In addition to releasing the new EU Cybersecurity Strategy before the holidays (see our post here), the Commission published a revised Directive on measures for high common level of cybersecurity across the Union (“NIS2”) and a Directive on the resilience of critical entities (“Critical Entities Resilience Directive”). In this blog post, we summarize key points relating to NIS2, including more onerous security and incident reporting requirements; extending requirements to companies in the food, pharma, medical device, and chemical sectors, among others; and increased powers for regulators, including the ability to impose multi-million Euro fines.

The Commission is seeking feedback on NIS2 and the Critical Entities Resilience Directive, and recently extended its original deadline of early February to March 11, 2021 (responses can be submitted here and here). Continue Reading Proposed New EU Cyber Rules Introduce More Onerous Requirements and Extend to More Sectors

In a landmark judgment on 19 November 2020, the CJEU ruled in Case C-663/18 that cannabidiol (“CBD”) is not a narcotic drug under the UN Conventions.  This is the case even where the CBD is derived from the whole cannabis plant.  The ruling provides clarity on the non-controlled status of CBD and the free movement of CBD products within the Union.  This is likely to have wide implications for the CBD industry. Continue Reading CJEU Confirms that CBD is Not a Narcotic Drug

On 11 November 2020, the European Commission has announced a range of proposals to build a European Health Union.  The proposed measures reflect on the learnings from the current COVID-19 and previous influenza pandemics and seek to enhance Member States’ preparedness for future health crises, which also includes a greater involvement of the EU.  As part of its set of measures, the Commission is proposing to revise the current EU joint procurement framework.

  1. Current Joint Procurement Framework

In 2010, as part of its “lessons learnt from the A/H1N1 pandemic”, the European Council called for the development of a joint procurement framework for vaccines and antiviral medication.  Subsequently, the European Parliament and Council adopted Decision 1082/2013/EU (the “Decision”) on serious cross-border threats to health, which, among others, provides that the EU and any interested Member States may conduct a joint procurement procedure.  The detailed procedure was then agreed between the Commission and the Member States in the Joint Procurement Agreement (the “JPA”). Continue Reading European Health Union: European Commission proposes Changes to the Joint Procurement Agreement

Today, October 1st 2020, the updated anti-gift scheme in France enters into force.  The anti-gift rules impose obligations on pharmaceutical, medical device and cosmetics companies when interacting with healthcare professionals (“HCPs”) and healthcare organizations (“HCOs”) in France.  The updated framework was foreseen in the adoption of Ordinance 2017-49 of 19 January 2017 and Decree 2020-730 of 15 June 2020.  This blog summarizes the new French rules.

Continue Reading Entry Into Force of Reinforced Anti-gift Rules in France

On 10 September 2020, the German Federal Social Court (Bundessozialgericht – “BSG”) has issued an important decision with significant impact on the drug pricing and reimbursement system. It ruled that a pharmaceutical company can file a direct legal action against the early benefit assessment in the so-called AMNOG process. This was not possible so far. The decision therefore significantly broadens the legal redress possibilities of pharmaceutical companies under the German drug pricing and reimbursement regulation.

For drugs with new active substances, the pricing and reimbursement process has three steps: First, an early benefit assessment is performed by the Joint Federal Committee (Gemeinsamer Bundesausschuss – “GBA”) to assess the drug’s “additional benefit” against the relevant comparator therapy. Second, the drug company negotiates the reimbursement price with the health insurances association based on the outcome of the early benefit assessment. If they cannot agree to a price, the third step is an arbitration process. The applicable Social Code V (“SGB V”) allowed legal actions against the arbitration decision and excluded isolated legal actions against the early benefit assessment (Section 35a (8) SGB V).

In this lawsuit, a drug company had launched a prescription drug with an off-patent generic active substance for a skin disease based on own clinical trials. The GBA took the view that the drug has a new active substance and must undergo the early benefit assessment and the AMNOG process. However, the drug company took the position that the product does not have a new active substance and did not submit a product dossier for the early benefit assessment. The GBA nevertheless conducted the early benefit assessment and came to a negative benefit assessment decision. The company filed an action against this decision but during the lawsuit it agreed on a reimbursed price with the health insurance association in order to prevent disadvantages and enable the reimbursement of the drug.

The first instance court (Landessozialgericht Berlin Brandenburg – “LSG”) rejected the action of the company as “inadmissible” and referred to the above mentioned Section 35a (8) SGB V. In contrast, the BSG ruled that despite Section 35 (8) SGB V, a drug company must be allowed to file a legal action against the early benefit assessment even if the company has subsequently agreed to a reimbursement price. Therefore, the BSG annulled the earlier decision of the LSG and referred the matter back to the lower court. The LSG will now have to decide whether the drug indeed had a new active substance and was rightly subjected to the AMNOG process.

The BSG’s full decision has not been published yet but in its press release about the decision, the BSG has summarized its view by referring to the significant legal effects of this benefit assessment to the drug company and finds that Section 35a (8) SGB V does not generally exclude all legal redress options against early benefit assessments in each scenario.

For this particular case, the BSG also noted that it appears possible that the active substance of the drug is not a new active substance. Against this background, the BSG found that blocking all legal redress against an early benefit assessment in all scenarios would violate the constitutional rights of the pharmaceutical companies. In contrast to earlier decisions of German courts in other pricing and reimbursement disputes, this decision appears to put a lot more emphasis on the constitutional rights of the pharmaceutical companies.

Before this decision, a pharmaceutical company could not seek separate legal redress against the early benefit assessment even if it was already contested whether the drug has a new active substance or not. The GBA had the power to just make that assumption and to subject a medicine to the AMNOG process without facing the risk of being exposed to direct legal action. The system required the drug company to wait until the entire AMNOG process of benefit assessment, price negotiation and arbitration is completed before it could file a lawsuit against the arbitration decision. That caused the companies to lose significant time before it could seek legal redress. Further, a drug company had to tolerate that throughout this time and until it obtained a court decision, the negative benefit assessment was made public and harmed its product plus the product was only reimbursed at a low price level because of the negative benefit assessment.

Overall, this new judgment of the BSG clearly strengthens the position of pharmaceutical companies in the AMNOG process and offers a new opportunity to legally challenge the early benefit assessment. The court has particularly stressed the constitutional rights of the pharmaceutical company. It will be interesting how this particular case will continue and which claims the company could make if the lawsuit finds that the drug was unlawfully subjected to the AMNOG process. Further, and beyond this particular case, it appears possible that the principles and arguments of this BSG decision can also be invoked in other disputes in the German drug pricing and reimbursement system.

This BSG decision will have a significant impact to the German drug pricing and reimbursement system and the respective judicature of social courts. Pharmaceutical companies should carefully analyze the full reasoning of the BSG as soon as the complete judgment is available.

The Covington team in Frankfurt, Germany, will continue following and discussing these and other developments on the “Inside EU Life Sciences” blog.


The UK Medicines and Healthcare products Regulatory Agency (“MHRA”) has published Guidance on the regulation of medical devices from 1 January 2021 (the “Guidance”).  It discusses the regulatory requirements that apply to medical devices after the end of the Brexit transitional period under the EU-UK Withdrawal Agreement.  In summary:

  • From 1 January 2021, different rules will apply to medical devices placed on the market in Great Britain (e., England, Wales and Scotland) and those placed on the market in Northern Ireland and elsewhere in the EEA.
  • Manufacturers may continue to use the CE-mark and it will be recognised in Great Britain until 30 June 2023.
  • Manufactures may continue to rely on EEA Notified Body certificates until 30 June 2023 for products placed on the market in Great Britain.
  • There will be a new route for conformity assessment of medical devices placed on the market in Great Britain from 1 January 2021.
  • All medical devices and in vitro diagnostic medical devices (“IVDs”) placed on the market in the UK have to be registered with the MHRA. There will be certain grace periods for registering existing devices.
  • Manufacturers based outside the UK will need to appoint a UK Responsible Person.

Future Regulation of Medical Devices and IVDs in the UK

In the EU, Regulation 2017/745 on medical devices (“MDR”) will enter into force on 26 May 2021 and Regulation 2017/746 on in vitro diagnostic medical devices (“IVDR”) on 26 May 2022.  Since both Regulations will enter into force after the end of the Brexit transitional period, they will not be automatically transposed into UK domestic law through the EU Withdrawal Agreement Act.  Thus, the UK Government intends to hold a formal consultation process with stakeholders in autumn 2020 with the aim of delivering an attractive world-class regulatory system.  The Medicines and Medical Devices Bill, which seeks to increase oversight over medical devices and improve patient safety, is also currently pending before Parliament.

  1. Great Britain  

The Guidance explains the different rules that will apply to medical devices placed on the market in Great Britain (i.e., England, Wales and Scotland) from 1 January 2021.  We summarize certain of the key changes below.

a. Registration Requirements

Manufacturers who intend to place medical devices on the market in the UK have to register with the MHRA.  Manufacturers based outside the UK will need to appoint a UK Responsible Person, established in the UK, to register on its behalf.

From 1 January 2021, any medical device, IVD or custom-made device must be registered with the MHRA before being placed on the UK market.  There will be certain grace periods for manufacturers to complete the registration process.  The length of the grace period depends on the category of device:

  • Registration by 30 April 2021:
    • Active implantable medical devices
    • Class III medical devices
    • Class IIb implantable medical devices
    • IVD List A
  • Registration by 31 August 2021:
    • Class IIb non-implantable medical devices
    • Class IIa medical devices
    • IVD List B
    • Self-test IVDs
  • Registration by 31 December 2021:
    • Class I medical devices
    • General IVDs

The MHRA has published separate registration guidance to assist manufacturers with the process.

b. UK Conformity Assessment and UKCA Mark

Until 30 June 2023, manufacturers may rely on conformity certificates issued by EEA Notified Bodies for Class II and Class III devices.  Moreover, until that date, the CE mark will be recognised on the Great Britain market.  CE-marked devices that have been assessed by an EEA Notified Body will be deemed to meet the requirements of the new (UK conformity assessed) UKCA mark.  From 1 July 2023, all devices placed on the Great Britain market, will have to bear the UKCA mark.

The UK intends to roll over the designation of any existing UK Notified Bodies, which are currently designated under the Medical Devices Directive 93/42/EEC, the in vitro Diagnostics Medical Devices Directive 98/79/EC and the Active Implantable Medical Devices Directive 90/385/EEC.  From 1 January 2021, these bodies will be called “Approved Bodies”.  These Approved Bodies will be able to carry out certain conformity assessments under the UK Medical Devices Regulations 2002, as amended.

For self-certification devices (Class I medical devices and general IVDs), the manufacturer will be able to complete the UK conformity assessment procedure and affix the UKCA mark to their devices.  Manufacturers of these devices may also continue to rely on the EU CE-mark until 30 June 2023 for products placed on the Great Britain market.

c. Labelling

From 1 January 2021, devices placed on the market in Great Britain will need to bear either the UKCA mark or the CE mark, as well as the number of the EEA Notified Body or UK Approved Body.

Products that bear the CE mark and the EEA Notified Body number do not have to be relabelled until 1 July 2023.

  1. Northern Ireland

Special rules will apply to devices placed on the market in Northern Ireland.

  1. Placing Devices on the EU Market

Any device placed on the EU market from 1 January 2021 must comply with the applicable EU legislation and the CE mark must be affixed to the device.  The UKCA mark will not be recognised in the EU (including Northern Ireland), unless the device is also accompanied by the CE mark.

Manufacturers that are currently relying on a UK Notified Body need to bear in mind:

  • Any devices placed on the EU market before 1 January 2021 in accordance with the EU-UK Withdrawal Agreement, may remain on the EU market.
  • For any devices placed on the market after 1 January 2021, the manufacturer can no longer rely on the conformity assessment of a UK Notified Body. A conformity assessment by an EEA Notified Body will be required.

For self-certification devices, Great Britain-based manufacturers may continue to self-certify compliance with EU requirements.  All Great Britain-based manufacturers intending to place CE-marked devices on the EU market will also need to appoint an Authorised Representative in the EEA.

Manufacturers based outside the EU may no longer rely on Great Britain-based Authorised Representatives for devices placed on the EU market.  They will need to appoint an Authorised Representative in the EEA.

As of January 2021, many imports and exports of agricultural products covered by EU tariff quotas will be subject to the new licensing rules of Commission Delegated Regulation (EU) 2020/760 (“Delegated Regulation”) and Commission Implementing Regulation (EU) 2020/761 (“Implementing Regulation”) (together, “Licensing Regulations” or “Regulations”).  The new Regulations introduce significant changes to – and are likely to disrupt – the trade of a wide variety of food and feed products, including beef, pork, poultry, sugar, cereals, rice, olive oil, garlic, mushrooms, milk, eggs, cheese and cat and dog food.  Operators that do not comply with the rules in time (in some cases requiring action as early as of August 31, 2020), may not be able to import or export at least during the first quarters of 2021.

The new Licensing Regulations are intended to introduce common rules for the EU’s import licensing system for tariff rate quotas of agricultural products and to limit speculation and circumvention by operators with multiple shell companies applying for the same tariff rate quotas.  The Regulations replace and repeal 39 EU Commission Regulations and Commission Implementing Regulations that separately regulated import and export licenses by product category and/or origin.  They also establish new registration and declaration of independence requirements on license applicants that will force most operators to merge their shell companies.  However, the lack of clarity and possible contradictions of the new requirements, and the fact that their effective timing of application depends on the starting date of the quota period of each tariff quota may result in a disruption of trade of some agricultural products.

The Licensing Regulations will start to apply at different times to different tariff quotas as both Regulations “apply to the tariff quota periods starting from 1 January 2021 onwards.” Such differences in the time of application may even occur with tariff quotas affecting identical products but with different origin.  Below, we outline the main requirements that apply to applicants of import licenses and illustrate their timing with respect to quota periods that start in January 2021:

  • Establishment and VAT Registration: Only operators that are VAT-registered in an EU Member State may apply for import and export licenses.  The relevant national license issuing authority for each operator will be that of the Member State where the operator is registered.
  • LORI Registration: For many tariff quota order numbers, the Licensing Regulations require operators to register with the European Commission’s new License Operator Registration and Identification (“LORI”) electronic system prior to applying for import tariff quota licenses.  This requirement of prior LORI registration and the declaration of independence that is needed for such registration are intended to prevent the practice of operators having hundreds of shell companies to apply for import licenses simultaneously.
  • Declaration of Independence: Operators wishing to LORI register must declare that they are not linked to other legal or natural persons applying for the same tariff quota order number, or that, where such links exist, the different operators regularly perform substantial economic activities.  Such “substantial economic activities” are defined as actions or activities carried out by an operator with the objective of ensuring production, distribution, or consumption of goods and services.
  • Securities: Operators applying for any EU import license must submit a security to the license issuing authority before their application deadline.  The amount of this security will vary depending on the quota order number for which the operator is applying.  Securities will be proportionally forfeited where operators fail to effectively import and market the products within a prescribed period.
  • Reference Quantity: The new Licensing Regulations introduce new rules on the amounts of quota for which operators may apply for.  Where a tariff quota requires proof of “reference quantity,” applicants may not apply more than their reference quantity during the particular tariff quota period.  An operator’s reference quantity must be calculated on the basis of two cumulative elements:
    • First, the reference quantity must be based on the average annual quantity of products that the operator released for free circulation in the EU during two consecutive 12-month periods ending two months before the first application may be submitted for the tariff quota period. Moreover, the reference quantity can only be calculated based on products released for free circulation in the EU which fall within the same tariff quota order number and have the same origin.
    • Second, the reference quantity of any operator must never be higher than 15% of the quantity available for the tariff quota concerned during the tariff quota period.

These new reference quantity rules may substantially disrupt previously common import flows where large importers may not LORI register in time or are constrained by the new limits.

  • Proof of Trade: If the Commission decides to suspend the reference quantity requirement or where quota order numbers only require a “proof of trade,” operators must submit such proof of trade as part of their applications for import licenses.  The Annexes to the Implementing Regulation define the minimum quantity of product (e., the proof of trade) that operators must have released for free circulation in the EU in each of the two consecutive 12-month periods ending two months before the first application may be submitted for the tariff quota period.
  • Possible Suspension of Reference Quantity and/or LORI registration: To limit possible disruptions of trade, the Delegated Regulation provides for different exceptions from the reference quantity requirement.  Possible exceptions include the following:
    • The Commission must suspend the reference quantity requirement where by the end of the ninth month of a tariff quota period, the quantities applied for under a tariff quota are lower than the quantity available under the tariff quota for that tariff quota period.
    • The Commission may suspend the reference quantity requirement for any tariff quota where “unforeseeable and exceptional circumstances threaten to cause underutilization of that tariff quota.” While unclear, suspension of the reference quantity should also entail suspension of the LORI registration requirement.
    • During the first two tariff quota periods as of January 2021, license issuing authorities may allow operators to establish their reference quantities in accordance with the requirements of the old rules.
  • Deadlines for license applications: To apply for import licenses under the new Regulations, operators must comply with a series of strict deadlines. For example, license applications for tariff quota order numbers with a tariff quota period starting on January 1, 2021 must be submitted between November 23 and November 30, 2020.  Where LORI registration is required, operators wishing to apply during these dates must submit their LORI registrations by August 31, 2020.  This is because LORI registrations must be submitted at least two months before the month in which the operator will submit its license application.

Traders, producers, as well as governments seeking to protect the value of their concessions under their trade agreements with the EU, should assess the impact of the Licensing Regulations on their trade and their supply chains.  They should also consider engaging with the European Commission to try to agree on temporary exceptions.

On 3 July 2020, the German parliament passed a draft bill (German language) for patient data protection and for more digitalisation in the German healthcare system (Patientendaten-Schutz-Gesetz). The draft bill is currently in the legislative procedure and is expected to enter into force in autumn 2020.

One of the main objectives of the bill is to make everyday life easier for patients and healthcare professionals by increasing use of innovative digital applications, while protecting sensitive health data. It is assumed that increased digitalisation in the healthcare sector will open up opportunities at all levels of healthcare, both for patients and healthcare providers. As such, it is expected that digitalisation will help to take care of the growing number of chronically ill patients, to relieve the burden on specialists, to make better use of resources and to prepare the healthcare system for the challenges of the future.

A series of documents that so far has only been provided and used in hardcopy, such as certain prescriptions or patient files, will now be made available in digital form. In addition, a special app shall be made available to enable patients to redeem digital prescriptions in pharmacies. Alternatively, patients may present a 2D barcode on paper. In this case, the prescription will also be transmitted to the pharmacy in digital format. Further, the law aims to enable patient referrals from one doctor to medical specialists to be made in digital form (currently this is done in writing and requires the referral to be collected from the doctor’s office).

From 2021, statutory health insurance providers will be obliged to offer their insured persons electronic patient files (ePA). To ensure that this is effectively used, patients may request that their doctor include their medical records in their personal ePA. In addition, from 2022, the ePA will also be able to display other information that is currently only documented in hardcopy, for example, maternity logs, paediatric health records and vaccination cards. To incentivise doctors, they will be paid to use ePAs. Patients will ultimately have control over their ePAs and be able to decide which data is stored there and who will have access. For example, patients may specify that a doctor may have access to the ePA, but that certain findings are not displayed. The protection of the processed patient data is ensured by a gapless regulation of the chain of responsibilities.

From 2023 onwards, patients will have the option of voluntarily making the data in their ePAs available to researchers as part of a “data donation”. The donation could become an important element to increasing the availability of real-world evidence on new treatments and medicines. Informed consent will be required from each of the patients, and it will be possible for that consent to be given digitally. Patients will be free to choose the scope of their data donation and can limit access to certain information. The data that is released will be restricted to certain research purposes, like research on improving the quality of healthcare.

This new law will have a significant impact on the digitalisation of the entire German healthcare system. It will also create a better infrastructure for research with patient data and for collecting real-world-evidence for scientific and regulatory purposes.

Healthcare companies, providers and payors as well as technology and research companies should closely follow the next steps of this legislative development in Germany.

On 9 July 2020, Advocate General Bobek delivered his opinion on the status of edible insects (e.g., mealworms, locusts, and crickets) under the EU novel foods rules.  While insects fall under the scope of the new EU Novel Food Regulation 2015/2283, the opinion recommends the Court of Justice to deny novel food status to such ingredients under the old legal regime of now repealed Regulation 258/97.  Continue Reading Advocate General delivers Opinion on Novel Food Status of Insects

Since July 4, 2020 the manufacture, marketing and use of perfluorooctanoic acid (“PFOA”), its salts and PFOA-related compounds (collectively, “PFOAs”), and products containing them, is significantly restricted in the European Economic Area (“EU/EEA”).  The restrictions were introduced by a Commission Delegated Regulation amending Annex I to the EU POPs Regulation, and are intended to implement a decision of the ninth meeting of the Conference of the Parties to the Stockholm Convention that was held from April 29 to May 10, 2019.

The new PFOA restrictions will have significant impact on a wide variety of products marketed, and businesses operating, in the EU/EEA, including semiconductors, textiles, firefighting products, pharmaceuticals, medical devices, and materials used in the life sciences industry.  In effect, the new restrictions implementing the Stockholm Convention are significantly broader than the restrictions on PFOAs that were introduced under the EU REACH Regulation in 2017, and which the Commission now intends to repeal. Continue Reading Manufacturers and Marketers Beware: The EU Adopts New Restrictions on Products Containing PFOAs