French Competition Authority announces healthcare sector enquiry during presentation of 2016 Annual Report

The President of the French Competition Authority (FCA), Isabelle de Silva, recently confirmed in a radio interview the forthcoming launch of a sector-wide enquiry into the healthcare sector, with a special focus on hospital procurement, biomedical laboratories and pharmacies.  The enquiry aims to address the major economic and financial challenges that the sector entails for the French insurance system and the patient population, and to assess the feasibility of more competitive conditions to improve efficiency with the aim of reducing health expenditure.  In this respect, Ms de Silva stated that there is margin for price reductions, especially in relation to non-prescription medicines.

Ms de Silva had already announced the enquiry during the presentation of the FCA 2016 Annual Report on 3 July 2017, where she confirmed that the healthcare sector remains a priority for the FCA.  Reportedly, she also communicated the FCA’s intention to take a closer look at all aspects of the market for medicines and, in particular, the pricing aspects (including regulatory mechanisms to determine prices).  The FCA, which is competent to conduct sector enquiries pursuant to Article L462-4 of the French Commercial Code, intends to collaborate with healthcare stakeholders throughout the enquiry.

The FCA 2016 Annual Report highlights the importance of the healthcare sector for the FCA.  In particular:

• In 2016, the FCA conducted another sectorial enquiry into the audio prosthesis market, which led to several recommendations to improve competition conditions in the sector, including decoupling the sale of the equipment and the provision of follow-up healthcare services, in order to reduce costs of entry into the equipment market and to allow patients to better compare among alternative offers. This requires adapting the current insurance reimbursement modalities, whereby professionals must provide an inclusive flat rate for both the equipment and the provision of healthcare services as the basis for reimbursement (régime du forfait). In addition, the FCA recommended that the numerus clausus for audio prosthesis students be abolished or at least increased in function of the demand. Accordingly, an order increasing the number of first-year students for 2017/2018 by 22% compared to 2016/2017 entered into force in April 2017.
• In April 2016, the FCA issued unfavourable opinions on two draft decrees regulating the online sale of non-prescription medicines, namely on (i) good dispensing practices and on (ii) technical regulations applicable to websites selling medicines. In the FCA’s views, the envisaged provisions introduced excessive regulatory obstacles for this type of sales that were unjustified on grounds of the protection of public health and unduly discriminated in favour of brick-and-mortar pharmacies. On 1 February 2017, two revised decrees entered into force partially taking into account the FCA’s recommendations (see previous posts: Online sales of medicines take a step forward in France and French Competition Authority issues unfavourable opinion on draft decrees regulating online sales of medicines).

The exact timing and scope of the FCA’s sector inquiry remains uncertain at this stage. Industry should keep a close eye for any developments in this respect.

This post was originally authored by Patricia Carmona Botana.