The French government has announced plans to save 860 million euros next year through price cuts on drugs and medical devices and increased measures to encourage the use of generics.

The price cuts are expected to save 500 million euros, while further savings are expected from a reduction in the reimbursement rate on medicines of “moderate” therapeutic value (Service Medical Rendu - SMR) from 35% to 30%. The moves form part of France’s newly-announced social security financing plans for 2011, which aim to save 2.4 billion euros overall and maintain health care spending growth for the year at no more than 2.9%, down from this year’s 3.0%.

In April, the government created a new 10%-20% reimbursement rate for drugs of “weak” SMR, in addition to the existing 100%, 65% and 35% levels, and announced that 110 drugs currently reimbursed at 35% would be assigned to the new, lower level.

Another significant move will be the removal next year of non-aggravated hypertension from the list of 30 chronic diseases for which around 10 million patients receive their treatments at 100% reimbursement. “The potential exclusion of least severe diseases from the scheme will be something to watch out for in coming years, even though it will be politically risky for the government,” say analysts at IHS Global Insight, commenting on the moves.

The 2011 social security funding plan also envisages savings of 550 million euros through a greater focus on general practice prescribing trends, aimed at reducing prescription volume and boosting generic prescribing.

In 2009, spending on medicines in France grew just 2.5% to 35.4 billion euros to account for 20.1% of total health care costs, which rose 3.3% to 175.7 billion euros, according to the public health insurer CNAM, which covers around 75.5% of national health care expenditures. Drug spending in 2008 had risen 2.7% while in 2007 it was up 3.8%, and last year’s lower growth rate was due to a number of factors, including a 2.6% price cut, volume growth stagnating at 5.2%, reductions in reimbursement rates and increased use of generics.

Last year, generics accounted for 12% of France’s reimbursable drug market, compared to 4.1% in 2002 when 64 therapeutic classes had included at least one generic product. In 2009, as a result of the government’s ongoing drive to increase substitution, 95 therapeutic classes out of a total of 354
included at least one generic, notes IHS Global Insight.