French government determined to sanction pharmaceutical companies for shortages of medicines

According to an article published by French newspaper, Les Echos, the French government has decided to impose financial penalties on companies in cases of negligence that result in shortages of medicines. Shortages of medicinal products are increasing in France (See our previous blog post: French regulator (ANSM) imposes major financial penalty on a pharmaceutical company for shortage of medicine).

On 19 September 2019, a few days before the presentation of the 2020 Social Security budget, several pharmaceutical companies were convened by the government, as it continued to roll out its roadmap to fight medicine shortages. The Prime Minister will announce the introduction of financial penalties for manufacturers who have not fulfilled their obligations.

In July 2019, the Health Minister promised to set up a steering committee in September to implement the roadmap. Her plan provides for a strengthening of the powers of the French National Agency for Medicines and Health Products Safety (ANSM) to sanction manufacturers who have not implemented shortage management plans. In cases of shortage, a company may be subject to a penalty for each day of shortage, of up to a maximum of 30% of the average daily turnover in France, within the limit of 10% of annual turnover or EUR1 million. In addition, her plan proposes increased obligations in terms of medicine stocks. The penalties mechanism will be detailed in the 2020 Social Security Financing Bill.

In the past 20 years, medicine shortages have increased twentyfold. With the outsourcing of production to subcontractors located in countries where quality controls are not as strict as in Europe, supply disruptions are becoming more and more frequent. In the first half of the year, the disappearance of corticosteroids from pharmacists' shelves was noticed, and this past August, a group of academics and doctors called for the relocation of production to Europe.

A prior version of this post was originally published by the same authors in Practical Law – Life Sciences, September 2019 Issue (Thomson Reuters).