Key legal aspects of implementing digital therapeutics (DTx) in Slovenia

To ensure the efficiency of the common European market and a high standard of health and safety for its people, especially the patients and other users of medical devices, certain regulations are in place both at the European level as well as individual state levels. These regulations include safety and performance requirements of products, supervision of persons operating in the medical devices market, ensuring market transparency, and of course product qualification. As there are different rules and standards regarding products qualified as medical devices, product qualification is important for anyone looking to compete in the market.  

There are two main legislative acts on the European level regarding medical devices - Regulation 2017/745 of the European Parliament and of the Council (also known as Medical Devices Regulation or “MDR”) and Regulation 2017/746 of the European Parliament and of the Council (also known as In-Vitro Diagnostic Regulation or “IVDR”). Both provide the legal framework necessary for dealing with medical devices on the European market and both must be complied with by manufacturers. Furthermore, there are different laws in individual states, such as the Slovenian Medical Devices Act (Zakon o medicinskih pripomočkih – ZMedPri) which follows the MDR in most respects. 

Under ZMedPri, similary to MDR, “medical devices” are identified mainly by their medical purpose. This includes devices intended for: 

- diagnosis, prevention, monitoring, treatment, or alleviation of disease; 

- diagnosis, monitoring, treatment or alleviation of the effects of an injury or impairment, or compensation for an impairment or disability; 

- examination, replacement or modification of anatomical functions or physiological processes of the body; 

- control of conception, where the device does not achieve its intended effect by pharmacological, immunological, or metabolic means, but it may be aided in its functioning by these processes. 

Notably, there are very few limitations to the form a medical device may come in, from instruments and appliances to software either by itself or as part of another device, all may be subject to regulatory provisions of the ZMedPri and MDR. When it comes to software the main determining factor of whether it can be considered a medical device is the purpose that the manufacturer envisioned for the software and/or the necessity of the software for other devices to function as intended. 

These medical devices are then placed in different “classes” based on the risks they pose to the individuals using them as well as method of use, source of energy, duration of use and other factors. They are also divided by their invasiveness to the human body. The class that a device falls into is an important factor for any manufacturer of the device, since it can mean different regulations must be followed, different quality of product must be observed and different features a product must have. Failure to meet the outlined criteria can mean fines for the manufacturer of a medical device as well as a complete ban of a product from the market.

Offering services with a product or even offering services by themselves can be a great way to ensure proper use of a product and the health and safety of the end user. However, not all services can be provided by anyone and there are certain regulations in place to ensure their quality. These include certain types of services that can only be provided by medical professionals and certain businesses that require government approval prior to entering the market. Following these regulations and criteria is important for any service provider who wishes to offer their services to the end user. 

The main piece of legislation in the field of healthcare providers is the Slovenian Health Services Act (Zakon o zdravstveni dejavnosti – ZZDej). It contains a classification system for different types of services on a primary, secondary, and tertiary level. For example, services provided by a healthcare institution such as a hospital or a health center are considered health services on a primary level and can only be provided with approval from the Slovenian Ministry of Health and by medical professionals. Notably, services that do not require the provider and the end user to be in the same room can be provided using telecommunications technologies under ZZDej, thus allowing certain types of online and virtual treatment. 

Unfortunately, there is little in the way of abstract factors and criteria under the ZZDej that could be used to identify whether a service could be labeled as a healthcare service, making it subject to ZZDej’s rules and regulations. These services are often described on a practical level in the form of examples that the service provider can compare their service to. For instance, healthcare services on a primary level are usually services related to monitoring the health of a person and proposing measures to protect, promote and improve health as well as prevent further diseases. Another example is healthcare services on a secondary level that involve specialists from different areas and offer a more in-depth analysis of a person's condition. 

Even though a coherent system of classification for healthcare services is missing under the ZZDej, it is still important for anyone considering providing such services to follow the rules and regulations set out in it. A good first step would be to contact competent authorities, particularly the Ministry of Health, and request approval to conduct business which can be granted upon fulfilment of certain criteria. Again, failure to conform with applicable law can lead to fines for the service provider and a ban from conducting business in the future. 

Data usage and data collection from the end user are a big part of conducting business and tailoring provided products and services to the consumer’s needs. However, the use of collected data and especially data protection have been some of the biggest priorities for the European Union and subsequently its member states in recent years. The most significant legislative act regarding this issue is Regulation 2016/679 of the European Parliament and of the Council, better known as the General Data Protection Regulation or simply “GDPR” which contains provisions relating to lawful and transparent processing of data, limitations to use of collected data for the intended purpose and storage of data in a safe and secure manner.  

Additionally, there are a number of national legislative acts aiming to further ensure the safety of personal data. In Slovenia the most notable are the Personal Data Protection Act (Zakon o varstvu osebnih podatkov – ZVOP-2) and the Patients’ Rights Act (Zakon o pacientovih pravicah – ZPacP). Both provide a legal basis for data processing, similar to the GDPR, regarding the usage of data for its intended purpose. This is especially true for medical information about a patient under the ZPacP, which contains provisions primarily focused on the confidentiality of a patient’s medical condition and their medical record. Any violation of these rules, especially by medical workers and other healthcare providers, is usually met with a stern response by competent authorities that can result in a loss of the medical worker’s license or ban of conducting business for the institution responsible. 

A service provider or a product manufacturer should always analyze the way they conduct business first. Are they collecting data from the consumer, and could they be deemed a healthcare provider are among the first questions to answer, since this would mean a certain set of rules would apply, complicating the way they conduct business. As previously mentioned, failure to comply with applicable law can be met with harsh punishments and government oversight in this area is common, thus making sure that all the boxes have been ticked and the legal groundwork has been established is essential. 

Regarding product manufacturers and businesses developing software to be used as a medical device, product qualification is key. Besides the mentioned classes that a device, including software, could fall into, there are further legal requirements that need to be observed. For product manufacturers these can again be found in the ZMedPri such as certain conditions for the premises and personnel involved with the manufacturing process, ensuring that there are persons present responsible for oversight of the process and ensuring that proper liability insurance is in place in case of damage caused to a patient by the inadequate quality or safety of the medical device. A big step for any business looking to place their product on the medical devices market is registering with the competent authorities and obtaining the CE label, deeming their product compliant with European health, safety, and environmental protection standards. 

Of course, this process can be convoluted and complicated, often taking time to properly identify and apply necessary requirements. This is where a good legal analysis of the envisioned product and relevant market is crucial. Obstacles and roadblocks described in previous points, such as determining which class the product will fall into, whether a service constitutes a healthcare service or not, and proper use of data collected from consumers, can be alleviated, and easier to overcome with a proper understanding of the relevant legal framework. 

Promoting a medical device is also possible under the ZMedPri. It is defined as any form of spreading information about a device, that is intended to promote the sale or use of the device. The Act does not prohibit the promotion of a medical device based on the person it is intended to be promoted to and medical devices can be promoted to both the general and “professional” public (i.e., healthcare workers). 

However, certain limitations are in place regarding what can be claimed in an advert, the underlying principle being the ban on any misleading advertisement, contained in both Art. 7 of the MDR and Art. 59 of the ZMedPri as well as other legislative acts focused on consumers such as the Slovenian Consumer Protection Act (Zakon o varstvu potrošnikov – ZVPot-1). The other key requirement is prior registration of the product with the competent authorities, as promoting a product as a medical device is banned if the product does not meet all the necessary criteria to be labeled as such. Medical device manufacturers should also note that promoting their devices to medical workers along with offers or promises of any financial benefits is generally prohibited. 

Much like failing to comply with proper product qualification, promoting a product that does not meet certain criteria or promoting a product incorrectly/misleadingly can be met with fines and bans of a product from the market. Government oversight is common in the area so ensuring legal conformity is important. 

As mentioned in the previous section, promoting a medical device to healthcare workers along with providing or promising to provide any financial or material benefit is generally prohibited. This means that a medical device manufacturer can promote a product or a sample of a product to healthcare workers, however they must do so fairly (without misleading the workers) and without any other incentive except the quality of the product itself. Due to anti-corruption policies, this is also commonly enforced when discovered, and the parties involved are often punished accordingly. 

Notably, this prohibition of financial or material benefits does not always apply. An exception exists under the ZMedPri allowing for some smaller gifts or benefits to be given regardless of the general ban. These are further described in the Slovenian Public Employees Code of Conduct (Kodeks ravnanja javnih uslužbencev) as benefits in line with usual hospitality or gifts of smaller values. However, when a gift could be deemed inappropriate or could indicate corruption is subject to a case-by-case review. 

For distributors of medical devices, partnering with local healthcare workers is possible through promotion and advertisement of a product as previously described. This can also be done in the form of samples, which can be given out to healthcare workers or the general public. Another idea might be cooperating with medical professionals in clinical trials. Under the ZMedPri, the manufacturer of a medical device can conduct a clinical trial upon notification and approval from the JAZMP, after which the results of the trial can be shared with both the public and other healthcare workers making it a useful way of promoting the product.  

Manufacturers should keep in mind existing restrictions regarding advertisement and promotion of a product to healthcare workers as well as notifying the JAZMP when conducting a clinical trial. When partnering with local pharmacies and other outlets, manufacturers should also ensure that the outlet employs staff qualified to advise and consult with customers as this is required under the ZMedPri. 

In Slovenia, under the ZMedPri, and in accordance with the MDR, the principle of free movement of goods applies to medical devices as well. This means that no unjust restrictions or barriers may be enforced by individual states and state bodies regarding a medical device if the device has been granted the CE label. These medical devices can then be promoted to both the general and professional public as described in previous sections. 

Before distribution of a medical device can start, a potential distributor should again analyze the way they will conduct business. ZMedPri contains provisions requiring anyone distributing medical devices to register with the competent authorities, specifically the Agency for Medicinal Products and Medical Devices of the Republic of Slovenia (Javna Agencija Republike Slovenija za zdravila in medicinske pripomočke – JAZMP), prior to conducting business or at least within the first 15 days. There are also different provisions applicable depending on the relevant type of distribution, such as wholesale, retail, or mere import of a product. With wholesale distribution for example, additional care is required from the distributor regarding the CE label and for importers, additional duties apply requiring vigilance over the manufacturer’s compliance with relevant legislature. 

However, subject to proper registration and approval from the JAZMP, there are few additional limitations for distribution of medical devices under the ZMedPri. For software, online distribution is possible in accordance with ZVPot-1’s provisions regarding off-premises trade. Other more classical types of distribution are also possible, such as distribution via healthcare institutions, pharmacies, and similar specialized outlets. 

Monetizing medical devices can be done in different ways, the most obvious being direct sale to consumers. As previously mentioned, this can either be done in stores, or off-premises, mainly online, in accordance with the ZVPot-1. Subject to proper registration and approval from the competent authorities this may be a sensible way of distributing a product, however, while this method may work for some products, manufacturers and distributors may encounter certain obstacles for others. There is usually a reluctance from individuals/patients to cover the costs of medical devices by themselves. This is due to most people being insured through the public health insurance system and primarily using this system when reasonably possible, but the system has certain flaws, and some patients may be prepared to pay by themselves for quicker/better treatment. 

Another model for monetization is providing medical devices to public healthcare institutions. This is usually done via public procurement under the Slovenian Public Procurement Act (Zakon o javnem naročanju – ZJN-3). A manufacturer looking to sign a contract with a healthcare institution would need to enter the selection process, often providing the institution with proof of competence, proving that they could fulfil the order. Next, an offer would be made to the institution by all candidates, and the institution would pick the best one following certain criterion regarding pricing and quality of the product. While this process can take some time, these orders are often much larger, such as providing a whole institution with a certain type of product, thus profits can be much larger than regular retail sales. 

Additionally, under the Slovenian Health Care and Health Insurance Act (Zakon o zdravstvenem varstvu in zdravstvenem zavarovanju – ZZVZZ) every person insured through the public health insurance system has a right to certain medical devices and appliances that are intended to help with their illness. The Health Insurance Institute of Slovenia (Zavod za zdravstveno zavarovanje Slovenije – ZZZS) keeps a list of these medical devices detailing illnesses a device can be prescribed for and its price. The prices for these devices are contractually pre-set by the distributor and ZZZS during the negotiations phase. However, a patient may choose to opt-out of the prescribed device if they are willing to pay for the difference in price between the device included in the insurance and the device they want. 

Finally, if a medical device manufacturer decided to offer services along with their product, and if these services were classified as healthcare services, requiring licensed healthcare workers, reimbursement could be ensured by the government. Under ZZDej, if a healthcare institution struggles to perform certain tasks, or finds itself unable to efficiently provide its services, concessions may be given to national and foreign persons. Services provided through these concessions are then subject to reimbursement by the ZZZS. 

Providing services and medical devices directly to private individuals is possible under the ZMedPri, either on premises or off (i.e., online). While these are usually smaller orders, the advantage comes in the form of greater freedom and flexibility for the contracting parties. There are little limitations to what the parties can agree to, including the price, however, since this constitutes a B2C agreement, provisions from the ZVPot-1 would need to be observed along with general provisions from the Slovenian Obligations Code (Obligacijski zakonik – OZ). 

Since most people in Slovenia are insured through the public health insurance system, access to this system can be lucrative for any medical device manufacturer either by adding their medical device to the ZZZS’s list or offering medical services subject to reimbursement. Another possible way of conducting business with public healthcare agencies and institutions is through the process of public procurement, providing them with needed items and devices in larger quantities. 

For medical devices provided by the ZZZS through the public health insurance system a manufacturer would need to go through a selection process, often competing with other candidates. The ZZZS would then choose a provider based on certain criteria in line with the ZZVZZ. While prescriptions of software in the form of “apps” are not commonplace in Slovenia yet, this could nevertheless be possible under the ZZVZZ and the ZZZS’s guidelines. As mentioned in earlier sections of this guide, there are little limitations to the form in which a medical device may come in, allowing manufacturers specializing in software to offer their product. Furthermore, software imbedded into medical devices ensuring they function properly is widely used and these devices are prescribed on a regular basis. 

Offering healthcare services along with a product or supplying this product to healthcare institutions are also viable ways a product manufacturer could wish to conduct business. However, both may come with certain obstacles. For healthcare services this would mean ensuring that properly certified medical professionals are involved when providing the service. For supplying healthcare institutions through public procurement, the process would take time and the irregularity of orders may prove cumbersome. 

Reimbursement schemes for medical devices are commonplace in Slovenia. For manufacturers specializing in software the main goal should be inclusion in ZZZS’s list of medical devices prescribed to patients. If such a device was included, a doctor could prescribe the device to a patient when deemed necessary and the cost of this device would subsequently be borne by the public health insurance fund. Since most people in Slovenia are part of the public health insurance system, this could mean a significant source of revenue for any business looking to manufacture/supply such a product. 

The selection process for these devices is similar to that of public procurement. An invitation to tender is called allowing different candidates to compete with their offers. If enough offers arrive, ZZZS chooses among them based on certain criteria regarding the price and quality of a device. This is done via “standards” that are pre-set for each type of medical device and include its expected price, material used and durability. These standards usually represent the minimum care that is required by a patient and therefore the maximum costs that the insurance fund will cover. However, the patient nevertheless retains the right to choose a better/more expensive device, if they are willing to pay for the difference in costs by themselves. 

After the selection process, the selected manufacturer would need to sign a Medical Device Supply Agreement (Dogovor o preskrbi z medicinskimi pripomočki) with the ZZZS. Here the rights and obligations of both parties would be further determined, including the way the manufacturer would be reimbursed. This Agreement is usually concluded for the duration of a year, after which a new Agreement would need to be negotiated. The Agreement also allows ZZZS oversight regarding fulfilment of the Agreement’s provisions by the supplier as well as other provisions from the ZZVZZ, ZMedPri etc.