In the European Union, decisions on pricing and reimbursement of medicinal products are made at a national level following negotiations between governments and Marketing Authorisation Holders (MAH).
In France, after obtaining a Marketing Authorisation (MA) for a medicinal product, a pharmaceutical company can freely establish its price. However, in order for it to be reimbursed by French social security, the company must submit a reimbursement application to the French National Authority for Health (HAS) for its assessment by the Transparency Committee (CT).
The Transparency Committee (CT) evaluates the Actual benefit (Service Médical Rendu) and the Improvement in actual benefit (Amélioration du service médical rendu) of the drug.
- The Actual benefit (Service Médical Rendu (SMR)) is a criterion used to inform the National Union of Sickness Insurance Funds (UNCAM) and the Minister of Health of the clinical interest to include the drug on the list of medicines covered by the national health insurance (reimbursement).
- The Improvement in actual benefit (Amélioration du service médical rendu (ASMR)) is used to define the negotiation context for pricing the drug under evaluation.
The opinion issued by the CT is sent to the UNCAM and the Healthcare Product Economic Committee (Comité Économique des Produits de Santé (CEPS)). It is also communicated to the company that submitted the evaluation request and posted on the HAS website.
The rate of reimbursement is defined by the UNCAM on the basis of the Actual benefit (SMR) and the seriousness of the condition concerned.
The final decision on reimbursement is taken by the Minister of Health and is published in the Official Journal of France.
The prices of medicines not reimbursed by social security are freely set by manufacturers.
Medicines sold to hospitals are subject to regulations set out in the Public Health Code ("agrément aux collectivités"). Their prices are free and purchases by public health establishments are governed by the Public Procurement Code.
The price of medicines reimbursed by social security (manufacturer's price excluding tax (PFHT)) is set by the Economic Committee for Health Products (CEPS), generally by negotiation with the company exploiting the medicine (failing that, by decision of the committee), based namely on :
- price of medicines with the same clinical purpose
- envisaged sales volumes
- target population
- prices observed in other countries
France sets its prices in reference to four European countries (Germany, the United Kingdom, Italy and Spain), and prices are not set below the lowest price observed in those countries. In practice, prices are most often at the bottom of the European market range. In addition, the prices thus fixed are temporary.
If a medicine offers an improvement over other existing products in a therapeutic indication, its price may be set higher than that of its competitors.
Since generics do not bear the initial research costs of the originator drug, they can be sold at a much lower price than the brand-name drug. Thus, in France, when generics are marketed, their manufacturer's price excluding taxes (PFHT) is set at -60% of the price of the brand-name drug.
In parallel, the price of the brand-name drug is reduced by 20% when the generic drug is marketed (the brand-name drug company may decide to lower the price further to avoid too much competition from the generic drug).
After 18 or 24 months of commercialization, the CEPS decides, depending on generic market penetration:
- Either to place the generic group (original medicine and generics for a given INN, strength and pharmaceutical form) under a TFR (fixed accountability tariff), if the substitution of an original medicine by its generic is deemed too low. Thus, reimbursement in the generic group is carried out on the basis of a fixed price equal to the price of generics.
- Either to further reduce the price of originator drugs (-12.5%) and generics (-7%).
The CEPS regularly reassesses the price of drugs in France.
Thanks to the savings generated by generic drugs, new and often expensive innovative treatments, such as those for serious diseases like cancer, have been covered by the French health insurance system and French patients have been able to benefit from them early on.
Price controls heavily penalize older reimbursable drugs in France, whose manufacturer's price excluding taxes (PFHT) regularly drops.
Older drugs are thus sold at very low prices and have become unattractive for the major pharmaceutical companies.
Between 2000 and 2021, public prices of reimbursable drugs decreased by 48.6%. (Source: INSEE)
Drug prices in France are on average lower than European prices. (CEPS, 2014-2015 activity report).
One of the reasons given for the shortage of drugs in France is their low price.
With the increase of the world demand for drugs, some manufacturers prefer to sell their drugs to countries offering a higher price.
In response to the shortage of drug supplies and in order to preserve the attractiveness of the French market, France announced early February 2023 a moratorium on price cuts for strategic generic drugs for industrial and health reasons and targeted price increases for certain strategic generic drugs produced in Europe. Price increases will be made in exchange for commitments by manufacturers to secure supplies for the French market.
Information on prices and reimbursement rates for reimbursable drugs: base de données publique des médicaments.
International non-proprietary name (INN): globally recognised name used to identify the active ingredient in a medicine.
Fixed accountability tariff (Tariff Forfaitaire de Responsabilité (TFR)): The TFR is calculated based on the price of the cheapest generic drug. If the company marketing the brand-name drug decides not to align itself with this price, the drug is reimbursed at the TFR price, with the price difference being borne by the patient. The TFR limits thus the reimbursement base for drugs in a generic group, regardless of the public price including tax.
Manufacturer's price excluding taxes (PFHT): price without the margins of distributors, wholesalers and pharmacists and without VAT.
Read our article on drug shortages here.