FRENCH HEALTH SPENDING STAGNATES AMID GOVERNMENT CUTS

French health spending increased only marginally in the first seven months of the year, growing 3.5% to reach EUR64.30bn (US$79.81bn), as government cost-containment measures began to take effect. The private sector accounted for EUR750mn (US$932.22mn) of this total. Meanwhile, hospital spending rose 5.7% with drug prescriptions increasing by just 3.7%.

The French government is continuing a series of tortuous healthcare reforms, with officials announcing plans to cut health spending by EUR3.5bn (US$4.35bn) by 2008. Measures have included encouraging the use of generic drugs as well as curtailing the traditional freedom of French patients to consult as many doctors as they wish. The list of longterm illnesses that qualify for 100% reimbursement is also being revised.

However, domestic drugmakers and many consumers have been bitterly opposed to the reforms. Pharmaceuticals currently account for around 19% of total health fund reimbursement in France, and the industry employs over 100,000 people. Meanwhile, consumers are reportedly concerned at their growing personal share in the burden of health costs. Currently, average drug prices in France are 15% lower than in the UK and Germany.

Industry observers expect growth in the French drug market to continue to stagnate, with drugmakers increasingly concentrating on exports. The exception is the generics market, which is likely to expand notably in the short term as government enthusiasm for the sector continues.