Amendments to article 10§3 of the Act of 25 March 1964 on medicinal products, as effected by the Act of 16 December 2004 relating to measures to reduce excessive promotion of medicinal products, came into effect on 1 January 2007.  In accordance with this provision, when pharmaceutical or medical device companies invite healthcare professionals to attend scientific meetings or reimburse their expenses for such meetings that include at least a one night stay, it is compulsory, prior to the meeting, to obtain a visa from the Belgian non-profit-making organisation, Mdeon. 

Mdeon, which was created in May 2006 by associations representing physicians and pharmacists together with representatives of pharmaceutical and medical device companies, published its annual business report on 1 February 2008.  A copy was provided to the Federal Agency for Medicinal and Health Products (the "Agency").

The Agency noted that some pharmaceutical and medical device companies have never submitted any visa requests to Mdeon.  The Agency therefore decided to issue a new circular number 513, dated 27 February 2008, which was intended to remind pharmaceutical and medical device companies of their obligations to obtain Mdeon visas.

The content of this Circular can be summarised as follows:

• The requirement to obtain a visa applies to foreign companies in addition to companies located in Belgium.  Sponsorship of a healthcare professional practising in Belgium is subject to a visa being obtained in advance even if the funds come from a foreign company.

• The visa procedure applies to (i) any sponsorship paid to the organisers of scientific meetings; (ii) situations where an invited speaker is a healthcare professional; and (iii) invitations for healthcare professionals to attend a scientific meeting.

• A visa request should be submitted at least 15 working days before the scientific meeting and before inviting the person who is to benefit from the sponsorship.

Non-compliance with the Mdeon visa requirement is punishable with a fine in the region of EUR 2,750 - 132,000.

For further information on this article please contact Annabelle Bruyndonckx or Natasja De Splenter of the Brussels office.

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Implementation of the EFPIA Code 

On 21 March 2008, Belgium implemented the EFPIA Code of Practice on Relationships between the Pharmaceutical Industry and Patient Organisations, in the Code of Pharma.be, the Belgian Pharmaceutical Industry Association.

One of the most important changes in the new code is the obligation for pharmaceutical companies to enter into a written agreement with any patient organisation that it intends to support.

For further information on this article please contact Annabelle Bruyndonckx or Natasja De Splenter of the Brussels office.

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Research expenses to be included in the calculation of research tax credits

In a decision of 29 November 2007, the Versailles Administrative Court of Appeal delivered a ruling on the application of the terms of Article 244 quarter B of the French Tax Code ("Article 244") in respect of the research expenses eligible for research tax credits (CAA Versailles 29 November 2007, n°05VEO1865, SA BP France).

According to paragraph I of Article 244, companies incurring research expenses over the year are entitled to receive a tax credit.  Paragraph II of Article 244 stipulates that tax credits apply to depreciation expenses for fixed assets created or purchased new that are assigned specifically to scientific and technical research activities.

The BP France case raised the following questions:

• Can the research expenses a company has invoiced to its group be included in the expenses that qualify for research tax credits?

• Can fixed assets transferred to an absorbing company in a merger be classed as fixed assets that have been created or purchased new insofar as they had been classed as such by the company that is being taken over?

• Can fixed assets leased out under a lease management ("location-gérance") agreement be viewed as being assigned directly to research activities?

Are re-invoiced costs eligible for research tax credits?

The Versailles Administrative Court of Appeal decided that only the expenses that had actually been incurred by the company could be eligible for research tax credits.  However, any expenses the company re-invoiced to subsidiaries of its group should not be included in the tax credit base.

This decision considerably limits the tax credit base and appears to run contrary to Article 244 which refers to "the research expenses incurred" by the company and does not distinguish between the expenses incurred on its own account and that it has incurred on account of other companies as a subcontractor.  Besides, it can be clearly seen from the parliamentary debates conducted at the time the research tax credit system was adopted in 1983 and those relating to the proposed reform of the regime in the Finance Act of 2008, through which the legislature is aiming to promote research in France, irrespective of which parties will directly benefit from the research.

Can fixed assets transferred via a merger be classed as fixed assets created or purchased new?

The tax administration claimed that the industrial assets transferred to BP France when it absorbed the company, BP Chemicals SA, should be classed as acquired and, as such, could not be considered to have been created or purchased new.  Hence, the absorbing company's depreciation of these fixed assets could not be included in the calculation of research tax credits.

The Court did not confirm this reasoning insofar as, according to established precedents, the transfer of assets in mergers or similar operations do not constitute sales on the part of contributing companies or companies being merged because, as Mrs Le Montagner, the Government Commissioner, recalled in her conclusions, a merger results from a pooling, not a sale, of assets.  Consequently, the fixed assets transferred to BP France were indeed fixed assets created or purchased new under the terms of paragraph (a) of Article 244.

Can fixed assets that are leased out under lease management agreements be considered to be assigned directly to research activities?

Article 244 stipulates that, for depreciation expenses to be eligible for tax credits, the fixed assets must be assigned directly to scientific and technical research.  Neither the law nor the administrative policy refer to a notion of direct allocation or pose limitations.

Under these circumstances, the Court agreed that the depreciation of fixed assets leased out under a lease management agreement and used for research could be included in the calculation of research tax credits.

For further information on this article please contact Sophie Jouniaux of the Paris office.

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Further implementation of EC Directive 2004/27/EC and publication of Law 2008-337

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Pharmacists and privacy protection law

Royal Decree 1720/2007 (the "Royal Decree"), which implements the Spanish Data Protection Act (Law 15/1999), has been approved as a measure to (i) provide greater consistency with the transposition of Directive 95/46/EC, (ii) to implement the new aspects of the Law 15/1999, and (iii) to increase the degree of precision necessary to provide the system with legal certainty, i.e. by defining the scope of privacy protection.

The majority of pharmacists in Spain are sole traders and under the Royal Decree, personal data relating to sole traders that refers to them as traders shall be excluded from the new system of personal data protection.

Thus, the personal data of sole traders (and therefore, of pharmacists), which are linked to their commercial or business activity or which identifies a link to their commercial establishment (e.g. a pharmacy), or a trademark for a certain product/service that includes their name, are not protected under the Spanish Data Protection Regulation, provided that the data processing is being carried out in the business field.

Notwithstanding this, the personal data of the sole trader shall be protected under the Spanish Data Protection Regulation, through which the processing of the sole traders' data is intended not to maintain a business relationship with the commercial establishment (i.e., the pharmacy), but to collect information regarding the individual sole trader.

Therefore, the personal data of pharmacists are not protected under the Spanish Personal Data Regulation, provided the following two (2) requirements are met:

1. A pharmacist's personal data refers to him or her only as a sole trader; and
2. The use of the pharmacist's personal data is limited to business activities, i.e., invoicing data of a pharmacy managed by a pharmacist.

A detailed explanation of Law 15/1999 and the Royal Decree has been published by the Agencia Española de Protección de Datos.

For further information on this article please contact Jordi Masdevall of the Barcelona office.

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Changes to the medicinal products authorities' inspection powers

The Spanish Ministry of Health has recently passed a new regulation (ORDER SCO/362/2008) which modifies the previous regulation (ORDER SCO/256/2007) on good clinical practice and the requirements for the authorisation of manufacturing or importation of medicinal products for research in human use.  The aim behind the Order is to avoid disputes regarding inspection powers between the national authority and the Autonomous Communities Authorities.  Therefore, this Order amends article 10 (sections (1)(d), (3) and (5)) to restrict any broad interpretations regarding competence delegated to Spanish Autonomous Communities.

The Order has introduced the following developments:

• Ending the inspection powers granted to the Spanish Medicinal Products and Medical Devices Agency (the "Agency") regarding clinical trials which may not have been previously authorised by the Agency.
  
• Invalidating prior authorisations granted by the Agency for clinical trial inspections previously carried out by other EU competent authorities.
  
• Encouraging the development of relationships between the Agency and other EU competent authorities in relation to good clinical practice inspections.
  
• Placing the onus on the Agency to inform the relevant Autonomous Community Authorities of any possible inspection into good practice carried out under the authority of any third country in a clinical centre of such Autonomous Community territory.  

The Agency shall develop the following procedures:

1. Requesting inspections or collaboration from other EU members and compulsorily cooperating in inspections carried out by other EU members.
2. Carrying out inspections in other third countries outside the EU.

For further information on this article please contact Cecilia Pastor or Ester Navas of the Madrid office.

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Foreign trade with medicinal products

Eucomed Code now a condition of ABHI membership

The Association of the British Healthcare Industry ("ABHI") has confirmed that on 1 April 2008, compliance with the Eucomed Code of Business Practice became a condition of membership of the ABHI. 

A copy of the Eucomed Code of Practice is available here, together with a copy of the ABHI procedure relating to complaints under the code.

For further information on this article please contact Paul Hawkins or Beatriz Araujo of the London office.

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MHRA exercise to establish marketing status of all UK medicinal products

The Medicines and Healthcare products Regulatory Agency ("MHRA") has published plans to establish the marketing status of all medicinal products on the UK market.  The exercise is designed to identify any marketing authorisations that should be invalidated as a result of the product not being placed on the market for 3 years or not having been marketed at all within the 3 years following authorisation.  These rules apply under Article 24 of Directive 2001/83/EC as amended, the so-called "sunset clause".

The MHRA's exercise will apply to national marketing authorisations and those granted under the decentralised or mutual recognition procedures, but will not apply to parallel imported products or those granted through the EMEA's centralised procedure.  The MHRA will issue instructions to marketing authorisation holders during May 2008 with responses required by 12 July 2008.

Exemptions from the sunset clause can be applied for on public health grounds.  Details of this exemption and further information on the marketing survey are available from the MHRA's website.

For further information on this article please contact Paul Hawkins or Beatriz Araujo of the London office.

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