Medicine Manufacturers Hit Hard by Latest French Healthcare Finance Reforms

Spending Changes

Recently the French government has published its Social Security Finance Bill 2021 (PLFSS 2021), which covers the annual review of their health and social security expenditure. With the impact of COVID-19 increasing there seems to be an ever-increasing cost cutting exercise which seems to be directed in majority at drug manufacturers.

The PLFSS 2021 legislation will limit pharmaceutical expenditure, to an absolute maximum of 0.5% of spending in 2019. The reasoning behind this is due to the unprecedented spending seen in 2020 being using total expenditure in 2020 as a baseline inappropriate.

Also outlined in the PLFSS 2021, there will be price cuts totalling €640 million directly affecting drug manufacturers through the promotion of economical prescribing behaviour through increased use of cheaper branded medicines (€570 million) along with generic and biosimilar medicines (€110 million).

The only concession being provided for innovation purposes is for immunotherapies, such as PD-1 and PDL-1 inhibitors. If spending on these therapy types grows significantly over 2021, then the manufacturers will be able to negotiate pricing with the CEPS to be pardoned from penalties.

Access Changes

Other changes which are proposed in the PLFSS 2021 legislation is to streamline early access/compassionate use for drugs that fulfil unmet clinical need.

There are current six intersecting schemes that the French government have in place, built around the country’s system of Autorisations Temporaires d’Utilisation (temporary authorisations for use). The PLFSS proposes having two separate but linked paths—for early access and compassionate use.

The early access route:

  • For therapies being developed for a given indication.
  • If a therapy is approved for early access, the manufacturer will be free to set a price, subject to some rebates – this will be reimbursed at 100%.
  • In return, the company will have to commit to collecting data and ensuring continuity of treatment for patients.
  • The company may also be required to submit a Market Access Authorisation within a specified time.

The compassionate use route:

  • Applies to off-label use of therapies that are not being developed for a given indication.
  • Particularly relevant to rare diseases.
  • Prescribers will be able to submit a named-patient request for off-label use for a renewable period of 3 years.
  • There are plans to set up a platform for the collection of follow-up data from prescribers, which will be funded by manufacturers.

Final Thoughts

With these financial reforms, France as a market for new therapeutics and medicines will most likely become an even more competitive market for reimbursement for most drug manufacturers.

Manufacturers, where their primary focus is on immunotherapies or orphan/ultra-orphan therapies, will receive a certain level of respite with relatively easier access routes for their medicines and further opportunities to launch and expand their national coverage in France. 

The reforms plan to keep encouraging innovation in areas such as immunotherapies for oncology and orphan/rare asset to fill unmet need while proposing risk-sharing between manufacturers and payers.

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