In a decision of 20 March 2025 (Appeal No. N 22-23.927), the FR supreme Court ruled that the “product clawbacks” negotiated with the Economic Committee for Health Products (‘CEPS’) on the price of pharmaceutical products reimbursed by the health insurance are deductible from the turnover of pharmaceutical companies.
Following our victories in relation to VAT and C3S to have the “product clawbacks” deducted from the taxable turnover of pharmaceutical companies, the contributions on turnover referred to in Article L.245-6 of the Social Security Code, which form part of the financial regulation of the sector in the same way as the safeguard clause, will follow the same line.
In this case, the company Alexion Pharma France appealed a reassessment notified by the social security authorities, which resulted from the reintegration into the basis of assessment for the contribution on turnover (“Contribution on Sales”) of the “product clawback” which Alexion Pharma France had paid to the health insurance on its turnover in 2011 and 2012.
After noting that the “product clawbacks” paid to the health insurance by Alexion Pharma France (in this case under a “price-volume” agreement concluded with the CEPS) constitute ”granted rebates” within the meaning of Article L.245-6 of the Social Security Code, the FR supreme Court ruled that these clawbacks should indeed be deducted from the basis for calculating the Contribution on Sales paid by Alexion Pharma France.
Consequently, the FR supreme Court rejected the appeal lodged by the social security authorities against the judgement of the Paris Court of Appeal (14 October 2022, no. 16/15838), which had ordered the cancellation of the reassessment notified to Alexion Pharma France.
This is a long-awaited reversal of case law by the FR supreme Court, following the first pitfalls of a Roche decision of 6 November 2014 (No. 13-26.568), in which the FR supreme Court had based its rejection on a legal, economic and factual confusion between the clawbacks paid in lieu of the safeguard clause (known as “M clawbacks”) and the “product clawbacks” negotiated with the CEPS, embodied in clauses that can take various forms (rebates at the first box, cappings, etc.), in the price agreements of pharmaceutical products. This confusion led the FR supreme Court to describe the clawbacks as “financial penalties”, even though the “product clawbacks” are retroactive reductions of pharmaceutical products’ price negotiated with the CEPS.
With time, perseverance and pedagogy to make the judges understand the true nature of the clawbacks (rebates at the first box, cappings, etc.) that we negotiate on a daily basis in the price agreements, as outpayments to the health insurance, the FR supreme Court has restored the "product clawbacks " to their true nature as granted rebates.
Today, some people are wondering whether other types of clawback ("early access clawbacks" and "M clawbacks") can be treated in the same way.
Of course, I have already analyzed and dealt with this issue at length, and will be able to provide you with all my insights and advice if you are contemplating any action (claims, declarations, etc.).
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