On 27 January 2023, two companies from the Urgo Group, SAS Laboratoires Urgo Healthcare and Laboratoires Urgo were convicted by the Judicial Court of Dijon in the context of a guilty plea (comparution sur reconnaissance préalable de culpabilité or CRPC) to a 1.125 million euros fine as well as to the confiscation of the goods used to perpetrate the offense, for having offered or provided undue benefits in kind to pharmacists in exchange for purchasing non-discounted Urgo products.[1]

On the same day, the General Directorate for competition, consumer affairs and prevention of fraud (Direction générale de la concurrence, de la consommation et de la répression des fraudes or DGCCRF) published a press release stating that those practices had been discovered during a national investigation on the respect of the “anti-gift” procedure provided by the French public health code applicable to health professionals[2] and that they represented a massive fraud of over 55 million euros committed between 2015 and 2021.[3]

The DGCCRF specified in the same press release that the “anti-gift” procedure not only applied to the persons providing benefits, like the aforementioned companies of the Urgo Group, but also to the persons who accepted them. It therefore announced that it would continue to investigate pharmacists who had received benefits in kind from these companies.[4]

In this context, at the end of 2023, several medias revealed that an investigation was underway against now former French Health Minister and former pharmacist, Agnès Firmin Le Bodo, for having received, without declaring them, gifts worth around 20.000 euros from Urgo laboratories.[5]

This case provides an opportunity to review the “anti-gift” procedure created by the law n°93-121 of 27 January 1993, regularly updated and clarified since then, notably by several decrees published on 7 August and 24 September 2020, which prohibit the offer, promise and reception of benefits by actors operating in the health sector (I) and require some companies in the health sector to make public a certain amount of information (II).

I. Actors operating in the health sector are prohibited, except in cases of exemption, from receiving, offering, or promising benefits in cash or in kind

The French public health code (code de la santé publique or CSP) prohibits actors operating in the health sector to receive benefits in cash or in kind (A) but also to offer or promise such benefits (B), except in cases of exemption (C).

A. The prohibition of receiving benefits in cash or kind

The CSP provides that persons working in a regulated health profession, osteopaths, chiropractors, psychotherapists, students in initial or continuing education, associations bringing together these persons and certain public agents elaborating a public policy regarding health, social security or which are holding powers of sanitarian administrative police (hereinafter “health professionals”), are prohibited from receiving benefits in cash or in kind, in any form whatsoever, proposed or provided directly or indirectly by persons providing health services (as defined in article R.1453-13 of the CSP)[6] or manufacturing or marketing health products.[7]

It also provides that health professionals who breach this rule are subject to a penalty of one year’s imprisonment and a 75,000 euros fine for natural persons[8] and a 375,000 euros fine for legal persons,[9] as well as complementary penalties such as temporary or definitive prohibition to work in a regulated health profession for natural persons[10] or exclusion of public tenders for legal persons.[11]

B. The prohibition of offering or promising benefits in cash or kind

In parallel, the CSP provides that persons providing health services or manufacturing or marketing health products are prohibited from offering or promising benefits in cash or kind, in any form whatsoever, directly or indirectly to health professionals.[12]

While the complementary penalties for any person who breach this prohibition are the same as those aforementioned, the main penalties are however twice as important as those provided for by the CSP for health professionals who have received benefits in cash or kind, i.e., two years’ imprisonment and a 150,000 euros fine[13] for natural persons and a 750,000 euros fine for legal persons.

Furthermore, the persons manufacturing, exploiting, or marketing a product or a service covered by the compulsory basic social security programs who would have offered or promised a benefit in cash or in kind in the conditions mentioned hereabove face an additional penalty: the communication of the sanction to the economic committee of health products (comité économique des produits de santé).[14]

C. Exemptions to the prohibition of receiving, offering or promising benefits in cash or in kind

Firstly, the CSP provides for several exemptions to the possibility of receiving, offering or promising benefits in cash or in kind, depending on the nature of the benefit concerned. For example, proceeds from the exploitation or the transfer of intellectual property rights related to a health product or benefits in cash or in kind related to the practice of the beneficiary’s profession and of negligeable value[15] as defined by decree (e.g., 30 euros per meal up to two per year, 20 euros for office furniture or 30 euros for a book or a magazine)[16] are not considered benefits.

Secondly, the CSP also provides for exemptions to the possibility of offering benefits in cash or in kind regarding certain activities, notably those connected to research or training. For example, benefits consisting in costs incurred in activities of research, valorization of research, scientific evaluation and those engaged for professional events or professional training activities are considered as allowed benefits.[17]

However, it should be noted that some of these exemptions are subject to specific conditions. Indeed, benefits offered in this context and determined by the conclusion of an agreement between the beneficiary and the person providing health services or manufacturing or marketing health products must be disclosed and specifically authorized by the competent administrative authority or the professional association concerned.[18]

II. Actors operating in the health sector must publish the agreements they conclude as well as the compensations paid in the context of these agreements and the benefits provided in cash or in kind

Finally, the CSP provides, except in cases of specific exemptions, that companies manufacturing or marketing health products (listed in article L.5311-1 of the CSP) or providing services related to these products must publish:

• On one hand, the specific purpose, the direct beneficiary, the final beneficiary as well as the amount of the agreements they conclude with diverse actors operating in the health sector such as health professional associations, health system’s users’ associations, health establishments or editors of prescription and dispensing assistance software ;[19]
• On the other hand, the compensations paid in the context of these agreements as well as the benefits in cash or in kind provided directly or indirectly to these actors when the compensations or benefits are superior or equal to 10 euros (tax included for the benefits).[20]

This information must be published on a single public website.[21] Details of the information to be published as well as publication and conservation deadlines are defined in the regulatory section of the CSP, which furthermore specifies that the information is to be published in French and transmitted to the authority responsible for the said website.[22]

The fact for a company manufacturing or marketing health products or providing services related to these products to breach these disclosure obligations by willingly omitting to disclose certain information is punished by a 45,000 euros fine[23] as well as eventual complementary penalties (cf. §8).[24]

The aim of the “anti-gift” procedure hereabove presented is to fight against corruption among actors operating in the health sector, to preserve their independence, to encourage them to be driven only by public health considerations as well as to ensure that the market is not distorted by anti-competitive practices likely to increase the cost of healthcare expenditure for the community.[25]

To ensure that it achieves its goals and as exposed hereabove, the “anti-gift” procedure provides for sanctions that can be severe and dissuasive for the actors concerned. Therefore, it represents a major issue for them, who must be especially diligent when implementing it, especially considering that a reputational impact generally comes along with the sanctions provided, which may lead to major economic and financial consequences.

Furthermore, it should be noted that this risk is particularly aggravated by the diversity of authorities capable of investigating and recording breaches of the rules regarding the reception, offering and promising of benefits in cash or in kind. Indeed, in addition to police officers, some DGCCRF agents, health regional agencies inspection services, some territorial collectivities agents and national drug safety agency (Agence nationale de sécurité du medicament or ANSM) inspectors also have jurisdiction.[26] Therefore, this only multiplies the risks of prohibited practices being discovered and possibly sanctioned.