Pharmaceutical Price and Spending Controls in France: Lessons for the United States

Forthcoming, International Journal of Health Services

Suffolk University Law School Research Paper Forthcoming

19 Pages Posted: 17 Jan 2020

See all articles by Marc A. Rodwin

Marc A. Rodwin

Suffolk University Law School; Harvard University - Edmond J. Safra Center for Ethics

Date Written: January 2019

Abstract

As U.S. policymakers consider strategies to control pharmaceutical spending they can learn from France, which has stopped drug spending growth without slowing access to innovative medicines. France determines the comparative therapeutic value of new drugs. Insurance pays more for drugs superior to their comparator and the same or less for drugs offering modest or no improvement. Contracts require discounts for high sales volume and prohibit price increases. In addition, payers reduce prices of older drugs. Furthermore, Parliament sets an insurance pharmaceutical spending budget, and manufacturers pay clawbacks when spending exceeds the budget. France offers these lessons: setting prices based on added therapeutic value is a principled means to cap new drug prices and provides incentives for manufacturers to negotiate prices. Restricting formularies can help lower prices. Insurers can link prices and quantity to control spending and improper uses. Insurers can use global budgets to control spending and negotiate prices. Contracts can prevent manufacturers from raising prices after launch. External reference pricing can reduce price discrimination but is difficult to implement. Nations can ensure rapid access to new drugs while controlling prices. Regulation and competition are complementary strategies to control drug spending.

Keywords: pharmaceutical, HTA, health technology assessment, cost control, price controls, budgets

Suggested Citation

Rodwin, Marc A., Pharmaceutical Price and Spending Controls in France: Lessons for the United States (January 2019). Forthcoming, International Journal of Health Services, Suffolk University Law School Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3520008

Marc A. Rodwin (Contact Author)

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