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July/August 2017

Introduction

In the Netherlands, medicinal product advertising, including advertising by inducement of healthcare practitioners ("HCPs"), is regulated by two complementary systems: (i) statutory rules; and (ii) a system of self-regulation based on codes of conduct. The statutory rules on inducement are laid down in the Medicines Act and regulations and policy rules which are based on that Act (such as the Policy Rules on Inducement). Self-regulatory rules on inducement are provided for in the Code of Conduct for Pharmaceutical Advertising and in the Code of Conduct for Physicians. The first mentioned Code also includes the Sunshine-type transparency obligation to disclose certain financial relationships between pharmaceutical companies and HCPs in the Dutch Healthcare Transparency Register.

Advertising of medical devices by inducement is currently not regulated by statutory rules, but only by self-regulation based on the Code of Conduct Medical Devices, which includes the obligation for suppliers of medical devices to disclose certain financial relationships with HCPs in the Dutch Healthcare Transparency Register. The current Dutch Medical Devices Act does not regulate inducement or other financial relations between medical device companies and HCPs. As a consequence thereof the Dutch Healthcare Inspectorate ("IGZ") does not have any power to act against improper inducements in the field of medical devices.

However, this will soon change. Recently a legislative proposal aimed at introducing a ban on improper inducements in the Medical Devices Act, was approved by the Senate and published as the "Wet van 17 mei 2017 tot wijziging van wetgeving op het terrein van de zorg in verband met het invoeren van een wettelijke regeling voor gunstbetoon bij medische hulpmiddelen en enkele bepalingen over transparantie tussen beroepsbeoefenaren en bedrijven op het terrein van geneesmiddelen en medische hulpmiddelen" (the "Act"). The date on which the Act will enter into force and will thus amend the Medical Devices Act accordingly, is not yet known but is expected to be in the near future.

Statutory ban and exceptions on inducements for medical devices

Once the Act is implemented, the Medical Devices Act will prohibit medical devices suppliers from offering, awarding or giving the prospect of money or services or goods measurable in money to: (i) a natural person who is involved in the application of a medical device¹, (ii) a healthcare institution, or (iii) a healthcare insurer, with the apparent objective to enhance the sale of a medical device. This prohibition is reciprocal: healthcare professionals, institutions and health insurance companies may not accept or ask for improper inducements.

However, four exceptions to the prohibition of inducements have been formulated:

• Compensation for or not charging of participation fees for meetings and manifestations, including travel and accommodation expenses, provided that:
  • such gatherings are meant for natural persons who are involved with the application of medical devices and are solely aimed at the stimulation of: (i) knowledge and skills in the field of the practice, (ii) patient care, or (iii) the application of medical devices; and
  • such hospitality remains limited to what is strictly necessary for said natural person to participate in said gatherings.
• Fees for services by a natural person who is involved with the application of medical devices or by a healthcare institution, provided that:
  • the fees are reasonable and proportionate;
  • the services rendered are relevant for the medical device company or for said natural person; and
  • a written service agreement is in place.
• Gifts (in cash or in kind) to a natural person who is involved in the application of a medical device, provided that:
  • such gifts are of minor value; and
  • such gifts are relevant for the practice of said natural person.
• Discounts and bonuses related to the purchase of medical devices.

Any differences compared to the statutory framework for pharmaceuticals?

All in all, the statutory framework on inducements to be implemented for the medical devices sector is very similar to the existing statutory framework on inducements in the pharmaceutical sector. However, compared to the pharmaceutical field, the inducement prohibition in the field of medical devices could be conceived as having a somewhat wider scope. The prohibition on inducement in relation to medical devices does not only concern prescribing or dispensing healthcare practitioners, but also caregivers who are in the position to decide which medical device will be applied. Additionally, the inducement prohibition for medical devices also explicitly applies to healthcare institutions and healthcare insurers.

Any changes compared to the Code of Conduct Medical Devices?

More importantly, the statutory framework on inducements for medical devices does not appear to provide any substantive changes to what is currently already required pursuant to the self-regulatory provisions of the Code of Conduct Medical Devices. This means that medical device companies, who already diligently apply the provisions of said Code to their activities in the Netherlands, will likely not have to make any substantive changes to their policy on inducements and hospitality.

Consequences of non-compliance

Medical device companies, healthcare practitioners, healthcare institutions and healthcare insurers, must ensure that their policies on inducements and hospitality relating to medical devices comply with these imminent statutory rules before the Act is implemented.

Once the Act is implemented in the Medical Devices Act, non-compliance with these statutory provisions on inducements entitles the Healthcare Inspectorate to impose a maximum administrative fine of EUR 900,000 (which is twice as high as the maximum fine which applies in cases of non-compliance in the field of pharmaceuticals). A standard sum for administrative fines for violation of the ban on inducements will be included in a policy document still to be issued by the Minister of Health. By way of comparison, the standard administrative fine for non-compliance with the prohibition on inducements in the field of pharmaceuticals is EUR 150,000.

Furthermore, and as is also the case in the field of pharmaceuticals, non-compliance with the statutory rules on inducements relating to medical devices will become subject to criminal enforcement in the Netherlands upon implementation of the Act.

Not only may noncompliance have such serious administrative, civil law and criminal law consequences, it may also have a negative impact on the reputation of a company. All of which are important reasons to obtain legal advice in case of doubt.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.

¹The term “a natural person who is involved in the application of a medical device” should not be equated with the term “health care practitioner” as used in inducement related provisions in the Medicines Act.

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