French Pharma Industry Pays The Price For Country’s Financial Woes

 

In an effort to shore up its credit rating, the French government has turned the financial screw on pharmaceutical manufacturers.

Alarmed by the potential risk to France's trip A credit rating, the French government this week announced that it was going to slash the proposed rise in the social security budget (ONDAM) from 2.8% to 2.5%, with a bill expected on this within a fortnight.

Whilst it is not yet clear exactly where all the 0.3% will come from, the pharmaceutical industry is already in uproar about having to shoulder its share of the financial burden, which it says aims at short-terms gains at the expense of long-term stability.

Prior to announcing in the proposed social security law (PLFSS) that it would tighten the budget for 2012 even further, the government has already required healthcare companies to make savings of €670 million, compared with €500 million(€678 million) in 2011.

The main target for price reductions in the 2012 budget is a list of some 200 medicines, some of which will have their reimbursement levels reduced and others that will have to forego reimbursement altogether. “But I don’t think the cuts will apply to this list alone,” said François-Régis Babinet, associate at the law firm Covington & Burling.

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