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Italian Medical Device Payback: Italy approves 75% reduction on medical device payback to end disputes

Italian Medical Device Payback: Italy approves 75% reduction on medical device payback to end disputes
Published Date
Aug 8 2025

Background: The Payback Mechanism and Its Impact

Italy’s payback system for medical devices has been a source of significant upheaval in the sector, with both domestic and international companies closely monitoring developments. 

The regulatory framework, particularly Article 9-ter, paragraph 9-bis of Decree-Law No. 78/2015 (as amended), establishes a strict annual spending cap for each Italian region on medical device procurement, set at 4.4% of the National Health Fund. Should a region exceed this cap, suppliers are required to reimburse a portion of the overspend, calculated in proportion to their market share—a process known as the Medical Devices Payback Mechanism.

For several years, this mechanism remained dormant. However, in 2022, the Ministry of Health activated the payback system for the years 2015-2018, following a decree certifying that spending ceilings had been breached at both national and regional levels. Suppliers were ordered to repay hundreds of millions of euros, with the threat that, if payment was not made within 30 days, regions could offset debts owed to suppliers by claiming the payback amounts directly.

 

Legal Challenges and Initial Government Response

The scale of the sums demanded led to widespread legal challenges. Most suppliers took their cases to the Regional Administrative Court of Lazio, which granted temporary suspensions of the payment orders. In an attempt to resolve the mounting disputes, the Italian government introduced Law Decree No. 34/2023, offering a 52% discount on the amounts due in exchange for suppliers waiving ongoing litigation. Despite this, the majority of companies continued to contest the payback, refusing to pay.

The case was brought before the Italian Constitutional Court, which, in July 2024, declared the payback mechanism to be lawful. However, the Court also ruled that all companies—regardless of whether they had withdrawn their legal challenges against the payback—were entitled to a 52% reduction. As a result, no supplier would be required to pay more than 48% of the original amounts claimed for the years 2015 to 2018.

In March 2025, the Regional Administrative Court of Lazio rejected the claims, considering the payback mechanism lawful, within the limits set by the Constitutional Court (i.e. in the maximum amount of 48%), effectively obliging companies to pay.

Recent Developments: A Path to Settlement

Industry associations, recognising the need for a definitive solution, successfully lobbied for the establishment of a technical working group at the Ministry of Economy and Finance (MEF). This led to the government issuing Decree-Law No. 95/2025 (the “Economy Decree”) on 20 June 2025, introducing significant new measures to resolve the dispute.

The key provisions of the Economy Decree are the following: 

  • 75% Discount Approved: For the years 2015-2018, suppliers will benefit from a 75% discount on the payback amounts. Companies can settle their obligations by paying just 25% of the sums indicated by regional and provincial authorities, provided payment is made within 30 days of the law’s entry into force. No interest will be applied. The financial impact of the new measures will be addressed through a special governmental fund of 360 million euros.
  • Closure of Pending Litigation: Once the reduced payments are made, regions and autonomous provinces will confirm receipt and notify the Lazio Administrative Court, resulting in the closure of all related legal proceedings and the mutual waiving of legal costs.
  • Grace Period for Payment: If companies fail to pay within the 30-day window, the authorities may offset the amounts due, but only up to the limits set by the Constitutional Court (i.e., not exceeding 48%). Importantly, until 31 December 2025, no compulsory collection measures (including offsets) will be enforced, giving companies time to regularise payments and resolve any disputes over the precise amounts owed.
  • Reimbursement for Overpayments: Companies that have already paid more than the new 25% threshold will be entitled to a credit for the difference, which can be used to offset future debts. The operational details will be set out in a forthcoming decree from the MEF and the Ministry of Health.
  • Support for SMEs: Small and medium-sized enterprises will have access to state-guaranteed financing through the Guarantee Fund, subject to creditworthiness and resource availability.

On August 6, 2025, the Chamber of Deputies gave final approval to the conversion of the Economy Decree into law. This significant legislative step marks the conclusion of the parliamentary process, and the new rules are expected to come into force in the coming days, following their publication in the Official Gazette.

 

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