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France's Social Security Finance Bill 2014: What changes may occur in the French pharma market?
Among the many cost containment initiatives in healthcare around the world in recent years, France's Social Security Finance Bill (PLFSS) for 2014 represents a special case worth considering.
Savings under PLFSS 2014 The PLFSS 2014, currently going through the French parliament, foresees major budgetary savings. In particular, the French government tabled a legislative text which - if approved - would limit the national target for year-on-year (y/y) spending growth in expenditure on public healthcare (ONDAM) for 2014 at 2.4%. The new target would considerably limit expenditure growth compared to the ONDAM 2013 target of 2.7% y/y. The 2.4% spending threshold would secure savings for the French payor of approximately EUR2.9 billion (USD3.9 billion) over the course of next year. Savings realised through pharmaceuticals represent approximately 40% of the overall ONDAM target for 2014.
Although the actual figures may change over the course of the legislative process, the French government will certainly keep a tight grip on pharmaceutical costs containment. The draft bill brought before the Parliament by the government was rejected by the French Senate on 14 November 2013 and, therefore, will be amended before gaining the parliamentary seal of approval. However, the final text is unlikely to differ considerably from the original proposal. In particular, cost containment measures proposed by the government are here to stay and the pharmaceutical industry is expected to bear a significant part of the cost curbing.
A major share of pharmaceutical savings are planned to be secured through price cuts on reimbursed medicines - on patented as well as off-patent drugs. Conversely, the proposal does not introduce measures to reduce the number of drugs reimbursed by the system, or measures to reduce pharmaceutical co-payments. In fact, the Minister of Health, Marisol Touraine has made clear since the beginning of her mandate that interventions will be aimed at increasing cost efficiency rather than shrinking drugs reimbursement. Measures may be put in place to avoid misuse of medicines and to encourage "appropriate" prescribing.
Beyond price cuts Provisions included in the PLFSS 2014 are not exclusively focused on price cuts. In particular, the Minister of Health also plans to boost biosimilar drugs uptake in the French market enabling substitution of off-patent biologic drugs at pharmacy level in treatment-naïve patients. In fact, with the biologic drugs patent-cliff on the horizon, France, in line with other European markets, is hoping to reduce pharmaceutical expenditure by expanding biosimilars utilisation. However, penetration of biosimilars is likely to be limited as substitution could be allowed exclusively for treatment-naïve patients who represent a small portion of the overall patient population.
In addition, the French Senate agreed on 25 October on the introduction of a three-year trial period for antibiotic dispensation in unit doses at the pharmacy level. The measure is aimed at reducing risks of antimicrobial resistance as well as at avoiding resource waste. According to a study published by the French pharmacists' association PHR, unit dose sale may generate savings for the system between EUR300 million and EUR500 million for the top 10-15 most consumed drugs.
Meanwhile, the PLFSS 2014 also aims at increasing transparency on discounts obtained by pharmacists on generic drugs. This would enable Economic Committee on Health Care Product (CEPS) to set generic drug prices at a level that takes into consideration the discounts applied at pharmacy level.
Finally, the government plans to regulate price setting for drugs that have received a temporary authorization to use (ATU; Autorisation temporaire d'utilisation). The system currently in place enables manufacturers to freely set the price in the time lapse between marketing authorisation approval and the price is assigned by the CEPS.
Pharma concerns The saving effort has been defined as "sans précédent" (unprecedented) by the French government. Certainly other cost containment measures have been introduced in recent years in France, the tiers-payant contre génériques policy adopted in July 2012 represent a significant example of expenditure curtailment. However, the pharmaceutical industry fears that new cuts will significantly jeopardise opportunities for pharmaceutical innovation in the French market. Furthermore, it will also be interesting to follow how the government intends to design policies aimed at boosting biosimilars expansion in the market. Some observers have questioned whether biosimilars will represent a significant source of savings for the healthcare system as manufacturing costs for these drugs tend to be high and, therefore, actual pricing reduction secured through biosimilars may be ultimately limited. However, since a significant number of biologics' patents will expire between now and 2015, governments are paving the way for pharma legislation allowing them to maximise the potential savings from use of biosimilars.
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