French Govt Has The Chance To Act Now To Boost Pharma Prospects, Says Industry Body
Executive Summary
Sales growth is slowing, innovation is being impaired, and prices remain constrained in France, says the industry body Leem. It has called on the government to take urgent action to remedy the situation.
The French pharmaceutical industry association, Leem, has again castigated the government for damaging its growth prospects by imposing what Leem calls “short-term economic regulation”, Leem is calling for urgent action to be taken to help boost research and innovation, as talks commence on the 2018 social security financing bill.
“The pharmaceutical industry, one of the most strategic industrial sectors in the country, is emerging weakened by several years characterized by the implementation of regulation and price setting that are not up to the job of bringing back innovation,” Leem says in its 2017 economic report on the sector.
According to Leem president Patrick Errard, “pressure on drug prices, an inflationary regulatory environment and the weight of general and sectoral taxes are nothing but brakes on productive investments” that threaten early patient access to innovative medicines. What the industry needs instead are “reforming and ambitious” health policies, Errard says.
Leem has long complained that the French authorities treat the pharma sector as a cost rather than an investment, and that years of cost-containment policies have caused an “economic recession” in the sector. The association repeated these assertions in June this year, although this time it said it was “cautiously optimistic” that the new French government would take a longer-term view of the industry’s contribution to healthcare after the pro-business, pro-EU centrist Emmanuel Macron was elected France’s President on May 7. (Also see "French Pharma Industry Lays Out Wishlist For New Government, Proposes Five-Year Pact" - Pink Sheet, 5 Jun, 2017.)
Now, Errard says in his preface to the report on the sector, the government has the chance to take such action, as discussions begin on the 2018 social security financing bill, the annual legislative package where the government of the day traditionally spells out its plans for the healthcare and other sectors.
The government, Errard says, has a strategic choice to make. It can decide to turn the screw even further and see France “permanently” exit the group of innovative nations, or it can choose to undertake structural reforms of the healthcare system in order to “reaffirm the strategic character of the healthcare industry” and guarantee French patients access to therapeutic innovation.
Market Grows, But More Slowly
The report says that in 2016, French pharmaceutical sales – comprising reimbursed and non-reimbursed drugs in the outpatient and hospital sectors, but excluding exports – rose by 3%. But Leem describes this as “false good news.”
For one thing, the trade body says, sales of medicines in the ambulatory sector rose by only 0.1%, and while the hospital sector saw a much larger increase – of 7.5% – this was achieved through sales of drugs under temporary use authorizations “for which companies pay very large rebates.” As for medicines reimbursed under normal mechanisms, Leem says that once rebates paid by companies are taken out of the equation, their sales rose by just 0.9% last year.
Moreover, at the international level France’s share of the market in 2016 stood at 3.4%, compared with 5.6% in 2006. While it remains the fifth-largest world market, behind the US, China, Japan and Germany, its global market share has declined by 2.2 percentage points in 10 years.
Leem defends itself from accusations that drug prices are continuing to rise. “This is false. While the cost of living continues to rise, the prices of ambulatory medicines continue to fall. Between 1990 and 2015, the cost of living index rose by 48.4% while that of retail prices of medicines (reimbursed or not) declined by 27.9%,” the report declares.
Also unfounded, it says, is the claim that the pharmaceutical industry enjoys a “particularly attractive tax regime.” The sector may benefit from various fiscal incentives such as the research tax credit and the competitiveness and employment tax credit, “France still has the highest level of specific taxes in Europe,” ahead of Germany, Ireland, Italy, Spain, Switzerland and the UK, it says, citing a study conducted for Leem by PricewaterhouseCoopers.
Effects On Innovation And Access
Leem laments the fact that France, “which has traditionally welcomed innovative products with open arms, has seen its situation deteriorate over recent years.” Of the 282 medicines approved in the EU between 2012 and 2016 (excluding generics), it says, only 21 of them came from the French industry, compared with 86 for Germany, 68 for the UK and 39 for Ireland.
France also has “the sad privilege” of having one of the slowest rates of access in Europe, with new drugs taking 400 days on average to reach the market after approval, compared with the maximum of 180 days stipulated under EU regulations.
Even in the case of the accelerated access procedure (i.e., the temporary use authorization), which gives patients restricted access to very innovative drugs, it can take 335 days to complete the price evaluation and setting procedures, it says.
From the editors of Scrip Regulatory Affairs.