Italy’s latest medical quandary. Under the so-called “payback” mechanism, biomedical and pharmaceutical companies are called upon to contribute to the repayment of health deficits caused by regional health policies. And they have accumulated theoretical debts with their regional administrations for no less than €8 billion over the last eight years. As of Tuesday, the matter passed into the hands of the Constitutional Court.
- The Administrative Court of Lazio has raised the question of constitutional legitimacy for this issue, which means the impasse will remain until Italy’s highest judicial body has its say (it will take eight to ten months).
A controversial matter. The “payback” mechanism was created in 2013, but companies have been long calling for its abolition. The issue has been taken to heart by the current majority, especially the ruling party, Brothers of Italy, which is looking for a structural solution to the problem – which would create significant difficulties for the entire biomedical system.
- However, tight budget margins and borrowing limits in 2024 mean it’s doubtful the regional expenditure ceilings may be raised – which in turn would sterilise the deficit and bring the companies themselves mostly out of the woods.
- In the meantime, the latters have begun to appeal to the administrative courts – not least because there’s a considerable difference in paying €2 billion for the 2015-2018 period and owing €6 billion for the 2019-2022 period, where the pandemic has had a considerable impact.
What happens now. The regional court’s decision has stopped the clock on reimbursements, pointing out that “the legislative choices could be unreasonable in many respects” and raising the issue of constitutional legitimacy regarding the entire “payback” mechanism. According to sources consulted by our sister website, the timeframe will be extended.
- Nothing will move for some time, namely the time it will take for the Constitutional Court to review the matter.
- The government will try to balance the increase in regional budgets, but it is very likely that it will have to wait until next year’s budget law (for 2025).
Hear from the industry. “The decision of the Lazio [Court] takes up exactly what we have been saying, i.e. that companies are a value not to be destroyed, and supports our position on a crazy regulation,” explained Massimiliano Boggetti, President of Confindustria Medical Devices, who also noted that the repayment mechanism is temporarily suspended.
