Rebates (remises conventionnelles)

Rebates are the sums that companies marketing reimbursable medicinal products pay to the national health insurance system under the agreements concluded with the Economic Committee for Health Products. They come on top of the published price and reduce its net cost to the public purse. Their individual amount is confidential, with only an aggregate report made public.

Main forms of rebates

• price-volume rebates, due where sales exceed the volumes provided for in the agreement
• rebates based on a daily treatment cost or on a ceiling on expenditure per patient
• performance-based rebates, which depend on results observed in real-world use.

They differ from the repayments imposed by statute in connection with early access and compassionate access, whose amount derives directly from the legislation and not from negotiation with the Committee.

Distinction from the safeguard clause

Rebates must not be confused with the contribution due under the safeguard clause, which is levied collectively on companies where the sector’s turnover exceeds an amount set by the Social Security Financing Act. A company that has signed an agreement may, however, discharge that contribution in the form of a so-called exonerating rebate. The two mechanisms thus combine in the management of turnover.

Implications for contracts and litigation

Confidential rebates raise a recurring difficulty in licences with royalties based on net sales. The contractual definition of net sales should state whether rebates paid to the national health insurance system are deductible, and on what timetable, since their amount is often known only after the financial year has closed. The same question arises in the assessment of loss caused by infringement, where the reasoning must focus on the margin actually lost after rebates.

Key points

Rebates account for the gap between the list price and the real price of the medicinal product. In any licence or distribution agreement, the treatment of rebates in the basis for royalties and payments should be checked. In a dispute, rebate data must be obtained, under an appropriate confidentiality regime, before quantifying any loss.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats acts in pharmaceutical patent disputes and on the medicines regulatory questions that accompany them, from the marketing authorisation to the supplementary protection certificate.

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