Since the global Covid-19 pandemic, national and European legislation has been constantly evolving in order to anticipate issues relating to shortages and is, in fact, merely a manifestation of a “never again” policy.
Five years later, the situation is no different: legislative and regulatory provisions are flourishing and the competent authorities are toughening their relationship with the healthcare industries by imposing increasingly severe sanctions.
In the fall of 2024 and for the second year in a row, the French National Agency for the Safety of Medicines and Health Products (“ANSM”) launched a winter plan to anticipate, monitor and manage possible shortages of major winter medicines.
This plan aims to ensure that healthcare product needs are met and to provide equitable access to these medicines for patients during the winter season. It has been developed taking into account the interests of patient associations, representatives of healthcare professionals and the main players in the supply chain.
Of course, the ANSM is not alone in developing its policy, since the winter plan is part of the 2024-2027 inter-ministerial roadmap to fight shortages of health products and the charter of commitment of the actors in the medicine chain signed in November 2023 and proposed to all actors in the supply chain in France.
Shortages, in France as in the rest of Europe, can be caused by various factors related to the production of the products (tensions in the manufacture of active substances in certain countries such as India or China), the explosion of demand due to an epidemic, or even problems with the export of products when the holder of the marketing authorization or its operator in France are changed to distribute stocks throughout Europe.
These shortages can be even more serious when the indication for a medication for restricted categories of the population: young children or rare pathologies.
Since the winter of 2023, the French authorities have tightened controls on pharmaceutical companies and have imposed much more severe sanctions than in the past. The late 2024 is now a reference concerning the shortage issue.
The French legislation over shortages for medicines
From a legal point of view, the definition of a shortage is very large. For medicines, the French Public Health Code (“FPHC”) is indeed defining the shortage by the “the impossibility of manufacturing or exploiting the marketing authorization of a medicine”1.
In a more precise way a supply shortage is characterized when a pharmacy cannot provide a patient with a medication within 72 hours after having contacted two pharmaceutical companies2.
In order to avoid stock shortages, of it risk, any owner of a marketing authorization or any operator of a medicinal product in France must maintain a safety stock3.
This safety stock may be located on French territory, in another member country of the European Union or in a country that is party to the agreement on the European Economic Area (Iceland, Lichtenstein and Norway) and made available to the ANSM.
By default, this safety stock is supposed to cover an entire week of patients’ needs and can be extended up to a month in certain cases.
The important thing, therefore, is to be able to quickly redirect the medicines already on the market or in the process of distribution for the French market, which is not without its logistical difficulties.
Specific rules for major therapeutic interest medicines
Since 2021, for medicines of major therapeutic interest (“MTIM”) pharmaceutical companies which are commercializing in France are required to maintain an extended safety stock.
The MTIM are medicines or classes of medicines for which an interruption of treatment is likely to be life-threatening for patients in the short or medium term, or represents a significant loss of opportunity for patients in view of the severity or potential progression of the disease4.
The duration of extended safety stocks is determined according to parameters related to the importance of the medication in the treatment plans for pathologies, but also to the risk of shortages that they involve.
In other words, it is up to the pharmaceutical laboratory to prevent the shortage, and be compliant with the requirements set by the French applicable regulation.
This duration varies according to the category of MTIMs5:
- A minimum of two months of stock for all the MTIM;
- A maximum of four months of stock for MTIM that have been regularly out of stock or been at risk of stock-outs in the previous two years.
Since the promulgation of the social security financing law (“LFSS”) for 2024, the ANSM has had the power to include medicines on the MTIM list after an contradictory procedure to supplement the declarations made by the pharmaceutical companies.
For the record, the latest list of MITMs was posted online by the ANSM on its website on 19th of December 2024.
There are now 8,107 medicines on this list, including the ones declared by pharmaceutical companies in 2023 and 555 added as supplement by the ANSM.
The shortage management plan to be set by pharmaceutical companies
The FPHC is mentioning the positive obligation for pharmaceuticals companies which are operators for MTIM in France to write down a shortage management plan (“SMP”) on an annual basis6.
These SMPs will make it possible to identify the risks of unavailability and, in the event of supply difficulties, to provide solutions as quickly as possible to ensure the continuity of treatment for the patients concerned.
These SMPs are designed as tools that gather information on my MTIM, their points of fragility and actions to prevent stock shortages and, where appropriate, to reduce their impact in terms of public health.
Consequently, particular attention must be paid to their quality during their development and then their updating.
Each shortage management plan must include:
- General information on the drug concerned (therapeutic indications, impact for patients, distribution channel);
- An assessment of the risks that could lead to a stock shortage;
- The means of control planned to fight these risks (in particular safety stocks, alternative sites for the manufacture of the active substance and the finished product);
- Management measures in the event of a risk of shortage or proven shortage (rationing of residual stock, therapeutic alternatives, information for healthcare professionals and patients, imports of medicines).
Generally speaking, and according to the guidelines for the development of SMPs issued by the ANSM, they must enable the identification, analysis and evaluation of risks on the supply and manufacture of active substances and other components of a medicinal product, but also of finished products, their distribution and elements of variability (seasonality, volumes, etc.).
These guidelines also list the expectations in terms of the control measures provided to fight the risk of stock shortages. This is particularly the case for safety stock levels and the identification of other manufacturing sites.
On the other hand, the management measures cinsidered in the event of a risk of stock shortages or stockouts must be analyzed from a more general point of view than mere compliance with French regulations applicable to shortages.
Indeed, the ANSM guidelines propose “restrictions or modifications to the distribution circuit” or even the “remobilization of available stocks”, which includes making them available, stopping exports or re-importing them into French territory.
This amounts to remobilizing stocks and therefore restricting exports or trade to certain countries or distribution networks, which raises a legitimate question of compliance with competition law. Indeed, according to article L. 5124-17-3 of the French Public Health Code, wholesale distributors may not sell, outside France or to wholesale distributors for export, MTIMs for which an out-of-stock condition or risk of out-of-stock condition has been identified or reported to ANSM.
It is therefore important to comply with the objectives pursued by the ANSM by respecting the obligations of companies in terms of competition and product distribution in order to comply with the regulations in force.
Moreover, in the event of MTIM shortage presenting a “serious and immediate” risk for patients, and when the French market has no medicinal alternatives and the measures communicated by the operator are not sufficient to cover national needs, it is possible, by decision of the ANSM, to import a medicinal alternative7.
In consequence, the marketing authorization owner or its operator must prevent or solve the shortage issue by any possible way.
Applicable penalties
The ANSM may sanction pharmaceuticals operators with a financial penalty related to non-compliance with safety stocks requirements8.
If for non-MITM the non-compliance can be seen as any failure to maintain a safety stock, for MTIMs (and certain vaccines) the lack of compliance may also been analyzed regarding shortage management plan (“SMP”) and declarations made by the concerned operator.
Indeed, if the operator may lack to develop or implement its own SMP, fail to declare it to the ANSM or fail to include sufficient measures to prevent shortage or deal with stock-out situations, the French authority is competent to pronounce sanctions.
The idea is to make the operator face up to his responsibilities and the statements he could have made and would not respect.
In addition, operators in the pharmaceutical sector could also be sanctioned for not to import an alternative to a medicine that is out of stock when the shortage or the risk of it represent “a serious and immediate risk to patients” (see above).
The same risk also exposes operators who failed to inform the ANSM as soon as it becomes aware of any risk of a stock shortage or any risk of shortage for a MTIM, or more simply fail to implement the measures provided for in the SMP.
ANSM may impose a financial penalty which may not exceed 30% of the turnover for the last financial year by product or group of products concerned9, up to a maximum of €1 million per product, for a legal entity10, which is the general power of sanctions of the ANSM.
The basis for calculating the financial penalties that ANSM can impose for these failings is relatively precise:
- These breaches are rated at 3 (maximum rating), which corresponds to a basic penalty of 20% of the sales of the medicinal product in France during the last financial year;
- An initial adjustment of between 0.25 and 2% may be made depending on the seriousness and duration of the breaches;
- Any cooperation or diligence on the part of the laboratory may be an aggravating or mitigating factor, and a repetition of the breach(s) within a period of two years will result in a 3% increase in the amount of the penalty;
In the event of a repeat offence, the daily penalty in addition of the initial sanction is increased to 30% of average daily turnover (instead of 20%).
However, these amounts and penalty level may increase in the future. Negotiations concerning the Social Security Financing Act for 2025 suggested to increase these amounts to 50% of the turnover for each medicinal product concerned, up to a limit of €5 million.
The record of sanctions in 2024
Since the 1st of October 2022 the ANSM’s guidelines on financial sanctions have been tightened. This update, following the new requirements brought about by the social security financing law for 2020, has strengthened the ANSM’s power to sanction laboratories in the event of breaches of the regulations on medicine stock shortages, including the failure to build up a safety stock.
In April 2023, the ANSM launched a campaign to check the safety stocks of MTIMs subject to a threshold of 4 months of stock in order to ensure that they are properly constituted. In practice, the agency questioned all the laboratories concerned, covering 422 MTIMs.
After verifying the status of their safety stock, the ANSM conducted exchanges as part of an contradictory procedure with each of the laboratories whose safety stock of certain MTIMs was not duly constituted.
At the end of these procedures, the ANSM imposed financial penalties on 11 pharmaceutical laboratories for a total amount of nearly 8 million euros, compared to 6 financial penalties in 2023 for a total amount of 560,000 euros. The most important sanction for a single pharmaceutical company was 4 million euros.
These sanctions, pronounced in 2024, probably come in the wake of a report by the French Senate published on the 4th of July 2023 on the medicine shortage, which lamented that “the ANSM’s sanctioning powers are underused: the Agency only took eight decisions on financial sanctions between 2018 and 2022, for a total of 922,000 euros. None were taken on the grounds of a breach of the obligations […] to build up a safety stock”.
It is only a short step from there to thinking that the record sanctions handed down in 2024 are just a response to criticism from the political authorities. Everyone will make up their own mind.
In that perspective, these sanctions were criticized by the syndicate of pharma industry in France: Les Entreprises du Médicament (“LEEM”). The LEEM was sorry that despite the context of 2023 in which the Senate report is published, the 2024 sanctions occur in a less critical context, characterized by a notable reduction of shortages (-42% in the first eight months of 2024 compared to the same period in 2023), as well as in the risk occurrence (-21%), just as the ANSM stated a few time before.
The financial penalties recently pronounced by the ANSM marking a turning point in terms of scale. Just as the LEEM, it would be possible to consider that this new approach if not adapted or sufficient facing the shortage phenomenon.
We will just have to wait patiently for the adoption of the European pharmaceutical package to reform the current regulations, to see a consensus emerge on shortages, their definitions and their management.
What about medical devices?
As in the pharmaceutical sector, manufacturers of medical devices have been required since the 10th of January 2025, to report any risk of interruption or cessation of supply that could cause serious harm or a risk of serious harm to patients or public health in one or more Member States of the European Union11.
This new obligation comes from the article 10 bis of Regulation (EU) 2024/1860 of the European Parliament and of the Council of 13 June 2024 amending Regulations (EU) 2017/745 and (EU) 2017/746 as regards a gradual roll-out of Eudamed, the obligation to inform in case of interruption or discontinuation of supply, and transitional provisions for certain in vitro diagnostic medical devices.
With the exception of custom-made devices, the obligation applies to all medical devices (« MD ») and in vitro diagnostic medical devices (“IVD”) placed on the market of European Union and for which it is reasonably predictable that an interruption or cessation of supply could lead to serious harm or a risk of serious harm to patients or public health in one or more member countries.
It is the responsibility of the manufacturer of the MD or IVDMD to inform the competent authority of the Member State in which it is established or in which its authorized representative is established using a standard form, but also all economic operators responsible for distributing the device, who must share the information throughout the supply chain to the end users (or to the healthcare professionals to which they belong or to the organization to which they belong).
The information of the shortage risk, other than in exceptional circumstances, must be provided at least six months before the manufacturer’s anticipated interruption or discontinuation is expected to occur.
This means that the manufacturer should inform at a minimum 6 months in advance but can and is encouraged to inform of interruptions or discontinuations earlier in time where possible, following the Q&A on practical aspects related to the implementation of the obligations to inform about interruption or discontinuation of supply of certain devices published by the European Commission.
According to the European Commission, the “serious harm or risk of serious harm to patients or public health” should be understood as any serious injury to patients or threat to public health that occurs, or where there is a significant probability of this occurring. This may include where patients face an imminent risk of death, a serious deterioration of patient health, or a life-threatening condition and for which, no suitable alternative diagnosis method or therapy (including, but not limited to, pharmaceutical therapy) is available.
It should be noted that serious harm can also be due to the inability of a healthcare professional to deliver a specific medical treatment due to an interruption or discontinuation in the supply of a device.
As with medicines, the failure of medical device manufacturers or their representatives to inform the ANSM of a risk of disruption or any disruption in the availability of MDs is a breach that exposes them to a financial penalty12.
In this case, a contradictory procedure with the medical device operator concerned by the sanction must be carried out. Its main purpose is to:
- Put an end to the breach and determine the necessary corrective actions as well as the implementation deadline to rectify the situation, if applicable;
- Determine the turnover constituting the basis for the sanction;
- Take into consideration the ability to pay of the operator making the request by providing any evidence of these economic difficulties.
The penalty is imposed by the Director General of the ANSM and must follow the ANSM’s Guidelines for determining financial penalties, and is similar to the one for medicine shortage.
The amounts of the financial sanction and the penalty payment shall be proportionate to the seriousness of the breaches observed. They shall take into account, where applicable, the repetition of the sanctioned breaches within a period of two years from the date on which the first sanction decision became final13.
The maximum amount of the financial penalty incurred may not exceed 30% of the turnover achieved during the last financial year ended for the product or group of products concerned by the penalty, up to a limit of one million euros14.
Conclusion
The development in France of controls and sanctions relating to shortages of medicines or medical devices seems to be undeniably gaining momentum.
The wave of inspections carried out from the end of 2023 and throughout 2024 confirmed the ANSM’s intention to police shortages, in a context where these are increasingly a topical issue for the general public.
However, this logic of control and punishment is regrettable, since shortages represent both a loss of opportunity for patients to receive treatment and a loss of earnings for the healthcare industries.
It should be remembered that the profitability of certain drugs is often criticized, since there is no harmonization of prices at the European level (or even of calculation rules), which means that a drug is sometimes sold at double the French price in neighboring countries.
However, this profitability should not be the only reason given to the public in the event of a shortage. On the contrary, local circumstances, difficulties in obtaining raw materials and even force majeure should be taken into account.
As the situation seems to be becoming more tense, not to say more complex, it is important to keep an eye on these problems of supply disruptions, from the development of distribution networks to the declaration of shortage management plans.
Footnote(s):
1 Article R. 5124-49-1 of the French Public Health Code.
2 Article R. 5124-49-1 of the French Public Health Code.
3 Article L. 5121-29 of the French Public Health Code.
4 Article L. 5111-4 of the French Public Health Code.
5 As introduced in decree no. 2021-349 of 30th March 2021.
6 Article L. 5121-31 of the French Public Health Code.
7 Article L5121-33 of the French Public Health Code.
8 Article L. 5423-9 of the French Public Health Code.
9 Article L. 5471-1 of the Code de la santé publique.
10 Article L. 5471-1 of the French Public Health Code.
11 As defined in Article 3 of the Regulation 2024/1860. Interruptions or discontinuations of the supply of a device anticipated by the manufacturer prior to this date, do not need to be reported, even if the interruption of discontinuation itself occurs after 10 January 2025. Nonetheless, manufacturers are encouraged to inform the users of their devices of supply interruptions or discontinuations on a voluntary basis before 10 January 2025, in line with existing best practices.
12 Article L. 5461-9 of the French Public Health Code, taken into application of Article L. 5211-5-1 of the French Public Health Code.
13 Article L.5312-4-1 of the French Public Health Code.
14 Article L.5471-1 of the French Public Health Code.