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:
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.
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.
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.
