Category: Croatia

Advertising of medical devices is a significant market activity in the regulated pharma industry. Companies are always in search of new tactics and business strategies to remain competitive in the market and to attract new customers, in conditions of fierce market competition.

Medical devices carry certain risks, including health risks, hence everything connected to them, including their advertising, is heavily monitored by Croatia’s Ministry of Health and the national regulatory authority, HALMED.

Croatia has a brief, general set of national rules on the matter. In the absence of more extensive guidance, advertisers are thus challenged with a question: what rules to observe in order to stay compliant? As there is no obvious answer, advertisers often choose a conservative approach and advertise medical devices under the rules applicable to medicinal products. But is this absolutely necessary?

The answer is no: Medicinal products (medicines) are subject to a heavy set of rigid rules on advertising, and advertisers of medical devices need not strictly follow them. Their relative freedom is limited, of course. EU-wide rules require that medical devices can be advertised only if marked as Conformite Europeenne. Even if a device is CE-marked, any promotion must be limited to the specific purpose for which the mark has been granted. Promotion of off-label uses of medical devices is prohibited.

There is also a strict prohibition against misleading advertising and advertising that is mainly or exclusively addressed to children. Advertisers should carefully examine their advertising claims as these are always under the scrutiny of the regulatory authority. Advertising claims must be based on scientific evidence and avoid un-objective, discretionary statements. Advertising must not use inappropriate, disturbing, or misleading statements about recovery options or inappropriate pictorial representations. Advertisers must not give the impression that a medical device guarantees success in treatment of a disease and that the health of a patient can be improved solely by the use of a device.

These basic restrictions are EU-wide, and by now familiar to advertisers. Country-specific rules, though, may give a headache. In Croatia, all information related to a medical device must be in Croatian. Croatia provides a limited derogation from the national language requirement for medical devices that are intended for professional use only. Other marks (that serve promotion purposes) may be affixed, but these must not reduce the visibility and legibility of the CE marking.

In addition, two considerations deserve special attention: direct-to-consumer advertising and promotional actions, including interactions with key decision-makers and health-care officers (HCOs), such as hospital managers, acquisition managers, heads of departments, etc.

Croatia has not made direct-to-consumer advertising subject to a specific regulatory regime. Medical devices, unless professional-use only, can be advertised towards the general public under the rules applicable to health care professionals (HCPs). Professional-use only medical devices can be advertised only towards HCPs.    

Interactions with decision-makers are increasingly used as a form of promotion, but many forget that these interactions are heavily restricted, especially if the HCOs are hospital officials and if the interaction occurs during a running public tender. Interactions having promotional goals must be kept separate from any other interaction. If there is a mixture of promotional interactions and other interactions, or if interactions are promotional only, then the interaction with a HCP or a HCO must not exceed 15 minutes / once a month. Interactions must not involve the giving of a gift or an item of value in excess of HRK 70 (approximately EUR 8).

Discussions about a tender must be kept separate from promotional activities. You are permitted to ask information about availability of funds, as long as such information is not requested specifically for a certain product. Asking to see or seeing/checking a necessity report or tender documentation before it is officially published is prohibited. Any involvement in preparing the necessity report or the tender documentation or placing the order to a wholesaler must be made only through official channels using a procedure of consultations with market participants.

Use of social media, and information technology in general, triggers additional concerns. As much as social media easily unfold vast promotional opportunities, it is a challenge to navigate through the legal rules on on-line advertising. It is a field where the rules on consumer protection, product liability, data protection, anticorruption, health and safety, etc., interact with the specific pharma rules on medical devices in a complex and often confusing manner.

Advertising of medicinal products, although barely explicitly regulated, should be carefully thought-through.

By Marija Musec, Partner, CMS Zagreb

This Article was originally published in Issue 7.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Former Glinska & Miskovic lawyers Ivona Andelovic, Petra Siketic, and Marko Tomic have left their former home to launch the new Andelovic, Siketic & Tomic law firm in Zagreb.

According to an AST Law Firm statement, the three lawyers “worked before in reputable full-service law firms, where we had the privilege to work as a team and got to know one another. Our earlier experience gave us the perspective of how both the legal industry and business works. We learned that the two, without justified reason, are not necessarily adequately aligned and that such approach of providing legal services is a bit outdated. Thus, when we recognized that we share the same values regarding our profession and relationship with our clients, as well as the vision of a somewhat different business philosophy and approach, a decision to start our own firm seemed to be the next logical step.”

In addition, the statement claims, “besides typical legal services, each of us has developed a high level of additional skills and knowledge (including in areas of business, psychology, management, and organization), which enables us to provide legal advice by thinking outside of the (legal) box – thus, we come in very handy in negotiations, predictions of opposite parties’ moves and reactions, reaching business management decisions and keeping track of [clients’] daily business and tasks.”

Ivona Andelovic began her career with three and a half years at Porobija & Porobija, leaving it in September 2016 to join Glinska & Miskovic. She specializes in Dispute Resolution, Public Procurement, and Employment Law.

Like Andelovic, Petra Siketic began her career at Porobija & Porobija, which she left after almost four years in October 2014 to join Glinska & Miskovic. She focuses primarily on Banking/Finance (with an emphasis on Project Financings and Real Estate investments).

Marko Tomic began his career with a short stint at Laktic & Partneri, then joined Glinska & Miskovic in September 2014. He specializes in Company and Commercial law, M&A, Restructuring, IT and TMT, Data Protection, and Gaming.

All three graduated from the University of Zagreb.

“One of the key questions in Croatia right now is the upcoming parliamentary elections,” begins Mate Lovric, Partner at Lovric Novokmet Smrcek. “They will either occur in July or sometime this fall (although July seems more likely). The current government would prefer them to be earlier, when the memory of successful measures against the COVID-19 crisis is still fresh, while the opposition would like to see them as late as possible, of course.”

Lovric says that it is difficult to know how to distinguish the “measures to battle the crisis and those that serve election purposes.” In the meantime, Croatia’s numbers look relatively good – at the time of writing, there had been only 2221 confirmed cases (compared, for instance, to 10,374 in neighboring Serbia).

However, he says, the low numbers are not a reason for absolute joy. “Our tourism sector is poised to take a huge hit – some say as much as a 70% reduction from last year, and with it impacting around 20% of our GDP, it doesn’t seem stellar.” Lovric says that the projected numbers for GDP contraction are “between nine and ten percent, and even with the bounce-back that’s likely to occur next year, it will be difficult for us to be where we were in 2019.” He says that the biggest problem tourists face – aside of course from potentially contracting the virus – is the fact that “most of them would have to go into self-isolation upon leaving Croatia, as most countries from where tourists come to visit us are requiring.”

“One of the most prominent measures that the government has undertaken,” Lovric continues, “is the three-month cover of minimum wage employees’ salaries. A lot of lawyers and even some of the high-end, top-tier law offices in Zagreb applied for this, which only goes to show how much all markets have been impacted by the economic blowback of the crisis.” Indeed, he says, M&A transactions have slowed significantly, “especially when you compare the current numbers to Q1.”

On the other hand, Lovric says that “one of the upsides of the crisis is the switch to a more digital dealing with administrative and regulatory bodies.” He reports that “many institutions, like the tax authority, took part in this transformation, and hopefully this will last and become a norm from here on out.” He also praises the three-month freeze of enforcement and bankruptcy deadlines.

Finally, Lovric says that while Croatia has done well for the time being, “it is a huge question as to whether these measures will be possible, even, if a second wave of the epidemic strikes.” He says that Croatia experienced a negative VAT flow in April for the first time in the country’s history and that the markets are still “scared.” According to him, “there have been a lot of bad things, not only the virus,” pointing also to the earthquake that hit Zagreb, the country’s capital, in March. “The next three months will be crucial, to see where we are, what’s going on with the tourist sector, with remittances, and to just figure out the best way forward,” Lovric concludes.

Go2Law and BDV advised Optimapharm founders Igor and Gordana Cicak and Wolf Theiss advised investor Mezzanine Management on the sale of Optimapharm to the Rohatyn Group. Babic & Partners, Taylor Wessing, and Nauta Dutilh advised the Rohatyn Group on the deal.

Founded in 2006, Optimapharm is a Croatian contract research organization. Mezzanine Management has been operating in Central Europe since 2000 through its offices in Vienna, Warsaw, Bucharest, Budapest, and Prague.

According to Mezzanine Management, it “provided a EUR 10 million mezzanine facility in October 2018 and acquired a minority equity stake in Optimapharm through AMC Capital IV, a EUR 264 million fund, marking its first investment into Croatia. Over the next 18 months, the capital was used to support organic expansion as well as three add-on acquisitions in the Czech Republic, Switzerland, and Austria. The partnership saw Optimapharm increase its number of offices from 10 to 15 to serve an ever-increasing customer base across the whole of Europe.”

Go2Law’s team was led by Partner Hugh Owen.

BDV’s team was led by Partner Ivan Dvojkovic.

Wolf Theiss’ team included Partner Marcell Nemeth and Counsel Sasa Jovicic.

Babic & Partner’s team included Partners Marija Gregoric and Iva Basaric and Associate Ivona Vidovic.

Editor’s note: After this article was published, CEE Legal Matters learned that Taylor Wessing’s team included, in London, Partners James Goold, Lerika Joubert, and Liz Wilson, Senior Counsel James Stewart, Senior Associates Mark Brewer and Alexander Walker, Associates Alice Thomas, Luc Swietochowski, Sarah Wallace, Anna Dugoni, and Katie Horbury, and Trainees Tom Witte and Laura Roberts, along with Vienna-based Partner Philip Hoflehner, Prague-based Partners Janka Brezaniova and Ivana Menhartova, Germany-based Partner Michael Stein, Budapest-based Partner Torsten Braner; and Warsaw-based Partner Olav Nemling.

Croatia’s Tus & Andrijanic law firm, acting with New York’s Wuersch & Gering, has advised Budapest-based Lead Ventures Plc. on it EUR 3 million acquisition of an unspecified stake in insurtech start-up Amodo d.o.o.

Amodo, which was founded in Zagreb in 2013, primarily develops telematic platforms for insurance companies that gather behavioral data, thus facilitating the market entry of innovative insurance products such as usage-based insurance. According to a Lead Ventures press release, “Amodo has developed a Connected Insurance platform supporting the introduction of Usage Based Insurance products, currently used by several prominent insurance companies worldwide. The Connected Insurance platform developed by Amodo can alter the lives of drivers. By downloading an application, drivers can get insights on numerous driving-related data (speed, cornering, accelerating and braking data, etc.). An analytical software processes the collected information and sends them to the driver who will precisely understand how safely they drive and how energy efficient they are. Drivers also get awarded on tweaking behaviors that make them safer and more energy efficient.”

“Insurance companies have the most interest in launching these types of applications,” Lead Ventures continues, “as driving behavior is the determining factor in assessing the risk of securing the vehicle, driver and passengers. This means that drivers can get significant savings based on their driving behavior. Depending on the insurance company that launched the application, there is the possibility of receiving just in time offers for insurance products that might benefit the driver. Products offered span from automatically offered short term travel insurance while approaching the country border to parts of comprehensive insurance necessary for specific road conditions the driver is frequently traveling on.”

“We made the decision to invest a total of EUR 3 million in the company for a 3-5 year period,” explained Balazs Haszonics, CFO of Lead Ventures, Amodo’s newest board member. “Amodo is a swiftly growing, innovative company, which has already proven itself in the market of usage-based insurance. It has several major clients, such as AIG, Porsche Bank, P&V and Triglav. The company is now ready to enter new markets and expand its client base with proper capitalization. Amodo also needs to grow its IT development capacities, , thanks to the investment of Lead Ventures, they will establish their new development center in Budapest.”

“In the past six years, Amodo has created over 25 products in 18 countries on five continents for major international insurance companies,” stated Marijan Mumdziev, CEO of Amodo. “We plan to dynamically grow in the coming years and want to quadruple our client base by 2023. We found our ideal partner for our technological and business development and growth: Lead Ventures has significant financing strength and extensive business contacts in the region.”

“You’ve got mail!” Unfortunately, instead of coming from Tom Hanks, it’s the commercial court informing you that your company is being sued. Online! Are you and your SPV ready for the new mandatory electronic communication with Croatian courts?

The good news is, you might be reading this in time – Croatia’s new Civil Procedural Code (revised for the first time in five years) requires all legal entities to communicate electronically with courts in civil litigation proceedings as of September 1, 2020. You probably have some questions.

Does it work? Yes – surprisingly well in some cases. Attorneys-at-law, court-appointed experts, and state attorneys have been using the system to communicate with Croatian commercial and certain municipal courts for over a year, with experimental use going back two years – mostly successfully, at least from the attorney’s perspective. However, not all attorneys have been quick to adapt to the new system. To speed them up, some courts (most notably the Split Commercial Court, on the Croatian coast) took drastic steps, even barring attorneys from personally delivering motions to the clerk’s office. The same could happen to authorized representatives of legal entities after September 1, 2020, so the new rules should not be taken lightly.

It’s a gimmick, surely – I can still send motions to the courts in good old pen and paper, right? Wrong! After receiving a motion or submission in written form, the court will request that it be resubmitted in proper electronic form or have it be deemed withdrawn.

Will it save any money or time? It might! For starters, court fees are halved for motions filed electronically. On top of that, clients will be able to save time and money on motions that, due to urgency, previously needed to be filed personally. Your Zagreb-based company can instantly file a motion, for example, in Dubrovnik; there’s no need to fly over or hope that the express courier will deliver the lawsuit, injunction, or appeal in time.

Is it at least a comprehensive solution? Unfortunately, despite being equipped to electronically deliver motions between the parties, the court may still request that the parties send each other (written) submissions. The system is – in our opinion without any good reason – currently envisaged more to facilitate communication between the parties and the courts, not necessarily with each other. However, as September 1, 2020 approaches, and as attorneys, companies, and courts get used to the new system, it is envisaged that practically all communication between the parties outside of hearings will be conducted electronically.

What do I need to do to be compliant? All companies will have to obtain their own electronic business certificates, which are already fairly common in Croatian companies. Fortunately, the same communications system is used to communicate with all the Croatian courts, and documents can be signed with any Qualified Electronic Signatures compliant with the EU’s eIDAS Regulation. Therefore, as long as the signatory has eIDAS compliant signature and business certificates, there should be no need to obtain a new signing certificate in Croatia.

As a recent addition to the system’s functionality, the system allows for the appointment of proxies simply by entering their Croatian PIN number, so it’s not too early to start thinking about who within your organization will perform the official duty of receiving court documents.

What if I’m not compliant? Ignoring the new e-communication rules could have grave consequences, as improperly-filed appeals could simply be rejected outright while claims or motions sitting in the e communication inbox might simply go unnoticed and thus unchallenged.

Croatia’s endeavour to bring judicial proceedings into the 21st century has the potential to shorten the length of proceedings and reduce costs, but it can only work with a proactive approach from companies and attorneys. Don’t let September 1st catch you off-guard – check whether you have the necessary certificates and select your e-communication proxy. If done right, your next subpoena might be just a click away.

By Ana-Marija Grubisic Cabraja, Partner, Divjak Topic Bahtijarevic

This Article was originally published in Issue 7.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Lovric Novokmet Smrcek has advised I4 Invention and Miodrag Mircetic on the sale of a majority shareholding in Tradeticity DOO to Italian-listed company Antares Vision, which was advised by Wolf Theiss.

According to Wolf Theiss, “[the] Tradeticity Group specializes in software management of advanced traceability processes (serialization). The acquisition of 82.83% of the share capital of Tradeticity is based on an equity value of Tradeticity Group of EUR 1.256 million, i.e. on an enterprise value of EUR 1.610 million.”

According to LNS, “the deal involved two targets in two jurisdictions, Croatia and Serbia, with multiple sellers based in various countries.”

The Lovric Novokmet Smrcek team was led by Partner Mate Lovric.

Wolf Theiss’ team included Partner Luka Tadic-Colic, Counsels Dora Gazi Kovacevic and Sasa Jovicic, Senior Associate Luka Colic, Attorneys Marijana Zejakovic, Milos Andjelkovic, Katarina Stojakovic, Maja Stankovic, Nikolaus Fleissner, and Matea Lazeta, and Associate Berislav Draskovic.

“Nobody has a crystal ball, so it’s very difficult to foresee what the immediate future will look like,” says Mojmir Ostermann, Managing Partner of Ostermann & Partners, referring to the current situation in Croatia and the COVID-19 crisis.

“To be serious, I think that Croatia has responded to the coronavirus crisis as well as it could have,” Ostermann says. “The government team in charge of handling the situation is doing a good job, lockdown and social distancing measures have been implemented in time, and we’re doing our best to flatten the curve.” The measures Ostermann speaks of have been in place for almost a full month, and Croatia is approximately 995 active coronavirus cases.

“I think that we’re on a good path to avoid putting an insurmountable strain on our medical system,” Ostermann reports, though he admits to some concerns for the aftermath of the crisis. “The lockdown, which also includes the closing of Croatia’s borders, carries with it a huge threat to our tourism sector,” he says, “which makes up a large part of the country’s budget and our GDP.” He reports that some continue to hope that the tourist season will open by June or July.

As part of its economic stimulus package, the Government of Croatia has undertaken measures to protect jobs, Ostermann says. “The Government has decided to pay HRK 4000 [approximately EUR 525] to most endangered workers from March to May in order to prevent employers laying people off, and some 400 thousand people have already applied for this aid,” he reports. “The Government said that the country is liquid enough for three months of coverage and has also stated that negotiations with international financial institutions, such as the World Bank and the IMF, have also been initiated, in case additional funds are needed later on.”

Ostermann reports that the Croatian Central Bank has made some good moves to protect the HRK-EUR exchange rate. “The Central Bank withdrew a lot of HRK from the market when the current crisis started and has protected the exchange rate efficiently. If it had gone up to HRK 8 to EUR 1, people could have raided banks to get to their money.”

As if the COVID-19 pandemic weren’t enough, the recent earthquake in Zagreb took a heavy toll on the capital city’s downtown. “One of the towers of our Cathedral fell and was destroyed during the earthquake and the other one suffered so much structural damage that it’ll have to be taken down as well,” Ostermann states. The majority of downtown Zagreb’s buildings date all the way back to the 19th century, he says, and a lot of them were hit pretty hard in the quake. “There’s still no plan as to how and when these buildings will be fixed,” he sighs. “That effort will take time.”

Finally, speaking about how the crisis is impacting the legal profession, Ostermann reports that litigation has been heavily affected. “Most cases have been put on hold due to courts not working, but there’s a problem: there hasn’t been a law yet that would put all of the relevant court deadlines on hold during this crisis. This can lead to many cases being decided in a suboptimal fashion.” In addition, he says, with the courts not working and the deadlines not being frozen, some people may be left stranded. “Imagine a situation where an employee gets fired now, due to the crisis. They’d normally have 15 days to file an appeal against this but with most lawyers being difficult to reach, or simply overwhelmed with work – they’re left stranded.”

In addition, Ostermann says, he expects lawyers who do dispute resolution to be swamped after the crisis ends. “We can expect a flood of court rulings that will be handed down and delivered after the crisis ends – this will leave lawyers with a lot of work and only 8 to 15 days to sort out most of it due to mandatory deadlines.”

By contrast, Ostermann reports that Corporate lawyers are seeing a lot of work. “When times are good we work on transactions, and when times are poor we work on restructurings. “At this stage we received a lot of inquiries about frustration of contract, and soon this work is expected to lead to restructurings of both debt and companies. In addition to restructuring and bankruptcy cases, he says, Labor lawyers are busy helping “people seeking ways to navigate the crisis by implementing remote work and filings for employees’ incentive measures introduced by the Government.”

Slovenian law firm Nlaw has opened an office in Croatia, with Frano Barovic, who joined the firm last fall, serving as Managing Partner.

Nlaw explained that “in recent years, Croatian entrepreneurs and businesses have been bringing many innovative products and services both locally and globally. Croatia’s start-up scene has started to rapidly develop and the number of investors that are coming to Croatia to support this new development is steadily rising. We see more and more interesting high-level business projects, as well as a lot of cross-border economic activity between Croatian and Slovenian businesses. Consequently, we decided to bring our proven approach to serve these exciting developments in Croatia. We are happy to have Frano Barovic on board as our Local Partner and Head of Zagreb office.”

Barovic is a graduate of the University of Zagreb Faculty of Law. Prior to joining Nlaw in 2019, he practiced law for three years with Hanzekovic & Partners, for a year with Igor Borcic Law Office, and then for several years as a solo practitioner.