Transparency of financial relationships between healthcare professionals and the medical industry is a hot topic. Various investigations of the Health and Youth Care Inspectorate (Inspectie Gezondheidszorg en Jeugd, IGJ) show that boards of healthcare institutions often have little insight into such financial flows within the healthcare institution. Through sponsorship agreements, healthcare professionals receive remuneration for their activities on behalf of the medical industry. In the past, this sometimes happened without the knowledge of the healthcare institution in which they work. As a result, the Minister of Health, Welfare and Sport announced a tightening of the current (complex) laws and regulations on inducement (gunstbetoon) and recently informed the House of Representatives about its progress.
In this blog, we outline the main features of (in)permissible forms of inducement and discuss the recently published letter to parliament.
What is inducement?
In brief, inducement means offering money, services or goods to a healthcare professional for the apparent objective of promoting the sales of a medicine or medical device. In principle, inducement is prohibited. The idea behind this is that a healthcare professional may not be influenced by (financial) favours from the medical industry when choosing a particular medicine or medical device. Instead, the healthcare professional must put health interests first. To ensure this, inducement is prohibited unless there is an exception.
Legislation and regulations
The ban on inducement regarding medical devices is regulated in the Medical Devices Act ('MDA')(de Wet op de Medische Hulpmiddelen) the Policy Rule on Inducement MDA ('Policy Rule MDA')(Beleidsregels gunstbetoon Wet medische hulpmiddelen) and the Medical Devices Code of Conduct ('Code')(Gedragscode Medische Hulpmiddelen) as self-regulation. The ban on inducements in relation to medicinal products is set out in the Medicines Act (de Geneesmiddelenwet), the Benefit Medicin Act Policy Rules 2018 (Beleidsregels gunstbetoon Geneesmiddelenwet 2018) and the Medicines Advertising Code of Conduct (Gedragscode Geneesmiddelenreclame). Below, we specifically address the regulatory framework of inducement for medical devices, but this framework is largely similar to that for medicines.
Exceptions to inducement
The Policy Rule MDA contains the following four exceptions to the general ban on inducement:
The reimbursement of participation fees
Exempted are reimbursements of costs for participation in, for example, a conference or continuing education. However, these participation costs must be limited to what is strictly necessary to attend this meeting and may only be related to the person involved in the actual application of the medical device. Furthermore, it is important that the meeting takes place at an appropriate location and the costs are limited to the main purpose of the meeting.
The remuneration of services
Healthcare professionals involved in the application of a medical device may perform services for a supplier for a fee. For example giving lectures or consultancy. This remuneration must be in reasonable proportion to the service and relevant to the supplier or the healthcare professional's practice. Besides, a written service agreement is required which specifies – among other things – the provided service and the remuneration.
Gifts of minor value
It must be possible for a medical device supplier to engage in marketing activities. Providing promotional materials or gifts may be part of this. Therefore, the giving and receiving of gifts is permitted if the gift is relevant to the professional practice. A maximum value of €50 per gift applies here, and in total a healthcare professional may receive a maximum of €150 in gifts per year.
Discounts and bonuses in medical device procurement
Finally, the prohibition on inducement does not apply to discounts and bonuses when purchasing medical devices. For this, the Policy Rule MDA sets out additional conditions that (i) there is a discount in cash or in kind as far as it is related to industry-related products, (ii) the bonus or discount must be explicitly documented in writing, and (iii) the bonus or discount is offset against the (legal) parties directly involved in the transaction or distribution of the medical device.
Sponsorship
Apart from these exceptions to the ban on inducement, the Policy Rule MDA and the Code outline a framework for 'sponsorship'. This is defined in the Policy Rule MDA as 'a large group of financial contributions'. This may include, for example, financial contributions for the purpose of scientific research. In practice, such sponsorship by a supplier ('the sponsor') does not always have the apparent objective of promoting the sales of a medical device. If each of the conditions in the Policy Rule MDA are met, it is presumed that these forms of sponsorship do not have an apparent sales-promoting objective and therefore fall outside the scope of the legal ban on inducement.
Conditions for sponsorship
The Policy Rule MDA provides the following conditions:
- Sponsorship is provided solely for purposes unrelated to the purchase, use, application or recommendation of the sponsor's products or otherwise linked to previous, current or potential future use of the sponsor's products or services;
- The sponsorship is useful and necessary to contribute to the intended health interest;
- The nature, purpose and extent of the sponsorship must be set out in writing in advance, must be approved in advance in writing by the board of the healthcare professional's institution and must be transparent;
- The sponsorship may not require any consideration from the healthcare professional, with the exception of name recognition;
- Decisions on the use of the sponsored financial contribution must be made independently and without influence from the sponsor;
- In the case of sponsorship for scientific research, the research must meet the standards of scientific quality, objectivity and integrity.
Code
The Code provides further regulations regarding transparency. According to the Code, the healthcare professional must obtain verifiable permission from the board of directors of the institution where the healthcare professional is employed, prior to entering into the service and sponsorship agreement. In addition, the Code obliges that service and sponsorship agreements must be published in the Healthcare Transparency Register (Transparantieregister Zorg).
More government regulation
Currently, compliance with laws and regulations on inducement and sponsorship often goes wrong. Common mistakes are, for example, that before entering into a sponsorship agreement, the required approval of the healthcare institution's board was not requested or that the sponsorship agreement was not published in the Healthcare Transparency Register.
To promote transparency in this regard, the Ministry of Health, Welfare and Sport (Ministerie van Volksgezondheid, Welzijn en Sport) is working on tightening laws and regulations with the focus on a shift from self-regulation to government regulation. In the letter to parliament of 8 April 2024, the minister announced three new measures to increase transparency in financial relationships and prevent unwanted influence.
Transparency register
First, establishing a statutory transparency register in which healthcare professionals must register all their 'financial relationships', unless there is a good reason to make an exception. The minister proposes - in line with the current self-regulation through the Code - a threshold of five hundred euros per year and limiting the administrative burden on healthcare professionals by placing the registration burden on the giver.
Board approval
Second, the minister advocates a greater role for boards of healthcare providers in entering into 'financial relationships' between healthcare professionals and companies. More specifically: regulations requiring boards to approve 'all agreements in which financial relationships are entered into'. This aims to increase internal transparency within hospitals and create a basis for IGJ supervision. The minister sees increasing alignment within hospitals and Medical Specialist Companies (Medisch Specialistisch Bedrijf, MSB) as an 'additional benefit'.
Tightening sponsorship rules
The third and final measure concerns improving the legal framework for sponsorship. As the current framework is insufficiently clear to enforce, the minister proposes two options for a new legal framework. Either sponsorship is defined as an additional exception to the ban on inducement or financial relationships (inducement and sponsorship) are only allowed under conditions to be further defined. Both options will be further examined.
Practice
These plans still raise some questions for us. How does the statutory transparency register relate to the pending legislative proposal of a similar register? How will 'financial relationships' be defined and what does this mean for the scope of the proposed approval right for boards? What will be done with sponsorship agreements that fall entirely outside the prohibition on inducement (and the related exceptions)?
In practice, we notice that institutions are proactively working on the implementation of proposed changes. Fear of the social trend sometimes leads to an (unnecessarily) rigid reading and implementation, resulting in internal discussions. For instance, sponsorship agreements are quickly lumped together with the profit distribution discussion under the legislative proposal for Care and Youth Aid Providers (Integrity of Operations) (Wibz). We also see a wrong reading of the application of the above conditions for a sponsorship agreement. Institutions apply the conditions as requirements for a valid sponsorship agreement, while under the Policy Rule MDA, meeting the conditions only results in presuming there is no apparent sales-promoting objective and therefore the sponsorship agreement falling outside the prohibition on inducement. We emphasize that under the Policy Rule MDA, a sponsorship agreement that does not meet these conditions is not necessarily invalid.
In conclusion
We recommend that healthcare professionals keep a close eye on developments in this area and also review current sponsorship agreements. Remember that elements of the announced measures are already part of current self-regulation. At the same time, avoid that anticipating intended plans lead to legal uncertainty, with possible negative consequences for medical scientific research. Feel free to contact one of our experts in this area for any questions or consultations on this matter.
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.