Italian Sunshine Act and transparency in the health sector

Introduction to the Italian Sunshine Act

On June 26^th, 2022, following a three-year-long legislative process, Law no. 62/2022 (“Italian Sunshine Act”) entered into force.

This Law establishes provisions for transparency in the relationships between the companies of the life sciences and healthcare sector (“Companies”), healthcare professionals (“HCPs”), and healthcare organizations (“HCOs”).

However, its full enforceability is subject to implementing regulations and other fulfilments (e.g. the establishment of the Telematic Public Register for disclosures publication, named “Transparent HealthCare – “Sanità Trasparente”), with the result that it will probably not be effective for another year.

The key takeaway points of this legislative development are:

• transparency is no longer the result of Companies' voluntary membership in industry associations (e.g. Farmindustria and Confindustria Dispositivi Medici).

• the range of players affected by this legislation is very broad;

• the Italian Sunshine Act contains some relevant differences with respect to national industry codes of practice which Companies and Italian Industry associations will have to take into account. In particular:

  • transparency obligations will cover all kinds of transfers of value that exceed certain minimum thresholds, regardless of their purpose;

  • transparency obligations will cover information on HCPs and HCOs who have shareholdings, bonds, or have received income from industrial or intellectual property rights too;

  • communication of data shall be made on an individual basis since the Italian Sunshine Act does not envisage aggregated disclosure;

  • violation of the Italian Sunshine Act will be a ground for whistleblowing reports to the Ministry of Health (“MOH”);

  • the administrative pecuniary sanctions, issued for violation of the Italian Sunshine Act, will be publicly available on the first page of MOH’s website for at least 90 days.

We have set out further details on these aspects here below.

Scope

The Italian Sunshine Act provides very broad definitions of Companies, HCPs, and HCOs: 

Companies: any legal entity, including nonprofit ones, engaged in an activity directed at: i. producing or marketing drugs, instruments, equipment, health or non-health goods or services, including nutritional products, marketable in the field of human and veterinary health; ii. organizing conferences and congresses concerning the goods and services described in item i.

HCPs: any subject who work, in any capacity, within a public or private healthcare organization and who have responsibility for the allocation of resources or in relation to decision-making processes in the area of drugs, devices, technologies, and other goods, including non-medical goods, as well as research, trials, and sponsorship, including the members of public procurement boards in the health sector.

HCOs: local healthcare units, hospitals, university hospitals, scientific institutes for research, hospitalization, and healthcare (IRCCS), any public or private legal entity providing healthcare services, university departments, graduate schools, public and private research institutes, scientific associations, and companies of the health sector, professional orders of health professions and associations among HCPs, including those without legal personality, public and private entities that organize continuing medical education activities, as well as companies, patient organizations, foundations ad other entities which: (i) are incorporated or controlled by the HCOs referred to above; or (ii) are owned by them; or (iii) act as an intermediary for the aforementioned HCOs. 

Transparency obligations under the Italian Sunshine Act

The Italian Sunshine Act provides for three different transparency obligations upon  Companies, which must publicly disclose:

• every semester: transfers of money, goods, services, or other values towards HCPs and HCOs, subject to the exceeding of a specific threshold value (“Transfers of Value”);

• every semester: agreements entered into with HCPs and HCOs (“Agreements”), that resulted in direct or indirect benefits consisting of: (a) the participation in seminars, training events, committees, commissions, consultive bodies, and scientific committees; or (b) the establishment of  consulting, teaching or research relationships;

• by the 31^st of January of each year: the identification details of HCPs and HCOs, in the event in which they are holders of shares/quotas/bonds of the Companies, or in the event in which they received consideration from the Companies, in the previous year, in relation to licenses for the economic use of industrial or intellectual property rights.

The transparency obligations envisaged in the Italian Sunshine Act will strengthen the legislation already existing in Italy on the conflict of interests in the health sector.

As a matter of example, the new legislation complements:

- Article 6 of Legislative Decree no. 52/2019, which requires - in the context of clinical trials - the investigator to declare to the clinical center any conflicts of interest of his or her own or his or her partner with the Sponsor;

- the Public Employment Law, which requires the authorization of the employer before engaging a public employee for a remunerated activity.

Whistleblowing and Sanctions

The Italian Sunshine Act also fosters citizens’ cooperation in ensuring transparency in the health sector. The law sets forth that violation of its provisions constitutes a ground for whistleblowing reports, which will have to be addressed directly to the MOH.

The practical aspects of this whistleblowing procedure - which will also have to be coordinated with the upcoming implementation in Italy of the Whistleblowing Directive (Directive (Eu) 2019/1937) - will be regulated by the MOH with a future implementing decree. 

From a disciplinary perspective, the Italian Sunshine Act provides for administrative pecuniary sanctions, which vary depending on the specific violation, the amount of the transfer of value or the agreement, and the Companies’ revenue.

It is worth noting that the above sanctions with the name of the Companies sanctioned will be made public on the first page of MOH’s website for at least 90 days and entered the Telematic Public Registry.

Italian Sunshine Act and Industry Codes of Ethics

Companies in the health sector are not new to transparency obligations.

Starting from 2015, the Code of Ethics of Italian trade associations (hereinafter “Industry Codes of Ethics”), such as Farmindustria and Confindustria Medical Devices, provided for their members the obligation to publish information on their website with reference the to transfers of value in favor of HCPs, HCOs, and third parties.

There are some important differences between the Italian Sunshine Act and the Industry Code of Ethics, that will probably require a review of the latter.

• the Italian Sunshine Act, when will be fully implemented, will oblige all Companies to comply with the obligation of transparency, through an online Telematic Public Register and not just through the Companies' website;

• companies will also have to disclose information on HCPs and HCOs who have shareholdings, bonds, or have received incomes from companies in relation to the use of industrial or intellectual property rights;

• the Codes of Ethics excluded from transparency obligations some transfers of value such as the ones related to OTCs, promotional materials, meals, and medical samples. The Italian Sunshine Act covers all kinds of expenses and agreements to and with HCPs and HCOs, providing for a general obligation to disclose all Transfer of Values, regardless of their purpose. However, to exclude non-relevant expenditures from transparency obligations, it provides for an economic threshold of relevance both for the single Transfer of Value or Agreement with HCPs and HCOs and for their annual overall amount, under which no disclosure obligation is due.

• the Industry Code of Ethics mainly provides several sanctions of a reputational nature, the worst of which is ouster from the relevant association, with the residual possibility of also imposing fines. The Italian Sunshine Act provides fines as the main sanctions and a reputational sanction (i.e. the publication of the name of the Companies sanctioned on the first page of MOH’s website), which probably is the worst for the very strong impact on the image of Companies.

• the Industry Codes of Ethics provides for the possibility to publish data on an aggregated basis – rather than individually – in two situations:

  • if the HCP does not provide the consent for the processing of his/her data for the fulfillment of the transparency obligations; and

  • for research and development transfers of value, which can always be published on an aggregated basis. The Code of Ethics of Confindustria Dispositivi Medici provides for the aggregated disclosure also for donations to subjects different from HCOs and scholarships.

The Italian Sunshine Act rejects this approach and does not envisage in any case aggregated publication of data. Indeed:

• research and development expenses would likely fall within the scope of the Agreements with HCPs and HCOs, which are subject to individual disclosure;

• consent by HCPs and HCOs is considered as granted with: the acceptance of the Transfers of Value; the execution of the Agreements; the acquisition of the shares or bonds in the Companies; and the acceptance of the compensation from industrial property rights; provided that they have received a specific privacy notice.

Full implementation of transparency obligations

To be fully applicable, the Italian Sunshine Act’s provisions require the establishment of a dedicated database (“Transparent HealthCare – “Sanità Trasparente”) which will be set up on the Ministry of Health’s website within 6 months from the Italian Sunshine Act entry into force (i.e., June 26, 2022).

If MOH will meet the implementation deadlines, Companies will be subject to transparency obligations starting from:

• the second semester of 2023, for the disclosure of Transfers of Value and Agreements;

• January 2024, for the disclosure of HCPs and HCOs who have shareholdings or bonds in the Company, or who have received compensation from IP rights.

How to get ready for what is next

While waiting for the full implementation of the Italian Sunshine Act, Companies may take advantage of this transition period to be ready to go when the time comes. For example, Companies could:

• assess to what extent their compliance policies need to be updated. This includes:

  • the establishment of an internal monitoring and collection mechanism aimed at easing and ensuring the collection and submission of information to the Telematic Public Register;

  • the amendment of their internal policies on interactions with HCOs or HCPs, so that the relevant agreements include clauses consistent with the Companies’ transparency obligations;

• set up training activities for functions that might be affected by the Italian Sunshine Act’s transparency obligations;

• update their Organizational Model according to Legislative Decree 231/2001, stating that they have implemented all necessary measures to comply with the Italian Sunshine Act’s transparency obligations. This update along with evidence of the Supervisory Body's monitoring of the implementation of these measures will be essential to avoid the very serious sanctions provided for in Legislative Decree 231/2001, in case of the commission of bribery offenses by Commpanies' staff or agents.

Authored by Giuseppe Aminzade, and Angelo Forte.