France: Again The Life Science Industry Will Have To Take A Close Look At A New Set Of Regulations Reshaping Transparency-Related Obligations

The relationship between the life sciences industry and health-care practitioners is being reshaped in France through regulatory developments under both the French Anti-Gift Law and the French Sunshine Act.

The regulatory landscape in France regarding the relationship between the life sciences industry and health-care practitioners (HCPs) continues to undergo significant changes.

Transparency requirements are regulated in France by two main sets of regulation: Law No. 93-121 of 27 January 1993 (the "French Anti-Gift Law or French DMOS Law) regulates the provision of gifts, discounts and other incentives to HCPs by life sciences companies, while Law No. 2011-2012 of 29 December 2011 (the French Sunshine Act) imposes on companies disclosure obligations relating to benefits granted to and agreements concluded with HCPs.

While the French Sunshine Act has been frequently amended to reflect subsequent changes brought by implementing decrees, orders, and circulars, the Anti-Gift Law has been less subject to change, at least until now.

Reshaping of Anti-Gift provisions

Changes to the Anti-Gift Law are contemplated in the near future pursuant to the recent adoption of Ordinance No. 2017-49 on 19 January 2017, which aims at extending the scope of the Anti-Gift Law and at changing the procedure related to the prior submission to the national or departmental board of the relevant HCP professional body.

Under its original provisions, the Anti-Gift Law established the principle that HCPs cannot receive any benefits from companies manufacturing or marketing health products that are reimbursed under the French social security system. However, it provided specific exemptions to this general rule by allowing (i) remuneration under agreements related to research activities or scientific evaluation, provided that such remuneration (a) was not calculated proportionally to the number of products prescribed by the HCP concerned and (b) was of a reasonable amount, and (ii) hospitality offered at promotional, professional and scientific events, provided that such hospitality was (a) reasonable and (b) limited to the scientific and professional purpose of the event.

The new provisions expand the scope of the Anti-Gift Law to broadly cover any company manufacturing or marketing health products, regardless of whether or not payment for the products is reimbursed under the French social security system. However, the Anti-Gift Law does not extend to companies manufacturing non-corrective lenses, cosmetic products and tattoo products.

The new provisions will also clarify what benefits will be specifically excluded from the scope of the Anti-Gift Law. For example, exceptions would include remuneration, compensation, and reimbursement of expenses provided by an employment contract and relating exclusively to the exercise of the HCP's professional activities; or benefits related to the exercise of the HCP's professional activities, provided that the amounts concerned are of a negligible value. In that respect, the maximum amounts paid as a benefit under each category are to be determined by means of a future implementing order.
Another upcoming change relates to the processing of the transparency requirements: as things currently stand, before being concluded or granted, agreements and hospitality proposals must be submitted for prior opinion to the national or departmental board of the relevant HCP body in order for it to assess whether the remuneration for services and the hospitality provided are reasonable in amount and limited to the sole scientific or professional purpose of the relevant event. This procedure is about to be changed into a declaration/authorisation procedure, depending on the amount of the benefits and hospitalities provided. The thresholds for determining whether a declaration or an authorisation is required are also to be set by means of a future implementing order.

Last but not least, the penalties incurred for non-compliance with the requirements of the Anti-Gift Law will be doubled from the current fine of up to €375,000 to a fine of up to €750,000. Alternatively, the fine could be up to 50 per cent of the expenses incurred in carrying out any practice constituting an offence. Although the notion of expenses incurred in carrying out any practice constituting an offence remains to be clarified, such change points towards a clear strengthening of the applicable rules.

The new provisions will enter into force after the adoption of an implementing decree, and at the latest on 1 July 2018. It is already to be expected that the announced changes will particularly impact life sciences companies manufacturing or marketing non-reimbursable health products – which were until now exempt from the rules of the Anti-Gift Law. These companies will have to promptly integrate the procedural rules into their daily business.

Upcoming clarification on the disclosure of remuneration paid to HCPs

In addition to the Anti-Gift Law, life sciences companies are required to disclose certain information on a public Stateportal. In recent years there have been changes concerning the content of the disclosure and this has presented a challenge for life sciences companies trying to meet their disclosure obligations. (See our previous alert).

Initially, life sciences companies were required to disclose any benefits granted to HCPs and the nature of agreements concluded with HCPs, but they were not required to disclose the amounts of any remuneration. However, on 24 February 2015, the French Supreme Administrative Court (Conseil d'Etat) ruled null and void the provision under which only the existence of agreements with HCPs had to be disclosed, but not the remuneration amounts paid to HCPs. As a consequence, Law No. 2016-41 of 26 January 2016 codified the principle that any remuneration contained in agreements concluded with HCPs must be disclosed, with implementation of the new provisions to be carried out by way of decree. In this respect, Decree No. 2016-1939, recently published on 28 December 2016, provides partial clarification as to the basis for the implementation of the new provisions.

The new decree provides that any remuneration above €10 under agreements concluded with HCPs has to be disclosed. This provision harmonises the rules relating to disclosures and aligns the regime applicable to any benefits, hospitality or remuneration for services provided for in agreements.

The new decree also corrects the discrepancy in the reporting timelines. In the past, while agreements had to be disclosed within 15 days after their signature, benefits had to be disclosed only twice a year: by 1 February and 1 August.

Now, details of benefits and remuneration for services above €10 granted during the first half of the calendar year will have to be disclosed by 1 September, and those granted during the second half by 1 March of the following year. This means that, going forward, disclosures of both benefits and remuneration will be in step.

Finally, the decree provides that the new provision on the disclosure of remuneration will enter into force as soon as the relevant implementing order is published, and at the latest on 1 July 2017.

In that respect, the guidelines of the French Pharmaceutical Association (the LEEM), issued in February 2017, anticipate that the first disclosure of any remuneration provided for under an agreement will need to be made by 1 September 2017.
Indeed, since the implementing order was issued after 1 February – the deadline date for the disclosure of data related to the second half of 2016 – it is unlikely that this will have retroactive effect on remuneration under agreements concluded in 2016. However, the LEEM mentions that this possibility cannot be totally excluded and companies should await publication of the implementing order for further guidance.

It should be borne in mind that at the time of its publication in May 2013, the original decree to implement the French Sunshine Act had full retroactive effect to as far back as January 2012 – the date the French Sunshine Act came into force. Both companies and industry associations resisted this interpretation on the grounds that such retroactive disclosure would be too cumbersome for companies to implement.

Under a restrictive interpretation, the new disclosure requirement relating to remuneration should apply as of January 2012, which means adjustments will need to be made to cover the last five years. However, a degree of flexibility will probably be allowed with respect to such retroactive disclosure given the burden of work this would impose on companies.

In any case, companies should be prepared for significant upcoming changes and therefore monitor closely the evolution of the regulation in that respect.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions