26 December 2023 marked the enactment of the annual French Social Security Financing Bill for 2024 (LFSS). As every year, the LFSS introduces a number of changes which could have a significant impact on companies in the life sciences sector. This year’s LFSS includes amongst other, new measures to fight shortages, a reduction of the maximum contribution payable under the safeguard clause for certain medicines and a new clawback mechanism for manufacturers of medical devices whose packaging has a negative impact on the environment.
Although the French government decided to bypass the French National Assembly to speed up the enactment of the LFSS, no measure has caused a major outcry. However, experts and the health industry have raised concerns regarding some of its measures.
A new LFSS is introduced annually in France to set the budgetary provisions for the national social security system. The LFSS determines the general conditions for balancing the annual finances and sets expenditure targets for the upcoming year. The LFSS is a structural element of the French reimbursed health products’ market dynamics because it defines the level of growth ‘acceptable’ to the State in respect of expenditure of health products, the overall level of savings required, and the measures needed to deliver the level of savings.
From health companies’ perspective, the LFSS is a channel for dialogue with the legislator. It is in practice the only opportunity for public discussion of health products’ policy in France.
Some of the most important measures of this year’s LFSS expected to have an impact on the health products market include the following:
- Establishment of an obligation for marketing authorisation holders of medicines of major therapeutic interest (MMTI) to find a successor to take over the MMTI commercialisation if there are insufficient available therapeutic alternatives to meet patients’ need on a permanent basis. Failure to comply results in specific constraints and significant criminal and financial penalties.
- Possibility for the Minister of Health to impose mandatory unit dispensing and the use of conditional medical prescriptions in the event of shortages of certain medicines.
- Reduction of the maximum contribution payable under the safeguard clause for generic medicines and brand-name medicines whose amount is based on the cost of the generic (so-called TRF) to 2% of the turnover.
- Introduction of a clawback which will be due to the French health insurance by manufacturers of medical devices whose packaging is unsuitable or generates waste, and therefore has a particularly negative environmental impact.
Many of these measures require implementing texts. Once these are available, we will have a better grasp of the impact the new measures will have. It is important to monitor these developments closely, especially in light of the potential upcoming changes to the EU pharmaceutical legislation which are also aimed at limiting vulnerabilities in the supply chain for the most sensitive medicines. For a summary of the regulations introduced by the LFSS click here.