More on internet sales of medical devices

With the Ker-Optika judgment that I wrote about before in relation to internet sales of medical devices and online sale of eHealth services the European Court (ECJ) set boundaries for national legislation in the EU regulating the internet sales of medical devices. To sum it up, the fact that an expert consult is necessary initially does not justify a prohibition on internet sales of a medical device.

It is a common principle in EU internal market law that what member states are not allowed to prohibit via national law companies are not allowed to prevent by means of agreements. It is therefore no great surprise that the ECJ, when faced with the question if internet sales for prestigeous cosmetic products could be prohibited in a selective distribution agreement on grounds of ‘cosmetovigilance’, ruled in the recent Pierre Fabre Dermo-Cosmétique case that it

“has not accepted arguments relating to the need to provide individual advice to the customer and to ensure his protection against the incorrect use of products, in the context of non-prescription medicines and contact lenses, to justify a ban on internet sales” (point 44)

The ECJ referred explicitly to the Ker-Optika case in this respect as well as to the DocMorris case in which it also dissociated the internet delivery of a regulated product (medicinal product) and the need to protect consumers against incorrect use of the product. Consequently, the ECJ held that

“in the context of a selective distribution system, a contractual clause requiring sales of cosmetics and personal care products to be made in a physical space where a qualified pharmacist must be present, resulting in a ban on the use of the internet for those sales, amounts to a restriction by object within the meaning of that provision where, following an individual and specific examination of the content and objective of that contractual clause and the legal and economic context of which it forms a part, it is apparent that, having regard to the properties of the products at issue, that clause is not objectively justified.” (point 47)

The manufacturer of the cosmetic products had further submitted that the prohibition was allowed because it was equivalent  to a prohibition on operating out of an unauthorised establishment, which was exempted under Regulation 2790/1999, the old vertical restraints block exemption. That argument did not convince the ECJ either because it held that

“prohibiting de facto the internet as a method of marketing cannot be regarded as a clause prohibiting members of the selective distribution system concerned from operating out of an unauthorised place of establishment within the meaning of Article 4(c) of Regulation No 2790/1999″ (point 55)

This will play out in the same way under the new vertical restraints block exemption, Regulation 330/2010, which has exact hardcore restriction that removes an agreement from the safe harbour in articel 4 (c). That does not mean that a manufacturer has no instruments at all to protect consumers even if it cannot prevent internet sales as such, since the Commission has stated in its FAQ about the new block exemption:

“However, certain vertical restraints on online sales can be justified because they eventually benefit consumers. For instance a supplier may impose a requirement, as for off-line sales, that, in a selective distribution system, a distributor must not sell online through a website that does not meet the agreed quality standards, or to unauthorised distributors.”

In the end however the judgment of the ECJ does not mean that internet sales cannot be prohibited in a selective distribution system under any circumstances. The manufacturer needs an objective justification derived from the properties of the product at issue. So, while it may not be objectively justifiable to prohibit internet sales for low-risk over-the-counter medical devices, it may well be that higher risk devices sales  on the internet can be prohibited as I have written in my post about the Ker-Optika case, when discussing ‘burden of justification’ in detail.

Advertising, Competition law, e-commerce

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20/10/2011

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Something new at Eucomed’s MedTech Forum (also about the Recast)

Right after the event I wrote about in my previous post I visited the Eucomed MedTech conference in Brussels on 12-14 October 2011. At the end of conference I did learn something new about the Recast: the likely date that it will be published. Can’t wait and read the rest first? Then scroll down to the end, but you’ll miss something interesting.

At the heart of the conference was Eucomed’s ambitious programme in the framework of its continuous mission to show the added value of medical technology in the provision of healthcare, the Contract for a Healthy Future in which it outlines the role industry must play in steering healthcare systems onto a sustainable path. As is clear from “Future-proofing Western Europe’s healthcare” the report prepared by the Economist’s Intelligence unit in connection with the conference, healthcare systems must be efficient, effective, integrated and informed to meet the challenges of the future.

We know what these challenges are: healthcare systems have to achieve more with less as the population ages and more and more people become dependent on the same healthcare systems. The Economist’s report shows that member states have very different approaches to the problem, not all of which work (yet). The figures show that medical technology accounts for only 5 % of total healthcare spending. 70 % of healthcare spending goes into healthcare overhead.

Let me give you my candid and frank opinion as someone that specialises in medical technology legal issues and spends time in hospitals supporting hospitalised family members that thank their lives and health to medical technology. I’m necessarily biased that way, of course, but I do have an opinion. If one thing is clear for me with the provision of healthcare it is the glaring lack of process and result oriented organisation. The only way to cut down on overhead is to make healthcare providers think like companies in the way that all resources must be deployed to play a role in support of the key process. The key process should not be sustaining the number of available beds in your hospital – that would be like a car manufacturer aiming to sustain production lines without paying any attention whatsoever to demand and to what cars people want to have. Makes no sense, right? Yet this is what most healthcare systems have promoted and still largely promote. Since every organism has a tendency not cut in its own flesh when it gets in trouble, a common reaction is to try to spend less on technology (part of the solution) and leave legacy bureaucracy (part of the problem) untouched.

How can we solve this? No one will deny that better technology will improve healthcare. The excuse is just that it’s too expensive and complicated. I always learned that expensive is a relative term: expensive compared to what? Compared to the billions and billions of Euros that go into overhead supporting process that makes no sense, spread out over different member states with different solutions that are each not future proof in their own unique way? The Economist report and the Eucomed materials show that the big wins can be made by reforming the way healthcare is provided.

That may be difficult at first, but my feeling is that the paradigm shift will be more difficult for the healthcare providers than for the patients. For example, my mother in law was immediately convinced that she needs an iPad when she found out she can video Skype with her grandchildren as much as she likes. She bought her iPad2 before I had one (that hurt!). She will have no problems with telemedicine solutions when she will need them. I saw other interesting mHealth applications from Denmark demonstrated at the conference. Denmark is one of the few EU member states that got the implementation of electronic patient files and associated telemedicine right on a national level and should be an example to others.

Research shows that even the oldest people accommodate to mHealth and eHealth solutions easily, provided that the technology is user friendly. I was struck by an analogy that Petra Wilson of Cisco used when speaking about privacy and e/mHealth: if we trust to get money from a hole in the wall, why don’t we trust our health data in networks? When I thought about this a bit more I realised that this analogy is relevant in another way too: electronic banking has shown that it is perfectly fine that consumers of services take over processes from service providers. Indeed, no-one will deny that it has been enabling for consumers of financial services. I don’t want to give up electronic banking again. So why should I not be able to manage my own health records or plan my own treatment agenda or talk to my doctor via videoconference? Same thing, same development – same paradigm shift. Who still goes to the bank building for things that do not require actual human intervention? I would be crazy to. Waste of time and resources.

Imagine how much administration can be done away with if I can plan my own visits in the hospital system and decide what treatment and visits should happen where and when, all of course within a quality system that makes sure that I don’t make choices that are bad for me, mind you. Then imagine that this would work as you are used to your credit card and debit card working – internationally and 24/7. That will be another – in my view necessary – step, because so far the Commission is taking careful steps not to overstep the boundary of exclusion of healthcare from the Treaty on the Functioning of the EU. If member states are brave and need to revise the TFEU anyway to beef up oversight on member states for the Euro, please remove this hurdle too. I don’t care if the surgeon that puts a new hip or heart valve in me speaks Portuguese or Finnish as long as (s)he is competent. I can speak to my own doctor by videoconference before the procedure and consult him at home for reassurance and would rather not have him or her operate if I can get someone more specialised or with better facilities. If I can get my replacement sooner in another country, I will do it.

So, summarising – two in essence simple paradigm shifts:

  • integrated and process oriented healthcare provision (figure out how can we help someone as quickly and seamlessly as possible and send them home as soon as possible and then deploy all resources with a view to achieving that goal)
  • outsourcing/administration of administration and planning tasks (what can a patient manage his or herself)

all seen in the context of what function can be taken over and simultaneously improved by technology (for example, what do you prefer: wait for a consult with the doctor in a waiting room after travel, or in your own living room?). One could say that this dehumanises healthcare. I don’t agree. The banking experience has improved with electronic banking. I am happy that an autopilot flies the airplane these days. I allow my car to stay in lane by itself and adjust speed to traffic. And frankly, I trust diagnostic expert systems more than doctors because they make demonstrably less mistakes in diagnosis. For example, my father for example would have been happy with an expert system that would have spotted his Lyme disease symptoms immediately or at least would have offered that indication as something to exclude. Now he had to be treated for developed neglected Lyme disease, undergo expensive antibiotics therapy and suffered a drop in quality of living as a result. All preventable with good technology.

And are doctors so much more “humane” in the end? A brief while ago Ms. Schippers, the Dutch Minister of Health was quoted in a Dutch paper (NRC Handelsblad) saying that she was baffled by the utter lack of emotional intelligence of physicians vis-à-vis (in that case breast cancer) patients. At least you can program machines to care and, as Agent Smith says in the Matrix about software and machines running the show: “It is inevitable.” That much is clear from my personal experiences above only. And there is no excuse for healthcare provision that is overly expensive but underperforming at the same time. We do not accept that in other areas, so why in healthcare? It is time to face the music and ‘jump over our own shadow’. It’s good that Eucomed is prodding us to do so, and shows that it is an EU wide problem.

One more thing. I was touched by the story of a special guest at the conference dinner, Hylke Sieders, a brave guy that made a remarkable comeback from an almost full paralysis caused by a spinal cord bleeding between the C2 and C3 vertebrae. Hylke’s present quality of life is better than it could be as a result of medical technology, but it might be a lot better because many of the devices that he uses can be improved, in particular his wheelchair. Indeed, Hylke is an intelligent guy with very interesting opinions about usability engineering of medical devices. He is looking for contacts with manufacturers and resellers of any device relevant to persons confined to a wheelchair to help them improve their products so everyone can benefit. And remember, manufacturers are obliged to consider usability engineering for the technical file of their devices and talking to Hylke would actually be good post marketing surveillance, another important manufacturer obligation. So, legally you are actually doing yourself a favour by taking to him, that is my free legal advice here. If your company is interested, please contact Hylke himself, Eucomed or me.

Right, and then the Recast, as promised. In her speech Ms. Jacqueline Minor told us a lot that we know already, good summary though, but there was one easter egg in it: the Commission has not really written down anything yet, and has been busy evaluating the different policy approaches to the problem. They seem to have decided what course to take now (which one remains somewhat unclear, but will fit in the scope of the Council Conclusions earlier this year) and will publish the draft Recast in April/May 2012.

eHealth, Recast, Uncategorized

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14/10/2011

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Regulating Medical Software and nothing new on the Recast

Today I attended the COCIR workshop Regulating Medical Software in Brussels, a very interesting event that brought a lot of new information to my attention and I had the opportunity to speak to many people close to developments in EU legislation, EU guidance and standards.

First there was the very interesting keynote address by Ms Sabine Lecrenier, head of unit Cosmetics and Medical Devices at the European Commission with an update on the Recast of the Medical Devices Directives and on other initiatives. She confirmed that a MEDDEV document on standalone software is in the works, which is more or less ready and the member states are expected to sign off on it in December this year, so it can be published immediately then. The main issues to tackle via the Recast as she mentioned were:

  • High level of patient protection
  • Adjust scope of the rules to include non active tissue products and cosmetic implants, as well as genetic tests
  • Strengthen control on notified bodies
  • Ensure timely and uniform action in vigilance and PMS must be ensured.
  • Improve clinical evidence requirements
  • Improve borderline products rules
  • Management of regulatory system will be looked at with a view to int trade, in which the Global Harmonisation Task Force (GTHF) will play an important role.

This is nothing new compared to what we knew from the earlier Council Conclusions, which I suppose is good news for the industry although many specifics remain unclear, like the way notified bodies will be controlled – in that respect there are two remaining options now I understand, one of which is oversight by the EMA. Adoption of the final Recast text is still foresoon in the first half of 2012.

During the day it became clear that there is still a lot of controversy about the scope of the rules on medical devices with respect to software. The FDA’s mobile medical apps draft guidance was discussed, and new standards were addressed, such as IEC 82304-1 regarding Healthcare Software Systems (the new product standard for standalone software) currently under development. Other interesting discussions concerned the difference in regulation of software that stores data between the US and the EU, in which field the US seem to be stricter than the EU and look more at the risk of the integrity of information, while in the EU the only question is whether the intended use of the software is directly therapeutic or diagnostic. There is furthermore a  difference between the two systems in that the FDA has the grey area in which it exercises enforcement discretion, while the EU authorities have to use a binary criterion (device or not) and operate on that basis.

All in all a productive day. If you were not there, I understand that the presentations can be downloaded from the COCIR site. If you are interested in regulation of software under the medical devices directives in the EU, you should.

Accessories, CE marking, eHealth, In Vitro Diagnostics, Software, Standards

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12/10/2011

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EU regulation of e-labelling of medical devices to apply as of 1 March 2013

On 23 September 2011 the draft of the e-labelling regulation that I wrote about earlier was discussed in the comitology committee for the Medical Devices Directive. I received the text of the amended draft regulation from the European Commission’s services this morning. There were some very minor modifications to the document, as you can see in this compare document.

Apart from some corrections of lay-out, there are two corrections of relevance:

First, there was a minor modification to the way that the instructions for use could be obtained. Rather than the general obligation on the manufacturer explain how and when the instructions for use can be obtained, this explanation must now be given in the paper IFU (see article 6 (3) (d)).

Secondly, the date as of which the regulation will apply is now known. Although it looks like the regulation will still enter into force end of this year, it will apply as of 1 March 2013. With this date manufacturers have a clear horizon for planning of implementation of e-labelling.

Not all companies are happy with this and the general feeling that I perceive from my contacts in the medical devices industry is that this proposal is a big disappointment first and foremost because of the very limited scope of application. Also, there is fear of borderline problems: for example, the concept of ‘fixed installed devices’ in article 3 (1) (c) is less than clear and makes the situation of devices that used to fixed becoming mobile (like CT scanners, X-ray devices) very unclear. I hear a lot of criticism about the manufacturer’s one-sided obligation to do risk management to ascertain if a hospital can handle e-labelling. This is of course a moving target because hospitals are normally not at all amenable to giving the manufacturers any degree of control over and full insight in risks at the hospital side in this respect. That makes risk management a moving target and basically a mission impossible, not to mention an additional regulatory requirement that is not imposed by the Medical Devices Directive.

And, as last big criticism: why so long after the US permitted e-labeling (10 years ago)? If the EU wants to keep its medical devices framework as innovative as it claims it is and is just as good as that of the US, items like this really need to keep up with developments. This is likewise true for software – also in that respect the US is way ahead of the EU in guidance for the industry.

eLabelling, Labeling

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30/09/2011

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EU court to clarify medical device / drug borderline and the status of MEDDEV documents

Important developments for the medical devices and medicinal products industry: clarification of EU law about the borderline between these groups of products is currently in the making at the European Court of Justice. The German Oberlandesgericht Frankfurt am Main referred a reference for preliminary ruling to the European Court of Justice, which was lodged there on 20 June 2011 under number C-308/11. The case concerns the borderline between medicinal products in the meaning of applicable EU law and medical devices, and it turns on the ever problematic demarcation question: “What does pharmacological action mean?”. Although the particulars of the dispute are as yet difficult to ascertain and I was not able to find any in public sources, we do know the three questions that were referred to the European Court in order to obtain a highest instance interpretation of concepts of EU law:

  1. For the purpose of defining the term ‘pharmacological action’ in Article 1(2)(b) of Directive 2001/83/EC, as amended by Directive 2004/27/EC, can recourse be had to the document compiled under the auspices of the European Commission to provide guidance in distinguishing between medicinal products and medical devices (the ‘Medical Devices: Guidance document’), which states that there must be an interaction between the molecules of the substance in question and a cellular constituent, usually referred to as a receptor, which either results in a direct response or blocks the response of another agent?
  2. If the first question is answered in the affirmative: does the term ‘pharmacological action’ require that there should be an interaction between the molecules of the substance in question and cellular constituents of the user, or is it sufficient if there is an interaction between the substance in question and a cellular constituent which does not form part of the human body?
  3. In the event that the first question is answered in the negative or that neither of the two definitions proposed in the second question is appropriate: which alternative definition should be used instead?

It will be a while before we will first see the opinion of the Advocate General in this matter and subsequently the Court’s judgement. I expect about nine months for the opinion of the AG and then another three to six months for the Court’s judgment.

Borderlines and pharmacological action

Let’s take a step back in the mean time and look at borderlines again. As I have argued on this year’s DIA Euromeeting, the use of the term borderLINE is not helpful from a scientific perspective, because borderline questions are in the end scientific questions, and no so much legal questions and for that reason it would be more appropriate to speak about a border area, in which the edges of two or more regulatory regimes (like in this case medicinal products and medical devices) overlap. Judges, as I have shown in that presentation, are not at all well-equipped to decide scientific questions.

What do we know already about how the European Court interprets ‘pharmacological action’ and what factual support it requires for its interpretation? We know that the legal criterion is that a product, for it to constitute a medicinal product by function, must “significantly affect the metabolism and thus modify the way in which it functions” (see BIOS Naturprodukte, point 21). The question then is: “Does ‘significantly affect the metabolism and thus modify the way in which it functions’ require that there should be an interaction between the molecules of the substance in question and cellular constituents of the user, or is it sufficient if there is an interaction between the substance in question and a cellular constituent which does not form part of the human body?”

To ask this question is to answer it: that depends on whether the interaction between the substance and the cellular constituent that does not form part of the body is still capable of restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action. It is difficult to answer this question without any knowledge of the product concerned, but excluding interactions between substance and cellular constituent removed from the body could have consequences for the Advanced Therapy Medicinal Products Regulation. This regulation relies on Directive 2001/83/EC for its core definition of medicinal product (see article 2 (a)) and the core criterion of ‘substantial manipulation’ (article 2 (c)) presumes that often procedures will be applied to cellular constituents that do not form part of the body.

My guess therefore is that the European Court will bounce this question right back in the way I just did: it will repeat its case law and then leave it to the national court to decide on the facts if the interaction between the substance and the cellular constituent that does not form part of the body is still capable of restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action.

Furthermore, the first question of the preliminary reference misrepresents the MEDDEV in that it suggests that the MEDDEV requires “an interaction between the molecules of the substance in question and a cellular constituent usually referred to as a receptor, which either results in a direct response, or which blocks the response to another agent.”, because the question is phrased that the MEDDEV “states that there must be an interaction” (bold and underlining added). In the text of the MEDDEV (see p. 6) the element describing ‘interaction’ is however immediately followed by this statement:

“Although not a completely reliable criterion, the presence of a dose-response correlation is indicative of a pharmacological effect.”

Wait a second, all my lawyer alarms are going off now. Not a completely reliable criterion? Correlation? Indicative? There is the wiggle room in science that the European Court will use as described above. The fact that the German judge posed the question as a positive “must” while science in these cases only speaks about “not completely reliable criterion”, “correlation” and “indicative” underlines my thesis that judges are really not that well equipped to answer scientific questions, especially when there is correlation involved, which they all too often mistake for causality, as a Dutch judge recently did in a case involving a dispute about the outcome of a statistical analysis of clinical trial data. So, again, knowing the European Court a bit, it will rephrase the first question to be able to give a useful answer, state that the causal link implied does not exist, and then repeat the criteria from its case law set out above, to finally hand it down again to the Frankfurt am main Oberlandesgericht to apply the criterion that did not change at all to the actual facts of the case, which it just should have done in the first place like the Hecht Pharma case prescribes (points 38-45).

This case does show however that there is demand for a supra-national EU capability to make borderline product calls between the different regulated products regimes, which sources close the Recast drafting process tell me is likely to make it politically. If that is instated cases like this could actually be decided on an EU level.

Status of MEDDEVS

Some further remarks about this case: the status of MEDDEVs – can one have recourse to these documents in legal proceedings? The first preliminary question obviously refers to MEDDEV 2.1/3 on Borderline products, drug-delivery products and medical devices incorporating,as integral part, an ancillary medicinal substance or an ancillary human blood derivative, last updated in December 2009. In addition there is a Manual on borderline and classification in the Community Regulatory framework for medical devices containing guidance on a number of specific borderline cases, last updated in August this year. In response to a Parliamentary Question about MEDDEV 2.1/3 the Commission answered in 2008:

“Moreover, in order to ensure a uniform approach within the Community, the Commission services have drafted a Manual that represents the agreed position of the Medical Device Expert Group ‘Borderline and Classification’ on specific borderline products or categories of products. This Manual will be regularly updated in the light of the discussions of this group. Once endorsed by the Medical Device Expert Group ‘Borderline and Classification’ the Manual will be published on the Commission’s website.

In order to update the MEDDEV guidance 2.1/3, the Commission services have undertaken a broad written consultation of stakeholders through the involvement of the abovementioned expert group, which includes experts from Member States’ competent authorities, the relevant Commission services, the European Medicines Agency and industry trade associations. These stakeholders were asked to send their written contributions on the draft revised guidance by the end of January 2008.

Due to the participation of the aforementioned interested parties and of experts from competent authorities, it is anticipated that this guidance will be followed within the Member States and, therefore, will ensure uniform application of the directives.”

So, it is clear that the MEDDEV and the Manual were both drafted with participation of the authorities of the Member States and that they are supposed to adhere to them because they are stakeholders in it. Does that impose an obligation for member states to act according to the MEDDEV? That will really first of all depend on national law governing policy documents because as we have seen: the EU has no competence under the current rules to decide in this matters. That is done by national authorities and judges.

The status of the MEDDEV is clearer to me than the status of the Manual although they address the exact same thing. The MEDDEV is a document drafted and released by the Commission itself after consultation with interested parties, as the Commission page on MEDDEVs explains. Such documents are not binding on the Commission but may serve to help the Commission meet its obligation to give reasoned decisions, as has been established in competition law cases (see for example Corsica Ferries, point 66). The documents can however never overrule or pre-empt the European Court’s or national courts’ interpretation of the EU statutes concerned, as these documents make quite clear themselves. MEDDEVs therefore only bind the Commission and then only insofar as the Commission uses them to give reasons for its decisions. One earlier case that was filed as a direct action claiming that the Court of First Instance should order the Commission to make a notified body act as set out in a MEDDEV failed quite spectacularly (sorry, the actual judgment in this case is only available in French).

The Manual is much more interesting, because the group behind that (the Medical Device Expert Group ‘Borderline and Classification’) consists of industry, trade associations and notified bodies. The Commission merely publishes the manual on its website if al of these parties agree. Even if this case clarifies the status of MEDDEV, it will  not clarify the status of the Manual, which deals with the exact same questions and is also a reflection of positions of representatives of Competent Authorities, Notified Bodies, industry and other interested parties in the medical devices sector.

However, my guess here is that the European Court will say that it is for the German court to decide under German law to what extent it and German authorities are bound by MEDDEVs and Manuals they helped write, provided of course that they can never act contrary to EU law in the application of that law because Germany has the duty to ensure effective application of EU law on its territory.

Anyway

An interesting case, although there is not much known about it yet until the AG opinion comes out. That should contain a good description of the facts underlying this case. In the mean time I could not help myself and had to write this speculative post. If any reader of this blog has more information about this case, I would be much obliged! Discussion about the outcome of the case is more than welcome too.

Advanced therapy medicinal products, Borderline, CE marking

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19/09/2011

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Some important practical points for ISO 14155 compliant clinical trial agreements in the EU, part 2

In a previous post I gave a number of practical tips for drafting ISO 14155 clinical trial agreements. In this post I will give another few. Additional points will surely come to mind and if so, I will devote a next post to those.

Agree on IP rights on the research data

If the clinical trial is to produce results in the form of data that the manufacturer of the investigational device wants to use to complete its technical file with a view to CE marking the device, it is critical for the manufacturer to own or at least have unfettered use of the data produced.

First of all, it is important to get the transfer of rights completely right. In the EU two types of rights come into play: copyrights on documentation created for the purpose of the trial and database rights under the EU databases directive on the databases used. Any assignment of rights must be broad enough or specific enough to encompass these rights.

Secondly, a problem with the database directive is that the sui generis database right accrues to the natural persons creating the database (i.e. the investigators) and only accrues to the legal entity the manufacturer is likely contracting with if national law of the EU member state concerned so permits. The same is true for copyright: it can differ from member state to member state whether employees’ rights to creation automatically accrue to their employer and how it works with works for hire if the investigators are not employed by the clinical facility (e.g. because they are self-employed or employed by a CRO). A little due diligence into local copyright and database law is therefore required to decide if the investigators should co-sign the agreement for the purpose of the IP rights transfer. Keep in mind that the law governing this transfer is not necessarily the same as the law governing the agreement – you cannot choose the law under which copyright and database rights come into existence.

Manage termination and investigator replacement rights

With the entry into force of the EUDAMED database for the EU is has become important that disagreement with an investigator or CRO does not lead to termination or suspension of a clinical investigation, as this will be a reportable event that will go into the EUDAMED database and will be instantly available to the authorities in the whole EU. For that reason, it  is important to include replacement rights for the manufacturer that may provide for the replacement of certain investigators if they do not perform as agreed. Alternatively a sponsor could impose a ‘key investigator’ clause, requiring the key opinion leader important to the manufacturer to stay actively involved, possibly combined with a replacement clause.

In addition the agreement should provide for a hand-over clause that looks a lot like the termination assistance clause in IT implementation and outsourcing agreements without the termination: it concerns obligations relating to the phase-in of a new investigator or new CRO while the project continues with the least disruption.

Mind anti-kickback and other anti-corruption rules

A clinical investigation with a key opinion leader of a potentially big customer involved is a dream position for a manufacturer, but also very potential risk for anti-kickback and fraud allegations by competitors under e.g. the FCPA (US statute) and the UK anti-bribery act, both of which have an extra-territorial reach that companies often tend to completely overlook. Just ask other devices manufacturers that were fined millions and millions, for example just because of historical mistakes of a distributor in a far away country that they acquired at some point. Another problem could be insufficient separation of sales initiatives and clinical investigations with investigators that are employed at the intended customer, as basically most university hospital physicians in Europe are. Important universal principles that also apply to clinical investigation agreements are given in the Eucomed Guidelines on Interactions with Healthcare Professionals:

  • Consulting  agreements  must  be en entered  into  only  where  a  legitimate  purpose  for  the  services  is  identified  in  advance.
  • Selection  of  consultants  must  be  on  the  basis  of  the  consultant’s  qualifications  and  expertise  to  address  the  identified  purpose  and  should  not  be  on  the  basis  of  volume  or  value  of  business  generated  by  the  consultant.
  • Consulting  arrangements  with  Healthcare  Professionals  must  be  described  in  a  written  agreement,  signed  by  the  parties  and  must  specify  the  services  to  be  provided.  Such  arrangements  must  be  consistent  with  the  regulations  of  the country  where  the  Healthcare  Professional  is  licensed  to  practise.
  • The  compensation  paid  to  Healthcare  Professionals  engaged  as  consultants  must  be  the  fair  market  value  for  the  services  provided  and  must  not  be  tied  in  any  way  to  the  value  of  medical  devices  which  the  consultants  may  use  for  their  own  practice.  All  payments  made  must  comply  with  applicable  tax  and  other  legal  requirements.  I would add for clinical trials that the trial must not function as a means to provide the site with equipment and devices that have value for the site and can continued to be used (e.g. an MRI scanner or a large quantity of disposables).
  • Full  compliance  with  national  and  local  laws  with  regard  to  the  disclosure or  approval  requirements  associated  with  members  engaging  Healthcare  Professionals  as  consultants must be ensured.  Where  no  such  national  requirements  are  prescribed,  members  shall  nevertheless  maintain  appropriate  transparency  by  requiring  prior  written  notification  is  made  to  the  hospital  administration,  the  Healthcare  Professional’s  superior  or  other  locally-designated  competent  authority,  disclosing  the  purpose  and  scope  of  the  consultancy  arrangement.

If there is one thing that a company investing in clinical investigation really should not want it is a clinical investigation tainted with anti-corruption issues because it does not only lead to exposure to enormous fines, but also renders the data useless for future use.

Assure regulatory compliance with respect to the collection of patient data

A major issue with international clinical investigations are privacy rules and determining what exactly a sponsor should ask patient informed consent for. A typical mistake made by sponsors that have a US origin is that the forget to ask the patient’s permission for export of the data to a jurisdiction outside the EU. The US, and many other countries, are not considered by the EU to have adequate protection in place for a data processor to send personal data to, especially sensitve data as patient records. The easiest way to deal with this is to ask the patient explicitly for his or her permission to transfer the data to a place outside the EU. In addition, the sponsor must take really good care to double check translations of the patient informed consent form, as sometimes the preciseness of the original document is lost in translation. And in the end, the statement that the patient signed of in his or her own language is decisive. I am just dealing with a case where this happened in a multi-trial situation. Outsourced translations of e.g. the label is also a critical process anyway that manufacturers must really have under control as part of their quality system.

Other ways to get the data outside the EU are more document intensive and require e.g. self certifiation under the US Safe Harbour programme or implementing binding corporate rules (which need to be approved by an EU data protection authority) or use standard contractual clauses approved by the EU. In the end, however, getting the scope of consent right from the start is the easiest solution.

So

Yet another batch of important points to take into account. And I have not finished yet – to be continued.

Business compliance, Clinical evaluation, Clinical investigation, Copyright, FCPA

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10/09/2011

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New EU Commission guidance on medical devices borderline products and classification

Yesterday the European Commission’s Working Group on Borderline and Classification issued the new version (1.10) of its Manual on Borderline and Classification in the Community Regulatory Framework for Medical Devices. This manual has been around for some years and is gradually amended and updated from time to time.

It is a very useful tool for determining whether a particular borderline product is regulated as a medical device or as e.g. a medicinal product, biocide or cosmetic product. The guidance is particularly helpful because it does not only explain the general thinking of the European Commission on borderlines and classification but also includes a growing number of specific cases and the underlying reasoning for classification as well as the decision under what set of rules the product is regulated. It also includes guidance on in vitro diagnostic devices.

This new version does not bring any important substantive changes. It merely adds and amends the guidance on three distinct types of products:

  • contact lenses (par. 8.21), providing classification guidance for contact lenses, depending on the duration of uninterrupted use (overnight wear, daily wear, continuous wear or disposable)
  • gallipots (1.19), a sterile or non-sterile container distinct in use from and therefore not to be confused with the specimen receptacle under the In Vitro Diagnostic Directive that can pride itself on some case law; and
  • wound irrigation solutionscontaining antimicrobial agents (par. 8.20), clarifying the status of  irrigation solutions intended for mechanical rinsing contain ingredients such as chlorhexidine, cetrimide, iodine, hypochlorous acid (HOCl), free chlorine (chlorine/chloride ion Cl2/Cl-), hydrogen peroxide, hypochlorous acid, hydrogen peroxide, chlorine dioxide, sodium hydroxide, sodium chloride and sodium carbonate to the effect that “a wound irrigation solution containing an antimicrobial agent, irrespective of the amount of the antimicrobial substance liable to act on the body, will be considered to be Class III according to classification rule 13”.

Borderline, In Vitro Diagnostics

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24/08/2011

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Some important practical points for ISO 14155 compliant clinical trial agreements in the EU, part 1

In my day-to-day legal practice I see a number of points related to clinical investigation that seem to return and repeat all the time and thought it a good idea to share my thoughts on these. This list is not exhaustive and just a start (it will be extended in future postings), but it will give you some important pointers to avoid commonly made mistakes that can be costly to fix, may cause your sales to collapse and/or lead to investigation by the authorities. Of course all these point are intended to lead to ISO 14155 compliant agreements.

Define roles and responsibilities very clearly and follow up under the defined roles

I see it happen far too often that the party defined as sponsor does not follow up all the items that belong to the responsibility of the sponsor, like take out insurance for the trial. It is very normal to outsource many of the sponsor responsibilities and ISO 14155 explicitly allows this in point 8.3. However, the more sponsor responsibilities are outsourced, the more companies in the medical devices industry seem to forget that although the sponsor outsources them, the sponsor still bears the regulatory and legal responsibility, even if the sponsor has contractual recourse on the subcontractor. Good governance is important in outsourcing and where governance is bad, mistakes and incidents happen because things are overlooked. It is furthermore important that once the roles have been defined, parties stick to them to avoid mixing up of responsibilities and follow up under the rules to exercise their respective responsibilities. A good way to define who is responsible for what is to use a RACI matrix known from IT outsourcing that follows all relevant items of ISO 14155 as an annex to the agreement. Very practical and you will not overlook anything. Once it is in your template clinical investigation agreement, you will not want otherwise anymore.

Be careful with mixing up sponsor staff with investigator staff

Mixing sponsor staff with investigator staff makes it difficult to determine who is in charge of a particular person and consequently, who is liable for faults by that person. Roles of persons involved in the trial should therefore always be defined very clearly and it should always be clear to whom  what person is reporting. Mixing of roles often occurs in settings where the sponsor/manufacturer  ‘loans’ the hospital/investigator sponsor staff to go with its investigational device(s) or third parties for assistance with the clinical trial.

It is also important for other reasons to not mix up sponsor staff with investigator staff. Any problems with clinical trials will always be assessed by the authorities and others on ex post basis and each party involved will interpret the facts in the way most favourable to her. If it is unclear whether the sponsor staff was involved in actual clinical intervention (rather than pure administration of the trial) it may well be that liability problems arise because sponsor staff will mostly not be licensed and insured for clinical acts in the trial facility, which often is a public hospital.

Account for additional parties

It may well be that the trail was initially planned as a multi-center trial or evolves into one. It may also be that a CRO is included in the equation to manage the trial for the manufacturer. In all of these scenarios (and other possible ones) it is vitally important that the agreement provides for clear procedures on how the third parties concerned fit in the governance system set up under the agreement. I have seen it happen that both the sponsor and the investigators thought that the other one was managing the other centers in what had evolved into a multi center trial. In the end these are sponsor responsibilities (for multi center trials, see for example ISO 14155, point 8.2.1 (h)), so the sponsor must make sure that it fulfills them.

Manage publications and presentations at conferences

One of the most important drivers for the investigators will be to incorporate the results of the research in publications and/or present it at conferences. That means that it is important for manufacturers to assess what the goal of the investigator(s) is and to makes sure it has a degree of influence on the end result, although it cannot – for constitutional rights reasons – change the publications or presentations to reflect precisely what the manufacturer would like to see. A normal way to manage this is to put a waiting period in the contact that allows the manufacturer to assess the materials produced and engage in a discussion with the investigator if necessary. Also, as I will argue below, it is very important to agree on methodology for analysis of the data beforehand.

Agree on a methodology for interpretation of the trial data beforehand

As the saying goes: there are lies, damn lies and statistics. Research results conclusions may differ significantly depending on the method of statistical analysis used. A manufacturer can often not prevent the investigators from publishing unfavourable results, as this would limit constitutional rights. As the results however often depend on the method of analysis used, it is advisable to agree beforehand on the methodology to be used for interpretation of the results. A recent court case in the Netherlands, essentially about a dispute between manufacturer and investigators about the method of statistical analysis to be used and the conclusions that could be drawn from it, shows how investigators can destroy a device’s reputation (and sales). In that case the investigators insisted on using a less sophisticated method of analysis than advocated by the sponsor/manufacturer and arrived at a conclusion that was very unfavorable for the manufacturer, published this and presented it at a leading conference, causing even more bad publicity, causing sales to collapse. Since the agreement did not contain any relevant provisions on methodology, the court held that they did not act in breach or otherwise unlawful vis-a-vis the sponsor by using a less than state of the art method to arrive at the contested conclusion concerned even though the court admitted that they did not use state of the art analysis.

If the investigators give pushback on the manufacturer deciding the methodology to be used, it should be sufficient to remind the investigators that statistic analysis of the data and drafting a clinical investigation report are sponsor responsibilities under ISO 14155:2011 (point 8.2.6. (b) and (c)), which may be outsourced to the investigators (ISO 14155:2011, point 8.3). However, the responsibility for the quality and integrity of the data always remains sponsor responsibility (ISO 14155:2011, point 8.3). It is therefore important to always include an override provision in the agreement that allows the manufacturer/sponsor to override problems as described above in the Dutch court case.

So

These are just a number of important points that I often see go wrong in clinical trial agreements. Of course a lot more can be said about this subject and I will. More tips will follow in future posts on this subject.

Clinical evaluation, Clinical investigation

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16/08/2011

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FDA draft guidance on mobile medical applications

On 21 July the FDA released Draft Guidance for Industry and Food and Drug Administration Staff Mobile Medical Applications, a document that I think has great significance for the regulation of the EU eHealth and medical device markets, even if it is presently only a draft. If adopted by the FDA its importance will only increase. You can download a copy of the document with my annotations in it over here.

Important guidance for the EU too

I have read the document and the reasoning behind it can, as you will read in the following, almost for a 100% be transplanted to the EU medical devices regulatory environment and the document describes in a very detailed and practical way what is regulated as device (and what not) while giving lots of examples. This is a significant benefit for stakeholders in the EU (and in the US). Why is this document so significant for regulation of eHealth and medical devices markets in the EU?

Firstly, the EU regulatory environment, although software is regulated in very general terms, is way behind in terms of the sophistication and level of detail provided. While the different stakeholders and regulators are going back and forth to agree on possible guidance to be published after the publication of the ‘Swedish report‘ and whether this should be in a MEDDEV or guidance document, the industry and in particular the clinical institutions in the EU seem to have no clue about how apps, websites and software with diagnostic and/or therapeutic functionality are  regulated and more often than not act like it is not regulated at all.

Secondly, because the reasoning of the FDA fits so well into the EU regulatory system, medical technology and software companies can rely on the same things being regulated as medical device. Of course, the clinical substantiation and the way devices are regulated differs significantly between the EU and the US, but knowing that the same things are regulated as device in the first place is already a big step forwards.

Scope of software regulated

The FDA proposes that the guidance is applicable to mobile medical applications or “mobile medical apps”, defined as

  • “a software application that can be executed (run) on a mobile platform, or a web-based software application that is tailored to a mobile platform but is executed on a server”; and
  • has an intended use within the scope of the concept of medical ‘device’ as regulated by the FDA; and
  • are used as an accessory to a regulated medical device; or
  • transform a mobile platform into a regulated medical device.

Although the wording “app” is misleading here because that seems to refer to software that is stored and run locally, it is quite clear that also web applications are covered by the definition.

Such regulation applications are:

  • Mobile apps that are an extension of one or more medical device(s) by connecting to such device(s) for purposes of controlling the device(s) or displaying, storing, analyzing, or transmitting patient-specific medical device data
  • Mobile apps that transform the mobile platform into a medical device by using attachments, display screens, or sensors or by including functionalities similar to those of currently regulated medical devices.
  • Mobile apps that allow the user to input patient-specific information and – using formulae or processing algorithms – output a patient-specific result, diagnosis, or treatment recommendation to be used in clinical practice or to assist in making clinical decisions.

The FDA plans to address in a separate issuance mobile medical apps intended to analyze, process, or interpret medical device data (electronically collected or manually entered) from more than one medical device.

Excluded however are

  • “mobile apps that are electronic “copies” of medical textbooks, teaching aids or reference materials, or are solely used to provide clinicians with training or reinforce training previously received. These types of apps do not contain any patient-specific information, but could show examples for a specific medical specialty.” In EU regulation terms, these devices quite clearly do no achieve a therapeutic or diagnostic effect “in or on the human body” as required by the definition of ‘medical device’ under the Medical Devices Directive (MDD);
  • Mobile apps that are solely used to log, record, track, evaluate, or make decisions or suggestions related to developing or maintaining general health and wellness, provided that they are not intended for curing, treating, seeking treatment for mitigating, or diagnosing a specific disease, disorder, patient state, or any specific, identifiable health condition. This outcome would be largely similar under EU law as there is no intended therapeutic or diagnostic use except that the EU definition also covers “investigation […]  of the anatomy or of a physiological process” which makes these apps borderline cases under EU law.
  • Mobile apps that only automate general office operations with functionalities that include billing, inventory, appointments, or insurance transactions. These are also excluded under the EU MDD.
  • Mobile apps that are generic aids that assist users but are not commercially marketed for a specific medical indication, such as recording audio, note-taking, replaying audio with amplification, and other similar functionalities. These are currently also excluded under the EU MDD.
  • Mobile apps that perform the functionality of an electronic health record system or personal health record system. These are also excluded under the EU MDD.

Manufacturer

A mobile medical device manufacturer may include anyone who initiates specifications, designs, labels, or creates a software system or application in whole or from multiple software components. Examples of mobile medical device manufacturers include any person or entity that:

  1. Creates, designs, develops, labels, re-labels, remanufactures, modifies, or creates a software system from multiple components;
  2. Provides mobile medical app functionality through a “web service” or “web support” for use on a mobile platform;
  3. Initiates specifications or requirements for mobile medical apps or procures product development/manufacturing services from other individuals or entities (second party) for subsequent commercial distribution;
  4. Creates a mobile medical app intended to be used on a mobile platform, or that manufactures a mobile app to be supported by hardware attachments to the mobile platform with a device intended use.

All of this fits perfectly in the definition of manufacturer under the MDD, defined as “the natural or legal person with responsibility for the design, manufacture, packaging and labelling of a device before it is placed on the market under his own name, regardless of whether these operations are carried out by that person himself or on his behalf by a third party.”

An important point is that the FDA urges manufacturers of applications that do not meet the definition of ‘device’ still apply a quality system to the design and development. A standard that would work for the EU is the EN 62304 standard on life cycle requirements for medical devices software harmonised under the MDD.

Distributors

A very important final point in the draft guidance is that the FDA expects distributors of mobile medical apps who may or may not be a platform or service provider will cooperate with manufacturers in conducting corrections and removal actions and requires medical app manufacturers to make timely reports of corrections and removals made to reduce a health risk or remedy a violation of the FD&C Act that presents a health risk, and to keep records regarding other corrections and removals. In EU wording: the manufacturer must exercise control over its supply chain and be able to implement Field Safety Corrective Action through its supply chain, while the supply chain is expected to cooperate. This is a very important point, because in my experience manufacturers distributing apps via larger stores will have no control whatsoever over these stores, like the iTunes Store or the Android Market. They will have very limited options to implement field safety corrective action (in US wording: recall) in case of serious issues. If the FDA and the EU authorities are serious on safety in this respect, they should require design functionality that gives the manufacturer sufficient reach through to the user (e.g. by means of push messages to discontinue use or to upgrade the app to a new version), but also make it clear to the middle men that they have a duty to cooperate as they may be facilitating illegal / unsafe medical devices. In the EU that would mean that the store would for example lose its ‘only intermediary’ immunity under the e-Commerce directive.

Conclusion

A lot more can be said about the subject, like how to implement in practice all the consequences of a mobile app being regulated as medical device in practice but I will leave it at this for the moment. In any event this draft guidance should be welcomed on both sides of the Atlantic and the EU should use it to its advantage to take a much-needed and due step in the clarification of its regulation of software under the MDD.

CE marking, eHealth, Placing on the market, Recast, Software

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25/07/2011

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Consequences of the EU Ker-Optika case for eHealth services

In a previous post I have analysed the consequences of the European Court of Justice’s Ker-Optika judgment for e-commerce in physical medical devices. This post extrapolates the reasoning of the European Court in that case with respect to the provision or sale of medical devices as services in the context of eHealth services. My conclusion is that eHealth services constituting medical devices are regulated identically under EU law to physical medical devices and analyses the consequences of this.

Refresher; are eHealth services regulated under the EU Medical Devices Directive?

EU member states are not under all circumstances allowed to restrict the sale of medical devices to only physical outlets that specialise in medical devices. That is the outcome of the recent Ker-Optika judgment, concerning a dispute about the legality of Hungarian legislation that reserves the sale of contact lenses to shops that specialise in the sale of medical devices and, consequently, prohibits the sale of contact lenses via the Internet.

This has important consequences for the eHealth services industry in the EU, because eHealth services may very well constitute medical devices in the meaning of Directive 93/42 (“MDD”) as amended. In fact, many eHealth services have characteristics that cause them to fall within the scope of the concept of ‘medical device’ as defined in the MDD. Any software provided as service or software application provided to an end user for diagnostic and/or therapeutic purposes will normally constitute a medical device caught within the scope of the MDD. Indeed, with the adoption of Directive 2007/47 amending the MDD it has been clarified beyond doubt that standalone software can also constitute a medical device. That means that eHealth services constituting a medical device or involving a medical device must be CE marked as required under the MDD and the local national implementation of that directive, because otherwise they are on the market illegally. In practice however many eHealth services and applications do not meet this requirement and the level of awareness of regulatory compliance on the part of developers of such products and physicians prescribing them is very low.

Typical candidates for inclusion in the scope of medical devices are for example remote monitoring tools that monitor the physical condition of a patient via the internet and include a software algorithm that warns a physician if the patient’s parameters give cause for this. Another candidate would be remote readout and interpretation of blood values, like glucose or other critical values allowing a patient to adjust medication to the readout. As I have argued on other occasions, prime candidates are internet websites that allow individuals to assess their health risks or apps that psychiatric patients can use on their iPad to condition themselves for and report to their psychiatrist about otherwise threatening situations that may provoke panic attacks. Another good example is a medical decision support system running on a central server.

And finally, many of the telemedicine applications mentioned in the Commission’s Communication on telemedicine for the benefit of patients, healthcare systems and society will fall within that scope. Therefore, the legal situation with respect to telemedicine is a lot less unclear than the Commission states in its Communication on telemedicine for the benefit of patients, healthcare systems and society, because telemedicine will largely be an information society service regulated under the e-Commerce directive and the MDD.

Consequences for eHealth services

Because the e-Commerce Directive also applies to the sale or provision of services, it applies likewise to medical devices that are sold through the internet as an eHealth service, as has been confirmed by the European Commission in the Explanatory Memorandum to the Cross-Border Healthcare Directive and in the Communication on telemedicine for the benefit of patients, healthcare systems and society.

If we apply the reasoning in the Ker-Optika judgment, this means that EU member states cannot restrict the provision of eHealth services in general with the sole argument that the physical presence of the patient and the health professional in the same place is required at all times. This is for example one of the major obstacles to telemedicine mentioned in the Commission’s communication on telemedicine for the benefit of patients, healthcare systems and society.  This obstacle has been to an extent removed by the Ker-Optika judgment. However, an EU member state could prescribe that (certain) eHealth services can only be offered after initial expert clinical intervention, e.g. after prescription by a physician or after an initial consult to define the parameters of the eHealth service.

In addition, in case of cross-border eHealth services EU member states may restrict the freedom to provide those on grounds of the protection of public health (see ee article 3 (2) juncto article 4 (a) (i) 2nd indent e-Commerce directive), provided however that

  • the eHealth service concerned prejudices public health or presents a serious and grave risk of prejudice to those objectives and that
  • the measures taken are proportionate to those objectives (Article 4 (a) (ii) and (iii) e-Commerce directive) and that
  • the EU member state has concerned has asked the member state in which the provider is established to take measures and the latter did not take such measures, or they were inadequate, and notified the European Commission and the EU member state in which the provider is established of its intention to take such measures (article 4 (b) e-Commerce directive).

The Commission has indicated in its Communication on telemedicine for the benefit of patients, healthcare systems and society that

“for business-to- business (professional-to-professional) telemedicine services, such as teleradiology, the country of origin principle applies: the service offered by the professional must comply with the rules of the Member State of establishment. In the case of business-to-consumer activities (which might be relevant to telemonitoring services) the contractual obligations are exempted from the country of origin principle: the service might need to comply with the rules of the recipient’s country.”.

It is unclear to me why the Commission would want to make this distinction between B2B and B2C eHealth services, as there is no clear basis for that in the e-Commerce directive.

As explained above, national rules on how physical medical devices may be provided fall within the scope of the rules on the free movement of goods. This does not however apply to eHealth services in the same way. In the Ker-Optika case the Court held that this was an unregulated field under the e-Commerce directive because “requirements applicable to the delivery of goods” were explicitly stated to be outside the coordinated field pursuant to article 2 (h) (ii) e-Commerce directive. Consequently, the Court held, the national rules which relate to the conditions under which goods sold via the Internet may be supplied within the territory of a Member State fall outside the scope of that directive. Article 2 (h) e-Commerce Directive that defines the coordinated field of the e-Commerce Directive does not contain a similar limitation of the scope of the directive for information society services, so these are fully within the scope of the e-Commerce directive. This means that eHealth service providers are fully subject to the internal market clause in article 3 of the e-Commerce Directive (free provision of services provided that the provider meets the requirements for the activity concerned of the member in which it is established). Those member states may pose requirements with which the service provider has to comply in respect of:

  • the taking up of the activity of an information society service, such as requirements concerning qualifications, authorisation or notification,
  • the pursuit of the activity of an information society service, such as requirements concerning the behaviour of the service provider, requirements regarding the quality or content of the service including those applicable to advertising and con- tracts, or requirements concerning the liability of the service provider (Article 2 (h) (i) e-Commerce directive)

This means that it is very attractive to engage in forum shopping in the EU, because an eHealth services provider would logically establish itself in the EU jurisdiction with the most favourable eHealth regime and subsequently export that to the other member states via the internal market clause. Larger companies can choose out of which of their subsidiaries they will conduct the activities concerned.

In their implementation of EU directives member states have to observe the basic freedoms granted under the TFEU and the requirements that they may impose within the coordinated field have to be proportionate (see for example C-315/92 Clinique [1994] ECR 317, point 17). Member states have to be able justify the proportionality of their rules. Since the provisions on the free movement of services are highly similar (and some might argue identical) on the point of restriction of market access and possible justifications for them, the reasoning of the European Court in the Ker-Optika case would arguably be similar when applied to eHealth services. Whether or not a restriction in the form of a prior mandatory examination in person by a physician (as opposed for example to a video conference consultation) is justified will depend on the risks associated with the condition that the eHealth service seeks to treat. Conversely, the fact that there is a high safety risk for users and patients if the eHealth service fails, is not as such an argument to prohibit an eHealth service for a particular purpose altogether.

Finally, since article 168 of the Treaty on the Functioning of the EU provides that the EU is not entitled to regulate healthcare as such, the scope and content of healthcare services will remain member state competence, as the Commission also states in its eHealth communication. However, the Commission has stated in that same document that as a general principle the classification of specific telemedicine services as medical acts should ensure that these meet the same level of requirements as equivalent non-telemedicine services (e.g. teleradiology vs. radiology). This principle ensures that adequately regulated health services are not replaced by less regulated telemedicine services and it avoids discrimination between providers of the same service, which would be incompatible with the e-Commerce Directive.

One other important point is that any member states’ rules that have an impact on eHealth services are most likely technical regulations are caught under Directive 98/34/EC as amended by Directive 98/48/EC that establishes a procedure imposing an obligation on Member States to notify the Commission and each other of all draft technical regulations “concerning products and Information Society Services, including telemedicine”, before they are adopted in national law.  If this has not taken place the European Court has ruled in a line of case law including the CIA Security case and the LIDL Italy case “that breach of the obligation to notify renders the technical regulations concerned inapplicable, so that they are unenforceable against individuals”. As a result, eHealth providers have a strong instrument to use against technical measures impacting on eHealth services that have not gone through the notification procedure correctly and were duly scrutinized by the European Commission.

Conclusion

The Ker-Optika case confirms many of the legal assumptions that the Commission has previously made about the legal status of e-Health services. eHealth services that constitute medical devices fall within the scope of the e-Commerce directive. As a result, advertising and sales of these services are covered by that directive. Also the way the services are provided is harmonised under the e-Commerce directive and although it may still be regulated by EU member states in certain detail, such regulation must meet the proportionality requirements for restrictions on the free provision of services. If member states takes measures to regulate e-commerce in eHealth services, they must notify these to the European Commission for them to be enforceable against companies and private persons.

Advertising, CE marking, e-commerce, eHealth

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18/07/2011

5 Comments

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