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Impact of Class Actions on Pharmaceutical Oversight: US, Israeli and French Perspectives

A colleague recently drew my attention to the proposition that “in the United States, the specter of class-action lawsuits imposes a higher level of precaution on the part of drug makers.”  This statement was made in a newspaper article that discussed the scandal that erupted in France in connection with the prescription drug Mediator, which was only licensed as a diabetes drug, as a diet aid in order to increase sales. This has allegedly resulted in the French health care system being defrauded as well as in multiple deaths. I thought about this: Are class actions the best way to protect consumers? Working at the Global Legal Research Center of the Law Library of Congress, with colleagues who are legal experts from around the world, makes it easy to get multiple perspectives on this issue.

First I checked my primary research jurisdiction. The filing of class actions against drug manufacturers and distributors seems to be on the rise in Israel. Under Israel’s Class Actions Law, 5766-2006 (SEFER HAHUKIM [Official Gazette] 5766, No. 2054, at 264), the filing of a class action requires authorization by a court. The Law provides that a court may approve the filing of a suit against a “dealer” as defined by the Consumer Protection Law 5741-1981 (CPL), which states  that a “‘[d]ealer’ means a person who sells a commodity or performs a service by way of business and includes a producer” (CPL, § 1, 35 Laws of the State of Israel 298 (5741-1980/81), as amended).

An online search in several Israeli legal databases for Israeli class actions in connection with pharmaceutical and other health related products retrieved numerous cases. I identified several recently filed requests for court approval of class actions in connection with the distribution of a thyroid medication that has allegedly been altered without patients’ knowledge and which caused side effects. I also found that a class action was recently approved in Israel against the distributors of a food supplement for alleged false advertising. In rejecting a request to appeal the approval decision, Israel’s Supreme Court  noted that medical research had not supported the distributors’ advertisement that human cartilage could be healed as a result of consumption of the food supplement. The Court further rejected the applicants’ assertions that a class action procedure was not appropriate because of the complexity of determining the size of the damage caused by reliance on the misleading advertisement (Request for Authorization for Appeal 7540/10 Altman v. Jan, Israel: The Courts Authority Website).  

Thinking about the proposition that “the specter” of class actions makes consumers safer, I asked Nicole Atwill, the Law Library of Congress French Law Specialist, if she thought that in France consumers were less protected than in the U.S. and in Israel because they could not file class action lawsuits. Well, it is not that simple, she answered.

According to Nicole, France does not have class actions similar to the type used in the United States or in Israel. French law, however, provides for some forms of collective actions to protect consumers. Article L.421-1 of the Consumer Code allows duly registered consumer associations to join in criminal proceedings as civil parties where “direct or indirect damage has been caused to the collective interest of consumers.”

The right for a victim or his/her heirs to add his/her civil claim for damages before the criminal court is one of the key features of French criminal procedure (Code of Criminal Procedure, art.3).  This procedure is simpler, quicker, and cheaper than bringing a civil action before a civil court. This right has been extended to consumer associations as well as to associations representing medical patients (Public Health Code, art. L.1114-2).

In addition to adding a civil claim to a criminal suit, according to article L.421-2 of the French Consumer Code, consumer associations may ask either civil or criminal courts (when they rule on civil actions) for any measures to stop unlawful actions by the defendant or to remove illicit clauses from a contract or a standard contract offered to consumers. Article L 422-1 of the Code further authorizes consumer associations to initiate legal proceedings before any court on behalf of two or more consumers to obtain reparation where these consumers have suffered individual damages arising from the act of the same professional and having a common origin (action en representation conjointe). This procedure, however, has not often been used as it is viewed as complex.

It is true, Nicole submits, that these procedures have often been viewed by many French jurists and legal scholars as inadequate. It is also true, she says, that the introduction of a form of class action in France has been debated for the last two decades. Indeed, several draft laws were proposed but never adopted. (Sénat, proposition de loi sur le recours collectif, Exposé des motifs.) A new draft is currently pending before the Senate.

The current scandal regarding the drug Mediator, discussed in the article cited above, concerns the allegation that the drug has caused the death of up to 2,000 patients. The scandal, according to Nicole, has given new life to the trend in favor of introducing class actions in France. A recent Senate report outlines many recommendations to set forth a “French type” of class action that would fit with well-established French legal principles and avoid what is perceived by French jurists as the “excesses of the U.S. system;” in particular, the prohibitive cost of discovery, the high percentages of attorney fees, and the punitive damages.

The French discussion of a “French type” of class actions reminds us that there may be various ways to protect consumers from unsafe pharmaceuticals or any products that claim to contribute to health. The U.S., Israeli, or any other class action procedures may not be the only possible ways to alert drug makers and distributors of the need to preserve safety. In fact, the French Parliament adopted a law on December 29, 2011 on reinforcing medicine safety aimed at preventing scandals such as the one relating to the drug Mediator. The law, for example, strengthens the rules governing disclosure of conflicts of interests by directors and experts involved in the drug approval process at the competent regulatory agencies (Loi n° 2011-2012 du 29 décembre 2011 relative au renforcement de la sécurité sanitaire du médicament et des produits de santé, Legifrance). The adoption of this law prior to introducing class actions under French law shows that currently the emphasis of the French parliament is on protecting consumers at the early stage of the drug approval through an independent and unbiased review process. Time will show whether the future introduction of class action procedures may result in better protection of consumers in France.

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