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Focus on Regulation

The French Competition Authority Wants to Lower Prices of Pharmaceuticals

On November 21, 2017, the French Competition Authority (“FCA”) announced the launch of a new sector inquiry relating to the functioning of competition in the pharmaceutical sector.

This inquiry will lead the FCA to make recommendations to the French President Macron and the government on how to increase competition and lower prices of pharmaceuticals.

The FCA certainly hopes that President Macron will implement its recommendations, by legislation if necessary, as he has done in the past in other economic sectors when he was Minister for the Economy.

In the decision initiating the inquiry, the FCA mentions that it will review and make recommendations on the following issues:

How to decrease prices offered by pharmaceutical companies

The FCA will focus on:

  • Reviewing the criteria applied by the French Committee of Health Products (Comité économique des produits de santé) and pharmaceutical companies to set the prices of reimbursable drugs. The FCA will, in particular, assess the possibility of setting the prices by comparison with the prices of other originators and generics belonging to the same therapeutic class;
  • Enhancing the buying-power of hospitals to lower the prices of the most innovative and expensive drugs (listed in the so-called “liste en sus”); and
  • Increasing the buying-power of wholesalers, pharmaceutical purchasing organizations and pharmacists to lower the prices of drugs sold to pharmacists, in a context where pharmaceutical companies increasingly develop direct sales to pharmacists.

How to decrease prices offered by pharmacists

The FCA will focus on:

  • Authorizing retail chains to sell over-the-counter pharmaceuticals;
  • Increasing competition between pharmacists by facilitating online sales and encouraging the creation of large groups of pharmacists; and
  • Passing on to consumers the discounts granted by suppliers of generics to pharmacists.

The FCA will also assess how to increase competition in the medical biology sector.

The FCA will send numerous requests for information to pharmaceutical companies, wholesalers, pharmacists’ associations, hospitals and health agencies in the coming months. It probably currently aims at issuing its opinion by the end of 2018.