FRANCE TO SCALE BACK CONTROVERSIAL DRUG TAX

In the face of intensive government efforts to improve healthcare finances, French legislators have opted to reduce the forthcoming sales tax on pharmaceuticals from 1.96% to 1.76%. The new level is a compromise on earlier plans by Senators opposed to the plans to set the rate at 1.5%.

Although the government could still opt to force the tax through the National Assembly at its preferred 1.96% rate, observers claim such a move would invite added political tensions. Unsurprisingly, the new levy has not been popular with drug firms, while officials hope that the measure will help reverse France's traditional and costly penchant for excessive prescription.

Recent efforts to reverse healthcare deficits have illustrated the government's concern over the ballooning cost of state provision. Cost containment policies outlined to date have included plans to cut annual drug spending by EUR2.1bn (US$1.21bn), a new round of price cuts, increased generic prescribing and a 2.2% cap on annual healthcare reimbursement growth.