Market Access Outlook for France

Editor's Note: This article originally appeared in the July 2015 issue of Pharmaceutical Technology Europe.

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In France, the pricing and reimbursement landscape is certainly changing. Take for instance the case of Gilead’s Hepatitis C blockbuster, Sovaldi. According to clinical trial data, 90% of patients for whom this drug is indicated for are for all intents and purposes cured upon treatment completion. A few years ago, Sovaldi would have likely been awarded a premium price in France, which has traditionally only considered the therapeutic benefit of new drugs to inform pricing decisions. It would have also entered the French market at a high price point relative to other European Union Five markets, including the cost-conscientious United Kingdom.

However, the need for the government to continue providing universal healthcare coverage to an aging population, along with increasing drug prices and shrinking budgets, recently drove the country to introduce pharmacoeconomic analysis as part of its pricing process. Due in part to a more economically focused health technology assessment process, in late 2014, the French government was able to get Sovaldi at the lowest list price in Europe. The government also secured a volume-based tax and performance-based discount in exchange for 100% reimbursement. Based on the limited number of pharmacoeconomic analyses that have been published to date, manufacturers can expect to face tougher negotiations with the pricing committee, with a final price potentially below expectations.

In addition to pricing pressures, manufacturers face other challenges in France including the government’s mounting focus on driving the use of generic drugs and biosimilars, which may restrict market growth. This article explores some of the recent developments in the French pharmaceutical market, identifies pricing and reimbursement challenges, and discusses strategies manufacturers should consider for sustainable success

Healthcare spending regulation in France
As in most other developed markets, budget and cost control have been key issues in France. The country’s compulsory and uniform health insurance scheme has faced large deficits over the past 20 years. Economic downturns and the growing healthcare needs of an aging population have only amplified the government’s focus on driving down healthcare costs to ensure sustainability.

Successive reforms have led to a decrease in government-sponsored reimbursement rates for select populations and/or types of care, leaving some patients with higher copayments and coinsurance. While more than 90% of the country’s population has supplemental health insurance, reimbursement of copayments through private insurers has recently been discontinued for certain types of prescription drugs, doctor visits, and ambulance transport (1, 2).

Decreased reimbursement is just one mechanism through which healthcare spending has been regulated. Other mechanisms include a reduction in the number of acute-care hospital beds, the removal of more than 600 drugs from public reimbursement over the past several years, the monitoring and sanctioning of medical practitioners for prescribing too many drugs, changes to its health technology assessment (HTA) process, and promoting uptake of generic and over-the-counter medicines (3). The French Government shows no sign of slowing down its health reform efforts, as it hopes to make €10 billion in additional cuts over the next three years (3).

The French pharmaceutical market-Overview, key trends, and developmentsPricing and reimbursement in France. Reimbursement for pharmaceuticals is determined primarily at the national level. Following market authorization from the European Medicines Agency (EMA), a drug is assessed by the independent health authority, Haute Autorité de Santé (HAS).

In France, HTAs have traditionally only considered the therapeutic benefit of new drugs to inform pricing and reimbursement decisions. Consequently, the key requirement for obtaining maximum reimbursement and a premium price has historically been innovation. However, since the formal introduction of drug cost-effectiveness evaluation in October 2013, therapeutic benefit remains a prerequisite for optimal market access but is no longer sufficient on its own.

HTAs still begin with determination of a product’s “medical benefit” (SMR--Service Médical Rendu) based on the following criteria--efficacy and safety; existence or absence of therapeutic alternatives; severity of the disease; treatment type, specifically preventative, curative or symptomatic; and public health impact.

In a separate, but concurrent process, a new product is also measured against a comparator drug to determine the “improvement of medical benefit” (ASMR-Amélioration du Service Médical Rendu). In France, the method for assigning a comparator is less rigidly defined than in other countries. For instance, in Germany, the comparator is defined by the government, while in France, the manufacturer sets the comparator but must provide justification (4). The ASMR rating, from I (superior) to V (inferior), is generally clearly correlated to a relatively narrow range of price premiums or discounts.

Nonetheless, as highlighted above, in late 2013, the Committee for Economic Evaluation and Public Health (CEESP), a separate group under HAS, was mandated to also consider pharmacoeconomic evidence for new technologies that claim a high ASMR (I-III) and that are expected to have sales in excess of €20 million. By the end of 2014, the CEESP had completed 12 economic evaluations, four of which have been made publically available (5). These evaluations include cost-effectiveness/cost-utility analyses, health economic modelling, and sensitivity/scenario analysis, all of which feed directly into the decision-making process of the pricing committee (6).

While guidelines used for economic assessments in other countries such as the UK are descriptive, detailed, and prescriptive, the ones published by HAS are prominently non-exhaustive and non-definitive, leaving researchers with more flexibility to conduct these evaluations (7). One aspect of the pharmacoeconomic evaluation that remains quite unclear is the financial threshold HAS deems to be acceptable when looking at the conclusions of CEESP’s analyses. Currently, there is no established threshold in terms of incremental cost per quality-adjusted life year (QALY) or per life-year gained.

Potential future changes to the pricing and reimbursement process. Despite the recent introduction of pharmacoeconomic analyses, innovation and clinical effectiveness remain the sole determinants of product adoption in France. However, as the government continues to explore mechanisms for reducing healthcare expenditures and increasing healthcare value, manufacturers should expect discussions around future changes to the pricing and reimbursement process to continue. For instance, in a recent report, the General Inspectorate of Social Affairs highlights the introduction of economic evaluations into the pricing process and discusses how cost effectiveness analyses could also be considered in national coverage decisions and in defining specific reimbursement rates as seen in other countries like the UK (8). With the commission currently finding it difficult to justify the use of a fixed threshold to refuse a new product, a dramatic shift is unlikely in the near future but remains a possibility over time.

Beyond the role of cost effectiveness analyses, changes to the broader pricing and reimbursement system are also being considered. In 2012, the HAS proposed to replace SMR and ASMR by a single index called the Relative Therapeutic Index (ITR), a new assessment tool which was to place greater emphasis on comparator and clinical endpoint relevance as well as on the validity of studies aimed to demonstrate superiority and non-inferiority (9). While the ITR determination process failed to gain enough traction among policymakers to lead to changes, the government continues to explore new, stricter methods of deciding on reimbursement rates and pricing. In fact, the French Ministry of Health has reportedly commissioned a work group to review current modalities for drug assessments (10).

Use of generic drugs. France has historically been a strong market for branded drugs. In 2008, generic drugs accounted for only 21.7% of the pharmaceutical market in terms of volume. As of 2013, the rate climbed to 30.2%, largely due to measures introduced to stimulate generic prescription by physicians, generic substitution by pharmacists, and generic acceptance by patients (11).

Generic-drug prescribing in France, however, still lags behind other countries. To address this issue, France’s health minister, Marisol Touraine, presented a national plan to increase generic prescription by five percentage points by removing “the remaining obstacles to the use of generic drugs for all situations where such use is possible” (12). Specific elements of this plan include a national advertising campaign to boost public confidence, the provision of additional payments to physicians and pharmacists linked to generic-drug prescription, mandates for hospitals to comply with a generic prescribing rate, and interventions to monitor physicians’ markings of prescriptions as non-substitutable.

With biologicals representing more than 25% of spending on drugs in France, legislation has also focused on promoting biosimilars as a means of reducing expenditures. In 2014, France became the first European country to formally allow substitution of biosimilars under certain conditions (13). Since 2007, the French market has not necessarily been a leader in biosimilar penetration relative to other EU countries, but volume in terms of sales has consistently increased each year. The recent launch of Celltrion’s Remisura, the world’s first biosimilar monoclonal antibody indicated for multiple chronic diseases, taken together with looser regulations on how biosimilars can be used, have many feeling optimistic about the cost-savings potential of these follow-on biologics moving forward.

Implications for manufacturers 
The French government remains committed to reducing growth in healthcare costs as evidenced by recent legislation and the introduction of cost-effectiveness evaluations in pricing decisions of select new products. While the country’s pharmaceutical industry has long been one of the biggest in both Europe and the world, these cost-containment and other measures have serious implications for manufacturers and their go-to-market strategy. The market is forecast to grow at a tepid compound annual growth rate (CAGR) of 0.7% from US$46.2 billion in 2014 to US$48.2 billion by 2020 (14).

Some manufacturers may prefer to wait and see if France adopts more stringent pricing and reimbursement policies for new therapeutic products--either through more rigorous clinical effectiveness requirements or through the use of cost-effectiveness analysis to guide coverage decisions--before changing their development and commercial strategies. However, global markets, including France, are already showing clear signs that incremental innovations will be closely scrutinized and that unless there is clearly demonstrated value, new products are unlikely to command premium pricing. Even doing so may not be enough to protect products from additional scrutiny over price and access restrictions, as seen with Sovaldi.

With generic drug use expected to rise and as “generics as standard-of-care” settles in, biopharmaceutical companies will need a higher degree of clinical and economic differentiation to be successful (14). Business models need to shift from being product-centric to patient centric (15). Clinical trials must focus on endpoints that matter to patients, their caregivers and their families, as opposed to surrogate endpoints that are not validated.

The message manufacturers are delivering to key stakeholders also needs to change. Large data packages and exhaustive global value dossiers deliver much-needed evidence but do not make a compelling case in isolation. “What is your technology’s benefit to the patient population and other stakeholders in that particular market?” This question needs to be front and center of all discussions. Manufacturers that understand specific pain points can design products or services that address these issues and package those benefits into meaningful value stories.

While product innovation remains the key determinant of coverage in France, innovative pricing mechanisms, such as risk sharing, outcomes-based contracting and managed entry agreements, are becoming more important for optimal pricing. This trend is seen in other countries as well (16). In fact, Celgene recently committed to the French Government on the effectiveness of their multiple myeloma drug Imnovid in exchange for a higher price (17). The agreement required Celgene to build a registry for collecting real-world efficacy and safety data. Discounts and price volume agreements have been used in this market for several years; however, the growing focus on value has created a greater appetite among decision makers for more productive sharing of risk with manufacturers. Here, understanding the economic and clinical value delivered by a given product is crucial in determining whether a risk-based agreement is the right strategy, and if so, how an arrangement should be structured.

Acknowledgement
The author would like to thank Dr. Marc Bardou for his contributions to this article.

References
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About the author
Michael J. Kuchenreuther, PhD is a research analyst for Numerof & Associates.

Article Details Pharmaceutical Technology Europe
Vol. 27, Issue 7
Pages: 6-10
Citation: When referring to this article, please cite it as M. Kuchenreuther, "Value-Based Healthcare in the: United Kingdom," Pharmaceutical Technology Europe 27 (7) 6-10 (2015).