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Violation of the anti gift law ceo fined a record level 75000€
1. Violation of the anti-gift law: CEO fined a record level
75 000 €
April 2017
The Paris Court of Appeal last week rendered an extremely harsh decision against a company
commercializing healthcare products in the dental sector. The decision can be applied to all types of
manufacturers and distributors of directly or indirectly reimbursed healthcare products, and to
healthcare service providers.
In the course of criminal proceedings initiated by the company's statutory auditor, the Court imposed
fines of 75,000 € each on both the CEO and the company for violation of the anti-gift law. No
healthcare professionals were prosecuted in the case.
In our opinion, the main lessons to be taken from this are as follows:
1. The Court officially and unsurprisingly confirmed that the gifts offered by the company to
healthcare professionals, such as bottles of champagne, purses, and pleasure trips to New
York, are prohibited.
2. The argument that the company had aligned its commercial practices with those of its
competitors is not an effective defense.
3. The Court gave a broad interpretation to the anti-gift law as concerns three elements:
(i) the companies concerned by the anti-gift law include those "which manufacture and/or
commercialize products which are not directly reimbursed by the social security system but
which are used to perform services covered by social security". The indirect reimbursement
of the healthcare products caused the offending company to fall under the scope of the law.
(ii) the advantages must "be understood in a broad sense", which corresponds, in particular,
for the Court to the "providing, at no cost, of equipment, cash advantages, discounts or
rebates for the purchase of equipment."
(iii) in addition, a broad interpretation is also made with respect to those granted
advantages: for example, dental assistants, although not mentioned in the anti-gift law, are
considered as to be closely related to dental surgeons, and thus, according to the Court,
cannot receive advantages.
4. The yearly amount of 30 € for gifts, set by the relevant professional body, under which the
value is considered to be negligible, was validated by the Court who officially rejected the
amount of 60 € used by the company in its internal policies, and this even though the Code
of Public Health does not set an amount.
2. 5. In addition, with respect to the offending company's commercial policy:
- The practice of loyalty cards, in this case giving healthcare professionals the possibility of
choosing between a gift or a discount, is prohibited under the anti-gift law.
- Discounts and rebates are authorized but only on the condition that they constitute a commercial
advantage granted to dental offices themselves and are not intended for personal use separate from
a practitioner's professional activities
Contacts
Olivier Lantrès
Partner
olivier.lantres@fieldfisher.com
+33 (0)1 70 37 81 00
Sébastien Pradeau
Of Counsel
sebastien.pradeau@fieldfisher
.com
+33 (0)1 70 37 81 00
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