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France's 2016 Social Security Financing Act: A figure is worth a thousand words

09 October 2015 Choukri Genane

On 24 September 2015, the French Minister of Social Affairs, Health and Women's Rights Marisol Touraine and the Secretary of State for the Budget Christian Eckert presented the draft of France's 2016 Social Security Financing Act (Projet de Loi de Financement de la Sécurité Sociale; PLFSS). This sets out the country's plan for the reduction of the Social Security General Scheme by EUR3 billion in 2016 to reach some EUR6 billion, perpetuating the ongoing struggle of the French government with its health deficit.

Such an ambitious target has a price. If the intent of the PLFSS is to find multiple saving opportunities and to fight against expansion of the deficit, new investments will have to be resisted by the Health Minister.

Doing more with less could easily sum up the forty page document presented by Marisol Touraine, in which we can find the Minister's different arrows of its cost-containment bow, such as:

  • Optimisation of hospital expenditures, including the promotion of ambulatory care, reform of hospital funding and implementation of regional hospital groups;
  • Drug price decreases and promotion of generics;
  • Consultation price decreases for private healthcare professionals;
  • Control volumes of drug prescriptions;
  • Reform of health professional contributions.

But a figure is worth a thousand words and can reveal the truth about the turn that health policy is likely to take in the coming year.

Cost-containment measures on drugs are the focus of the Minister's strategy to bring down the deficit: one-third of the targeted savings is dedicated to drugs, through the promotion of generics, price cuts, and biosimilars. Add the control on prescriptions volume to that programme, and the whole cost-containment effort on drugs will reach EUR1.6 billion, almost half (46.3%) of the whole amount of the saving measures.

As it stands, the French Minister's intentions towards the pharmaceutical industry are quite clear: the industry will have to contribute and help make room for new innovative drugs. As M. Touraine declared during the presentation of the PLFSS 2016, "lowering drug prices, it is not just a budgetary objective, it is also to fund innovation (…) because this is what allows us to assume the high cost of innovative treatments, so that they are accessible to all patients", bringing to mind the case of Sovaldi. In contrast, for the French Drugs Industry Association (LEEM), drugs are once again "the victim of a profoundly short term fiscal vision".

Doesn't it remind you of something? Industry and payer positions were actually the same last year, after the presentation of the previous PLFSS: with therapeutic advances happening every day, the question is whether drugs will continue being the main answer to the deficit problem, and what impact this will have on the pricing and reimbursement approach in the future. I'm no good at betting, but something tells me that the crusade on drugs expenditures is not about to stop.

Choukri Genane is a life sciences analyst for IHS
Posted 9 October 2015

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