United States: The GDPR – Possible Impact On The Life Sciences And Healthcare Sectors

Regulation (EU) 2016/679 of the European Parliament and the Council of 27 April 2016, (the "GDPR") came into force in May 2016 and introduced a number of changes to European data protection law. Such changes will impact upon many entities conducting business within the European Union, (the "EU") however, the implications for organizations operating in the life sciences and healthcare sectors are likely to be particularly far reaching. Life sciences and healthcare related businesses often collect and/or use large amounts of sensitive health related data in respect of living individuals, such as patients and clinical trial subjects, so the new data protection requirements will be particularly relevant for them.

We set out below a summary of some of the more significant changes which are likely to impact upon stakeholders within these sectors.

Extra Territorial Effect

Previously, European data protection legislation only applied to organizations which collected and/or used personal data if such organizations were established within the EU, or if they were established outside the EU, but used equipment within the EU to process personal data (unless this was only for transit purposes).

The GDPR will continue to apply to organizations established within the EU which process personal data however, organizations established outside the EU will now also be subject to the GDPR if such organizations process the personal data of EU based individuals and either: (i) offer goods or services to individuals within the EU; and/or (ii) monitor the behavior of data subjects within the EU. Any non-EU based entities to which the GDPR applies will be obliged to appoint a representative within the EU and ensure that they comply with the requirements of the GDPR when processing the personal data of European citizens in the ways set out above.

This means that more non-EU based organizations operating in the life sciences and healthcare sectors (for example, contract research organizations involved in clinical trials, providers of healthcare services and health insurance companies) are likely to be subject to the GDPR, going forward, than were subject to previous European data protection legislation.

Special Categories of Personal Data

The GDPR prohibits the processing of certain special categories of personal data (or "sensitive personal data"), subject to certain exceptions. The special categories of personal data include, among other things, genetic data and data concerning health.

"Genetic data" is defined by the GDPR for the first time. "Genetic data" includes personal data relating to the inherited or acquired genetic characteristics of a natural person which give unique information about the physiology or health of that natural person and which result, in particular, from an analysis of a biological sample from the natural person in question.

Although data concerning health was protected as a special category of data under the previous EU data protection legislation, the GDPR also defines "data concerning health" for the first time. "Data concerning health" includes personal data related to the physical or mental health of a natural person, including the provision of healthcare services, which reveal information about his or her health status.

Organizations operating in the life sciences and healthcare sectors which collect and/or use any data concerning health, genetic data, or other types of sensitive personal data, will need to ensure that they fall within one of the exceptional circumstances set out in the GDPR when the prohibition on the processing of sensitive personal data is deemed not to apply. Among others, these include circumstances where:

  1. the individual to whom the sensitive personal data relates has given his/her explicit consent to the processing for one or more specified and lawful purposes (unless such consent is prohibited by applicable EU or Member State law). Obtaining consent from individuals under the GDPR is discussed further below;
  2. the processing is necessary to protect the "vital interests" of the individual to whom the relevant data relate or another individual where the data subject is physically or legally incapable of giving consent (generally, this exception can only be relied on in "life or death" type situations);
  3. the processing is necessary for the purposes of preventive or occupational medicine, for the assessment of the working capacity of the employee, medical diagnosis, the provision of health or social care or treatment or the management of health or social care systems and services on the basis of EU or Member State law or pursuant to contract with a health professional and subject to certain conditions and safeguards; and
  4. the processing is necessary for public interest reasons in the area of public health, such as protecting against serious cross border threats to health or ensuring high standards of quality and safety of healthcare and of medicinal products or medical devices, on the basis of EU or Member State law which provides for suitable and specific measures to safeguard the rights and freedoms of data subjects, in particular professional secrecy.

It should also be noted that Member States may maintain or introduce further conditions, including limitations, regarding the processing of genetic data or data concerning health, so organizations will need to be confirm whether any such additional restrictions exist in the relevant EU Member States where they process any such data.

Consent

Many organizations and businesses operating in the life sciences and healthcare sectors rely on obtaining the explicit consent of individuals to justify the collection and use of their sensitive personal health related or genetic data (although this is not the only legal basis for processing of such data that can be relied on). The GDPR introduces a number of additional requirements which must be met to ensure that any consents that are obtained can be relied upon.

The GDPR introduces a new definition of "consent". "Consent" is defined to mean any freely given, specific, informed and unambiguous indication of the data subject's wishes by which he or she, by a statement or clear affirmative action, signifies agreement to the processing of personal data relating to him or her. Valid consent can be obtained in various ways (e.g. by requiring individuals to sign consent forms, or by clicking on an electronic "I consent" button).

If processing is based on consent, organizations must be able to show that individuals have agreed to the processing of their personal data. Furthermore, if consent is given in a written declaration that also relates to matters other than the consent, the consent request must be presented in a way which is clearly distinguishable from the other matters, intelligible, easily accessible and in clear and plain language in order to be valid.

The GDPR also makes clear the fact that individuals have the right to withdraw their consent to the processing of their personal information at any time (although this will not affect the lawfulness of any personal data processing which was carried out before consent was withdrawn). Individuals must also be informed that they have the right to withdraw their consent before consent is given and withdrawing consent must be as easy as giving consent.

The GDPR also provides that consent is unlikely to be deemed to be freely given where the performance of a contract, including the provision of a service, is made conditional on consent to the processing of personal data which is not necessary in order to perform the contract.

Life sciences and healthcare related businesses which are subject to the GDPR should consider the procedures and wording that they use when obtaining consent from individuals, for example, informed consent forms used in connection with clinical trials or patient treatment. Informed consent forms which complied with the requirements of the previous EU legislation are unlikely to be adequate to comply with the consent requirements of the GDPR, so these should be updated as necessary to make sure that they are robust. Some commentators have observed that the GDPR's consent requirements are likely to make valid consent difficult to obtain in practice, so it will be interesting to see whether data controllers continue to rely on individual consent or seek to rely on alternative justifications for their processing of personal and sensitive personal data.

Anonymisation and Pseudonymisation

Many life sciences and health sector businesses use coded data, particularly in the context of clinical trials. The issue of whether or not such data constitutes personal data and therefore whether or not European data protection legislation applies to it has long been a controversial topic.

The GDPR defines "pseudonymisation" for the first time. Essentially, pseudonymisation is defined to mean the processing of personal data in such a way that the personal data can no longer be attributed to a specific individual without using additional information, provided that such additional information is kept separately and is subject to technical and organizational measures to ensure that the personal data is not attributed to an identified or identifiable individual.

Among other things, the GDPR provides that data protection principles should apply to any information concerning an identified or identifiable individual. It also makes clear that personal data that has undergone pseudonymisation, which could be attributed to an individual by the use of additional information, should be considered to be information on an identifiable individual (in other words, pseudonymised personal data which allows re-identification of individuals will often be considered to be personal data).

The GDPR provides that, in order to decide whether an individual is identifiable, all the means reasonably likely to be used, either by the relevant data controller or a third party to identify the individual directly or indirectly should be considered. In deciding whether means are reasonably likely to be used to identify an individual, various objective factors should be considered, for example, the costs of and amount of time required for identification taking into account the technology available at the time the data is processed and technological developments.

Life sciences and health sector businesses will need to consider carefully whether individuals who are the subjects of any coded data that they collect and/or use would be deemed to be identifiable for the purposes of the GDPR. If so, then they will need to comply with the provisions of the GDPR in respect of such pseudonymised personal data. Certain commentators have observed that effective pseudonymisation of personal data which does not allow re-identification of individuals will be difficult to achieve in practice. Pending further guidance from European regulators on this point, it is probably safer to assume as a default position that any coded data constitutes personal data for the purposes of the GDPR and comply with the GDPR's requirements in respect of such data.

Data Protection By Design and Default and Privacy Impact Assessments

The GDPR introduces new formal requirements in respect of data protection by design and default principles. When deciding on a system for personal data processing and also when using that system to carry out such processing, data controllers must now implement appropriate technical and organizational measures, such as pseudonymisation, which implement data protection principles (for example, data minimisation) effectively and incorporate appropriate safeguards into the processing of personal data to meet the GDPR's requirements and protect individuals' rights. The state of the art, costs of implementation and the nature, scope, context and purposes of the intended personal data processing must be considered, together with the risks of varying likelihood and severity for individuals' rights and freedoms which are raised by the processing.

Data controllers must also put in place appropriate technical and organizational measures to ensure that, by default, only personal data which is necessary for each specific purpose of the processing is processed and that by default personal data is not made accessible without the individual's intervention to an indefinite number of people.

Life sciences and healthcare organizations will need to introduce appropriate policies and procedures to ensure that appropriate measures and safeguards are incorporated when introducing new personal data processing systems, products or processes and to ensure that data protection by design and default principles are respected.

The GDPR also formally requires data controllers to carry out privacy impact assessments in relation to any personal data processing which is likely to result in high risks to individuals' rights and freedoms, particularly where the processing uses new technologies. Privacy impact assessments must be carried out, in particular, in a number of specified circumstances, including where personal data processing involves large scale processing of certain sensitive personal data, including genetic data and data concerning health. Privacy impact assessments should include various elements and, where appropriate, data controllers are obliged to seek the views of data subjects or their representatives on the intended processing (without prejudice to the protection of commercial or public interests or the security of the processing).

Life sciences and healthcare organizations should carry out privacy impact assessments in any circumstances when they are proposing to process large amounts of sensitive health related data (e.g. when designing and running clinical trials and introducing new products and/or services for patients). Potentially, they may also have to seek the views of the relevant individuals or their representatives about their intended personal data processing in these circumstances, at least to some extent.

Data Processors

In addition to imposing new requirements on data controllers, the GDPR imposes various data protection obligations directly on data processors for the first time (data processors include any natural or legal person, public authority, agency or other body which processes personal data on behalf of a data controller). For example, the GDPR extends to data processors the requirement to ensure an adequate level of protection for personal data which is transferred outside the European Economic Area. Similarly, data processors must put in place appropriate technical and organizational security measures to protect personal data and create and maintain certain records of their personal data processing activities (among other things).

Life sciences and healthcare organizations who are acting as data processors on behalf of data controllers (e.g. contract research organizations acting on behalf of clinical trial sponsors) will need to ensure that they comply with all relevant requirements of the GDPR, going forward.

Group Actions

The GDPR gives individuals the right for the first time to mandate not-for-profit bodies, organizations or associations, which have been properly constituted under the law of an EU Member State, which have statutory objectives in the public interest and which are active in protecting individuals' rights and freedoms regarding protection of their personal data, to take various actions on their behalf. Such bodies, organizations and associations may lodge complaints on the relevant individuals' behalf, exercise certain rights to obtain effective judicial remedies against data protection regulators and data controllers and processors and receive compensation on the individuals' behalf in certain circumstances.

The GDPR thus increases the possibility of "group action" style data protection claims within Europe. Such claims, which may increase the frequency and costs of data protection related proceedings, could be especially relevant for life sciences and healthcare related organizations that infringe individuals' privacy rights, given the large amounts of sensitive health related personal data that such organizations typically collect and use.

Penalties

The GDPR considerably increases the sanctions and penalties which can be imposed on organizations which breach its requirements. In particular, the maximum monetary penalties which can be imposed by European data protection regulators for serious breaches have been substantially increased to up to: (i) €20,000,000; or (ii) 4% of an undertaking's global annual turnover, whichever is the greater.

Clearly, for life sciences and healthcare sector organizations which handle significant amounts of sensitive personal health related data, the imposition of such increased monetary penalties in the event of a serious breach could be highly significant, so ensuring that a robust data protection compliance program is in place will be critical.

Summary of Significant Issues

A checklist of significant issues which life sciences and healthcare sector organizations need to consider is set out below:

  • Does the GDPR apply to your organization, even if it is based outside the EU?
  • Has your organization established a robust data protection compliance program to ensure compliance with the GDPR?
  • Has your organization established a valid legal basis for processing personal data, particularly data concerning health, genetic data and any other relevant special categories of personal data?
  • Has your organization updated its procedures, forms and wording for obtaining individual consents to ensure compliance with the GDPR?
  • Does your organization use pseudonymised or "coded" data from which living individuals can be re-identified? If so, does your organization comply with the GDPR's requirements in respect of it?
  • Has your organization implemented appropriate policies and procedures to ensure that data protection by design and default principles are respected?
  • Has your organization implemented appropriate policies and procedures to ensure that data protection impact assessments are carried out where required?
  • If your organization acts as a data processor in any circumstances, is it able to comply with its new obligations under the GDPR?

Conclusion

Although officially in force, the GDPR will not be enforced by European regulators until 28th May 2018. The matters discussed above highlight some of the issues that are likely to impact upon life sciences and healthcare related organizations however, there are also other, more general, issues raised by the GDPR that such organizations will need to consider.

Life sciences and healthcare related businesses should take steps now to ensure that they are able to comply with the new requirements of the GDPR. This should help such organizations to build and maintain the trust and confidence of their customers, business partners, patients and other individuals whose personal data they collect and process and avoid breaches of relevant data protection rules. Organizations which are prepared for the GDPR are also more likely to avoid enforcement action by European regulators, legal action from data subjects, significant monetary penalties and the attendant reputational damage and negative publicity which can result.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.