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Discounts on Reimbursable Medicinal Products in France: A Dialogue Under Pressure

Prices, margins and discounts on reimbursable medicinal products in France are strictly regulated, in particular to control public health expenditures. The rules governing these discounts are laid down in the Social Security Code (“CSS”), mainly in Article L.138-9, and have recently been amended by the Social Security Financing Act for 2025 (Law No. 2025-199 of February 28, 2025, “LFSS 2025”, art. 33).

Article L.138-9 CSS specifically regulates the maximum level of discounts, rebates, and equivalent commercial or financial advantages, including service remunerations under Article L.441-3 of the Commercial Code, that suppliers can grant to pharmacies on reimbursable medicinal products (hereinafter the “Discounts”).
For most reimbursable reference medicinal products, the total value of Discounts granted by any supplier to any pharmacy may not exceed 2.5% of the ex-factory price excluding taxes (PFHT) per product line, per pharmacy, per calendar year. However, there are exceptions, such as reference products subject to a single reimbursement rate, known as the Tarif Forfaitaire de Responsabilité (TFR).

The LFSS 2025 has introduced a significant modification to Article L.138-9 CSS, namely the extension of the higher discount cap – previously applicable to generics – to substitutable biosimilars and hybrid medicinal products, as well as to reference pharmaceutical products with identical public sale prices. Under the new rules, for these categories of products, the maximum Discounts that suppliers may grant to pharmacies can now be set by Ministerial Order up to a ceiling of 50% of the PFHT, aligning them with the regime already in place for generics.

The forthcoming Ministerial Order setting the maximum Discounts cap for these products is highly expected and should be subject to discussions with the Health Ministry soon. The Government faces pressure to use this Order as a tool to contain public health expenditure, particularly by limiting or reducing the high Discounts cap of 40% historically granted to pharmacies on generics.
This situation creates tension among pharmacies, as many rely on these Discounts as a significant source of income. Some assert that any reduction in the allowable Discounts cap on generics could threaten the financial stability of smaller or independent pharmacies.

These tensions seem to have been exacerbated by a recent Ministerial Order setting certain Discounts caps published on May 14, 2025. This Order – which only applies to generics and not hybrids and biosimilars – maintains the Discounts cap at 40% of the PFHT, but only until next July 1st. This suggests that the Health Ministry wants to strictly regulate the timetable for future consultations or discussions on Discounts.

Like pharmacies, their suppliers must organize themselves and prepare for these discussions, which could prove heated in the early days of summer…

Managing trade barriers – What the new US tariffs mean for international supply contracts

The US tariffs on imports from all countries have greatly unsettled the global economy. According to US President Trump, the EU is to be subject to tariffs of on exports to the USA. For the European Union (EU), for example, tariffs of 20 % are to apply to exports to the USA. Shortly afterwards, US President Trump lowered the across-the-board tariffs to 10 % for 90 days to give countries the opportunity to negotiate. Only one thing is almost certain: there will be higher tariffs.

Companies should therefore already be considering the impact of higher tariffs on their trade transactions. The tariffs particularly affect products from key industries such as technology, steel, aluminium, automotive and agriculture. The US had already announced tariffs of 25 % on imports of these products in February 2025.

Scope of customs duties in supply relationships

First and foremost, companies should check the validity of their contracts under the new conditions and clarify how the costs of these duties are to be contractually allocated between the parties. This depends on the applicable law of the contract and the terms of the contract itself.

In practice, most contracts expressly or tacitly stipulate which party bears the costs for transport and customs, often by including an Incoterms® clause from the International Chamber of Commerce (ICC). In principle, the buyer is responsible for import clearance and the seller for export clearance. If the contracting parties have agreed the Incoterms® clause “Delivered Duty Paid” (DDP), the seller bears all costs for import and export duties up to the place of delivery, usually the buyer’s place of business. This means that the seller also bears the customs risk in cross-border transport under this clause. Mirroring the Incoterms® clause DDP, the buyer is fully responsible for customs clearance if the Incoterms® clause Ex Works (EXW) is agreed.

In the absence of a contractual customs agreement, the seller shall bear the costs of handover in accordance with the doubtful case provision of Section 448 (1) BGB for sales contracts, while the buyer shall bear the acceptance and shipping costs to a place other than the place of fulfilment. In the case of cross-border sales shipments pursuant to Section 447 (2) BGB, the buyer shall bear all transport costs incurred after handover to the carrier, including additional costs such as taxes and customs duties after leaving the place of fulfilment.

Statutory and contractual options for price adjustments

A statutory right to price adjustment between contracting parties generally only exists in the event of a gross disproportion between the contractually agreed service and the other party’s interest in the service. In the event of unexpected performance difficulties that lead to a mere disruption of the equivalence ratio between performance and consideration, which is likely to be the case with a short-term increase in customs duties, the affected party cannot refuse performance due to any impossibility of performance in accordance with Section 275 (2) BGB. The increase in customs duties does not constitute gross disproportionality for the affected party.

For the assertion of a right to contract adjustment in accordance with Section 313 (1) BGB, increased customs duties do not constitute a serious, significant change in which an unforeseen development occurs that may have existentially significant consequences for one party. Furthermore, foreseeable changes do not generally justify a right to contract adjustment in accordance with Section 313 (1) BGB, as the disruptions that are part of the normal contractual risk are borne by the affected party. Supply contracts always contain a certain risk with regard to price fluctuations or increased transport costs, for example if the contracting parties agree fixed prices.

Increased customs duties also do not constitute a case of force majeure. Force majeure is defined as an external event that has no operational connection and cannot be averted even with the utmost care that could reasonably be expected. However, higher customs duties do not generally prevent a contracting party from performing its obligations, provided that the duties merely cause higher costs.

Agreed hardship clauses in contracts allow the contractual conditions to be adjusted in the event of changed circumstances. The difficulty here, however, lies in the need for a clear definition of what is meant by a hardship case in order to avoid the undesirable effects of changes to customs duties. The categorisation of increased customs duties as a case of hardship depends on the individual design and interpretation of the clause, as there are no fixed limits.

Finally, it is common practice to agree price adjustment clauses in order to ensure flexibility in long-term contractual relationships. The exact wording of the clause is crucial, as case law places strict requirements on the effectiveness of the clause, particularly in the case of general terms and conditions (GTC) in accordance with Section 307 of the German Civil Code (BGB) and the provisions of the Price Clause Act (PreisklG). An effective price adjustment clause must be transparent and must not unreasonably disadvantage the contracting parties, for example by unilaterally increasing prices in the event of cost increases without a corresponding reduction in the event of cost reductions or if only one party can demand the adjustment. Precise wording and detailed drafting of the price adjustment clause are therefore essential.

Conclusion

Overall, it is crucial that companies affected by the new US tariffs act proactively and take appropriate measures to protect their international business models. Fair arrangements for price adjustment, delivery time extension and limitation of liability can help the contracting parties to react more flexibly to the changed trade conditions and maintain their long-term supply relationship and competitiveness.

unyer Webinar Whistleblowing and internal enquiries – how well are you prepared?

Hear from our team of unyer Employment experts about traps you face – and tips to avoid them – in conducting an internal enquiry. From first reaction to using the enquiry’s results, our advisers will highlight key issues which can damage your company’s reputation in the market.

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JOIN for our free one-hour webinar on 6 February 2024 at 3.30 pm. 

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unyer: the new international and interprofessional network created by Fidal and Luther

The two founding partners are extending their international reach and taking a new step in their strategic development by forming a branded organisation of leading international professional services firms.

unyer has only one member per country and offers more than just legal services. Sharing a similar mind set and providing a full service offering, members of unyer maintain their independence and strong position in their local market.

With nearly 2 000 lawyers and consultants in more than 10 countries in Europe and Asia, unyer currently generates revenue of more than €500 million.

unyer has an ambition to develop rapidly in the top 20 world economies.

“We are very proud to be announcing the foundation of unyer today, a truly unique global organisation. We believe that with our new organisation and approach we will meet all our client’s expectations in a rapidly changing environment. With unyer we can provide all services in all jurisdictions, legal and beyond”, says Christine Blaise-Engel, CEO of unyer and Senior Partner at Fidal.

Markus Sengpiel, Member of the Executive Committee at unyer and Managing Partner of Luther, adds: “Our goal is to create an organisation with its members linked by exclusivity, which does not exist on the market today. Our new members will share our strong industry focus and our values based on collaboration, innovation and dynamism.”

unyer reflects the desire of Fidal and Luther to show a new way of perceiving business advisory practice.

Clients’ needs at the international level are changing rapidly and significantly. unyer is a game changer and can offer them scalable and innovative services and solutions.

The clients of unyer thereby benefit from the expertise and a perfect understanding of the local market.

With its strong industry focus, unyer anticipates the changes of markets and industries and incorporates megatrends in their advice to its clients.

unyer wants to attract new members, sharing a strong local presence, an impeccable reputation in their respective markets with a pragmatic approach. Geographical exclusivity will further strengthen the ties between all members. Members will be law firms, but also structures that offer additional services beyond legal advice.

The form of this new organisation is a Swiss “Verein” regrouping member firms, that retain their own separate legal status and branding in their local markets.

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