Answers - Legal

The Transfer of Undertakings (Protection of Employment) Regulations 2006 now applies to service provision changes in circumstances where a client who engages a contractor to do work on its behalf is either reassigning such a contract or

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

bringing the work ‘in-house'.

There are two exceptions. It will not be a service provision change if the contract is wholly or mainly for the supply of goods for the client's use, or the activities are carried out in connection with a s

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

ingle specific event or a task of short-term duration.

The effect of TUPE 2006 on the service provision change is therefore that employees will be entitled to transfer on the same terms and conditions as they enjoyed with their original

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

employer upon a transfer of the service as a result of changes in contracting out or contracting in.

The absurdity of TUPE 2006 is that many businesses will want to retain a stable workforce and retain their employees when they cease t

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

o provide services to a particular client. There are some obvious precautions and measures that may be used by "clients" and their contractors to avoid TUPE 2006 from having any effect.

The following solutions are of course largely unte

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

sted because the reality is that TUPE 2006 has yet to be fully examined in the courts.

Encouraging objections by departing employees

The first method for avoiding the service provision change provisions is to encourage the use of the o

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

bjection by potentially transferring employees. Some businesses will adopt practical measures to provide incentive to their employees to remain with them, even if they technically should transfer to the client's new service provider. In

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

some cases clients may select especially valuable employees by encouraging them to object to the transfer pursuant to regulation 4(7).Once this occurs of course the client will have to re-negotiate new contractual arrangements with them.

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

Quota protection to avoid a service being deemed an organised grouping of employees

Secondly, it will also be open to businesses to put in place systems to ensure that no employee or group of employees becomes dedicated to a particula

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

r client (whether exclusively or not) in the provision of services. After all, TUPE 2006 will not apply to service provision change where employees are not working in a single economic grouping. The DTI guidance explains that the team sh

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ould be ‘essentially dedicated to carrying out the activities that are to transfer (though they do not need to work exclusively on those activities)'. Sophisticated end users will impose conditions in their contracts for supply of servic

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

es. These contracts may include a requirement that no employee engaged in the activity in question should spend more than a certain percent of their working time on that activity, and including appropriate warranties and indemnities from

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

the supplier. Clients may also seek to identify in new contracts the specific employees they do and do not want to carry out work on their behalf, although new contractors may factor into the price the costs of dealing with any ‘unwante

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

d' transferring employees.

This is a far more sophisticated model than entering into a series of one-off contracts because the court is likely to cut through a contractual device where the one-off contacts are in fact using the same emp

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

loyees in the same service provision to a dedicated client.

Such a quota system may very well cause problems in terms of quality of service, particularly where the client relationship is important for the delivery of a good service. Thi

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

s is because in reality by increasing the number of or frequently switching between suppliers quality may decrease. The advantages of doing this would have to be weighed up against any disadvantages such as losing continuity and the detr

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

imental effect on the client/supplier relationship. This will be a delicate assessment depending on the nature of the service.

The Secondment Route

The third method is to create a secondment situation. Similar to the objection method i

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

t involves the objection by employees to a transfer which allows the employee to remain in the formal employment of the original client – although not continuous. Additionally, the employee is seconded to the new contractor. Once on seco

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ndment any further transfers will be avoided by regulation 4(1) which states that employees transfer under TUPE 2006 if their contract of employment "would otherwise be terminated by the transfer." There can of course be no termination b

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

y virtue of a transfer to an employee is only seconded. This has been used by the NHS in Private Finance Initiatives (PFI) in order to allow NHS employees to have the benefit of a NHS pension whilst being seconded to a private contractor

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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