October 10, 2005

As part of France's increasingly desperate efforts to curb healthcare spending, the government is to introduce a 2.2% limit on healthcare reimbursement growth for the period 20072009. It is hoped that the measure will cut the country's overall social security deficit to EUR1.8bn (US$2.18bn) by 2009, from the current EUR11.9bn (US$14.44bn). In the same period, it is also hoped that approximately EUR600mn (US$727.93mn) will be cut from the health budget deficit.

The 2.2% growth level is based on the optimistic assumption that France's GDP will increase at a rate of 2.6% in the period 20072009. However, some industry observers calculate that despite these measures, the drug industry will still report a deficit of EUR1.8bn (US$2.18bn) in 2008 -- the year in which the government hopes health spending will break even.

Reimbursement is a very sensitive issue in France, and it is yet to be seen whether the new reforms -- which are currently at the draft legislation stage -- will be politically acceptable. Other recent cost-cutting reforms have included the creation of new health regulator, HAS, which will promote the "rational" use of medicines and evaluate current spending levels for pharmaceuticals.

In the first eight months of the year, the new agency has delivered 626 advisory reports on medicines, of which 255 re-evaluated the utility of 245 products. One of HAS' other primary tasks will be to examine and reform France's list of serious chronic illnesses, which have 7.2mn registered sufferers.