Insights

These days, texts relating to liability for defective products are read in a more daring way by the courts. The trend is for producer laboratories to be condemned almost systematically – which could be considered as excessive - each time a person considers himself a victim of one of their products.

For the past couple of years, the civil liability of manufacturers of medicinal products has been more easily recognised by French courts, due to the partial changing and evolution of the rules of liability law.

Since 1998, about ten cases have been judged by explicit reference to the said directive. Each of the judgments was unfavourable towards manufacturers of medicinal products. These decisions teach several things.

The first teaching relates to time limits. The text creates a ten-year time limit for debarment between the product’s entrance on the market and the filing of the claims, and a three-year time limit as the state of limitations between the appearance of the damage and the filing of the claims. Courts have nevertheless released themselves from these requirements: in the Distilbene case judged in May 2002, the ten-year time limit for debarment had already expired, as well as the three-year time limit in the case of contaminated blood products decided in 1998. The manufacturers, however, were still condemned.

In order to justify these decisions, the judges appealed to two different legal approaches, which could nevertheless be questioned in light of recent EC Decisions. The first one was the use of Article L.221-1 of the Consumer Code, which should not serve as a basis for a dispute regarding civil liability, whereas the second one refers to the use of an article relating to contractual liability, Article 1147 of the Civil Code, which the courts have interpreted in light of the directive according to which any person subject to trial is free to require the interpretation of his country’s law based on EC texts.

However, courts did not demonstrate all of this principle’s capability. Indeed, the directive indicates that only products marketed after 30 July 1988 are concerned by the text, in order to allow operators to become fully informed of it and be able to consider the consequences of it. In the growth hormone case judged on 9 July 2002, however, the products had been consumed in 1985 and in the Distilbene case judged in May 2002, the defective products had been marketed in 1968. The manufacturers were nevertheless condemned in both cases. The same argument was used a few years earlier in cases regarding contaminated blood and trace-elements vials. Therefore, a laboratory whose liability is sought will find it difficult to exempt itself by stating that the victim acted outside the time limit or that the product was marketed before 1988.

The second teaching from the recent decisions relates to the flexibility with which courts assess the existence of a causal relationship, to the detriment of manufacturers. In theory, French courts require proof of a definite and direct causal relationship between damage and its causal act. Most recent experts’ reports, however, have not provided any scientific proof of a causal relationship between taking the medicinal product and the damage. In the appetite suppressants case, the experts found that the causal relationship "was not definite but adequate," and in the anti-gouts products case it was stated that the damage was only "attributable in a probable way." As far as the anti-hepatitis B vaccination is concerned, the Versailles Court of Justice went a little further by acknowledging in 2001 that "it was incontestable that no definite scientific proof (…) had been given."

In order to prove the manufacturers’ liability, the judges used Article 1353 of the Civil Code, which acknowledges "serious, precise and corroborating presumptions" as proof of a causal relationship. Their argument consisted in analysing all of the causes that could have lead to the damage, before rejecting the ones that seemed impossible. Thus, in the growth-hormone case, the court acknowledged that the Creutzfeldt-Jacob Disease (CJD) may have appeared for several reasons: old age, transplants, passing on of the Mad Cow Disease or hormone injection. Since the victim was young, had not received any transplant and was suffering from a CJD that was different from the one linked to Mad Cow Disease, the only possible cause was the treatment followed by the patient. In other cases, like the Distilbene case for example, causality factors were analysed in the same way.

Therefore, a risk indeed exists for a laboratory to be condemned in the event that a patient seeks its liability, even if it has not been proven that its product caused damage. This risk must be taken into account all the more so since the amount of allocated damages is continuously on the rise.

It is therefore necessary to reflect on the equity of our substantive law, which not only imposes a large liability without fault on pharmaceutical laboratories, but which also seems to make them suffer a liability without cause as alleged authors of damage. One must fear that these court decisions may slow down innovation and reduce the effectiveness of exemption means mainly provided for in Article 1386-11 of the Civil Code.

The debated amendments to the Finnish Medicines Act entered into force as of 1 April 2003. Consequently, Finland follows the example of Denmark, Norway and Sweden and steps forward to generic substitution.

According to the earlier legislation, when a pharmacy dispensed to a customer a prescribed medicine generic prescribing was permitted (instead of specifying the brand, the doctor could decide on using only a generic name in his prescription). In this case the pharmacy had the option to dispense any brand of medicine with the active substances corresponding to the generic name. However, generic substitution was not allowed.

Recent changes in the Medicines Act enable generic substitution at pharmacy level without the consent of the prescribing doctor. The pharmacies should provide their customers with information regarding the substitutable medicinal products. The National Agency for Medicines publishes a list containing information on all substitutable medicinal products with a valid marketing authorization in Finland. The products are grouped by indication, active substances and strength. The list is to be published every three months. The prices were published on 1 of April 2003, and the decrease in the prices of approximately 400 medicinal products was reported by mass media as a sign of price competition.

As one may expect, there have been several diverging opinions on the different aspects of the topic. The pharmaceutical industry acknowledges that generic drugs have a place in the market. However, the industry has strongly opposed certain aspects of the legislation that limit free competition at the expense of research-based pharmaceutical companies. Also the cost effects have been debated. On behalf of the legislator, the assumed cost savings have been one of the main arguments used in favor of the generic substitution.

It remains to be seen what influence the new legislation will have in the future. Traditionally, the share of generic products in the Finnish drugs market is very modest – in the year 2000, for example, the generic drugs constituted only 3% of the value of the overall market. According to the surveys prepared in connection with the legislative motion, the relative share is highest amongst anti-inflammation drugs and antimicrobial drugs. The generic prescribing never rooted in Finland – in the year 2001 only around 10,000 prescriptions out of the total amount of some 37,7 million prescriptions were generic (prescriptions by veterinarians included). In the event that a doctor wishes to deny the pharmacy from performing generic substitution, he or she should enter a separate remark in the prescription to make it clear that the generic substitution is not allowed. Such denial by the doctor requires proper grounds. It should be noted, however, that a patient has always the right to refuse the proposed substitution. Based on Norwegian experience, this fact alone is likely to diminish the number of substitution in practice. Finally, it seems reasonable to expect that the role of marketing will continue to increase further.

On February 6th the German Minister of Health Ulla Schmidt, presented her fundamentals for the modernization of the healthcare system. The aim of the reform is to ensure that the statutory health insurance schemes will continue to provide medical care in good quality for everyone who is insured, and at the same time will continue to be affordable. Whereas these fundamentals are merely a summary of objectives, there is also an unofficial draft bill in circulation, which shows how consultants at the ministry imagine the conversion of these fundamentals. Drastic changes are more urgent than ever, since the German sickness funds recorded a deficit of 2,96 billion EUR in 2002. The average contribution rate increased to the record level of 14,32 % at the beginning of 2003. Nevertheless, since the proposal for a long term reform of the financing of the compulsory health insurance prepared by a committee made up of university professors, trade union and management representatives is not due to be released before April an official comprehensive draft bill on health reform will not be published before May. Moreover, after suffering painful defeats in the state parliament elections in Lower Saxony and Hess, the government is effectively dependent on the opposition Christian Democrat Union since this party, and its Bavarian branch the Christian Social Union, dominate the upper house of parliament, which has a veto in many of the planned legislation. Leading representatives of the opposition have already said that they are willing to cooperate with the Social Democrat and Green coalition in order to guarantee the continued existence of the healthcare system.

In order to improve patient care Lula Schmidt plans an independent control body, "The German Centre for Qualitative in Medicine", whose purpose shall be to improve information for patients, assess the cost benefit ration of medicines, and develop guidelines for the treatment of the most common diseases. The setting up of another public healthcare institution is highly controversial and the opposition has already announced that it will not give its corresponding consent. Furthermore, a partial deregulation of the German drug market is planned. Lula Schmidt proposes to liberalise the pricing of drugs and lift the prohibition on pharmacists running several shops. Online and mail order drug sales shall be introduced. Insurers believe that this could lead to a cutting down on drug costs to an amount of 400 million euros to 1 billion euros. The planned health reforms also aim to make physicians more responsible for their treatments. Family doctors shall become the patient’s pilot in healthcare. Payment to doctors shall be reformed in order to encourage more cost-effective treatment. At present, an intermediate agency receives a lump sum from insurers and pays doctors per treatment. The ministry plans that in some specific areas, doctors should deal with the insurers directly.

For the time being, it cannot be said which of the currently discussed points will actually become part of the official draft bill. Moreover, a good deal of the reforms will be diluted in order to be pushed through both houses of parliament.

Editor: