IHS Global Insight Perspective | |
Significance | Healthcare expenditure was up 3.3% year-on-year in France in 2009 to reach a total of 175.7 billion euro, of which 75.5% was covered by the public health insurance CNAM. Expenditure on medicines accounted for 35.4 billion euro, up 2.5% y/y, during 2009. |
Implications | The slowdown witnessed in drug spending was induced by the combined effect of a new decrease in pharmaceutical prices and of a stabilisation of sales in volume, all triggered by the implementation of targeted cost-containment measures aimed at containing drug spending. |
Outlook | Growth during 2010 should be contained again as a new reimbursement band of 10-20%, price cuts and the entry of new generics on the market should contribute to lower prices and restrain growth in volume terms. Medicines of intermediate therapeutic value (SMR) are set to be the next target of the government which is planning to lower their reimbursement level by 5 percentage points to 30%, increasing the share of private spending on these drugs. |
In 2009, healthcare expenditure was up 3.3% year-on-year (y/y) in France to attain a total of 175.5 billion euro (US$234.77 billion), or 9.2% as a percentage of GDP, according to the latest figures published by the public health insurer CNAM. The growth was contained compared with 2008 (+3.7% y/y) but its share as a percentage of GDP—equal to 8.7% in 2008—increased due to the economic downturn and the consequent drop in GDP during 2009. Last year, approximately 75.5% of healthcare costs were covered by the public health insurer while complementary insurers provided 13.8% of the total cost, the rest—9.4%—being financed through out-of-pocket expenditure.
Healthcare Spending, 2007-09 | |||||||
Spending, in Bil. Euro | Y/Y Change, % | ||||||
2007 | 2008 | 2009 | 2000-2005 | 2007 | 2008 | 2009 | |
Inpatient care | 72,5 | 75,1 | 78,0 | 5,1 | 3,5 | 3,7 | 3,8 |
Outpatient care | 45,0 | 46,8 | 48,3 | 5,6 | 5,2 | 4,1 | 3,0 |
Transport | 3.2 | 3.4 | 3.6 | 8.4 | 4.9 | 4 | 6.8 |
Medicines | 33.6 | 34.5 | 35.4 | 5.9 | 3.8 | 2.7 | 2.5 |
Other medical devices | 9.6 | 10.2 | 10.5 | 8.1 | 7.3 | 5.9 | 2.8 |
Total | 164 | 170.1 | 175.7 | 5.6 | 4.2 | 3.7 | 3.3 |
Source: DREES, Comptes de la santé | |||||||
A Moderate Increase in Drug Spending
Expenditure on medicines, which accounted for 20.1% of total healthcare spending, reached a total of 35.4 billion euro in 2009, which represents a 2.5% rise compared with 2008. This is a notable slowdown compared with 2007 and 2008, at which time growth in drug spending attained 3.8% and 2.7% y/y respectively. The deceleration in value results from the combined effect of a new decrease in pharmaceutical prices and of a stagnation of sales in volume terms. Sales in volume grew by 5.2% y/y in 2009, after a 5.0% y/y growth in 2008 and a higher 6.4% y/y rise in 2007. This was directly induced by various cost-containment measures introduced by the government to contain spending, such as the success of the maîtrise médicalisée scheme and the reimbursement cut of certain drugs of insufficient therapeutic value. In terms of pricing, drug makers were affected by a 2.6% y/y decrease in pharmaceutical prices, which occurred after two years of comparable cut: -2.3% y/y in 2008 and -2.5% y/y in 2007. This contraction in drug prices is attributable to targeted price-cutting measures and to the growing penetration of generics in France. Generics accounted for 12% of the reimbursable drug market in 2009 in France, up from a share of 4.1% in 2002. This is due to the French substitution policy, whose scope is constantly broadened with the market launch of new generics. The number of therapeutic classes which counts at least a generic has increased from 64 in 2002 to 95 in 2009, over a total of 354 therapeutic classes.
Outlook and Implications
Figures published by the CNAM suggest the success of several cost-containment measures taken on both demand and supply sides of the pharmaceutical market. On the demand side, the maîtrise médicalisée scheme and the delisting of certain drugs of insufficient therapeutic value (SMR – Service Médical Rendu) have contributed to contain the growth in volume terms. The maîtrise médicalisée scheme, under which GPs' prescribing habits are monitored to encourage a lower volume of prescriptions and a higher take-up of generic prescribing, is set to be expanded to additional drug classes in coming years. This would encourage generic prescribing in a greater number of drug classes and trigger a further drop in pharmaceutical prices.
Overall, the year ahead should also be characterised by a decrease in pharmaceutical prices as price cuts worth around 100 million euro added to the new reimbursement band of 10-20% will continue to drive prices down in the country. Private expenditures are set to play an increasing role in future in France as further cuts in reimbursement rates are foreseen for the year 2011 with medicines of intermediate therapeutic value at risk of seeing their reimbursement level lower to 30%, from a current level set at 35% (see France: 17 September 2010: Additional Reimbursement Cuts Foreseen in France for 2011). Cuts in reimbursement level will require higher contribution from patients and/or complementary insurance, whose participation to healthcare cost accounted for 24.3 billion euro in 2009, or 13.8% of total healthcare costs against 13.7% in 2008. Complementary insurers have, ahead of the presentation of the Law Project on Social Security Financing, PLFSS 2011, announced an increase in private insurance contributions of between 8-10%. Further reimbursement cuts are set to directly affect people insured as private insurers are willing to stop "blind reimbursement" by amending contracts related to the reimbursement of drugs (see France: 18 August 2010: France's Private Insurers Plan Own Reimbursement System Based on SMR Rating).