European Union: European Health Care Compliance Challenges (And Solutions)

Life sciences and health care companies (“health care companies”) rightly invest a significant amount of time and money into ensuring compliance with health care regulations in the countries in which they are based, but global companies must also consider the panoply of compliance challenges posed by the European market. This alert will address the top five health care compliance challenges facing health care companies operating in Europe, as well as simple steps that health care compliance professionals can take to address these challenges. Future alerts will address these topics in greater detail.

1. Government Interactions in Countries with Public Health Care Systems

Health care companies operating in Europe will inevitably face a higher number of government interactions than their counterparts that operate only in the United States, because nearly all of Europe has either publicly sponsored and regulated universal health care or publicly provided universal health care. Due to the public or quasi-public nature of health care in much of Europe, there are a larger number of individuals who regulators may consider government officials and with whom employees may be interacting, including doctors, nurses, and hospital administrators. Enforcement actions against health care companies are often predicated on the fact that health care professionals are government officials, and companies that interact with them regularly must be particularly aware of these risks.

Companies doing business with state-sponsored health care systems will also need to contend with sometimes complex reimbursement regimes and potential obstacles around introducing new or innovative products. Delays caused by the necessity for government approvals or reimbursement can create the incentives for bribes or facilitation payments, and the volume of government interactions increases the odds that a company may violate an anti-corruption law like the U.S. Foreign Corrupt Practices Act (“FCPA”). Health care companies must also be aware of changing local laws, such as Germany’s recent implementation of a revised Act to Combat Corruption in Healthcare which holds self-employed health care professionals (“HCPs”) liable for active and passive bribery, rather than just those at state-owned hospitals who would be classified as “public officials.”1

Solution: Companies can significantly mitigate the risks around government interactions by: 1) having clear policies and procedures around government interactions, including guidance around meals, hospitality, and sponsorship for educational events; 2) training employees who interact with government officials on these policies; and 3) monitoring compliance with these policies.

For additional information, see our Global Anti-Corruption Resources here.

2. Distribution Networks in Diverse Geographic Locations

In addition to risks from its own employees, health care companies must also be aware of the compliance risks associated with their distribution networks and foreign subsidiaries in the fragmented European market. Relying on a suite of different distributors, speaking different languages, using different currencies and with different cultures can create significant compliance challenges for companies across Europe. The actions of third-party distributors have been the basis for many FCPA settlements, sanction-related fines and compliance problems over the years, and companies must ensure that they have appropriate control and oversight of their third parties to limit such risks.

Solution: Companies can protect themselves by ensuring that distributors are carefully controlled, including with regards to issues around export control, sanctions, product registrations, and corruption. These steps include: 1) conducting appropriate risk-based due diligence on third-party distributors; 2) having clear written agreements that contain representations that the distributor will comply with anti-corruption, sanctions, export control and product registration regulations in the jurisdictions in which they operate, as well as limitations on the geographic area in which the distributor operates; and 3) monitoring distributor activities.

For additional information, see our White Papers and Alerts here.

3. Competing Regulatory Regimes in European Countries

Another layer of complexity involved in doing business in Europe is the presence of competing regulatory regimes in the highly regulated European market. Conduct that is legal in one European country, or in the country in which a company is based, may be illegal in another European country. These regulatory regimes are subject to change at any time and keeping current with developing laws may be a challenge.

Companies should also consider ethical guidance published by professional bodies, such as the code of ethical business practices and guidelines on HCP interactions published by the medical device trade association Eucomed and the European Diagnostic Manufacturers Association (“EDMA”), the codes of practice for interactions with HCPs and patient organizations published by the European Federation of Pharmaceutical Industries and Associations (“EFPIA”), the guiding principles published by the International Federation of Pharmaceutical Manufacturers & Associations (“IFPMA”), and the Association of the British Pharmaceutical Industry (“ABPI”) code of practice in the UK, along with many other country-specific laws and sets of guidance. These trade association standards and accompanying guidance are also constantly changing. For example, on June 30, 2016, as required by EFPIA’s code on disclosures of transfers of value, EFPIA’s company members began disclosing payments to European health care providers and organizations in 33 European countries.

Solution: Companies should keep abreast of changes in regulatory regimes, including changes to transparency laws and antitrust regulations; develop a strategic approach to global and local policies that allows for flexibility to address varying and evolving legal requirements and ethical guidelines; and ensure that they seek the advice of competent local counsel in the jurisdictions in which they operate.

4. Data Privacy

Data privacy issues are a challenge for all companies, but they are a particularly tricky issue for health care companies that may be dealing with sensitive information related to patients’ health. It is even trickier in Europe, as stringent European Union (“EU”) data privacy standards will be applied and these may differ in interpretation and enforcement from country to country. Data privacy is an area of law that frequently evolves, as shown by the changes in the last year alone, including the loss of the safe harbor for U.S. companies, and the new General Data Protection Regulation that will come into effect for the EU in 2018 and have implications for all companies providing goods or services in and to European individuals, no matter where in the world the company is located.

Solution: With the focus on the new regime coming into force, any company doing business in or with Europeans should be reviewing its people, policies and procedures to ensure that they will meet the new accountability standards and remain compliant. If necessary, companies should seek advice from data privacy counsel to ensure that they comply with relevant laws in the jurisdictions in which they do business.

For additional resources, see our Alerts and White Papers here.

5. New Supply Chain Disclosure Requirements under the UK Modern Slavery Act

The UK Modern Slavery Act (“MSA”) requires companies that do business in the UK with worldwide annual turnover of £36 million to annually publish a slavery and human trafficking Statement on their websites indicating the steps they have taken during the fiscal year to ensure that slavery and human trafficking are not taking place in their supply chains or in their own businesses. This broad disclosure requirement is applicable to both UK- and non-UK-based companies, including those in the health care and life sciences industries. Compliance is for fiscal years ending on or after March 31, 2016 and the Statement should be published within six months after fiscal year end. The Statement must be approved by the Board and signed by a director. Although the MSA is a disclosure-only statute that does not require companies to adopt policies and related management systems, disclosures will be used by NGOs, socially responsible investors (“SRIs”) and other stakeholders to assess ethical sourcing programs and push for change. Health care and life sciences companies often have complex multi-tier global supply chains of limited transparency. In addition, the raw materials and components in the supply chains of health care and life sciences companies (such as certain agricultural products used in pharmaceuticals and metals used in medical devices) often originate in higher risk locations that can present modern slavery risks.

Solution: If the process has not already begun, companies should start focusing on their first MSA Statements. In preparation for putting pen to paper, companies should assess human trafficking risks and current compliance procedures and determine whether enhancement is warranted. As part of this exercise, companies should benchmark compliance activities against peer companies, existing voluntary compliance frameworks and NGO and SRI expectations. Although the MSA is a simple statute on its face, Statements often take longer to prepare than companies anticipate. Many decisions will go into the approach to be taken and, especially at larger companies, many constituencies will need to weigh in on the Statement and it is likely to go through several rounds of revisions.

For additional resources, see our White Papers and Alerts here and the anti-human trafficking module of our Supply Chain Compliance and Corporate Social Responsibility Resource Center here.


1. Sections 299 et seq. of the German Criminal Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions