The Social Security Financing Bill for 2024 (PLFSS) is part of the current policy to fight medicinal product shortages in France, and proposes the inclusion in the legal regime of a particularly binding measure for the pharmaceutical industry.

Indeed, among other changes, the PLFSS includes a number of strong measures to pursue the objective of fighting supply shortages, including the obligation for certain pharmaceutical companies operating a medicinal product of major therapeutic interest (MITM) that wishes to suspend or cease its marketing to find a buyer, under certain conditions.

• Companies involved: companies operating an MITM that is no longer protected by intellectual or industrial property rights (medicinal products considered mature).
• Conditions of application of the obligation to find a buyer :
  • when these companies wish to suspend or cease marketing the MITM ; and
  • if the available alternatives do not cover the need on a permanent basis.
• Increased reporting requirement for involved companies planning to suspend or cease marketing MITMs: in addition to the declaration of suspension or ceasing of MITM marketing to be sent to the French National Agency for Medicines’ and Health products’ Safety (ANSM) one year before the actual suspension or ceasing (current article L5124-6 of the French Public Health Code), the company will have to supplement this declaration with an analysis of the foreseeable impact of its decision on the coverage of the needs of the French population.
• Requirement for companies to find a buyer, at the ANSM’s discretion: indeed, if the ANSM considers that the available alternatives are not sufficient to cover national needs, the marketing authorization (MA) holder is notified and is required to :
  • notify potential buyers of its intention to grant the right to operate or to transfer the MA for the medicinal product involved;
  • provide a detailed response to each offer submitted;
  • provide access to all information needed by companies applying to acquire the marketing of the medicinal product, except for information whose disclosure would be harmful to the company's interests.

The marketing authorization holder has a nine-month deadline from the ANSM’s notification that the available alternatives are unable to cover national needs, to notify potential buyers, launch an offer process, examine the offers submitted and notify ANSM of the offer it intends to accept. This notification must be accompanied by a report indicating :

• actions implemented to secure the takeover;
• offers submitted;
• the reasons that led it to accept or reject each offer submitted, notably with regard to the level of security of supply that the applicant company could provide, including the location of production sites.

This measure is likely to be particularly prohibitive and dissuasive for companies operating a mature MITM in France and who decide to suspend or cease its marketing. Indeed, it places these companies in a precarious situation in several respects:

• decisions to suspend or cease marketing of a MITM often result from prior economic difficulties; framing this situation with a requirement to find a buyer, in an unfavorable competitive context and within a deadline as short as nine months, will place companies in a position of weakness during takeover negotiations with one or more potential buyers. This nine-month deadline seems particularly out of touch with reality, given the steps involved in a product acquisition process (creation of a data room, legal and financial audit, financing, transitional services agreements, reorganization of the manufacturing and supply structure, etc.).
• the decision to suspend an MITM seems difficult to implement with this new system, which seems more suited to situations where the company operating the MITM would like to sell it in the long term;
• the decision to implement the requirement to find a buyer remains at the ANSM's discretion, which limits companies’ visibility and ability to anticipate;
• the requirement to spontaneously communicate strategic information to potential buyers in order to take over the marketing of the medicinal product could place transferring companies in a situation where they could weaken certain companies, and force them to disclose sensitive information regarding the relevant MITM, but which could also involve other products in their portfolio;
• if no buyer can be found within nine months, the companies involved may be forced to grant (i) the operation and (ii) the manufacture of the medicinal product for the French market, free of charge, to a pharmaceutical establishment owned by a legal entity of public law, for a period of two years, renewable without limitation;
• if the companies involved fail to implement this buyer search mechanism, they will be subject to the risk of financial penalties, to be paid to the French national health insurance fund (Caisse nationale de l’assurance maladie).

It should be noted that this measure is also coupled with the ANSM's ability to add new medicinal products to the MITM list on its own initiative, whereas the categorization of a medicinal product as an MITM is currently based on self-registration by the company. Companies operating a MITM face specific and more burdensome requirements than those operating medicinal products that do not belong in this category, and this new ANSM ability could also place some companies in tricky situations if one of their products were to be considered a MITM.

This proposal thus tightens up the system applicable to medicinal product supply shortages, which has already been expanded in recent years, even going so far as to allow the ANSM, in certain cases, to require a company to import, at its own expense, an alternative medicinal product in the event of a MITM shortage.

However, the system could also create opportunities for other companies interested in buying mature MITMs, probably at a much lower price than the transferor would have charged in a less unfavorable context.

Next steps

At this stage of the debates, this article is still very much open to amendment, and could be the subject of an industry outcry. According to the outcome of the debates, should this obligation remain in the final text, a certain number of criteria and conditions will have to be specified by decree; adoption of which is currently anticipated for the second half of 2024, which would give industry a few months to prepare for the entry into force of this measure.

Should you have any questions about this draft article, or more widely about the regulations applicable to health care product supply shortages in France, please do not hesitate to contact the authors or the Hogan Lovells attorneys with whom you regularly work.

Authored by Mikael Salmela and Josephine Pour.