Global Insight Perspective | |
Significance | The French government has announced plans to cut the prices of all erythropoietins (EPOs) products by 9% in the immediate future. |
Implications | The move is estimated to save 42 million euro (US$58.2 million) in reimbursement costs during 2008, and is part of ongoing efforts to curb spiralling healthcare expenditure in France. However, it also appears timed to take advantage of reimbursement cuts on EPOs in the United States, where safety concerns have seen a recent slump in sales. |
Outlook | With a precedent having now been set, the possibility remains that European countries, using France as a reference in price setting, could follow its lead and impose price cuts of their own. However, these countries are not all facing a healthcare deficit crisis the size of that in France, and EPO efficacy data will play a role in companies fighting to maintain price levels elsewhere in Europe. |
Pharmaceutical regulators in France have informed producers of erythropoietins (EPOs) that a 9% price cut is to be enforced on all products in the drug class in the very near future. EPOs are used to treat anaemia in patients with chronic kidney failure or who are undergoing chemotherapy. The price cut, agreed by the government's CEPS pharmacoeconomics committee, is the latest manifestation of a new Health Ministry strategy to make targeted price reductions on pharmaceuticals deemed simultaneously the most expensive and the most frequently purchased (see France: 10 July 2007: Latest French Healthcare Savings Plan to Hit Prices of Costly Top-Selling Drugs). EPOs are amongst the most commonly prescribed drugs in France, with Aranesp (darbepoetin alfa; made by U.S. biotech Amgen) holding the number-five spot on the French drug market in terms of national sales in 2006 and NeoRecormon (epoetin beta), produced by Swiss pharma company Roche, falling within the top 20. The other brand-name EPO drug sold in France is Eprex (epoetin alfa), made by U.S. firm Johnson & Johnson.
According to French newspaper Les Echos, CEPS is hoping that the across-the-board price cut on EPOs will result in total savings of 42 million euro (US$58.2 million) for the Social Security system, specifically the CNAM public health insurance fund, during 2008. If the price cut had not been implemented, CEPS estimates that total reimbursement costs for the three EPOs would have reached some 480 million euro. The cuts have not yet come into force, however, and CEPS has not publicly revealed a date. None of the companies affected by the decision have agreed to comment until the cut comes into effect.
The EPO price cut in France will likely bring to an abrupt halt the drug-makers' celebrations brought on by yesterday's U.S. FDA decision not to impose dosing restrictions on EPOs used in kidney-failure patients (see United States: 12 September 2007: FDA Advisors Spare EPOs; Race Card is Played). Data from clinical trials released at the start of 2007, suggesting a link between EPO use and adverse cardiac events or indeed the growth of cancerous tumours in chemotherapy patients, has led to a year of misery for EPO-makers in the United States, with severe warnings slapped on drug boxes and limitations imposed on reimbursement (see United States: 31 July 2007: CMS Relaxes Proposed Constraints on EPO Reimbursement and United States: 11 May 2007: FDA Advisory Committee Recommends Expansion of Warnings on EPO Labelling). The persistent uncertainty over EPOs has hit Amgen the hardest, as it depends on EPO sales for the majority of its U.S. revenue (see United States: 27 July 2007: Amgen's U.S. Sales Devastated by EPO Safety Scare). Until now, however, the regulatory constraints on EPO use have been restricted to the U.S. market, with European sales of Aranesp showing strong growth during the first six months of the year.
Outlook and Implications
European Reference Pricing Matrix: France | |
Formal | Informal |
Austria | Belgium |
Source: Global Insight | |
France has become the first European country to target EPOs for cost-containment purposes. The move is an astute one by the French government, coming at just the right time to ride the wave of regulatory reform in the United States, and tying it in with France's own urgent need to scale back on spiralling healthcare spending and reduce its Social Security deficit. Although the high cost of EPO products for the French reimbursement system is not doubted, their high consumption levels in the country are in stark contrast to press reports released earlier this year suggesting that anaemia drugs are prescribed in doses twice as high for U.S. dialysis patients as for their counterparts in Europe.
If EPOs are gaining in popularity elsewhere in Europe as well—which seems likely, given Amgen's strong Aranesp figures from Europe during the first half of this year—it is conceivable that other European countries may follow France's lead in imposing price cuts on this therapeutic class. This is particularly likely in the 10 countries that officially use France as a reference country in deciding drug prices. The one factor that could spare EPOs from this fate is their efficacy in treating anaemia, and EPO-makers are likely to step up efforts to demonstrate their drugs' effectiveness in European populations over the coming months.