France: Draft 2020 Social Security Financing Bill encourages price cuts and biosimilar uptake

In order to ensure savings for the healthcare system in 2020, French legislators are encouraging biosimilar uptake and price cuts.

The draft 2020 Social Security Financing Bill (2020 PLFSS) introduces new measures that tackle tactics developed by medicinal product originators, which consist of offering low prices for biological brands to healthcare institutions as a way of encouraging prescription of their medicinal products after hospitalisation. In addition, with the aim of reducing healthcare spending and limiting the increase to 2.3% for 2020, the 2020 PLFSS introduces price cuts and promotes generics and biosimilars.

Reference medicinal products offered at low prices to hospitals are prescribed at much higher prices after hospitalisation, which leads to overall additional costs for the healthcare system. In order to overcome such practices and to increase the overall efficiency of prescriptions, French legislators have introduced financial incentives to encourage hospitals to prescribe less expensive medicinal products. As indicated in the explanatory statement of Article 43 of the Bill, several actions have recently been implemented to promote the development of biosimilars.

The explanatory statement accompanying Article 29 furthermore indicates that in order to avoid additional, unjustified costs for the health insurance, the 2020 PLFSS also specifies the procedures for purchasing certain hospital medicines.

However, both the French pharmaceutical industry association, Leem, and the French generic and biosimilar medicines industry association, Gemme, have expressed their concerns over recent French government measures. In its press release, Gemme emphasises that the price cuts could lead to shortages and has declared the recent government sanctions for shortages of medicines as counterproductive (See our previous blog post: French government determined to sanction pharmaceutical companies for shortages of medicines).

A prior version of this post was originally published by the same authors in Practical Law – Life Sciences, November 2019 Issue (Thomson Reuters).