IHS Global Insight Perspective | |
Significance | A new 10-20% reimbursement rate has been officially added to the three existing reimbursement rates (100%, 65% and 35%). Drugs of low therapeutic value will from April be entitled to this new reimbursement level. |
Implications | This cut in reimbursement rate could potentially bring savings of up to 150 million euro for the French public insurer as 110 drugs of weak SMR rating will be targeted in 2010. |
Outlook | The French government is banking once again on cost-containment measures to curb healthcare spending and transfer healthcare costs to complementary health insurers and patients through increased co-payments. |
Reimbursement Cuts for over 100 Drugs
In France, drugs are assessed for reimbursement by the Transparency Commission of France's Higher Authority on Healthcare (Haute Authorite de Sante, HAS), which assigned a therapeutic value rating, known as SMR (Service Médical Rendu) rating, to each drug when carrying out its recommendation. Each grade—major, important, moderate or weak—corresponds to a specific level of reimbursement. The future level of reimbursement at 10-20%, unveiled in the French annual Law Project on Social Security Financing (PLFSS), will be valid in three months' time. From April 2010, each drug of low therapeutic value—weak SMR—shall be added to the French reimbursement list and entitled to a 10-20% reimbursement rate. Until now, drugs of low therapeutic value as well as drugs with a moderate therapeutic value rating were entitled to a 35% reimbursement rate under the French public insurance. The specific levels of reimbursement are now classified as follows:
- Major or Important: Drug is added to the reimbursement list and is reimbursed at 65%;
- Moderate: Drug is added to the list and is reimbursed at 35%;
- Weak: Drug is added to the list and is reimbursed at 10-20%;
- No SMR rating: Drug is excluded from the positive reimbursement list.
Roselyne Bachelot, the French Minister of Health, has already revealed that 110 drugs of low therapeutic value and initially reimbursed at 35% will be targeted by reimbursement cuts in 2010.
Example of Targeted Drugs | |||
Brand Name | Active Ingredient | Manufacturer | SMR Rating |
Zovirax Cream | Acyclovir | GlaxoSmithKline (U.K.) | Weak |
Hexomedine | Hexamidine | Sanofi-Aventis (France) | Weak |
Eryfluid | Erythromycine | Pierre Fabre (France) | Weak |
Coltramyl | Thiocolchicoside | Sanofi-Aventis (France) | Weak |
Nifluril cream | Niflumic Acid | Bristol Myers Squibb (U.S.) | Weak |
Equanil | Meprobamate | Sanofi-Aventis (France) | Weak |
Budget 2010
The upcoming reimbursement cuts come as no surprise knowing the French deficit is expected to reach a record 30.6 billion euro in 2010. The decline in France's economy, a direct consequence of the economic crisis, and the consecutive decrease in employment rates have led to a contraction of revenues in 2009. The government, which has pledged not to raise national insurance contributions, is banking once again on cost-containment measures to curb healthcare spending. Among the targeted measures announced for 2010, the reimbursement cuts of 110 drugs and a 2 euro increase in daily hospital fees should help provide significant savings, which altogether are expected to reach 3 billion euro in 2010 (see France: 28 September 2009: French Government Puts Up Daily Hospital Fees).
Outlook and Implications
Non-profit mutual insurers have already announced a 5% jump in insurers' contributions directly linked to recent reforms, including reimbursement cuts and daily hospital fees increases. Measures introduced will transfer the healthcare cost from the public health insurance towards complementary insurers and patients. The cost of the 150-million-euro savings achieved through reimbursement cuts will therefore be borne by patients through increasing out-of-pocket payments and/or private contributions. Mutualité Française—the organisation for France's complementary health insurers—has said most complementary insurers will refuse to cover the cost of drugs entitled to a 15% reimbursement rate.
The rise in private insurance contributions is not only linked to the government's cost-containment measures. To the 3% standard annual rise induced by growing healthcare spending, must be added the cost of the influenza A/H1N1 (swine flu) vaccination campaign (see France: 11 December 2009: Private Contributions on Rise in France as Non-Profit Mutual Insurers Bear Swine Flu Cost). Commercial health insurers and non-profit mutual were required to help finance the effort against the influenza A/H1N1 pandemic through exceptional contributions and will increase contributions as a result.
Meanwhile, lower reimbursement levels are likely to be the norm in coming years for products of low therapeutic value as the Transparency Commission of France's HAS is now officially authorised to recommend a reimbursement rate between 10 and 20%, increasing co-payments for the French population.