June 2022 – On 14 June 2022, Kinstellar hosted a webinar centred on current developments in the life sciences & healthcare sector across Central and Eastern Europe.
We covered some of the most relevant and pressing topics currently impacting the life sciences & healthcare landscape, including (i) sector inquiries by local competition authorities in the area of life sciences; (ii) price reduction announcements and their relevance for the CEE pharma sector; and (iii) legal challenges on the use of artificial intelligence across the life sciences industry.
Presentations were made by Tomáš Čihula, Eszter Takácsi-Nagy, Péter Vörös and Petr Bratský.
Below we provide a brief summary:
Tomas Čihula presented a brief overview of recent actions taken by local competition authorities in CEE. In particular, he reported on the current status of a sector inquiry by the Czech Competition Authority centred on distribution models used by pharma companies, a preliminary report published by the Romanian Competition Council covering a study on OTCs and food supplements, and the recommendations made by the Antimonopoly Committee of Ukraine with respect to the advertising and labelling of medicinal products.
Eszter Takácsi-Nagy discussed recent sector inquiries initiated by the Hungarian Competition Authority in the life sciences sector. She detailed the close scrutiny to which the life sciences industry is being subjected by the relevant competition authorities, and the active cooperation between the competition and pharma authorities in the course of such sector inquiries. The presentation also covered a number of sector-specific regulatory issues that have recently been under consideration by local competition authorities. Additionally, the talk focused on the details of recent COVID antigen self-testing and COVID antibody self-testing-related sector inquiries launched by the Hungarian Competition Authority.
Péter Vörös discussed amendments to the Price Indication Directive (PID), introduced by Directive 2019/2161. As a result, all EU Member States were required to implement rules on price reduction announcements into their national laws by 28 May 2022. Most CEE region countries (Hungary, Romania, Bulgaria) have done so – Hungary’s competent ministry even published an interpretative guidance document – but the Czech Republic has still not adopted the necessary implementing rules.
A key novelty of the PID is that where price reductions are offered, the previous price must be clearly indicated. This previous price, in most cases, is the lowest price applied during the 30-day period preceding the respective price reduction. This directive also affects the pharma industry, and the extent to which products can be advertised, and their respective prices can be set, by pharmacies and retailers. Given the large number of price reductions that tend to be applied, the new rules raise key questions, primarily for those retailers, including pharmacies, responsible for ensuring compliance with PID rules.
Notwithstanding the above, the new PID rules also affect wholesalers and manufacturers, particularly in respect of group advertisements. Group advertisements containing announcements or promotions of price reductions by several traders – meaning campaigns covering multiple retailers, e.g. pharmacy chains – now qualify as a form of group advertising. Where such price reduction campaigns are designed or supported by wholesalers or manufacturers, the Kinstellar presentation suggested a number of useful measures that can be taken to mitigate risk.
Petr Bratský gave a presentation on legal challenges to the use of artificial intelligence (AI) in the life sciences industry. Industry experts have argued that the use of AI in the life sciences sector can be beneficial and has considerable potential, particularly in terms of saving time and resources. AI solutions are able to process large amounts of data from different sources in a short period of time, offering a range of further processing opportunities (creating data models, planning, learning from previous experience, generating predictions, recommendations, decisions, etc.).This potential has already yielded results, for instance, in the fields of image recognition (interpreting medical imagery to accurately and quickly identify potential diseases), personalized medicine, the designation of clinical trials, and the possibility of accelerating drug development.
However, life sciences industry companies using AI solutions face various legal hurdles, notably (i) the need for robust regulatory compliance and (ii) the need to ensure sufficient protection of intellectual property rights when developing custom AI solutions. Ensuring regulatory compliance entails, in particular, the fulfilment of obligations arising from personal data protection and cybersecurity regulations. Directly applicable rules concerning the use of AI are currently being prepared at the EU level.
As industry insiders know well, personal data protection compliance goes hand-in-hand with cybersecurity compliance. Moreover, the importance of both forms of compliance is on the rise due to the present high number of EU-wide cybersecurity attacks. The risk of hackers gaining unauthorised access to the data fed into an AI system, and of subsequent corrupting or tampering, is a particularly critical issue in the life sciences industry – after all, the risk concerns patient health and human lives. As a result, the revised EU legal framework on cybersecurity (Directive NIS 2.0) currently being drafted, broadens the scope of obliged entities in the life sciences & healthcare sector. In case of non-compliance with the above obligations, life sciences or healthcare companies could face high administrative fines as well as serious reputational risks.
In terms of CEE countries that are currently not EU Member States, AI-related national concepts or strategies have been drafted in both Ukraine and Serbia. However, the life sciences industry is either only briefly addressed in the respective documentation, or was not addressed at all. Nonetheless, we anticipate that these countries will address AI issues with greater specificity upon the adoption of the related general EU rules.
Petr Bratský concluded his presentation with a number of highly useful and innovative recommendations for those life sciences or healthcare companies developing internal AI solutions, or for those using third-party suppliers.