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The impact of Hollande's healthcare reforms in France

A tougher environment for pharma, with market access and regulatory challenges

France

A year after François Hollande's government was elected, a series of reforms have impacted on the healthcare system and the pharmaceutical industry. The recession and Euro crisis are the economic backdrop in the attempts of health minister, Marisol Touraine, to reduce the consumption of medicines, price drugs against standards of care and promote the uptake of generics among doctors and patients.

President Hollande had promised in his electoral campaign to stop what he called “the drift towards free-market healthcare,” protect the national health service, expand complementary coverage, lower the price of medicines and fight against health disparities. 

However, the realities of the economic crisis have made cost containment its main priority. While the government has strengthened the 2011 drug regulations, it has been focusing on reducing prices and medicine consumption in general. In fact, the new safety of medicines law reinforces economic assessments, requiring more data to support the benefit/risk ration of drugs.

The French healthcare system has universal coverage as its cornerstone in a mix of mainly public and some private providers and insurers. Although most medical services and pharma products are not free at the point of use, costs are partly reimbursed, even if at a low level, compared to Germany, for instance. Patients supplement their compulsory government scheme with voluntary private health insurance, which covers most out-of-pocket payments and this sector has been growing steadily.

The central government funds services through taxation and manages the system of employer and employee contributions, as well as setting health care policy. All French residents must be registered with National Health Insurance and have different levels of reimbursement, depending on their work conditions, incomes and healthcare needs. Some eight million patients are exempt, such as those with chronic illnesses.

Cuts starting to bite
Recently co-payments were increased to moderate levels (€1 per doctor visit, €0.50 per prescription drug and €18 for hospital treatment above €120). Patients are also required to register with a GP to act as a gatekeeper to oversee treatments and guide patients who face lower reimbursement if they wish to keep absolute control over the process.

In the past 20 years, governments have tried to curb rising healthcare costs with a number of measures with mixed degrees of success. According to the World Bank, healthcare expenditure in France was 11.6 (as per cent of GDP) in 2011. OECD figures for 2010 claim that around 15 per cent of this expenditure relates to pharmaceuticals.

President Hollande promised to stop what he called the drift towards free-market healthcare

The French government spent €634 on medicines per capita in 2010 (OECD). According to the Executive Agency for Health and Consumers (European Commission) the net pharma budget impact for 2012-2016 in France will be significant (around €5,589m) and the savings will come from cuts in purchase of cardiovascular and central nervous system drugs.

The government says cuts in the cost of prescription medicines will save €530m in 2013 and the goal for substitution rate, currently at around 71 per cent, is 85 per cent.

Slow market access and more regulations
Once a drug is approved by the European Medicines Agency (EMA), or by the French regulator, it is assessed by the independent, High Authority of Health, created in 2004 to evaluate medical benefits of pharmaceuticals through its Transparency Committee. Then the inter-ministerial body, Economic Committee for Medical Products, sets prices after negotiations and decides reimbursement levels.

Market access is still slow, although there is a Temporary Authorised Use (ATU) system, which allows for the launch of innovative life-saving drugs in hospitals even before registration and is free to the developer of the drug. This is the case with oncology treatments, as part of a national cancer care plan that includes a fast-track system for new therapies. 

In 2012, the National Agency for the Safety of Medicines and Health Products (ANSM) replaced the previous regulator, AFSSAPS (Agence Francaise de Securite Sanitaire des Produits de Sante), in the wake of the Mediator scandal. Servier's diabetes drug, Mediator was being prescribed as an appetite suppressant for decades, when it was pulled from the market, over safety concerns in 2009. It was revealed that it caused heart damage in patients and resulted in at least 500 deaths. An estimated 5 million people took Mediator in France and it was reimbursed at 65 per cent.

The regulator was given broad new powers to oversee the pharmaceutical industry and its relationship with the medical profession. A new tax was imposed on the industry to fund continuing education for doctors. The French government also announced it would seek to block EU approval of drugs that did not meet the new French standards that drugs must be clinically tested against an active comparator (an existing course of treatment for the condition in question), rather than exclusively against placebos. In the aftermath of Mediator, many other drugs are being re-evaluated in terms of proven efficiency over other drugs already on the market and more than 50 were put on a list for reinforced pharmacovigilance.

Radical changes to reimbursement
All registered pharmaceuticals are subjected to evaluation of therapeutic benefit (Service Médical Rendu, SMR) and improvement of medical value (Amélioration du Service Médical Rendu, ASMR) by the Transparency Committee and then can apply for reimbursable status. 

The current policy stipulates that patients should have access to innovative medicines but to keep down costs, other products, considered of low or moderate value will see their reimbursement rate cut or can even be delisted. 

Once approved for reimbursement, a medicine will be on the positive list for five years and then it will be evaluated and its price reviewed.

Most pharmaceuticals are covered at a rate of 65 per cent, but this varies from 100 per cent for non-substitutable or expensive drugs, with high or considerable amount of innovation to 15 per cent for drugs considered of a low medical benefit.

Since President Hollande's government was elected, France is debating the introduction of a new therapeutic index  (see box below) to replace the complex system of clinical value and added benefit on existing medicines for the setting of reimbursement rates. The new system merges both concepts and goes further comparing the benefit of a medicine and an alternative (regardless of its approval status) using an index from inferior to highly superior, similar to the Germany's added therapeutic benefit scores, although not imposing reference pricing.

Relative Therapeutic Index – ITR

ITR will provide guidelines on both reimbursement and pricing.

This evaluation of the index will be based on the analysis of criteria determined by the Transparency Commission including:

  • The clinical relevance of comparators
  • The clinical relevance of primary and secondary endpoints
  • The validity of methodological studies presented for demonstration of superiority and non-inferiority, whether they are direct or indirect comparisons

Each category will be linked to certain levels regarding price:

  • ITR inférieur (lower): no reimbursement
  • ITR identique (similar) : lower price
  • ITR bénéfice minime (marginal benefit): same price 
  • ITR bénéfice moyen (moderate benefit) : price negotiated
  • ITR bénéfice majeur (major benefir) : European price 

The case for change states that it can improve the country's innovation lag. There is a drop in the number of drugs being granted high scores in terms of innovation for inclusion in the reimbursement list.

The French reform may have wider regulatory implications with other countries looking into enforcing a system where each drug has to prove the value added against pre-existing medicines and placebos.

Article by
Catarina Féria

freelance journalist specialising in the pharmaceutical industry

15th May 2013

Article by
Catarina Féria

freelance journalist specialising in the pharmaceutical industry

15th May 2013

From: Sales, Regulatory, Healthcare

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