ITALY: An Introduction to Life Sciences

Life Sciences in Italy: Reforms of Healthcare Sector Institutions as a Challenge to Innovation

In a rapidly evolving global landscape driven by technological innovation, it is crucial that the safeguarding of fundamental human rights remains the guiding light of necessary reforms. This is especially true in healthcare and pharmaceutical assistance, where the protection of health is not only a fundamental individual right but also a social concern, as affirmed in Article 32 of the Italian Constitution.

The healthcare sector has rapidly evolved in recent years, following technological innovations and a growing focus on personalised care. Digital technologies have introduced new therapeutic options, including:

• artificial intelligence;

• telemedicine;

• advanced therapies (ATMPs);

• digital therapies (DTx);

• medical device software; and

• big data.

These advancements are transforming healthcare delivery, enhancing efficiency, diagnostic precision and patient experience. Innovation in technologies goes hand in hand with consistent innovation in the organisations utilising them.

The Universalist System

It is important to note that the Italian public health system is based on the National Health Service (NHS), an articulated set of organs and functions established by Law No 833/1978, inspired by the principles of universality, equality and equity in access to care and which also protects access to pharmaceutical assistance.

The “governance” of the NHS involves multiple decision-making centres for pharmaceutical policy, organised on two levels: State and Regional.

The State defines the sector’s fundamental principles and determines the essential levels of care (LEA), ensuring uniform access across the country by annually setting the standard national health requirement and allocating NHS resources. This allocation distinguishes between shares assigned to Regions and those for other entities.

Within the allocated resources, Regions have concurrent authority to define health policies, organise services and manage spending locally, without limiting or altering the essential levels established at the State level.

The universalist system requires guaranteeing all citizens homogeneous access to care throughout the territory. As with all universalistic models, one of the most delicate aspects is economic-financial sustainability, which requires a constant search for a “balance point” between universalistic vocation and resource constraints.

Among the tools designed to ensure the economic and financial sustainability of the NHS, a key role is played by the payback systems for medicines and medical devices. The rules governing these mechanisms are not uniform, but in substance they are systems that require private companies contracting with the NHS to contribute pro rata together with the Regions which contributed to the deficit.

The ratio is to be found, on the one hand, in the responsibility of the Regions in the work of cost containment and rationalisation of purchases and, on the other hand, in the principles of solidarity (as recognised by the Constitutional Court through sentences Nos 139 and 140 of 2024, which recently declared the constitutionality of the medical device payback). This led to the companies involved bearing these economic burdens by virtue of the fact that they benefit from carrying out activities in favour of the NHS. This is to ensure the provision of medical devices in a sensitive economic environment, which seeks to maintain itself through a careful balancing of conflicting needs.

The health sector faces significant challenges, but opportunities must be seized to drive reform through innovation and digitalisation. This transformation requires strategic investments to involve authorities and public bodies in adopting new, extended and integrated collaboration models, including partnerships with third parties. In Italy, institutional reforms have been launched to address change, starting with the reorganisation of the Italian Medicines Agency (AIFA). Nearly 20 years after the agency’s establishment, the reform marks a major step towards a more functional and secure system.

Key Aspects of the Reform

The reorganisation introduces the Scientific and Economic Commission, merging the roles of the former Technical-Scientific Commission and the Pricing and Reimbursement Committee to streamline drug reimbursement processes. This, along with improved governance and new advisory bodies, enhances AIFA’s ability to address challenges, promote pharmaceutical research and expedite drug approvals, benefiting patients and healthcare professionals. Other key changes involve restructuring the Ministry of Health and expanding Regional competences in healthcare.

In 2024, ten years after its last reorganisation, the Ministry of Health was restructured into four departments and 12 general directorates. Notably, the Department of Planning, Medical Devices, Drugs and Policies in Favour of the National Health Service oversees national health planning, the definition of LEAs, and the regulation and supervision of medicines, medical devices and other health-related products.

The reorganisation will end with the appointment of general managers and a ministerial decree assigning non-general managerial roles. The Ministry’s structure will be reviewed every two years to evaluate its efficiency and to make potential adjustments.

The Ministry of Health’s functions were expanded by Legislative Decree No 134/2024, implementing Directive (EU) 2022/2557 (the Critical Entities Resilience (CER) Directive). The Ministry has been designated as the sectoral competent authority for the health sector, tasked with supporting “critical actors” – entities providing essential services vital to society, the economy, public health, safety and the environment, including entities delivering healthcare services or producing and distributing critical medicines and medical devices.

As the supervising body, the Ministry of Health will oversee the implementation of resilience measures, investigate violations and impose sanctions.

The greatest impact for the life sciences sector could come from the reform launched in October 2017 and now outlined in its essential elements by the recent Law No 86/2024. It will progressively implement the differentiated autonomy of the Regions, already foreshadowed in Article 116 of the Constitution and which concerns 23 matters indicated in the law, including the “protection of health”.

Differentiated Autonomy

As mentioned previously, in the current system of health governance, the State determines the essential levels of care as well as determines financial resources. The Regions are, therefore, charged with planning and managing – within the areas of autonomy left by State regulations – the provision of these services within their territorial areas of competence.

Under the new arrangement, Regions can request greater autonomy in “health protection”, triggering negotiations to reach an agreement approved by State law. Each agreement – lasting up to ten years with possible automatic renewal – will define new regional competences and allocate financial, material and human resources for the transferred functions. Funding will come from a share of State taxes collected in the Region (rate reserve). A Joint State-Region Local Authorities Commission will annually assess financial burdens and propose adjustments to the tax-sharing rate.

The “differentiated” autonomy can cover 23 subjects, 14 of which require setting essential levels of services (LEP) to ensure uniform nationwide delivery of fundamental rights. In “health protection”, the State already defines and funds LEP, so it is unclear whether this system will continue unchanged.

Focusing specifically on Regional requests regarding health, increased autonomy could involve:

• therapeutic equivalence – the competence to take decisions on therapeutic equivalence would go to the Region, on the basis of its own evaluations, if AIFA did not adopt the reasoned, mandatory and binding opinion for the entire national territory;
• utilisation of supplementary health funds – greater legislative, administrative and organisational autonomy in the establishment and management of supplementary health funds; and
• dispensing of medicines and medical devices – greater competence to define the forms of direct distribution of medicines for the treatment of patients, subject to recurring monitoring, or in home care, the period following hospitalisation or specialist outpatient visits.

The law has raised concerns about the implementation of differentiated autonomy and its practical effects. Balancing the State’s role – ensuring LEP nationwide – and the Regions’ expanded autonomy is challenging. Without a clear mechanism to guarantee standard services, further autonomy could result in excessive disparities between Regions, leading to patient migration and regional budget strains, ultimately harming citizens.

As a result, Law 86/2024 was reviewed by the Constitutional Court. In recent ruling No 192/2024, the Court upheld the overall constitutionality of differentiated autonomy for ordinary Regions but deemed certain provisions unlawful. The Court emphasised that autonomy must involve “specific legislative and administrative functions”, not broad subjects or areas, and must align with the principle of subsidiarity, ensuring justification for each Region.

The Court clarified that differentiated autonomy must serve “the common good and the protection of constitutional rights”. It should improve public sector efficiency, ensure political accountability and better meet citizens’ needs.

While debates will continue, if the process towards autonomy does not stop, the resulting changes in the life sciences sector could be significant.

The major challenge for healthcare organisations will be maintaining system sustainability amidst limited resources without compromising service quality. This requires optimising resource use and leveraging technological and organisational innovation to enhance long-term efficiency, effectiveness and sustainability. Achieving these demands stronger governance of innovation, along with investments in staff.

Additionally, health technology assessment (HTA) will play a critical role, especially under Regulation (EU) 2021/2282. HTA is essential for creating safe, effective and patient-centered healthcare policies. However, at the regional level, a fragmented approach to HTA could weaken its effectiveness or create redundancies within an already uneven national landscape.