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Volume XII, Number 142

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French Supreme Court Specifies Requirements for Health Care Companies Under the Sunshine Act

Law no. 2011-2012 of 29 December 2011, also known as the French Sunshine Act, introduced into French law disclosure obligations imposed on health care companies (HCC).  The French Medical Board and a nonprofit organisation challenged the law’s implementing decree of 21 May 2013 and its explanatory circular of 29 May 2013.  On 24 February 2015, the Conseil d’Etat annulled some of the challenged provisions of the aforementioned decree and circular, and provided useful clarifications on the scope of the disclosure obligations.

Pursuant to the decree of 21 May 2013 and the explanatory circular of 29 May 2013, there were three exceptions to the obligation to disclose (i) benefits in kind or cash exceeding EUR10 and (ii) written agreements:

  • Payments made as reasonable compensation for services rendered and for salaries did not have to be disclosed.

  • Companies that manufacture or commercialise cosmetic and tattoo products did not have to disclose agreements other than those relating to the conduct of health and safety work assessments and biomedical or observation research on these products.

  • Companies that manufacture or commercialise health products did not have to disclose commercial sales agreements of goods and services.

Under the Conseil d’Etat decision of 24 February 2015, the two first exceptions no longer apply, and the scope of the third exception has been specified.  The three main changes entailed by this decision are described herein.

All payments made from 1 January 2012 by HCCs to HCPs that do not constitute salaries must be disclosed.

The Conseil d’Etat specified the limits of the concept of “benefit in cash or in kind” that must be disclosed.  The 2013 explanatory circular had given a narrow definition of this concept, stating that it excluded payment made as reasonable compensation for services rendered and for salaries.

According to the Conseil d’Etat, however, the provisions of Law no 2011-2012 exclude only salaries received by health care professionals (HCPs) working exclusively as employees of HCCs.  According to the words of the General Advocate (Rapporteur Public) before the Conseil d’Etat, the exclusion relates to an “HCP who works exclusively as an employee in a HCC.”

Consequently, the Conseil d’Etat annulled the provisions of the explanatory circular which disregarded both Law no. 2011-2012 and the decree of 21 May 2013 by excluding from the scope of the disclosure obligations payment made as reasonable compensation for services rendered.

Companies manufacturing or distributing non-corrective contact lenses, cosmetic or tattoo products must disclose all agreements concluded with French HCPs, regardless of the object of the agreement. 

With regard to companies manufacturing or distributing non-corrective contact lenses, cosmetic or tattoo products, the decree limited the scope of the disclosure obligations to agreements concluded with HCPs relating to the conduct of health and safety work assessments and biomedical or observation research on the products.

The Conseil d’Etat stated that by limiting the scope of the disclosure obligations, the decree disregarded the provisions of Law no. 2011-2012, and therefore annulled the regulatory provisions at stake.

The only commercial sales agreements of goods and services that are excluded from the disclosure obligations are those in which the HCP is the buyer.

The Conseil d’Etat clarified the content of Article R. 1453-2 of the French Code of Public Health, which excluded from the disclosure obligations commercial sales agreements of goods and services.  Even though this article was explained in the circular, it remained unclear which agreements it really targeted.

According to the judges, this exemption concerns solely commercial sales agreements of goods and services in which the HCP is the buyer.  Furthermore, despite the rather unclear wording of Conseil’s decision, it must be noted that, in light of the words of the General Advocate, the decision clarified that this exemption does not apply to purchase of advertising space by HCCs in medical journals.

Conclusions

Since the Conseil d’Etat did not time-differentiate the effects of its decision, its 24 February 2015 interpretation of the Sunshine Act is deemed to apply to all conventions concluded and benefits paid from 1 January 2012.  Therefore, HCCs should now disclose the following:

  • All payments made from 1 January 2012 by HCCs to HCPs for services rendered that do not constitute salaries

  • All agreements concluded from 1 January 2012 between companies manufacturing or distributing non-corrective contact lenses, cosmetic or tattoo products and French HCPs

  • Commercial sales agreements of goods and services in which the HCP is not the buyer

In accordance with the principle of legal certainty, HCCs should be given reasonable and sufficient time to adapt to the regulation as interpreted by the Conseil d’Etat, during which period of time they should not be sanctioned.  

© 2022 McDermott Will & EmeryNational Law Review, Volume V, Number 68
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About this Author

Associate

Charlotte Michellet is a jurist in the law firm of McDermott Will & Emery and is based in the Firm’s Paris office. Charlotte Michellet focuses her practice on Public, Administrative and Regulatory law.

Prior to joining the Firm, Charlotte Michellet was, for almost three years, a jurist in the legal department of the Conseil Supérieur de l’Audiovisuel (French Audiovisual Council) and interned at a prestigious French law firm, where she worked on Public, Administrative and Regulatory matters. She also worked for two years assisting judges at...

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Sabine Naugès Paris France Regulatory Constitutions Law Partner McDermott Will Emery Law
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Sabine Naugès counsels clients on all aspects of public law, including administrative and regulatory, competition and constitutional law. Among other high-profile clients, Sabine has advised telecommunications companies France Télécom and Orange on regulatory matters in cases before administrative and commercial courts, and before EU and French competition authorities. She also regularly represents major companies with interests in a wide range of industries, including aerospace, energy, oil and gas, and public health care, before the French government and in litigation...

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