Financialization of the health sector – Recent political, regulatory and judiciary developments in France

“There are illnesses that can only be cured by naming them.”¹ One of the key challenges raised by the financialization of private practice companies is the need to safeguard the professional independence of practitioners.

France's liberal healthcare system is traditionally grounded in professional independence and personal liability; financialization, however, introduces investor-driven logics, return-on-capital expectations, and contractual constraints.

In this context, capital structuring must remain aligned with the specific requirements of professional practice and, more fundamentally, with the paramount interest of patients. The debate centres on the notion of effective control, understood as the practitioner's actual ability—rather than that of the investor—to direct the private practice company and make key operational decisions. In the healthcare sector, this requirement aims to ensure that medical judgment prevails over purely financial considerations.

Article 5 of Law No. 90-1258 of 31 December 1990 (now incorporated into Ordinance No. 2023-77 of 8 February 2023) requires that more than half of the share capital and voting rights of a private practice company be held, directly or indirectly via a holding structure, by professionals practising within the company.

While this rule appears arithmetical, it does not in itself resolve the issue of actual control. The legal framework allows preference shares and complex ownership structures, provided that statutory capital and voting thresholds are formally respected. However, the multiplication of holding companies, chains of ownership, and shareholders' agreements has blurred the boundary between financial participation and genuine governance power. It is precisely on this ground that the case law of the French Administrative Supreme Court has provided decisive clarification.

On 10 July 2023, the French Administrative Supreme Court issued four landmark decisions that marked a significant shift in approach. Moving away from a purely formal assessment of capital ownership, the Court adopted a functional analysis of effective decision-making power.

In these cases, the Court upheld the removal of private practice companies whose share capital was formally majority owned by practising veterinarians, but whose governance and economic flows were, in practice, controlled by financial investors. The Court emphasised that “the articles of association and shareholders' agreements result in the professional partners, despite holding a majority of the capital and voting rights, being unable to exercise effective control over the company.”

These rulings identified several indicators of a loss of effective control, including the concentration of financial rights in the hands of third parties, contractual dependency, veto or approval rights over strategic decisions, and the absence of genuine operational management by professionals.

This debate, initially developed in the veterinary sector, was later extended to the medical field. In an order dated 12 September 2024, followed by confirmatory orders in October 2024 and May 2025, the French Administrative Supreme Court suspended the removal of a medical imaging company from the register of the Order of Doctors. The Court held that the majority ownership of capital and voting rights by practising radiologists—directly and indirectly—was sufficient to establish effective control in the absence of evidence to the contrary.

These decisions reflect a nuanced and evolving jurisprudence. Effective control must be assessed in concreto, by reference to actual governance mechanisms rather than formal ownership alone. Conversely, the presence of investors benefiting from enhanced financial rights does not automatically imply a loss of professional independence where operational decision-making remains in the hands of practitioners.

Senate Information Report No. 776 (Sept. 2024), entitled “Financialization of Healthcare Provision: A Takeover Bid on Health?”², and the joint IGAS and IGF report (May 2025) entitled “Causes and Effects of the Financialization of the Healthcare System”, warn of the proliferation of structures where, despite formal compliance with professional majority, strategic decisions escape practitioners. They call, among other preventive measures, for a legislative redefinition of effective control, based on a set of indicators: distribution of capital and votes, management autonomy, and economic independence.

This reflection now extends to other professions:

• pharmacists, through studies by the National Council of the Order of Pharmacists, as well as proposed amendments aiming to prohibit non-pharmacists from joining pharmacy groups, such as the Isaac-Sibille amendment (PLFSS 2026, No. AS889), since rejected. A recent study³ notably pointed out that the French community pharmacy model, historically based on the monopoly of medicine sales by qualified pharmacists must balance between maintaining territorial coverage, adapting to new public health needs, evolving its economic model, and preserving professional independence in the face of financialization. Along with a series of recommendation aiming at regulatory changes favouring independence, it also suggested to revise the status of assistant pharmacists (capital, minimum staffing), or require prior approval by the Order of Pharmacists for contracts establishing a pharmacist’s installation, as well as to promote cooperative models in order to better regulate financialization;
• chartered accountants, for whom financialization via SPFPL or SPE raises similar questions.

Current law thus tends towards horizontal regulation: standardising the notion of effective control across all regulated liberal professions.