France: Industry calls for moratorium on price cuts

Following the shortage of medicines announcement made on 25 September 2019 by the French Prime Minister and the Minister of Health (See our previous blog posts: French government determined to sanction pharmaceutical companies for shortages of medicines and Draft 2020 Social Security Financing Bill encourages price cuts and biosimilar uptake), the French pharmaceutical industry association (Leem) has published a press release, calling for a moratorium on price cuts to be included in the draft 2020 Social Security Financing Bill (2020 PLFSS).

For several months, the Leem has been warning of the consequences of ten years of disproportionate economic regulation, not only on the attractiveness of the territory in terms of research and production, but even more so today on the access and availability of treatments for patients for whom the disruption of the supply of medicine will have one of the most visible and dramatic consequences.

The situation has become worse all over the world in recent years due to the increase in global demand for medicines, the increasing complexity of production chains, technologies and processes, controls and regulatory obligations, and also the concentration of the production of active ingredients around a few countries.

The new obligation to strengthen stocks of medicines of major therapeutic interest, accompanied by financial penalties for companies that do not comply with this obligation, provided for by the 2020 PLFSS, further increases the conditions for the economic exploitation of a large number of medicines.

The Leem points out that France is one of the major European countries with the lowest prices for medicine and that, over the past five years, the total effective price reductions have reached EUR5 billion. These low prices have a negative impact on the supply of medicines by deterring certain suppliers from operating and maintaining their presence in the French market. They also promote the parallel exports of medicines to neighbouring European countries who allow higher prices.

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