Should health and life insurers use the data collected by health-related apps?

With the generalisation of health-related apps, health and life insurers are keen to use the collected data to improve the accuracy of their insureds’ profiles. This trend raises important questions in terms of privacy but also in terms of risks mutualisation in society.

A bit of context

With the increase of technology and the ability of our smartphones or smartwatches to collect our heartbeats, count our steps, and assess our pace, developers have naturally seen an opportunity to develop health-related apps.

These apps track running performances (Runkeeper, Runtastic, Nike+, Fitbit…), monitor diet (MyFitness Pal…), analyse sleeping habits (Fitbit, Jawbone, isommeilr…), etc.

Citizens are using more and more of these health-related apps in their daily life.

Of course, health and life insurers are greatly interested in the health data collected by these apps. This is not necessarily a bad thing as this can mean that insurers can better assess the risk they insure and its evolution, and request more accurate premiums from their policyholders. Nonetheless, this trend also raises important questions in terms of privacy, but also in terms of insurance paradigm as such.

The privacy issue

The privacy issue is rather obvious. One might reasonably desire to keep certain aspects of one’s life private.

The privacy issue is not limited to the insurance world. Privacy is primarily addressed by the EU General Data Protection Regulation (GDPR). The purpose of this news is not to examine this regime in details. Let us simply remind that under Article 9 of the GDPR, health-related data are considered as “special categories of data”.

The process of this kind of data is subject to higher requirements and may only serve highly valued purposes. The data subject may, however, always give its explicit consent to the use of his/her health-related data (Art. 9, 2, (a) GDPR).

This explicit consent is rather well protected and must be free and genuine. For instance, a service provider may normally not monetise or subject the delivery of its services to the data subjects’ consent.

The segmentation issue

Where do we stand?

The insurance industry is based on the idea of risk mutualisation. This principle can be extremely useful to the operation of a society. In a nutshell, the healthy clients’ premiums pay for the insurance indemnity of the ill insured persons.

Health and life insurers have always tried to assess the risks presented by insured persons with the highest accuracy possible using statistical data. Typically, all things being equal, a young sporty person is less likely to die than and old person suffering from diabetes. This reality will normally result in the young person paying a lower insurance premium.

The division of insured persons in categories (e.g. young and healthy versus old and ill) is called “segmentation”. To each category corresponds a level or premium, certain categories of risk being simply refused by insurers (depending on their risk appetite). This is the reason why health and life insurances are almost systematically subject to a medical questionnaire and, in some cases, a medical examination.

Naturally, the more accurate and detailed the segmentation is, the less insurance services offer a mutualisation of risk to society and – arguably – the less useful become insurance services to society as a whole.

This risk has been identified by the Belgian legislator. One of the main Belgian attempts to avoid the risk of “demutualisation” is embodied in Article 44 of the law of 4 April 2014 relating to insurances. Under this provision “Any segmentation made in terms of acceptance, cost, and/or extent of the insurance cover must be objectively justified by a legitimate purpose, and the means to achieve this purpose must be appropriate and necessary”.

This provision lays down the legislator’s ideal but it is very broad and offers a lot of room for interpretation.

What’s next?

Certain members of Parliament fear that connected devices and health-related apps unduly change the paradigm of mutualisation in the insurance sector.

To prevent this potentiality, they have filed a law proposal with the intention of prohibiting the use by health and life insurers of personal data collected by connected devices. The law proposal further prohibits to subject insurance acceptance, pricing and/or extent of the insurance cover to the use by the insured person of health checkers and the sharing of data collected by such health checkers with insurers.

Practically, if enacted, the law proposal would bring a new Article 44, § 2nd, to the Law Insurances:

In derogation to Article 43, § 1st, this paragraph applies to the following insurance contracts:

1° Individual life insurance;

2° health insurance […].

No segmentation can be applied to acceptance, pricing and/or extent of the insurance cover subject to the condition that the policyholder accepts to acquire or use a health checker, accepts to share the data collected by the health checker, or subject to the condition that the insurer uses such data. The processing of the personal data collected by a health checker, relating to the way of life or health of the policyholder, is prohibited”.

The concept of “health checker” would be defined in a new Article 5, 53°, of the Law Insurances as “a device allowing the measurement of one or more variables associated to the way of life or the health of the policyholder”.

At the end of January 2020, the Belgian Data Protection Authority (“DPA”) issued an opinion on the law proposal.

The law proposal is primarily based on Article 9.4 of the GDPR, according to which “Member States may maintain or introduce further conditions, including limitations, with regard to the processing of genetic data, biometric data or data concerning health”.

The proposal is further based on abovementioned Article 9, 2, (a) of the GDPR, which provides that special categories of data (such as health-related data) cannot be processed unless “the data subject has given explicit consent to the processing of those personal data for one or more specified purposes, except where Union or Member State law provide that the prohibition […] may not be lifted by the data subject”.

According to the DPA, these two provisions of the GDPR effectively allow the Belgian legislator to introduce additional limitations to the processing of health data so that the law proposal is compliant with the GDPR.

Conclusion

While nothing is (yet?) cast in stone, the discussed law proposal is a perfect illustration of the difficult balance regulators need to strike between innovation and the preservation of existing paradigms.

Interestingly, it shows a strong desire of certain members of Parliament to safeguard the principle of mutualisation of risks in the insurance industry. This mutualisation is often seen as a key principle to the health system as a whole.

The DPA’s opinion is also a good reminder that the GDPR, although an EU regulation, still allows Member States to adopt stricter requirements when it comes to protecting special categories of data. In the case at hand, the law proposal somehow “protects the data subjects from themselves” by revoking their right to agree to certain use of their connected devices.

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For any question or assistance, please contact Thomas Derval
td@simontbraun.eu  |  +32 (0)2 533 17 09

Coronavirus sur le lieu de travail et chômage temporaire – Mise à jour

Dans notre précédente news, nous avons fait le point sur les solutions à mettre en place au sein de votre entreprise pour faire face à l’épidémie de Coronavirus, notamment la possibilité de mettre les travailleurs en chômage temporaire pour force majeure ou pour raisons économiques. Ces mesures ont depuis lors fait l’objet de procédures de simplification qu’il nous semble utile de résumer ci-après.

Chômage temporaire pour force majeure – Elargissement et procédure simplifiée

Elargissement

Le 20 mars dernier, le gouvernement a décidé, avec effet rétroactif au 13 mars 2020, que toutes les demandes de chômage temporaire liées au Coronavirus relèveront, jusqu’à tout le moins le 5 avril prochain, du régime de la force majeure.

Il n’est donc plus utile de faire la distinction entre les situations où le Coronavirus rend impossible la poursuite du travail (p.ex. en cas de mise en quarantaine de travailleurs, de fermetures imposées par le gouvernement ou d’impossibilité de mettre en place du télétravail ou de respecter les mesures de distanciation sociale) et les situations où, en raison de la crise du coronavirus, les entreprises ont trop peu de travail que pour pouvoir continuer à occuper tous les travailleurs (en raison d’une baisse du chiffre d’affaires, de la production, des commandes, etc.).

A présent, toutes les entreprises impactées (totalement ou partiellement) par le Coronavirus peuvent suspendre, tout ou partie, des contrats de travail de leur personnel en ayant recours au chômage temporaire pour force majeure. Dans la pratique, cela veut donc dire que certains travailleurs peuvent être en chômage temporaire et d’autres pas. Les travailleurs peuvent également alterner les jours de travail et les jours de chômage temporaire.

Procédure simplifiée

Par ailleurs, la procédure permettant de mettre en place le chômage temporaire a été largement simplifiée :

  • Il ne faut plus introduire de demande électronique de chômage temporaire ;
  • Il faut uniquement introduire une « déclaration scénario 5 » sur le portail de la sécurité sociale, en visant la situation de chômage temporaire pour “force majeure” et en indiquant comme motif “coronavirus” ;
  • Il n’est par ailleurs plus nécessaire de délivrer un formulaire de contrôle C3.2A aux travailleurs concernés ;
  • Il n’y aura par ailleurs pas de contrôle des conditions d’accès pour les travailleurs (qui sont en principe d’application pour le chômage économique).

Allocation de chômage perçue par les travailleurs

Jusqu’au 30 juin 2020, le travailleur mis en chômage temporaire pour force majeure recevra 70 % de sa rémunération moyenne plafonnée (plafonnée à 2.754,76 EUR brut par mois). Un précompte professionnel de 26,75 % sera retenu sur l’allocation. En complément à cette allocation de chômage, l’ONEM paiera un supplément aux travailleurs de 5,63 EUR par jour de chômage (dans un régime de 6 jours).

Tout employeur peut par ailleurs, de façon tout à fait volontaire, envisager de payer un complément aux allocations de chômage afin de compenser dans le chef de son/ses travailleur(s) la perte de rémunération durant la période de chômage temporaire. Ce complément ne sera pas considéré comme de la rémunération par l’ONSS et sera dès lors exonéré de cotisations sociales, pour autant que le travailleur ne reçoive pas au total une rémunération nette supérieure à celle qu’il aurait perçue s’il avait travaillé. Ce complément sera également soumis au taux de précompte de 26,75%.

Le chômage pour raisons économiques – CCT n°147

Les entreprises confrontées à un manque de travail en raison du Coronavirus et qui éprouvent des difficultés à occuper leur personnel selon le rythme habituel peuvent toujours avoir recours au chômage temporaire pour raisons économiques. Toutefois, selon le FAQ de l’ONEM, l’employeur est pour l’instant invité à suivre la procédure (simplifiée) force majeure (voir ci-avant).

Ce régime, qui présentera certainement de l’intérêt à l’issue de la période de confinement actuelle, a également fait l’objet d’une procédure de simplification, pour ce qui concerne le personnel employé, dans le cadre de la CCT n° 147 adoptée par le CNT le 18 mars dernier.

Les entreprises touchées par le Coronavirus peuvent, jusqu’au 30 juin 2020, invoquer cette CCT pour demander le chômage temporaire des employés pour des raisons économiques et ne doivent donc plus, préalablement, négocier une convention collective ou établir un plan d’entreprise expliquant ce qui justifie le chômage temporaire.

La CCT n° 147 prévoit néanmoins des procédures d’information et/ou de consultation impliquant que l’entreprise doit :

  • Introduire, par voie électronique, un formulaire de demande auprès de l’ONEM au moins 14 jours avant que le régime puisse être appliqué, en prouvant qu’elle satisfait aux conditions ;
  • le même jour, communiquer cette notification au conseil d’entreprise ou, à défaut, à la délégation syndicale de l’entreprise ;
  • informer les travailleurs, au moins 7 jours à l’avance, de l’instauration d’un tel régime soit par voie d’affichage, soit par notification écrite à tout travailleur dont l’exécution du contrat est suspendue ;
  • envoyer à l’ONEM, par voie électronique, la communication de l’affichage ou de la notification individuelle aux travailleurs, le jour même de l’affichage ou de la notification individuelle ;
  • le jour de l’affichage ou de la notification écrite à chaque employé, communiquer au conseil d’entreprise, ou à défaut, à la délégation syndicale, les causes économiques justifiant l’instauration d’un tel régime.

Si l’entreprise est reconnue comme entreprise en difficulté, l’employé percevra de son employeur, une garantie de revenus de 5,00 EUR par jour de chômage, sauf accord sectoriel ou d’entreprise plus avantageux.

La durée de la suspension totale et partielle du contrat de travail dans le cadre du régime décrit ci-avant ne peut dépasser, par année civile, 16 semaines en cas de suspension totale du contrat de travail, et 26 semaines en cas de régime de travail à temps réduit. Une combinaison des deux systèmes est néanmoins possible.

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Nous restons bien entendu à votre disposition pour toute question que vous pourriez avoir en la matière et vous assister dans la gestion de cette crise sanitaire dans votre entreprise.

Pierre Van Achter – pva@simontbraun.eu – +32 (0)2 533 17 36

 

Patent dispute settlements under scrutiny by the CJEU: the crossroads between IP & competition law

Introduction and context

It is safe to say that on 30 January 2020, the Court of Justice of the European Union (hereafter the “CJEU”) handed down a landmark decision in EU IP and competition law. The CJEU writes a new chapter in the patent dispute settlements saga, and more particularly in the debate commonly known as “pay-for-delay”. To recall, in the context of the pharmaceutical sector, “pay-for-delay” is a term used for agreements between originator pharmaceutical companies and generic manufacturers where the latter agrees for a certain period not to enter the market with generic medicines in exchange for a value transfer.

The question arose whether there was an issue with competition law. It is particularly hard to answer when it takes place in the context of a settlement between the originator company and the generic manufacturer following a real dispute (i.e. patent dispute settlements). Ever since the European Commission launched its sector inquiry regarding patent dispute settlements that ended in 2009 (the full first report available here and the latest report of 2018 here), where the issue was brought to the surface, market players and practitioners have been eager to know the CJEU’s take on the matter.

There has been a belief that competition rules on restrictive agreements do not apply to settlement agreements between originator pharmaceutical companies and generic manufacturers who have not yet entered into the market as the companies are not in competition. The pharmaceutical context – and patent law specifically – would constitute an insurmountable barrier to enter the market. There is also the belief that, even if competition law would apply, agreements to settle ongoing court proceedings pursue a legitimate objective which is from the outset incompatible with the categorisation of an agreement as restricting competition by its object, since such settlement agreements have a public interest and are encouraged by the public authorities.

The question of whether a patent dispute settlement agreement would constitute a restrictive agreement by object or by effect is of great importance. When it is considered a restrictive agreement by object, the restrictive effect of the agreement on competition does not need to be proven for there to be an infringement of competition law, as opposed to when it is considered a restrictive agreement by effect.

By way of preliminary ruling, the CJEU, in line with the reasoning of AG Kokott (which you can read here), sheds light on the matter and inter alia (figuratively) bursts these two assumptions. You can read the judgement here.

By way of information, the present case takes place within the context of Lundbeck (case T-472/13) and Servier (T-691/14), currently pending before the CJEU, in which the European Commission found that agreements in settlement of patent disputes constituted infringements of article 101 of the Treaty on the Functioning of the EU (“TFEU”) and with regard to Servier, article 102 TFEU.

 It should also be mentioned that the debate is not only taking place in Europe but also elsewhere in the world. For instance, in California (US), Assembly Bill No. 824 – commonly referred to as the “Pay for Delay” bill (here) – passed, which makes it unlawful for companies to settle patent infringement claims filed by generic manufacturers by providing “anything of value” in exchange for settlement. Any attempts to settle in such a fashion will be considered anti-competitive and open the company to civil litigation. The bill is aimed at lowering the cost of prescription medicines and fostering greater access to healthcare. It became effective on 1 January 2020. Not completely surprising considering that the Supreme Court of the United States had already found in 2013 that these settlements could violate antitrust laws (here).

The position of the CJEU

In the judgement of 30 January 2020, the CJEU responds to 10 questions (which the CJEU boiled down to 5) referred to by the Competition Appeal Tribunal (UK). The latter wonders, in essence, whether an agreement to settle a medicinal product patent dispute constitutes a restriction of competition by object or by effect and whether the conclusion of that agreement, possibly combined with entry into other agreements, constitute an abuse of dominance.

Before going into the decision, it is important to recall the facts briefly. It concerns an originator pharmaceutical company that is the holder of a manufacturing process patent for an active ingredient that is in the public domain, and generic manufacturers who have not yet entered but are preparing to enter the market with generics having the same active ingredient. The originator pharmaceutical company and the generic manufacturers were in dispute as to whether the process patent is valid and/or whether the generics infringe the patent.

Given that the originator pharmaceutical company only held a process patent, there was uncertainty of whether or not there was an infringement. Against that background, the originator pharmaceutical company and the generic manufacturers, even the ones with whom at that time no patent litigation was yet pending, concluded settlement agreements. The generic manufacturers undertook not to enter the market and not to pursue their actions challenging the validity of the patent for the duration of that agreement, in return for transfers of value.

In light of those circumstances, the CJEU responds very precisely by ruling that:

  • the pharmaceutical company and the generic manufacturers are potential competitors provided that the latter have a firm intention and an inherent ability to enter the market, and do not meet barriers to entry that are insurmountable;
  • the settlement agreement where the net gain has no other explanation than the commercial interest of the parties not to engage in competition on the merits, constitutes an agreement that has as its object the prevention, restriction or distortion of competition unless the settlement agreement is accompanied by proven pro-competitive effects capable of giving rise to a reasonable doubt that it causes a sufficient degree of harm to competition;
  • the strategy of the dominant undertaking, which leads it to conclude settlement agreements, which have, at least, the effect of keeping temporarily outside the market potential competitors who manufacture generics, constitutes an abuse of dominant position, provided the strategy has exclusionary effects going beyond the specific anti-competitive effects of each of the settlement agreements.

What should you take away from the judgment?

The decision is without a doubt of significant interest to pharmaceutical company patent holders, generic manufacturers as well as competition and IP lawyers. It provides much food for thought for those presently involved in or contemplating settlement agreements.

In general, the decision teaches us that patent dispute settlements are not immune from competition law review. In particular, it will be important to keep in mind that the mere fact of a dispute between a pharmaceutical company patent holder and a generic manufacturer may be sufficient to demonstrate that they are potential competitors and thus any settlement between them involving a value transfer is likely to attract antitrust scrutiny.

In that regard, the mere existence of the patent, or the likelihood of success in litigation (for example, in proceedings about validity or whether a patent has been infringed) is irrelevant to whether the parties are potential competitors and whether an agreement can affect competition. The question is rather whether, notwithstanding the existence of the patent, the generic manufacturer has real and concrete possibilities of entering the market at the relevant time. To that end, the CJEU explicitly recognised the ‘at risk launch of a generic medicine’ as inherent to the pharmaceutical market.

Positively, the CJEU affirms that patent dispute settlements are not as such prohibited by competition law and neither is the transfer of value in that setting. However, there is a high probability that where agreements involve significant value transfers and the sole consideration given for that value transfer is the generic manufacturer refraining from market entry and from challenging the patent during an agreed period, there will be a finding of a ‘restrictive agreement by object’ prohibited under article 101 TFEU.

The attentive reader might have spotted that the CJEU, as it only responds to the facts presented by the referring judge, leaves certain issues open. For example, one might wonder how the analysis might change if it was not a process patent but a compound patent or whether the transfer of value is not made solely in return for market exit and no-challenge commitments, but reflects other considerations between the parties.

Another interesting issue to further develop is the consequences of pro-competitive effects on the finding of a ‘restrictive agreement by object’. Of great value is the explicit recognition by the CJEU that pro-competitive effects are not completely excluded from the debate of whether or not there is a ‘restrictive agreement by object’. What is certain is that the CJEU does not require a balancing test to be carried out or consider that the mere existence of pro-competitive effects would be sufficient to exclude the finding of a ‘restrictive agreement by object’. The pro-competitive effects should be considered with the other circumstances of the case to verify if it raises a reasonable doubt on the conclusion that the agreement, by its nature, would result in a sufficient degree of harm to competition and whether it should thus be categorised as a ‘restrictive agreement by object’.

We look forward to the CJEU further expanding on the above and its guidance on patent dispute settlements in general when it delivers its Servier and Lundbeck judgement.

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Eric De Gryse and Christopher Dumont
You may always contact the authors should you have any questions:
eric.degryse@simontbraun.eu – +32 2 533 17 52
christopher.dumont@simontbraun.eu – +32 2 533 17 58

Our Digital Finance Team interviewed on the latest FinTech Trends

Catherine Houssa, Partner in our Digital Finance Team, was interviewed on the latest FinTech trends by La Libre Belgique in a special edition dedicated to the take-off of tech in Brussels.

An opportunity to also highlight the advantages of Brussels as a set-up point for FinTechs willing to reach all of Europe.

The full article is available here.

La représentation en justice par un agent d’affaires en cas de petit litige

Un passager cherchant à être indemnisé par une compagnie aérienne pour cause d’annulation ou de retard de son vol peut-il être représenté par un agent d’affaires ?

Marc Baetens-Spetchinsky analyse cette question au regard du Règlement européen sur les petits litiges, abordant aussi la notion de « circonstances extraordinaires » au sens du Règlement européen « droits des passagers » que les compagnies aériennes pourraient invoquer pour se défendre contre une demande d’indemnisation.

Publication parue dans le Journal des Juges de Paix, 3-4/2019, p. 152, disponible ici.

Our Digital Finance Team has authored the Belgian chapter of Chambers’ FinTech Global Guide 2019

Our Digital Finance Team has authored the Belgian chapter of the FinTech Global Guide 2019 released by Chambers & Partners, providing practical insight on key FinTech topics, such as Payments, Open Banking, Robo-advisory and InsurTech. The guide is available here: http://bit.ly/2UfuBxy