France’s 2025 social security financing bill (PLFSS) that would have enforced €1bn ($1.06bn) of price cuts on medicines has been rejected after a vote of no confidence toppled the government on 4 December. Critics of the bill said it would lead to greater austerity and a weakening of social safety nets.
Though the bill contained unpopular measures, it is unlikely that what replaces it will be any more favorable to industry, said Alexandre Regniault, a partner at Simmons & Simmons law firm and vice president at France Biotech.
The PLFSS
The social security financing bill, the PLFSS, aimed to impose price cuts amounting to €1.2bn on reimbursed health care products, €1bn of which were intended for medicines and €0.2bn for medical devices.
It would also have introduced changes to the way rebates paid by companies are calculated under the “safeguard clause” to prevent overspending on drugs. Under the bill, the rebate would have been based on actual spending on reimbursed medicines rather than on company sales.
No Confidence
The vote of no confidence came after French prime minister Michel Barnier tried to force the bill through the parliamentary process without allowing the lower house of the French parliament, the National Assembly, to vote on it. The National Assembly had already rejected the bill on 12 November.
The vote meant that the National Assembly, rejected the PLFSS, and by association the PLF, a bill setting out the 2025 budget. It also led to the resignation of Barnier on 5 December, though he remains in place until a new government can be formed.
Emmanuel Macron, the French president, will have to form a new government. Barnier was chosen to head a minority government in September following a snap election in June that resulted in a hung parliament.
The next steps for the PLFSS and the PLF are unclear and depend on when Macron can form the new government, said Regniault.
If Macron can put in place a new prime minister and full government by the end of the year, the new government could present a revised PLFSS and PLF. However, the problem with this is that both bills would have to be published before 2025, commented Regniault. A fast track parliamentary process could ensure the bills are passed, but there is much uncertainty surrounding the use of this mechanism. He added that it would also run the risk of law makers calling a second vote of no confidence.
If no PLFSS is published by the end of December, the social security system can continue to function as normal with the government collecting premiums from contributors who pay into the systems. A legislative mechanism also exists that could allow the government to continue collecting taxes until a new PLF is voted through.
Uncertainty
“The uncertainty is absolutely huge for companies, although not catastrophic as even without a new PLFSS, the system will continue working and reimbursing the same drugs at the same price,” said Regniault.
However, despite the unpopularity of the PLFSS, whatever replaces it is unlikely to be any more industry friendly, he said. Parliament has strong representation from the far left and far right, neither of which are sympathetic to industry, he said. “The two extremes are not working towards a balanced budget, which is not the main concern of their voters.”
He added that France is in a very difficult financial position and will have to find some €40bn to try and reduce the country’s deficit.
Leem, the French R&D-based pharmaceutical industry group, said it was too soon to comment on the consequences for industry and what might happen next. However, the group has been outspoken about the bill and its potential impact.
“At a time when public finances are suffering a critical deterioration, the French government is once again, in alarming haste, targeting the pharmaceutical sector, which already has one of the highest tax burdens in Europe,” said a statement from Leem published on 18 November after the National Assembly initially rejected the bill.
