THE FRENCH ACT N DATED 29 DECEMBER 2011 RELATING TO THE REINFORCEMENT OF HEALTH SECURITY OF MEDICINAL AND HEALTH PRODUCTS

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1 THE FRENCH ACT N DATED 29 DECEMBER 2011 RELATING TO THE REINFORCEMENT OF HEALTH SECURITY OF MEDICINAL AND HEALTH PRODUCTS Author: Daniel Kadar, Partner, Paris Publication Date: January 10, 2012 This Act is focused on three main objectives: Combating conflicts of interest and promoting transparency Strengthening the monitoring of medicinal products and medical devices Making better information more readily available to patients and healthcare professionals and, in particular, establishing binding provisions covering the advertisement of drugs, medical and diagnostics devices This Act appears to be the French version of "Sunshine Acts" found in other countries. The Act also creates a new national agency, the Agence Nationale de Sécurité des Médicaments (ANSM), replacing the AFSSAPS in August of The ANSM will have new roles and powers, such as the power to impose administrative and financial penalties. Numerous provisions of this Act are still subject to follow-up decrees by the ANSM. The main features of this new Act are the following: 1. CONFLICTS OF INTEREST AND TRANSPARENCY Obligation to Declare Positions of Interest The Act expands the list of persons holding regulatory powers devolved to them by the French Ministry of Health, cabinet members and members of the new ANSM subject to the obligation to declare their interests when they take office: experts and all other professionals holding a regulatory role (New Article L of the French Public Health Code).

2 Administrative and Financial Penalties: Annulment of the decisions taken by these persons / Fines of up to 30,000 Euros. (New Article L of the French Public Health Code) Obligation to Disclose Compensation The Act imposes an obligation to publicly disclose any agreement for providing direct or indirect compensation 1 to a number of persons expressly listed (e.g. health professionals, organisations of health professionals, students and students associations of students in healthcare related studies, organisations of consumers of the health industry, health establishments, foundations, consulting organisations involved healthcare business, communication and publishing businesses involved in the life sciences market, software companies providing software concerning the drafting and delivery of medical prescriptions, companies involved in the education of healthcare professionals). (New Article L of the French Public Health Code) Business Subject to the New Act: Business which manufacture, distribute and market cosmetics or medicinal products intended for humans, or which provide services linked with these products. Financial Penalties Under the New Act: Up to 45,000 Euros fines for individuals and up to 225,000 Euros for companies, without affecting other possible additional penalties and sentences. (New Articles L seq. of the French Public Health Code) 2. REINFORCED MONITORING AND CONTROL OF MEDICINAL PRODUCTS AND MEDICAL DEVICES The Act creates a new agency named Agence Nationale de Sécurité des Médicaments et produits de santé (ANSM) replacing the AFSSAPS (New Articles L seq. of the French Public Health Code) The ANSM will determine the risks and benefits linked to the use of health products intended for humans as well as cosmetics, monitoring the benefit/risk ratio of products and to act as an authoritative body with the power to impose fines and injunctions depending on the seriousness of the breach or violation.

3 The ANSM will publish all communications, notices, minutes and reports of commissions, committees and expert meetings within this agency (except in cases of industrial, commercial and professional confidentiality) The Act also reinforces the obligations of pharmacovigilance in the medical industry with respect to the follow-up of their products after marketing authorisation (AMM) (The ANSM must be informed without delay of any imposed prohibition or restriction of any suspension of marketing of the authorisation-holder in France) (New Articles L seq. of the French Public Health Code) 3. INFORMING PATIENTS AND HEALTH PROFESSIONALS A public web site with information on medications is to be set up. Information campaigns on medication including its characteristics, risks and its proper use are to be conducted. Continuing education obligations are imposed on all healthcare practitioners. New provisions concerning the advertising of medicinal products For medicinal products intended for humans Advertising medicinal products is prohibited when the product is subject to a re-appraisal of its benefit/risk ratio following a reporting of pharmacoviligance (new Article L of the French Public Health Code) Advertising campaigns concerning medicinal products intended to prevent smoking, reduce the addiction to smoking, or for vaccinations which are subject to medical prescription or reimbursed by French social security. Advertising intended to healthcare professionals is subject to the mandatory prior authorisation of the ANSM. Such authorisation is referred to as «visa de publicité» (advertising visa) (new Article L of the French Public Health Code). Advertisements which have been

4 published before the enactment of this reform shall remain subject to the old regime for one year following the date of this enactment (30 December 2011). Amending the French Intellectual Property Code that now provides that documents needed for the granting of the visa de publicité shall not amount to counterfeiting. Two year experimentation of a new system according to which medical representative shall only be able to make presentation and visits in healthcare establishments before a group of healthcare professionals (i.e. not on an individual basis). Concerning medical devices: New Articles L seq. and L of the French Public Health Code Control of advertising in relation to medical devices and harmonizing this regime to the regime applicable to medicinal products Public advertising of reimbursed medical devices by the French NHS/Medicare is prohibited, except for devices which present a low risk to public health (list to be determined by decree). Mandatory prior authorisation of the ANSM for medical devices presenting an important health risk (list to be determined by decree). Penalties: a maximum of two years of imprisonment and a fine of up to 30,000 Euros in the following cases: Where an advertisement is of a deceptive nature or presents a public health risk. Where an advertisement is broadcasted or communicated without having obtained the visa de publicite, or if this authorisation was terminated or refused.

5 Other penalties are also provided for both individuals and legal entities. 4. IMPORTANT MISCELLANEOUS PROVISIONS The Act includes an important provision allowing a generic drug to copy the appearance or the texture of an original medicinal product in its oral shape (New Article L of the French Public Health Code). * * * This Act will lead to noticeable changes for pharmaceutical and cosmetics companies (concerning transparency requirements) in France in the management of their internal procedures and their compliance requirements. 1. The threshold of which will be determined by decree. About Reed Smith Reed Smith is a global relationship law firm with more than 1,600 lawyers in 23 offices throughout the United States, Europe, Asia and the Middle East. The information contained herein is intended to be a general guide only and not to be comprehensive, nor to provide legal advice. You should not rely on the information contained herein as if it were legal or other professional advice. Reed Smith LLP is a limited liability partnership registered in England and Wales with registered number OC and its registered office at The Broadgate Tower, 20 Primrose Street, London EC2A 2RS. Reed Smith LLP is regulated by the Solicitors Regulation Authority. Any reference to the term partner in connection to Reed Smith LLP is a reference to a member of it or an employee of equivalent status. This Client Alert was compiled up to and including January The business carried on from offices in the United States and Germany is carried on by Reed Smith LLP of Delaware, USA; from the other offices is carried on by Reed Smith LLP of England; but in Hong Kong, the business is carried on by Reed Smith Richards Butler. A list of all Partners and employed attorneys as well as their court admissions can be inspected at the website Reed Smith LLP All rights reserved.