On 24 February 2015, the French Supreme Administrative Court (Conseil d'Etat) reached a landmark decision which significantly expands the scope of the so-called French Sunshine Act.
The decision was issued after a French association named FORMINDEP, advocating for transparency in the health care industry, and the French National Medical Council (CNOM), challenged the legality of the decree dated 21 May 2013 and its associated governmental circular of 29 May 2013, implementing the French Sunshine Act.
The decision of 24 February 2015 annulled two provisions of the decree and the circular:
- First, the partial exemption concerning companies which manufacture or market non-corrective contact lenses, cosmetic and tattoo products was annulled. The decree stated that companies manufacturing or marketing these products were not subject to the same transparency obligations as drug and medical devices manufacturers or distributors. Instead, they only had to disclose agreements relating to the conduct of health and safety work assessments and biomedical or observation research on non-corrective contact lenses, cosmetic and tattoo products. This provision is now void and the transparency regime seems to be aligned with the drug and medical devices industry.
- Second, and more importantly, the provision under which only the existence of agreements with HCPs had to be disclosed, but not the remuneration of the said HCPs, has also been ruled null and void. Claimants referred to the fact that the French Sunshine Act provides that "all benefit in cash or in kind" should be disclosed. As a result, the practical consequence is that further to this decision, transparency reporting in France shall also contain any contractual remuneration paid by health care companies to HCPs.
This decision constitutes the second major change to French transparency regulations that is not directly reflected in regulation. In late 2014, one of the French health care regulators, the Direction Générale de la Santé (DGS), issued guidelines that, in effect, radically changed the territoriality of the French Sunshine regulation: although the regulation sets forth that the transparency reporting requirements are necessary for companies which manufacture or market health products regulated by the French National Agency for Medicines and Health Products Safety (the ANSM), the DGS guidelines provided that:
"Any company that manufactures or markets health products must disclose the agreements concluded with HCPs. This is so whether the said company is or not incorporated in France, and whether its products are or not manufactured or marketed in France. It is indeed the provision of benefits or the conclusion of agreements with French HCPs which triggers the application of 'Sunshine' measures and therefore the disclosure obligations".
The decision of the Conseil d'Etat is therefore another consequent change that adds to the complexity of the French Sunshine regulation, as it is not the Ministry of Health, but regulators and courts which now significantly impact the scope of a regulation the industry was just getting to grips with.
How do these two changes affect reporting requirements, and in particular what is their date of application?
- In relation to territoriality aspects, as the guidelines are an
interpretation of the regulation, they should be understood as
being valid since the very beginning, i.e. since 1 January 2012,
the date of the first reporting requirements.
As a result, health care companies not headquartered in France, not manufacturing or marketing health products in France, but having contracted with or granting benefits to a French HCP, should file their reporting on the unique state portal.
- Regarding the obligation to disclose the contractual remuneration paid to HCPs, the French Ministry is now analysing the consequences of this decision and a clarification is necessary concerning the date of application of this new requirement. In this particular case, three options are available: either the ruling changes transparency requirements for the future, or it is considered as retroactive, or the ministry sets forth another alternative date.
That being said, one important point requires some clarification: the impact of these important changes in regulation is not as significant from a US perspective. Class actions are not (yet) available in France for health care products. The product liability scheme is primarily based on the defectiveness of the product, rather than on the negligence of the manufacturer. Therefore, from a litigation perspective, the use of transparency data is not likely to constitute key information. However, this might change if claimants want to sue HCPs personally, either on tort or criminal grounds. On this particular topic, insurance coverage will need to be closely monitored.
Clearly, recent developments affecting French transparency regulations must be monitored very closely, as the French Sunshine Act is, more than ever, still a work-in-progress.
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