October – November 2022
Article: Ethics and CSR clauses in pharmaceutical contracts
Ethics and CSR clauses in pharmaceutical contracts
Whatever the sector of activity concerned, everyone knows today to what extent commitments in terms of CSR and ethics in companies have become unavoidable subjects.
The pharmaceutical industry is no exception to this rule.
How to manage and negotiate these clauses in manufacturing contracts in the pharmaceutical sector?
How to set up a good supplier policy, while respecting CSR and Compliance commitments in the pharmaceutical sector?
With regard to CSR and ethical clauses in contracts for the supply of specialty pharmaceuticals, there are several points to consider.
Is the client company, which is going to address its supplier – subcontractor and manufacturer of specialty pharmaceuticals – able to ensure that its supply chain does not violate human rights, the environment, health and safety?
Is the company able to demonstrate that it has a system in place to identify risks, and does it take sufficient account of the interests of stakeholders and exposed third parties?
If the company is subject to the Duty of Vigilance Act, it should be remembered that any interested third party can obtain answers to these questions in the vigilance plan, and can bring a case before the court in the event of the absence or inadequacy of the plan, which has become compulsory, and which includes an indication of all the measures actually taken by the company.
Faced with an increasingly restrictive legislative and regulatory environment, companies must adopt not only a voluntary approach to compliance, but also an attitude of caution, by preserving the possibility not only of implementing controls of their production chain or suppliers, but also of preserving the proof that these measures have been taken, and are effective in the company.
In this respect, CSR clauses in contracts are certainly part of a major aspect of the control system, in the context of relations with suppliers and subcontractors.
But of course, these clauses must not be purely “cosmetic”.
They must be based on tangible, detailed and verified criteria and commitments.
In this respect, here are the criteria to be retained for the development of this CSR clause in pharmaceutical subcontracting contracts
- the mention of a reference framework ;
- control of compliance with the clause
- the consequences of non-compliance;
- the scope of effect of the clause;
- adaptation to the context of the transaction;
- the coherent integration of the clause into the contractual framework.
The questions raised by these clauses relate essentially to their legal effectiveness, and to the fact that they will probably not systematically exempt the client from liability, depending in particular on its needs, and on the actual capacity of the subcontractor to comply with these sometimes very heavy obligations.
This is why it is important to avoid adopting “standard” clauses which would not take into account the precise contractual context, or the effective capacities of the subcontractor, in relation to the requirements of the principal.
Ultimately, these clauses must establish a spirit of collaboration between the parties, allowing for greater knowledge of the subcontractor’s situation and the problems encountered locally.
Complying with the new whistleblower law
The law of March 21, 2022 aimed at improving the protection of whistleblowers has extended the notion of whistleblower to staff members, or those whose employment relationship has ended, those who applied for a position and were not selected, associated shareholders, holders of voting rights, external and occasional collaborators, and co-contractors, sub-contractors, staff members of sub-contractors, contractors.
This extended definition implies an extended openness of the whistleblower mechanism, the company must therefore adapt the existing reporting mechanism in order to be able to demonstrate that employees and contractors have been able to use the mechanism (accessibility of the system and information).
One of the ways in which the company can comply with the new whistleblower provisions is by including specific whistleblower clauses in commercial contracts referring to the whistleblower system in place.
On October 13th, the law firm was invited to speak at a day organized by the APRIL group on the theme “CSR / Compliance, what points of convergence?
The following subjects were developed by the firm, before an audience very aware of these issues within the APRIL group that we thank for these very interesting exchanges:
– CSR and Compliance in the pharmaceutical industry
– Anti-corruption, experience of Philippe LEGREZ
Digilaworld will be present at the “Salon des Transformations du Droit” on November 17 and 18, 2022, and will present the project on November 18
Do not hesitate to register to this event!