Last year, we wrote about the Loi Bertrand or the French Sunshine Act (“FSA”), which provides that health products companies must make available to the public the existence of any contract with health care providers (HCPs) and certain entities of the health sector, as well as any benefit in cash or in kind granted to the latter beyond a certain threshold. The Sunshine Act was adopted on 29 December 2011 to ensure transparency of decision-making within the health care sector and to prevent conflicts of interest between stakeholders.
Consequently, as reported by the law firm McDermott, Will & Emery, the decree implementing French Law No. 2011-2012 on the Strengthening of Health Protection for Medicinal and Health Products (the decree), was issued on May 21, 2013. Its aim is to specify the scope of disclosure obligations, which affect all agreements concluded between health care professionals (HCPs) and companies, as well as every benefit in kind or in cash exceeding €10. They adopted a retroactive reporting requirement to January 1, 2012. Below is a summary of the final decree as written by the client alert issued by McDermott, Will & Emery.
New: see also client advisory from the law firm Drinker, Biddle & Reath.
Interestingly, shortly after issuing the decree, it was announced that the French National Order (Board) of Physicians (l’Ordre des medecins) is considering an appeal before the Council of State (Conseil d’Etat) against the Sunshine Act (Loi Bertrand).
Scope of The Disclosure Obligation
The decree affects a broad range of health care companies, including any company manufacturing or distributing products listed in Article L. 5311-1 of the French Code of Public Health:
- Drugs including insecticides, acaricides, pest control human products, compound, hospital and pharmaceutical preparations, narcotic substances, psychotropic or poisonous substances, essential oils, medicinal plants, raw materials;
- Contraceptive or contragestive products;
- Biomaterials and medical devices;
- In vitro diagnostics medical devices;
- Labile blood products;
- Human or animal organ tissue or cell;
- Therapeutic cells products;
- Breast milk;
- Contacts lenses products;
- [ repealed];
- Products for disinfecting sanitary rooms and vehicles;
- Ancillary therapeutic products;
- [repealed];
- Non-corrective contact lenses;
- Cosmetic products;
- Micro-organism and toxin products;
- Tattoo products;
- Software;
- Devices that are not medically necessary but are used in medical biology laboratories to perform medical biology tests.
The disclosure obligation affects any agreement concluded between companies manufacturing or distributing these products and French HCPs, or any benefit provided by those companies to French HCPs. Such agreements include in particular
- R&D contracts, e.g., clinical trials and observational studies
- Hospitality at conventions, e.g., invitations from individual HCPs to scientific or medical events, with the HCP paying incurred expenses such as travel costs, registration fees, etc.
- Other consultancy agreements, e.g., speaking positions or positions on advisory boards
- Any benefit in cash or in kind provided to French HCPs exceeding €10, inclusive of all taxes.
The only exceptions to the broad scope of this disclosure obligation are:
- Commercial sales agreements of goods and services concluded between companies and HCPs
- Agreements concluded by companies manufacturing or distributing non-corrective contact lenses, cosmetic or tattoo products, as long as these do not relate to the conduct of health and safety work assessments and biomedical or observation research on these products.
According to the FSA, failure to fulfill the disclosure obligation is subject to penalties, including a fine of up to €45,000 and additional sanctions.
Disclosure Process
Companies must disclose the following:
- The name and address of the parties to the agreement
- The qualifications and medical specialties of the parties, including the qualification and registration number for HCPs, school and registration number for students and any information related to the legal person
- The date of the agreement
- The subject matter of the agreement except secrets protected by law
- The program of the event that is the subject matter of the agreement.
All companies must also publish the following information on benefits provided to HCPs that exceed €10 Euros including tax:
- The identity of the recipient and companies providing the benefit
- The value of the benefits rounded up to the nearest Euro
- The date and nature of every Euro received during the relevant period
- The six months during which the benefit was granted.
According to the decree, a free public website will be launched to provide a platform for the information subject to the disclosure obligation. A public authority will be given responsibility for the website.
The information regarding agreements should be passed on to the responsible authority, in French, within 15 days of the signing of each agreement. The information on benefits granted and agreements entered into should be provided to the responsible authority no later than 1 August for benefits granted and agreements entered into during the first half of the year and no later than February 1 for those granted and entered into during the second half of the preceding year. The authority will publish this information no later than October 1 and April 1 respectively.
A future order (Arrêté) will further specify the conditions of the functioning of the website.
Transitional Provisions and Retroactive Effect
Until the publication of this order, transitional provisions state that health care companies must:
- Inform the national board of the relevant medical professions no later than August 1 of agreements entered into and benefits provided during the first half of the year and February 1 of agreements entered into and benefits provided during the second half of the preceding year. Agreements and benefits will be disclosed on boards’ websites.
- Publish agreements and benefits on each company’s website or on a common website shared by two or more health care companies created for this purpose no later than 1 October for benefits granted and agreements entered into during the first half of the year and 1 April for those granted and entered into during the second half of the preceding year.
Disclosure obligations are retroactive and will apply to all agreements concluded and all benefits granted at any point in 2012. Information regarding those agreements and benefits must be provided no later than June 1, 2013 to the national boards of the relevant medical professions. They must be published by boards and health care companies no later than October 1, 2013.
Companies in the health care sector should therefore have kept strict records of all interactions with and benefits to HCPs in order to ensure their contractual and non-contractual relationships are compliant with the Sunshine Act.
Notice to Professional Boards
The FSA provides that agreements concluded between companies manufacturing or distributing health care products and French HCPs must be submitted to the board of the relevant medical profession. According to the decree, the relevant board then has two months to issue an opinion on agreements aimed at promoting scientific research and one month for all other agreements. If no reply is received from the board within this period, the opinion will be deemed to be favorable. All unfavorable opinions will be addressed by the relevant board to the contracting company, which will pass them on to the HCPs.
The relevant board must be told of the implementation of the agreement within a month of giving its opinion. The decree does not, however, specify the content of the information that the company must provide regarding the implementation.
Further Guidance From The Government
The decree does not provide specific wording for its exact application. It only states that companies manufacturing or distributing health products will be subject to disclosure obligations. It is not clear from this wording if the disclosure obligation will be limited to companies that only produce or distribute products in France, or whether companies located outside of France will also be affected.
As the decree mentions that the relevant health products are those that are regulated by the French national administrative agency (the Agence nationale de sécurité du medicament et des produits de santé) and that the jurisdiction of this agency is limited to products produced and distributed in France, it may be inferred, for now, that the disclosure obligation will only affect companies manufacturing and distributing health products in France.
If this is the case, however, it would restrict the scope of the health care companies subject to the Sunshine Act.
The law firm Reed Smith, LLP also provided a short update about the FSA.
Drinker, Biddle & Reath noted thatthere are significant questions and
open issues, which stakeholders hope will be addressed in the
yet-to-be-released Circular, including:
- Confirming that the requirements apply only to companies that operate in France;
- Clarifying the scope of companies that must comply, in particular
clarifying the definition of companies that “provide services associated
with” covered products; - Clarifying the definition of “benefits;” and
- Providing guidance regarding reporting format to help ensure uniformity in reporting information