France Healthcare Market Regulatory and Reimbursement Landscape

Date: 22-May-2013
France has a Mature Healthcare Market as it Offers Universal Public Access to Healthcare Facilities and Insurance. The Increasing Disease Burden and the Launch of New Products will Drive the Growth of the Pharmaceutical Market; however, Increasing Focus on Generics as a Means of Reducing Healthcare Expenditure will Balance out the Quantum of Growth.
The French pharmaceutical market was valued at $44.8 billion in 2007 and an estimated $45.3 billion in 2012. The pharmaceutical market is expected to grow at a Compound Annual Growth Rate (CAGR) of 1.5%, from approximately $45.3 billion in 2012 to $47.3 billion in 2015. The increasing elderly population and its associated disease burden combined with the launch of novel medicines have been fueling market growth. The market in 2020 is expected to be worth $51 billion. In 2011, it ranked second only to Germany in terms of pharmaceutical production in Europe. The segments that dominated the market were cardiovascular drugs, Central Nervous System (CNS) drugs, gastrointestinal drugs, and anticancer drugs. In 2010, there were a total of 1,419 authorized medicinal products, of which 647 were generic medicines (ANSM, 2010b). In order to reduce healthcare expenditure, the government is focusing on the use of generics as a cost-containment tool. Furthermore, cancer drugs usually receive fast-track approval from the National Security Agency of Medicines and Health Products (Agence Nationale de Sécurité du Médicament et des produits de santé, ANSM) and expensive medicines are paid for through the central government’s budget. In 2007, generic drugs accounted for 9.3% of the pharmaceutical market (in terms of value) which increased to 11.4% in 2012 (ANSM, 2012b). On the other hand, increasing generic substitution combined with periodic price cuts were barriers to the growth of the pharmaceutical market.


The French medical device market was valued at $12.1 billion in 2007 and is projected to grow at a CAGR of 4.5% from $14.7 billion in 2012 to $20.8 billion in 2020. The major segments in 2012 were In Vitro Diagnostics (IVD) (15.7%), ophthalmic devices (11.1%), cardiovascular devices (10.2%), and orthopedic devices (7.6%). The main driving factors are increasing awareness regarding early disease detection and diagnosis, and advances in medical technology.


A Transparent and Efficient Regulatory System Combined with Organizational Reforms in the National Regulatory Agency will Attract the Trust of the Pharmaceutical and Medical Device Companies and Positively Influence the French Healthcare Market.


In France, the ANSM is the main regulatory authority for pharmaceutical products and medical devices. It came into existence on May 1, 2012 when it replaced the former regulatory authority, the French Agency for the Safety of Health Products (Agence Française de Sécurité Sanitaire des Produits de Santé, AFSSAPS). Its scope has been extended to include monitoring authorized medicines, promoting quick access to innovative drugs, and promoting academic research on medicine safety.


The ANSM authorizes product approvals under the national procedure or community procedure through the European Medicines Agency (EMA) and issues licenses for manufacturing, imports, exports, and clinical trials. Approval for new drugs or medical devices requires the execution of Good Manufacturing Practice (GMP) and compliance reviews by the ANSM. The ANSM also plays a crucial role in assessing the benefits and risks associated with the safe use of health products. It maintains transparency by publishing committee proceedings, agendas, minutes and all drug withdrawals online. Legally, assigning broad responsibility is expected to increase the industry’s trust in the regulatory system and provide professionals and the public with information which will facilitate decision-making regarding any new Marketing Authorizations (MAs).


The French Healthcare System Offers Universal Insurance Coverage, however the Economic Crisis and High Public Debt are Forcing the Government to Cut Healthcare Reimbursement.


The French healthcare system is well-developed and offers universal healthcare coverage to all citizens. The public insurance system is built on the principle that everyone must contribute to the health insurance scheme according to their income and receive care according to their needs, regardless of their place of residence. By 2011, approximately 100% of the population was covered under Statutory Health Insurance (SHI). SHI covers a broad range of basic medical services such as hospital care, rehabilitation or physiotherapy, ambulatory care and diagnostic services (Lopes et al., 2011). Healthcare expenditure is increasing due to the large and growing elderly population. In order to reduce the healthcare burden the government introduces reforms periodically. Cost-cutting measures in 2011 included drug price cuts and the strengthening of generic provision. In 2011, the government reduced the reimbursement rate for non-serious disease to 30%, down from 35% in 2010 (PPRI, 2012).


The market for complementary Private Health Insurance (PHI) also is well-developed. PHI mainly covers user charges that are not eligible for reimbursement by SHI, such as co-payments for psychologist or dietician consultations. In 2012, SHI covered approximately 95% of the population (Thomson et al., 2012).


Government Healthcare Policies and Administrative Reforms Contribute to the Success of the French Healthcare System


In 1996, as an administrative reform, the government created Regional Health Agencies (Agences Régionales de Santé, ARS) to increase the state’s role in the healthcare system and to reduce the excess acute-care capacity in order to control healthcare expenditure. In order to improve global competitiveness, the government is focusing on reducing the disease burden, especially that of the elderly population. Despite the high healthcare burden, the government has built up various policies to improve health outcomes and patient quality of life, such as:
In 2007, the government introduced a smoking ban prohibiting smoking in public places such as airports, railway stations, schools and hospitals.
In 2008, the Ministry of Social Affairs and Health (Ministère des Affaires Sociales et de la Santé, MoSAH) introduced a national policy for Alzheimer’s disease and other similar disorders. The main objectives are to enable patients and their families to choose support at home, to improve access to diagnosis and care pathways, and to improve support to care providers.
In 2010, MoSAH implemented the Obesity Plan 2010–2013, a policy to take preventive measures against the increasing incidence of obesity.
On November 18, 2011, MoSAH launched the National Antibiotic Plan 2011–2016, of which the main aim is to understand the threats to antibiotics and to promote the rational use of antibiotics.


A high public debt, budgetary deficit and increasing unemployment rate must be addressed to revitalize economic growth of France.


France was the world’s fifth largest economy in 2011 with a Gross Domestic Product (GDP) of $2.8 trillion, below the US, China, Japan and Germany (The World Bank, 2013e). Agricultural resources, a large industrial base, and a skilled workforce are the main contributors, although the economic situation is not devoid of challenges. After negative GDP growth of 2.6% in 2009, it rebounded to 1.5% in 2010 and 1.7% in 2011 (IMF, 2012). Subsequently, in 2011, the eurozone economy was affected by the global slowdown and high debt.


France’s GDP growth rate declined significantly to a negative figure of 3% in Q4 2012 (INSEE, 2013a). Government net debt was 83.1% of GDP in 2012, and is expected to increase to 84.9% in 2013 (IMF, 2012). Due to Eurozone crisis and thereby decline in industrial activity, the unemployment rate rose significantly from 7.4% in 2008 to 9.9% of the labor force in Q3 of 2012. On November 20, 2012, the ratings agency Moody’s downgraded France from AAA to AA1 due to the country’s lack of competitiveness, high unemployment, and level of public debt. Similarly, on November 28, 2012 Fitch raised the concern that the France would lose its sovereign rating of AAA in 2013 if it failed to implement austerity measures to reduce debt. These multiple downgrading have increased economic uncertainty and reduced investor confidence, which may impact negatively on foreign investment. Despite these setbacks, the government remains committed to decreasing the budget deficit from 4.5% in 2012 to 3% of GDP by 2013 in order to achieve the EU Stability Pact ceiling of 3% (MoF, 2012). On April 9, 2013, the Bank of France states that the economy is expected to report growth of 0.1% in the Q1 of 2013, which is slight higher than the previous quarter.


However, this low GDP growth combined with widening trade deficit in Q1 of 2013, may lead government to overlook its budget deficit targets in 2013 (Ellyatt, 2013).


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