On 24 September 2024, the French national agency for the safety of medicines and health products (the “’ANSM’) announced the imposition of financial sanctions totalling nearly eight million euros against 11 pharmaceutical companies for non-compliance with their legal obligations to keep a contingency stock of so-called medicines of major therapeutic interest.

These sanctions have been imposed in a context where the risk of shortages is worsening: in 2023, the ANSM recorded almost 5,000 reports of out-of-stock medicines and risks of stock shortages ie one third more than in 2022 and six times more than in 2018. Moreover, they represent a significant increase compared to the six fines equalling a total of 560 000 euros handed out in 2023.

Consequently, these most recent fines appear to be particularly severe and raise questions about both the ANSM’s enforcement policies and the practical consequences of such heavy penalties.

Medicines of major therapeutic interest are defined in the French Code of public health as medicinal products “for which an interruption in treatment is likely to jeopardise the patient’s vital prognosis in the short or medium term, or represents a significant loss of opportunity for patients in view of the seriousness or potential evolution of the disease”.

In order to protect patients against such risks, the Code of public health places upon marketing authorisation holders (‘MAHs’) and wholesalers in particular a default obligation to keep a dynamic contingency stock of medicines of major therapeutic interest covering at least two months’ demand for the French market.

Moreover, where such a medicine has regularly been at risk of stock shortages or out of stock in the previous two calendar years, the ANSM may decide to increase the contingency stock duration requirement to a maximum of four months’ supply. Currently, 748 medicinal products are designated by the ANSM as requiring a 4-month contingency stock, compared with 422 in 2021 when these measures were added to the Code of public health.

In the event of non-compliance by a legal entity with these obligations, the ANSM may impose a fine of up 30% of the previous financial year’s turnover for the product or group of products concerned, up to a limit of one million euros.

On a European level, recently re-elected president of the European Commission Ursula von der Leyen has confirmed that the EU Commission “will propose a Critical Medicines Act to reduce dependencies relating to critical medicines and ingredients” in order to remedy the problem of “severe shortages of medical devices and medicines, with antibiotics, insulin, painkillers and other products becoming particularly difficult to obtain.”[1]

This follows the establishment in January 2024 of the Critical Medicines Alliance, a consultative mechanism whose mission is to “identify the best measures to address and avoid shortages of critical medicines” and which is scheduled to make recommendations and present a strategic plan by the end of 2024.

Although concrete details of a future EU act are yet to appear and the CMA’s work is ongoing, contingency stock measures are already under consideration at the EU level.

First, article 134 of the proposal for a regulation for the authorisation and supervision of medicinal products for human use, published in March 2023, states that the Commission may take in account, in particular, recommendations of the European Medicines Agency’s Executive Steering Group on Shortages and Safety of Medicinal Products (MSSG) and may consequently “impose contingency stock requirements of active pharmaceutical ingredient or finished dosage forms, or other relevant measures required to improve security of supply”.

In that regard, the MSSG has recently flagged that:

• “Several Member States have implemented provisions at national level to require supply chain actors to maintain a contingency stock in order to have a buffer when short-term shortages occur”; and
• “The MSSG may also issue a recommendation that certain supply chain actors maintain safety stocks to create a buffer stock of certain critical medicines to protect against fluctuations in demand or supply.”[2]

Moreover, a 2021 Commission report highlighted the “important benefits to patients and health systems, in the form of costs avoided and continuity of care, from avoided shortages or from shortages that are resolved more quickly or mitigated better”. [3]

It should be noted, however, that the report ultimately recommended introducing “legal obligations for MAHs and wholesalers to maintain a safety stock of (unfinished) products for medicines of major therapeutic interest at EU-level”.

In any case, national precedents including the French ANSM’s vigorous enforcement of its contingency stock obligations present a case study for the Commission to consider in weighing up potential measures that could be included in a future Critical Medicines Act.

Following the ANSM’s announcement, the French industry association representing generic medicines manufacturers, the GEMME, swiftly denounced the fines, saying in a press release that “These extremely serious sanctions were imposed even though the products were, in most cases, available on the market. This approach is not viable for a high-volume, low-price sector. Faced with the scale of the penalties or the risk of being penalised, manufacturers will be forced to withdraw from the market…”

These are all factors that the European legislator will need to take into account in its pursuit of securing the supply of critical medicines while simultaneously maintaining affordable prices for patients.

unyer Working Group Health Care & Life Science

Ruslan Churches
Attorney at Law, Senior Associate

Jean-Baptiste Chanial
Attorney at Law, Senior Partner

[1] ‘Political Guidelines for the Next European Commission 2024−2029’, Ursula von der Leyen, 18 July 2024.
[2] ‘Recommendations to strengthen supply chains of critical medicinal products’, Executive Steering Group on Shortages and Safety of Medicinal Products, 19 April 2024.
[3] ‘Future-proofing pharmaceutical legislation — Study on medicine shortages’, European Commission, December 2021.