Life Sciences - Adamas · the PHC • No obligation to ... medicinal products, medical devices or cosmetics are excluded from the publication obligation on the public website () incumbent

Lyon - Paris - Bordeaux - Beijing– Shanghai – Stuttgart www.adamas-lawfirm.com Adamas Avocats

The legal landscape in the biotech and healthcaresector is constantly evolving.

The first edition of our Life Sciences Newsletter willprovide you with detailed information on :

• The changes that the French "healthcare systemmodernization" bill may result in for healthcareindustries

• A number of regulatory and legal developmentsconcerning the following issues :

On-line sales of medicinal products Transparency - Notion of "benefits" to be

declared Liability arising from defective products Health-related software and mobile

applications European regulation on clinical trials on

medicinal products for human use Administrative decisions de-listing products

from a list of reimbursable medicinalproducts

Strengthening of the provisions on theadvertising of veterinary medicinal products

Dispensing pharmacies : harmonization inrespect of their creation, grouping andtransfer

Wishing you a pleasant reading,

Barbara BertholetLawyer & Partner

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EDITO

NEWSLETTER

Life Sciences

Summer 2015

http://www.adamas-lawfirm.com/

Lyon - Paris - Bordeaux - Beijing – Shanghai – Stuttgart www.adamas-lawfirm.com Adamas Avocats

On April 14, 2015 the French National Assembly voted the “healthcare system modernization"bill (hereinafter "the Bill") at first reading. The Bill was transferred to the Senate which willexamine it in a public session, most likely next autumn.

If the Senate modifies this draft, the “fast track procedure” initiated by the government will lead,without a second reading by either chamber, to the creation of a joint committee which willendeavor to agree on a common text that should then be adopted definitively.

We have identified certain provisions in the Bill, shown in the table below, which if definitivelyadopted would have an impact on the legal framework applying to both health and cosmeticproducts.

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FOCUSTHE "HEALTHCARE SYSTEM MODERNIZATION" BILL: WHAT IMPLICATIONS FOR THE HEALTHCARE INDUSTRIES?

Transparency of links

Articles of the French

Public Health Code(hereafter "PHC") liable to be

created or amended

Content of amendment provided for in the Bill Comments

Amended articles :

L. 1453-1 et seq. of

the PHC

• No obligation to publish purchase agreements entered

into with healthcare professionals:

The Bill provides that agreements governed by Articles

L.441-3 and L.441-7 of the French Commercial Code and

covering the purchase of goods or services, by natural or

legal persons, from companies producing or marketing

medicinal products, medical devices or cosmetics are

excluded from the publication obligation on the public

website (https://www.transparence.sante.gouv.fr)

incumbent upon the said companies.

• Obligation to publish remuneration associated with

agreements concluded especially with healthcare

professionals:

Obligation for companies producing or marketing medicinal

products, medical devices or cosmetics to make public, on

the public website, the remuneration paid to natural or legal

persons under the agreements concluded with them, when

exceeding a certain threshold set by decree.

• Extension of publication obligations (agreements,

benefits, remuneration) to veterinary companies:

(All of these amendments are set out in Article 43bis of the

Bill)

Strengthening andclarification of the"transparency“ systemfollowing the Conseild’Etat (French Council ofState) judgment ofFebruary 24, 2015 (seejudgment summary onpage 7)

Reinforcement of theexisting publicationrequirements. Arealready subject topublication:-the existence, purposeand date of agreementsentered into withhealthcareprofessionals, and-benefits > €10 grantedespecially to healthcareprofessionals (amount,date, nature, andbeneficiary).



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FOCUS

On-line salesArticles of the French


created or amended


New article:

L. 5125-39 of the

PHC

New ministerial order redefining the best practices

for dispensing medicinal products over the Internet :

The Bill provides that "An order of the Minister for

Health establishes the technical rules applicable to e-

commerce websites selling medicinal products

concerning the protection of health data, the

websites’ features and the requirements for the

presentation of medicinal products".

(Art. 35bis B of the Bill)

This new article follows

the Conseil d'Etat’s ruling

of March 16, 2015 which

canceled the ministerial

order of June 20, 2013

regarding best practices

for online dispensing of

medicinal products (see

ruling summary on page

7).

Class actionArticles of the French


created or amended


New articles:

L. 1143-1 et seq. of the

PHC

Creation of a class action to obtain compensation for

damages resulting from bodily harm caused by

healthcare products:

• An association of users of the healthcare system

can take legal action to obtain compensation for

the personal damage suffered by the users as a

result of a breach by a producer or supplier of

health products (medicinal products, medical

devices, etc.) or cosmetic products of its legal or

contractual duties.

(These new provisions are set out in Art. 45 of the

Bill.)

Extension of the class

action provided for

consumer products by the

March 17, 2014 Act

dubbed "the Hamon Act"

to medicinal and health

products following

scandals involving multiple

damage claims (Mediator,

PIP prostheses, growth

hormone, etc.).

Note that legal action may

be brought "directly

against the insurer

underwriting the liability

of those responsible,

pursuant to Article L. 124-

3 of the French Insurance

Code".



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FOCUS

Supply disruption



created or amended


New articles:

L. 5111-4 and

L. 5121-29 et seq. of

the PHC

Creation of a list of "medicinal products of major

therapeutic interest", out of stock or subject to

stockout risk, which will be published on the ANSM's

website :

• Creation of a definition for medicinal products or

classes of medicinal products of major therapeutic

interest (hereinafter "MMTI")

• Establishment by the ANSM of a list of MMTI for

which actual stockout or potential stockout risk is

demonstrated or has been declared to the ANSM.

This list is published on its website.

Reinforcement of the obligations of pharmaceutical

companies on the management of supply disruptions of

these medicinal products :

• Obligation for marketing authorization (MA) holders

and medicinal products suppliers (“exploitants”) to

establish and implement managements plans for the

shortage of MMTI and declaration to the ANSM of the

medicinal products concerned.

• Suppliers (“exploitants”) of MMTI must :

- Inform the ANSM of any actual or potential stockout.

- After agreement by the ANSM, develop alternative

solutions and implement the measures established in

the management plan.

- After agreement by the ANSM, establish

accompanying and information measures for

healthcare professionals and patients, particularly

through patients associations.

(These new provisions are set out in Art. 36 of the Bill.)

These provisions will

be defined by a

Decree of the

“Conseil d’Etat” and a

ministerial order.



5

FOCUS

Medical devices



created or amended


New articles:

L. 5211-4-1;

L. 5212-2-1;

L. 5212-2-2;

L. 5461-4-2;

L. 5461-6-1 of the

PHC.

Amended articles :

L. 5211-6 and

L. 5461-9

of the PHC.

Requirement for the manufacturers of certain

medical devices to send a summary of the product

characteristics to the ANSM under threat of a fine:

• Requirement for manufacturers of medical

devices, a list of which will be established by

ministerial order after consideration by the

ANSM, or for their representative, to send the

ANSM a summary of their device’s characteristics

when put into use in France.

Failure to comply with such obligation is punishable

by a €150,000 fine.

Regulation of the sale, resale and use of certain

medical devices :

• Establishment by Decree of the “Conseil d’Etat”of the conditions under which the sale, resale oruse of certain medical devices or categories ofdevices are forbidden or regulated.

The act of selling, reselling or using medical devices

without complying with the conditions established

by the Decree is punishable by two years'

imprisonment and a €150,000 fine.

Creation of registers for the monitoring of medical

devices to be completed by healthcare

establishments:

• Creation of registers for the monitoring of

medical devices included in the aforementioned

list and obligation for healthcare establishments

to complete these registers, with criminal

penalties in case of non-compliance.

(These provisions are set out in Art. 35ter of the Bill.)

These provisions will

be defined by a

Decree of the

“Conseil d’Etat” and

a ministerial order.



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FOCUS

Information sheets on the proper use of medicinal

productsArticles of the French Social

Security Code(hereafter “SSC") liable to be created or

amended

Content of amendment provided for in the

Bill

Comments

Amended article :

L. 161-37 of the SSC

The French Health Authority (HAS) will

develop :

• or update, information sheets on the

proper use of certain medicinal products,

defining "in particular their place within

therapeutic strategy". Information sheets

on the proper use of anti-cancer drugs

will be developed and updated by the

French National Cancer Institute.

• or approve, a guide on the most effective

diagnostic or therapeutic strategies and

lists of preferred medicinal products

intended for healthcare professionals

after consideration by the National

Cancer Institute in the case of anti-cancer

treatments.

(These provisions are set out in Art. 35 of the

Bill.)

Conditions for the

creation or approval by

the Health Authority

(HAS) of information

sheets on proper use

and of the guide on

diagnostic and

therapeutic strategies

will be set by decree.


NEWSLEGAL AND REGULATORY

Lyon - Paris - Bordeaux – Beijing– Shanghai – Stuttgart www.adamas-lawfirm.com Adamas Avocats

On-line sales of medicinalproducts :

The on-line sales issue experienced thefollowing developments :

(Judgment of the French Council of State(Conseil d’Etat), March 16, 2015, nos.370072, 370721 and 370820, M. A., StéGatpharm, SELARL Tant D'M)

By decision dated March 16, 2015, theConseil d'Etat canceled the ministerialorder of June 20, 2013 regarding bestpractices for online dispensing of medicinalproducts for procedural reasons (lack ofjurisdiction of the Minister who exceededhis authority, and procedural breachconcerning the lack of prior notification ofthe decree to the European Commission).

Following this decision, an amendment tothe healthcare bill was introduced andpassed in order to enlarge the powers ofthe Minister in this matter and enable anew order to be taken (see above, Focuson the Bill).

(Judgment of the Administrative Court ofCaen, April 14, 2015, case no. RG 1402160)

By ruling dated April 14, 2015, the CaenAdministrative Court allowed pharmacistswho sell online to have separate storageand shipping facilities not within closeproximity of their pharmacy.

(Ministerial order of April 20, 2015 statingthe entry into force of the provisions ofArticles R. 5125-70 and R. 5125-74 of theFrench Public Health Code relating to thecommon logo which should appear on e-commerce pharmacy websites. NOR:AFSP1508956A JO: April 30, 2015)

Finally, since July 1, 2015, every websiteselling medicinal products should displaythe European logo in compliance with thegraphic and technical requirements ofImplementing Regulation (EU) No.699/2014 of the European Commissiondated June 24, 2014 concerning the designof the common logo identifying peopleoffering medicinal products for sale at adistance to the public.

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Transparency - Notion of "benefits" to bedeclared :

Judgment of the French Council of State (Conseil d’Etat),February 24, 2015, nos. 369074, 370431 and 370571

In a ruling dated February 24, 2015, the Conseil d'Etatclarified the concept of "benefits" within the meaning ofthe "transparency“ scheme provided for in ArticleL. 1453-1, II of the French Public Health Code. For therecord, this article requires companies producing ormarketing products for sanitary or cosmetic purposes tomake public "all benefits in kind or in cash that the saidcompanies provide, directly or indirectly, to persons,associations, institutions, foundations, corporations,agencies and bodies [such as in particular] healthcareprofessionals, health institutions, or associations ofhealthcare professionals."

According to the Conseil d'Etat, "cash benefits" cover feesthat these companies pay to healthcare professionals andother healthcare companies, with the exception of theremuneration of healthcare professionals who exercisetheir main activity as an employee of such a company.

Subsequently, the Conseil d'Etat annulled the provisionsof the Circular of May 29, 2013, which excluded from thescope of the information to be published allremuneration, commissions and fees paid by a companyproducing or marketing healthcare products for health orcosmetic purposes in return for a work or the provision ofservices.

It is interesting to note that the Conseil d'Etat specified inthat judgment that the transparency scheme is based onthe provisions of Article L. 4113-6 of the French PublicHealth Code "which pursue the same objective".Therefore, one may ask whether the broad sense of theconcept of “benefits” adopted with regard to thetransparency scheme can be transposed when it comes to"anti-gift" law.

Such an interpretation would go beyond the currentposition of doctrine and case law. Note also that the“healthcare system modernization” Bill expresslyprovides for the requirement to publish remunerationexceeding a threshold set by decree paid to healthcareprofessionals, health institutions and other healthcareeconomic actors on a single public website (see above,Focus on the Bill).

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Liability arising from defectiveproducts :

ECJ, March 5, 2015, case C-503/13, case C-504/13, Boston Scientific MedizintechnikGmbH v. AOK Sachsen-Anhalt - DieGesundheitskasse and BetriebskrankenkasseRWE

An important decision has been issued bythe European Court of Justice (ECJ)concerning liability for defective products,applying to all healthcare and cosmeticproducts. The Court held that :

• The risk of failure of an implantablemedical device constitutes a "defect".

• The finding of such a risk is sufficient toqualify all products of the same model orproduction series as defective, withoutthe need to prove the default of theproduct in each case.

• The cost of replacement surgery is adamage to be compensated by theimporter of the product manufacturedoutside the European Union.

The origin of this case involved a companywho imported in Germany pacemakers andimplantable cardioverter defibrillatorsmanufactured by a US company. Qualitychecks showed that an item used tohermetically seal the pacemakers couldgradually fail, resulting in an abrupt halt tocardiac stimulation, without warning.The importer recommended that doctorsreplace the implanted pacemakers with newones supplied by the importer. The Germanhealth insurance organizations paid thesurgical costs and requested reimbursementfrom the importer.

°°°

The case was brought before the GermanFederal Court which referred two questionsto the ECJ, namely whether it is possible,where it is found that products belongingto the same group or forming part of thesame production series have a potentialdefect, to classify as defective all theproducts in that group or series, withoutthere being any need to show that theproduct in question is defective and, if so,can the damage to be compensated consistin the cost of the intervention required toreplace the product?

The ECJ replied affirmatively.

Note that the Court took into account thevital function of the medical devicesconcerned and the particular vulnerabilityof patients who use them to consider thatthe safety requirements these patients canlegitimately expect are particularly high.According to the Court, “the potential lackof safety […] stems, for products such asthose at issue in the main proceedings,from the abnormal potential for damagewhich those products might cause to theperson concerned”.It also follows from this decision that whenthe manufacturer is located in a countryoutside the European Union, the actionmay be brought directly against theimporter or whoever sells it under theirbrand or distinctive sign (to compare withthe Court of Cassation judgment, 1st Cass.civ., June 4, 2014, no. 13¬13.548: JurisDatano. 2014-012053; Bull. civ. 2014, I, no. 10,where the Court sentenced the parallelimporter of a phytopharmaceuticalproduct).

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Health-related software andmobile applications :

The ANSM (French national authority formedical safety) published an informationbriefing for users on May 5. The authorityexplains that it is important to take advicefrom healthcare professionals when usingsuch items especially when the applicationallows monitoring of a chronic disease. TheANSM also briefly recalled that software orapplications that have a medical purpose(diagnosis, prevention, care or treatment)are medical devices that must obtain CEmarking before being put on the market andas such are subject to monitoring by theANSM.

However, software intended, for instance,for sports activities or well-being purposesdoes not constitute medical devices and isnot liable to be monitored. This is also thecase with software for the administrativemanagement of data.

Also note the ANSM's January 12, 2015ruling, which illustrates the difficulties inclassifying products and the embeddedsoftware in these products.

In this decision, the ANSM considered thatInfocament, which main purpose is themanagement and archiving of data from thepatient's medical record, does not fall withinthe medical device definition in Article L.5211-1 of the PHC and should not have hadto carry the CE label.

However, the software incorporated in thisproduct presented by the operator asenabling the viewing of diagnostic images,thereby assisting the physician whenconducting a medical examination, does fallwithin this definition.

The ANSM suspended the sale of thisproduct, firstly until removal of the CE labeland any suggestion that it is a medical devicefrom the product, and secondly until affixingof the CE label on the software installed in it,after delivery by an authorized body of acertificate of compliance with the applicableessential requirements.

°°°

Generics substitution objective :

The Ministerial order of May 27, 2015,approving amendment no. 9 to the nationalagreement setting generic specialty deliveryobjectives, set dispensing pharmacists a 85%generic substitution objective for 2015.

000

European regulation on clinicaltrials on medicinal products :launch of a pilot phase :

A European regulation on clinical trials onmedicinal products was published in theOfficial Journal of the European Union onMay 27, 2014 and should come into force inMay 2016.

In order to anticipate the new Europeanregulation, the ANSM announced on April 14,2015 the launch of a pilot phase inSeptember 2015, in collaboration with therelevant parties (academic and industrialdevelopers and ethical research committees("CPPs")). Participation in this pilot phase isvoluntary and will in particular enablemanufacturers to adapt to the newregulations. In practice, developers willprepare for the new procedures with theestablishment of a single schedule forprocessing applications and a singlenotification of authorization by the ANSMand CPPs. This pilot phase will aim tofacilitate application procedures for clinicaltrial authorizations.

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10


Administrative decision de-listing products from a list ofreimbursable medicinalproducts – obligation to statereasons :

ECJ, April 16, 2015, case. C-271/14 andC- 273/14, LFB Biomédicaments S4 et a.v. Minister of Finance and PublicAccounts et a.

In a ruling dated April 16, 2015, the ECJrecalled the applicable EU legislation onthe transparency of measures regulatingthe prices of medicinal products forhuman use. The Court said that thedecision to de-list a specialty from thelist of medicinal products provided tohospital patients that are reimbursableby health insurance, over and abovehospitalization services covered byhospital packages, must be duly justifiedin order to comply with thetransparency objective. Moreover, thisrequirement also applies to any decisionthat restricts the conditions ofreimbursement or reduces thereimbursement level of a drug byexcluding it from this list.

°°°

Strengthening of provisions on theadvertising of veterinary medicinalproducts :

(Decree of June 10, 2015, no. 2015-647 concerningthe advertising of veterinary medicinal products)

A decree of June 10, 2015, reinforces rules on theadvertising of veterinary medicinal products.

The decree provides a definition of advertising inrelation to this matter, namely “any form ofinformation, including canvassing activities,prospecting or inducement designed to promote theprescription, supply, sale or consumption ofveterinary medicinal products".

These new provisions now limit advertising ofveterinary medicinal products to those which haveobtained a marketing authorization in the EuropeanUnion or registration with the National Health andSafety Agency for food, environment and labor(hereinafter "ANSES"). Advertising must present theveterinary medicinal product objectively and shouldnot be misleading. In addition, it must includecompulsory information, specifically :• the name of the medicine;• the animal species for which it is intended;• the qualitative and quantitative composition in

active ingredients;• the authorization number, where relevant.

Advertising of certain veterinary medicinal products issubject to prior authorization from the ANSES; this isparticularly the case for antibiotics, drugs thatpromote prevention, diagnosis or treatment ofillnesses, as well as hormone based drugs. Finally,advertising of auto-vaccines is strictly forbidden.

°°°

Dispensing pharmacies : harmonizationin respect of their creation, grouping andtransfer :

On June 10, 2015, the Ministry of health issued aninstruction concerning the conditions for authorizingthe opening of a dispensing pharmacy by creation,transfer or grouping. The aim of this instruction is toharmonize the practices of regional health authorities(ARS), in particular for the handling of files.

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CONTACTS

To receive our newsletters send a request to: [email protected] To see all our newsletters please visit: www.adamas-lawfirm.com

Jean-Baptiste ChanialLawyer & [email protected]

Barbara BertholetLawyer & [email protected] of Life Sciences and Intellectual Property activities

Lyon : + 33 (0) 4 72 41 15 75Paris : +33 (0) 1 53 45 92 22

Other contributors to this newsletter:• Evgéniya Petrova-Eme, Lawyer• Gladys Andaloro, Legal Consultant

The articles in this newsletter are for information purposes only and cannot in any circumstances constitute aconsultation or legal advice. Neither the authors nor ADAMAS are responsible for any use by readers of theinformation contained in this letter.

Those wishing to use the information contained in this newsletter for purposes other than personal informationshould first seek professional advice from a qualified legal advisor.

The entirety of this newsletter is protected under copyright and is the exclusive property of Adamas law firm or theauthors associated with it. The items it contains may not be reproduced, even partially, without their permission.In accordance with the French Data Protection Act (“Loi Informatique et Libertés") of January 6, 1978 amended in2004, you have the right to access and rectify information concerning you. You also have the right to unsubscribefrom our newsletter mailing list. You can exercise these rights by contacting: [email protected]


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Life Sciences - Adamas · the PHC • No obligation to ... medicinal products, medical devices or cosmetics are excluded from the publication obligation on the public website () incumbent