximum threshold established yearly in the budget law. In a nutshell, this complex mechanism is based on the amount of revenues obtained by each company with respect to medicinal products reimbursed by the SSN, among others. When the expenditure threshold for the SSN is overrun, pharmaceutical companies are required to cover the excess by making payments directly to the regions and autonomous provinces.
A specific regime for medical devices is not provided for by national law. As a general note, medical devices that are only intended for use on patients by healthcare professionals in hospitals fall among those devices that are directly paid by the SSN and whose price is determined by negotiations between producers and the SSN (see chapter 1, para 13 above). Conversely, patients typically pay for medical devices they may purchase at pharmacies or other authorized retailers and, under certain conditions, they may deduct the cost from their annual tax return.
14. Who dispenses drugs and devices to patients and how are those dispensers compensated?
Medicinal products included in Class H may only be prescribed and administered to patients by healthcare professionals within health institutions, such as hospitals. Prescription-only medicines in Class A and C may be dispensed by hospitals or pharmacies. Non-prescription medicinal products may be sold through pharmacies or other OTC retailers.
Pharmacies are reimbursed by the SSN through the local health authorities. Pharmacists collect medical prescriptions on a monthly basis and provide them to the competent local health authority for refund.
Medical devices that require a medical prescription or that may only be used with the assistance of a healthcare professional must necessarily be prescribed, dispensed or used by a healthcare professional. Other devices may be obtained and used directly by patients and are available in pharmacies, healthcare facilities, opticians’ shops, supermarkets and other authorized retailers.
Italian law does not provide a specific framework for the reimbursement of medical devices. Generally, medical devices that can only be used within hospitals are directly paid for by the SSN. Conversely, patients typically bear the cost of all devices they purchase in pharmacies, healthcare facilities, opticians’ shops, supermarkets and other retailers.
15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?
Healthcare providers have a general obligation to act in the patients’ best interest in order to ensure the protection of health as a fundamental right of the individual pursuant to Article 32 of the Italian Constitution. In their relationship with pharmaceutical companies, Articles 170 and 171 of Royal Decree 1265/1934 prevent doctors and pharmacists from receiving payments or other benefits or from accepting their promise in return for prescription or promotion among patients of medicinal products. Violation of the aforementioned provision triggers criminal penalties both on the side of the doctor or pharmacists and of the person or legal entity who made such payment or promise.
Doctors have an obligation to inform patients on the nature, risks and therapeutic options relating to their conditions. When acting as investigator in a clinical trial, the doctor has an obligation to inform the patient about the nature, meaning, consequences and risks of the trial on the basis of all information and documentation received by the sponsor. Furthermore, when prescribing a medicinal product, the doctor is required to inform the patient of the availability on the market of medicinal products having the same composition in active ingredients, pharmaceutical form, route of administration, release and unit dosage, except when the doctor considers the specific medicine non-replaceable for the patient’s therapy. In such case, the doctor shall indicate in the prescription that the medicine is non-replaceable, along with succinct reasons for such decisions. Similarly, pharmacists are required to inform the patient of the availability on the market of medicinal products having the same qualitative and quantitative composition and the same pharmaceutical form and provide the patient with the one having the lowest price, except where the patient expressly requires the prescribed medicine or the doctor indicated that it is non-replaceable.