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Medical device pay-back, latest news

Payback dispositivi medici

Law-Decree 11 January 2023 no. 4 was published in the Italian Official Journal no. 8. This provides for a time extension for the payment to the Regions of the sums requested to balance the exceeding of the expenditure ceiling for medical devices, according a mechanism known as “pay-back”.

The deadline to make the payments to the Regions has been therefore postponed from the originally established date, 31 January 2023, to 30 April 2023, following the demands of manufacturers and suppliers of medical devices, and thanks to the intervention of the sector’s trade companies. But what is the pay-back? And what is the impact of this measure for the MA sector?

Pay-back, what it is and how it works

The payback is a well-known mechanism in the healthcare sphere, as it has been long in force for medicinal products. For medical devices, it was introduced by Legislative Decree 98/2011 (then enacted into Law 111/2011): the Decree established that an expenditure ceiling should be fixed, every year, with a balancing of any exceeding sum by the Italian regions that has contributed to it.

Only as of 2015, however, Law Decree 78/2015, then enacted into Law 125/2015, part of this exceeding expenditure was attributed to the suppliers.

The goal of this mechanism is clearly to limit healthcare expenditure, with companies “reimbursing” part of the sums exceeding the ceiling. As mentioned, the expenditure ceiling is fixed annually, with thresholds
Increased from one year to the next.

In the period concerned by the sums currently requested by the Regions from manufacturers and companies, these thresholds have been fixed at 40% in 2015, 45% in 2016 and 50% from 2017 onwards.

Issues and risks, the impact of pay-back on MDs

The introduction of pay-back has brought disarray in the sector, such as to require the intervention of trade associations that, having gained some time, are now calling out for official discussion to renegotiate this measure.

According to the sector’s representatives, in fact, the introduction of pay-back might create problems to many medical device manufacturers with important consequences for workers, patients and other stakeholders operating in this field.

According to some estimates, the outlay of more than 3.5 billion euros could seriously bring the MD industry to their knee, as this is mainly constituted by micro-, small- and medium-sized enterprises. Many manufacturers and suppliers would be forced to close, with a consequential loss of jobs, in a sector currently employing more than 100,000 people.

Manufacturers closing down would also involve a shortage of medical devices very frequently used in healthcare, in particular those celled “life-saving”, such as sterilisers, extracorporeal circulation products, prosthetic heart valves, mechanical ventilators.

However, such shortage might also concern MDs that even laypeople, the patients, take “for granted” in a hospital facility: prosthetics, surgical instruments, disinfectants, gowns, and even dressing, bandages and patches.

Growing expenditure

The sector is asking that the pay-back mechanism is revised, reminding that the compensation for device purchases are preliminary agreed via regular hospital tenders. Proposals include an increase of the healthcare expenditure ceiling from 4.4% to 5.2% on the total public expenditure to give SMEs a break, and a review of the system managing supplies by the Regions.

Public expenditure for devices increased of more than 18% in 5 years, with a 450 billion euros increase in 2020 only. The ceiling exceeding increased of 10 percentage points between 2015 and 2020, doubling the pay-back due. These are alarming data for a sector already dealing with the implications of the new European regulations, and requiring a reconsideration of the rules.

Scritto da Maria Pia Felici

Foto di David Mark da Pixabay