France may enforce new price cuts to balance budget

According to projections made by a national commission set up in 1979 to monitor social spending (CCSS), the whole social security system in France is likely to sustain a deficit of around E8.9 billion in 2008. Healthcare costs are predicted to exceed receipts from taxes, levies, fees and payroll charges by E4.1 billion, down from a deficit of E4.6 billion in 2007. The cost of providing old-age pensions is also believed to overshadow the deficit created by the healthcare.

The CCSS has revealed that a E0.50 co-payment per pack of medicine introduced in 2008 – capped at E50 per family per year – has helped to reduce medicines reimbursement, with the first quarter of 2008 witnessing a decline of 2.2% in reimbursements. However the commission has cautioned the government that the capping provision will dilute the effect of co-payments in later months of the year as more families cross the threshold.

Roselyne Bachelot-Narquin, the health minister, has said that the government may target expensive hospital drugs and generics as areas where money could be saved through targeted price-cuts or by coercing prescribers to prescribe less.
According to the CCSS report, the innovative medicines cost the French healthcare system -2.2 billion in 2007, after increases of 19.2% in 2006 and 18.5% in 2007, and constitute around 40% of medicines consumption in hospitals.

The French health department has launched a benchmarking exercise to curtail the wide discrepancies noticed between hospitals in the volume of expensive medicines prescribed to patients with similar illnesses. Ms Bachelot has also urged the CEPS, the committee that negotiates prices for reimbursed medicines, to achieve lower prices for specified pharmaceutical products – especially generics – before the end of 2008.