Pay-back for MDs, new developments from the “Decreto Bollette”
The so-called “Bills Decree” (“Decreto Bollette” – Law-Decree 30 March 2023, no. 34 “Urgent measures to support families and enterprises for the purchase of electricity and natural gas and on the subject of health and tax obligations”) was published in the Italian Official Journal no. 76 of 30 March 2023. Articles 8 and 9 of the Decree provide for interesting developments for medical devices, especially as far as pay-back is concerned.
The State contribution
First of all, under article 8, the Bills Decree provides for the creation – within the estimates by the Ministry of Economy and Finance – of a fund supplied with 1,085 million euros for 2023: a true State contribution for the balancing of the medical device expenditure ceiling exceeding.
The amount of the balancing charged to manufacturers and suppliers for the four-year period 2015-2018 has in fact exceeded 2 billion euros, so much so to drive trade associations to intervene and apply for a time extension, then granted with the so-called “decreto Milleproroghe” (postponements decree), until 30 April 2023.
Each Italian Region will be assigned with a share of the fund, calculated proportionally to the amounts they are entitled to for the period 2015-2018; the corresponding sums can be used for the balancing of regional health services in 2022.
The Bills Decree has established that medical device suppliers that did not start any litigation or that gave it up can pay the remaining share compared to the calculated one to an equal extent of 48% of the amount indicated in the regional and provincial provisions within 30 June 2023. For companies that do not intend to give up an ongoing litigation, the obligation to pay the integral share within 30 April 2023 still applies.
VAT deduction
Another important development involves the VAT. Since regional and national ceilings are calculated before VAT, under comma 1 of article 9 it is specified that for payments made “to balance the exceeding of expenditure ceiling for medical devices, suppliers of medical devices can subtract the determined VAT by deducting it”.
Companies will be entitled to such detractions only upon payment. Moreover, “for the taxes on revenues and for the regional tax on manufacturing activities as per comma 1, they are deductible in the tax period when the payment are made”.
MD pay-back, critics and risks
The publication of the Bills Decree has finally intervened in a situation that has been affecting medical devices for a long time. The application of the pay-back – i.e. the reimbursement by manufacturers and holders of the sums exceeding an expenditure ceiling that is fixed every year – has been creating problems to the MD sector, mostly made of small- and medium-sized enterprises that cannot bear a mechanism conceived for big pharma companies.
If, on one hand, the measure aims at containing health expense, on the other it risks to damage a whole share of economy, with relevant consequences not only for manufacturers and workers, but for the very patients.
Articles 8 and 9 of the Bills Decree represent therefore a breath of fresh air for medical device manufacturers and suppliers, relieved from the burden of reimbursing very high sums in full, and overloaded by the requirements of the European Regulations 745/2017 (MDR) and 746/2017 (IVDR), that luckily were also the subject of recent changes and postponements.
Trade associations, however, are not completely satisfied with a measure mitigating, but not abolishing, the pay-back, and have threatened new appeals. In particular, discounts and deductions seem to apply only to the previous amounts and the obligation would be still valid for the period 2019-2022. The application of the discount only in the case any litigation is given up was also criticised.
Trade associations spokespeople have stressed the risk that the Italian NHS becomes less attractive and that the pay-back turns from a cost-containing measure to a service-cutting tool.
In addition to the legal battle, companies have also submitted a report to the European Commission. Their goal is to induce the community executive to consider the opening of an infringement procedure against Italy for violating the community regulations on competition and market access.
Written by Maria Pia Felici on 05/04/2023
