French Tax on Evergreening Practices: Uncertainties Remain for Pharma Companies
France's so-called "evergreening tax" has been in force since December 31, 2025, but significant uncertainties remain as to its scope and practical application, with no administrative guidance issued to date. The draft 2027 Social Security Financing Bill, published on October 1, 2026, contains, in its current form, no provisions relating to the tax.
Background
According to the explanatory statement accompanying the Senate amendment that introduced the tax into French law, now codified in Article L. 138-10-1 of the French Social Security Code, evergreening consists, for certain pharmaceutical companies, in artificially extending the period of commercial exclusivity of certain medicinal products whose patents are approaching expiry by filing new patents covering non-innovative variants.
Scope and Mechanism
The tax is payable by companies marketing medicinal products in France under a marketing authorization where: (i) the initial patent or supplementary protection certificate has expired; (ii) no generic product has entered the market within one year of that expiry; and (iii) the delay results from the unjustified maintenance of commercial exclusivity. The rate is 3% of French turnover (excluding VAT) generated by the product during the financial year in which the delay is established, and may be increased to 5% for repeat offenses within five years.
The tax is generally collected and audited under the same rules as the pharmaceutical safeguard contribution provided for in Article L. 138-10 of the French Social Security Code, which is administered by the French social security collection body (Union de recouvrement des cotisations de sécurité sociale et d'allocations familiales, or URSSAF).
Two categories of practices are deemed to constitute an unjustified delay: (i) the filing of patents covering formulations, dosages, combinations, or processes providing no improvement in medical benefit (amélioration du service médical rendu, or ASMR); and (ii) any manifestly dilatory judicial or administrative action intended to prevent or delay the grant of a generic marketing authorization. The statute does not specify, however, whether that characterization may be rebutted.
Legal Uncertainties
Improvement in medical benefit is normally assessed by the Transparency Committee of the French National Authority for Health (Haute Autorité de Santé, or HAS) for drug-pricing purposes. However, the statute does not specify whether an existing HAS assessment would establish the absence of improvement for purposes of the tax, or whether a separate assessment would be required.
Further guidance would therefore be needed, in particular to determine which authority is competent to characterize the delay, how the absence of any improvement in medical benefit may be established, and what constitutes a manifestly dilatory action. Furthermore, the statute does not explain how the delay is to be formally established or how the first assessment and payment are to be organized. In addition, it does not expressly address how the tax interacts with existing pharmaceutical contributions and related caps.
In the absence of administrative guidance, the precise scope and practical application of the evergreening tax remain uncertain.
Practical Impact
The tax has been in force since December 31, 2025. Companies should identify products whose initial patent or supplementary protection certificate has expired without effective generic entry within one year, and document the therapeutic rationale for secondary patent filings and the legitimate grounds for any related judicial or administrative proceedings.
Looking Ahead
The discussions around the 2027 Social Security Financing Bill may provide an opportunity for Parliament to clarify, amend, or repeal the tax, including with respect to the characterization of an unjustified delay, the competent authority, and its interaction with existing pharmaceutical contributions.
