LIFE SCIENCES | The Regional Administrative Court Rejects Companies’ Appeals on Payback on Medical Devices

On May 7, 2025, the Regional Administrative Court of Lazio (TAR-Lazio) issued the first judgment on the medical devices payback scheme for the years 2015–2018, in the context of the so-called pilot proceeding involving only seven companies. The TAR rejected the arguments challenging the inherent unlawfulness of the payback mechanism and declared that it lacked jurisdiction over the individual regional payback measures (i.e., the payment requests), referring such matters to the jurisdiction of the civil courts. Although the various decisions are not entirely identical, they are based on the same two core arguments.

With regard to the alleged violation of Italian and EU public procurement law, the TAR found that the payback mechanism operates independently of public tender procedures: the payback applies globally to the companies’ turnover (limited to revenues from sales to the NHS) and therefore does not alter the outcome of tenders, as it does not affect either the quantity of supplies or the final purchase price. Instead, it operates on the suppliers’ overall financial position, in a way that is not unforeseeable, since companies were aware, from the time they participated in tenders, of the existence of a national spending cap of 4.4% for the purchase of medical devices. According to the TAR, this awareness excludes the existence of any retroactive effect, as the payback mechanism was well known and companies knew they would be required to share in any overspending beyond regional ceilings.

However, the TAR overlooks the fact that although companies were aware of the national cap, they were not aware of the regional spending data. They did not – and could not – know whether and how much they would have to pay in each region.

Moreover, the TAR commits a major error in interpreting the law, which states that regional spending ceilings should be set in accordance with the public-private mix in the regional healthcare offering, while respecting the overall national cap of 4.4%. The TAR argues that the national cap of 4.4% prevents any region from exceeding that threshold, and that companies have no interest in challenging such an allocation, since a successful claim would merely lower the regional ceiling and thereby increasing their own liability for overspending.

In fact, this is not correct: the law provides that individual regions could have different budgets – even exceeding 4.4% – as long as the total of all regional budgets remains within the national cap of 4.4% on healthcare spending. Regions with predominantly public healthcare systems could thus have higher ceilings, balanced by lower ones in regions with more private healthcare providers. This interpretation reflects both the purpose and literal wording of the law, which was not respected by the implementing acts and was misinterpreted by the TAR.

Lastly, the TAR ruled that disputes concerning the proper calculation of company turnover by the Regions – which forms the basis for the payback – fall within the jurisdiction of the civil courts, as these are merely factual and non-authoritative assessments. At present, this point appears to be the one where the TAR’s reasoning may not be entirely groundless and, if upheld on appeal, it could lead to significant difficulties in safeguarding companies’ rights and interests.

Newsletter n. 108 – June 2025