Key Benefits:
The Competition Council (Section 1),
Due to the letter dated October 14, 2003 Registered, on 15 October 2003, under number 03 /0071A, by which the Minister for the Economy, Finance and Industry referred the Competition Council to the Competition Council on the basis of Article L. 462-2 of the trade code of a request for an opinion On a draft decree on categories of prescription drugs and the sale of medicines to the public by certain health care institutions and amending the code of public health and the social security code;
Seen Directive 2001 /83/EC of the European Parliament and of the Council of 6 November 2001 establishing a Community code relating to medicinal products for human use;
In view of Act No. 2003-1199 of 18 December 2003 on the financing of social security for 2004 (in particular, Article 21 thereof);
Given the code of public health;
Given the code of Social security;
In view of Book IV of the Commercial Code on Freedom of Prices and Competition and Decree No. 2002-689 of 30 April 2002 laying down its conditions of application;
The rapporteur, the Deputy General Rapporteur and the Commissioner of the Government heard at the meeting of 17 December 2003,
Is of the opinion that The request made in the following sense:
I. -THE LEGAL FRAMEWORK FOR THE DRAFT ORDER
AND THE COMPETITION COUNCIL SAISINE
1. The draft decree submitted to the Competition Council consists of two largely independent parties. The first part reform the categories of medicinal products subject to restricted prescription, by adding two categories to the three existing. The second part of the text concerns hospital retrocession, i.e. the dispensation by a hospital pharmacy of medicinal products to ambulatory patients.
2. This particular circuit of distribution of medicinal products exists by Derogation from the common law. Article L. 5126-1 of the Public Health Code (PSC) states that " The activity of pharmacies for indoor use is limited to the particular use of the sick in the health or medico-social institutions where they were constituted [...]. The Act of 8 December 1992 (art. L. 5126-4 of the CSP) introduced the following derogation:
" In the interest of public health, the Minister responsible for health shall, by way of derogation from the provisions of Article L. 5126-1, lay down the list of medicinal products which certain health facilities, which have a pharmacy for internal use, are authorised For sale to the public, in detail and in accordance with the conditions laid down in Articles L. 5123-2 to L. 5123-4. The conditions of use and the transfer price of these medicinal products and sterile medical devices shall be agreed jointly by the Ministers responsible for the economy and finance, health and social security. "
3. Article L. 5126-14 of the CPMP provides that " The criteria according to which the list of medicinal products defined in Article L. 5126-4, their transfer price, and the choice of establishments authorised by the same article to be sold to the public are to be sold ' Are determined by decree in the Council of State. The second part of the text submitted in the opinion of the Competition Council is the implementing decree provided for in that article. Pending its release, the law of 8 December 1992 is not applicable and there is no list of retractable medicines. For certain medicines, circular letters from the Ministry of Health provide for the handover. For others, it takes place without the knowledge of the administration.
4. The second part of the draft decree has two parts. The first specifies the criteria for entry on the return list; the second relates to pricing and the assumption of responsibility for the health insurance of retractable medicines. This second part comprises, in particular, a provision which establishes, for medicinal products that hold market authorisation (AMM), a uniform sale price to the public. That provision justified the reference to the Council on the basis of Article L. 462-2 (3 °) of the trade code: '
' The Council shall be consulted by the Government on any draft regulatory text establishing a new regime having direct effect: [...] 3 ° to impose uniform practices on prices or conditions of sale. "
5. However, the Social Security Financing Act (LFSS) for 2004, adopted and published in the Official Journal of the French Republic of 19 December 2003, includes an article 21 which deals with the same subject, namely the fixing of the transfer price of the Retro-licenced drugs with an AMM. As Parliament amended the provisions of this Article, consistency with the draft decree was called into question. While the overall architecture of the device is the same in both texts, there are notable differences, in particular with regard to the procedure for regulating the transfer price and the organisation of negotiations between laboratories Pharmaceutical and the Economic Committee for Health Products (CEPS). The text of the decree will have to evolve to take account of the law passed. This notice takes these necessary changes into account.
II. -THE DRAFT ORDER SUBMITTED TO THE COUNCIL
A. -Two new categories of restricted
drugs
6. Article R. 5143-5-1 of the CSP states that:
" The marketing authorisation or the temporary authorisation for the use of a medicinal product may classify the medicinal product in one or more of the following restricted categories:
a) Drug reserved for hospital use (reservation Hospital);
b) Initial hospital prescription drug;
c) Drug requiring special supervision during treatment. "
7. The Thériaque database managed by the National Hospital Information Centre for Drug Information (CNHIM) identified 8,861 hospital specialties as of February 1, 2002, of which 2,047 are restricted prescription drugs. In this way, it is divided into the three existing categories: 1,778 in the hospital reserve, 191 hospital-based initial prescription drugs, and 78 drugs under special supervision.
8. Article 1 of the draft decree adds two additional categories: Prescription drugs for medical specialists " And the " Hospital prescription drugs ".
B.-Hospital retrocession framework
9. Retro-oceanic drugs are currently 100 % covered by compulsory health insurance (AMO). However, the bill sent by health care institutions to health insurance funds does not include the details of the retro-oceanic specialities. Due to the lack of coding of the drug in the hospital, there is no knowledge of the quantity and turnover, by drug, of the specialties that are currently being retroceded by hospital pharmacies. Only data from surveys of institutional samples is available.
10. Hospital retrocession is growing very rapidly and, according to CNAMTS, this growth continues in 2002. In its point of view n ° 12 of April 2003, the National Fund for Workers' Health Insurance (CNAMTS) pointed out that " The expenditure attributable to hospital retrocession continues to rise and progress at a sustained pace." The CNAMTS provides the following: " In 2002, the general sickness insurance scheme reimbursed a little over EUR 1 billion for hospital retrocession, or 7 % of the total annual pharmacy expenditure. In addition, while the expenditure on reoceanic medicines increased by 16.7 % between 2000 and 2001, it increased by 30.7 % between 2001 and 2002. For example, hospital retrocession grew four times faster than the market expenditure of the refundable drug (+ 7.4 % between 2001 and 2002) and twice as fast as the previous year. "
11. These figures are set out in " Date of repayment of the product ", the repayment occurring several months (eight to ten months in 95 % of the cases) after the issue of the products. The CNAMTS states that as of the date of issue the annual increase in 2002 should be in the same order as in 2001, i.e. 25 %. At this rate, the expenditure would double every three years.
Drug expenditure in 2001
(order of magnitude in billions of euro)
You can view the table in OJ
No 138, 16/06/2004 text number 75
Source: Court of Auditors (data SNIP and DGCP).
12. According to data from the National Union of Pharmaceutical Industries (SNIP), the total turnover of the drug in France was about 18.7 billion euros in 2001, of which 3 billion was taken in hospital. As a result, the share of hospitals in the overall drug expenditure was 16.3 % in 2001. This proportion has grown in the last decade (it was about 12 % in 1990). In 2001, the retrocession represented approximately 30 % of the hospital drug expenditure and 5 % of the total expenditure (approximately EUR 900 million).
13. Professor Claude Le Pen, in a report prepared at the request of the LEEM (cf. Note 1) and dated July 22, 2003, argues that the development of hospital retrocession has reduced the length of hospital admissions and the treatment of patients at home. A recent report by the Court of Auditors on the drug in the hospital states, on the contrary, that there is no evidence to support the view that the drug in hospital would save time. Therefore, the question remains open.
1. The positive retrocession list
14. The law of 8 December 1992 provides for the establishment of a positive list for the handover. Article 2 of the draft decree (new Article R. 5104-109 in the CPMP) sets out the modalities and criteria for inclusion on the future list of retrocession. The Minister responsible for health has the initiative to register (R. 5104-109-VI). The Minister may also delete a product from the list when the Minister ceases to meet the registration criteria (R. 5104-109-VII).
15. Section R. 5104-109-I states that drugs must be in the interest of non-hospitalized patients." For reasons such as special distribution or dispensing constraints, security of supply, the fact that the drug is preferentially administered in health care facilities, or the need for To carry out a specific monitoring of the prescription or dispensing of these medicinal products ". Distribution constraints include the example of drugs requiring cold chain maintenance while city pharmacies are not equipped with specific refrigerators.
16. Paragraphs II and IV of new Article R. 5104-109 exclude medicinal products reserved for hospital use from the return list. In other words, the drugs listed in " Hospital reserve " Will not be backeditable. On the other hand, drugs listed in the new category of prescription drugs are not a priori excluded from this list; they may be returned as long as the Minister authorizes it.
17. Paragraph IV deals with categories of speciality: medicinal products with temporary use authorisation (ATU). Nominative " (cf. Cit., note 2) (art. L. 5121-12 b of the Public Health Code) or temporary import authorization (ATI), hospital preparations and compounding. A specialty that belongs to one of these categories and is not registered as a hospital reserve is automatically included on the return list. For example, nominal ATUs and ATI will be backededable as long as they are not classified as " Hospital reserve ".
2. Fee Reform for Direocated Specialties
18. Throughout the notice, it will be distinguished:
-the " Sale price to establishments " : this is the price paid to the laboratory by the hospital. We will also talk about prices." Upstream " ;
-the " Transfer price " : this is the sale price to the public, which is collected by the hospital. It is also the price which serves as the basis for reimbursement by sickness insurance. You can qualify this price."
19. The difference between the upstream and downstream prices is the gross margin of the hospital establishment. To obtain the net margin or economic benefit of the establishment, the costs associated with the retrocession (dispensing costs) must be removed from the gross margin.
20. The component " Pricing " The draft decree and the Social Security Financing Act for 2004 establish a mechanism for regulating the sale price of the retro-oceanic specialities. On the other hand, neither the draft decree nor the law refers to the sale prices to the institutions. The upstream prices will therefore continue to be negotiated, in a decentralised manner, between the institutions and the laboratories (possibly in the tendering framework).
A. -The current funding system is cumbersome
21. The cost of the returned drugs is not charged to the overall budget of the institutions. Their assumption of 100 % by compulsory health insurance, on the basis of their purchase price plus an additional 15 % margin at the establishment, does not encourage hospitals to negotiate firmly with suppliers. The absence of a budget constraint imposed on hospitals for retro-oceanic drugs induces the risk of cross-subsidy between reoceanic and non-oceanic drugs at the expense of health insurance: to obtain moderate prices on the Drugs dispensed to inpatient and funded patients on its global endowment, an institution may be encouraged to accept high prices for the drugs it has returned to ambulatory patients, as these returned drugs will be, in Fine, paid by health insurance.
22. The de-accountability of institutions is compounded by the existence of the margin proportional to the purchase price. Pharmacies for internal use (PUI) are not normally intended to provide drugs to non-hospitalized patients. The retrocession gives rise to specific charges (installation of a window, personnel available for opening hours, etc.) which must be compensated. A circular letter from the CNAMTS of 2 February 1977 introduced a margin of 15 % which applies to the purchase price. As a result, the higher the price paid to the laboratory by the facility, the greater the perceived margin by the hospital. This mechanism worsens the phenomenon described above by encouraging institutions to accept high prices. The cost for health insurance of this margin exceeded 100 million euros in 2001.
23. The Effects " Inflation " From the retrocession to the ambulatory sector, when a surrendering drug with a temporary use authorization (ATU) receives the WMA and is about to be distributed in the city. In negotiating the price with the Economic Committee for Health Products (CEPS), the laboratory uses the prices paid by hospitals, during the period when the drug was only granted an ATU, as a reference (even if it accepts Often a decrease from this price).
B. -The transfer price of specialties that do not have
of an AMM (preparations and medicines under ATU)
24. Products whose efficacy and safety are highly presumed, but which do not yet have a marketing authorisation (AMM) and which concern diseases whose seriousness requires urgent treatment can benefit Temporary use authorization (ATU) issued by the Director General of the French Agency for Health Safety and Health Products (AFSSAPS). Initially, the laboratories donated these products, on a compassional basis, by considering that the hospital allowed them to carry out the final clinical trials necessary for their placing on the market. The arrival of anti-retroviral drugs (products against HIV) and the increasing importance of the number of patients to be treated led to the challenge of this rule. As with all other drugs in the hospital, prices are now negotiated, possibly as part of a call for tenders, between laboratories and institutions. However, when the trials have not reached their final phase, some drugs are given free of charge. But as soon as the tests are about to be completed, the prices are negotiated and are generally very high.
25. Article L. 5121-12 of the Public Health Code distinguishes the so-called ATUs. ", attributed to specialties manufactured for a group of patients (paragraph a) and ATU" ", intended for named patients (paragraph (b)). To benefit from an ATU of the first type, the laboratory must commit to requesting an AMM within a specified period of time. The Court of Auditors' report on the medicinal product in the hospital indicates that it is almost never refused and concludes that, in practice, ATU of cohort and AMM are very close. The average duration of cohort ATUs would be of the order of fifteen months. This period would generally be explained by the time required for the issuance of the AMM.
26. Article R. 5104-111-II of the future decree stipulates that the price of transfer of medicines with an ATU is equal to the price paid by the hospital in the laboratory, plus a flat-rate margin. This leaves the ATU with a type rule." Cost-plus ", i.e. the reimbursement to the hospital of the cost of purchase (plus a margin). Similarly, for preparations made by the establishment, the transfer price is equal to the sum of the cost of manufacture and a flat margin. It follows that the transfer price for ATU and preparations will not be uniform in the territory. Social security will continue to reimburse the same specialty on the basis of prices that may be valid for hospitals.
C. -The transfer price of medicinal products with an AMM
27. As regards pharmaceutical specialities which benefit from AMM and which are included on the list of retrocession, the draft decree and the LFSS for 2004 establish a negotiation of the downstream price (transfer price) between the CEPS and the Industry, the upstream prices remaining negotiated at the institutional level. The terms of the negotiation of the transfer price differ in both texts.
28. The draft decree involved a price " Notified " By the laboratory, but this notified price had to apply only if the CEPS had not delivered its opinion within the prescribed period of five months after the entry on the return list. Article 21 of the LFSS for 2004 introduces a genuine procedure for " Price deposit ". The laboratory is, indeed, supposed " Declare " A sale price to the establishments; the stated price is published by the CEPS. The transfer price is then equal, except as opposed by the committee, to the sum of the stated sale price and a fixed margin according to the same criteria as in the proposed Order.
29. According to the second paragraph of Article 21, it is only in the case of " "Final opposition" The CEPS (or non-declaration of the price by the laboratory) that the transfer price is fixed by order of the competent ministers, after the opinion of the committee. The deadline for the Minister to determine the price, and therefore the SPEC to deliver the opinion, is seventy-five days. This period runs from the entry on the back-back list or, if the drug was already on this list but did not benefit from an AMM (drug under ATU), from the date of receipt of the AMM.
30. In the case of opposition from the CEPS, the law specifies that the fixing of the transfer price " Takes into account primarily the selling prices for this specialty, the prices of the therapeutic drugs, the anticipated or actual sales volumes, the foreseeable or actual conditions of use of the drug, and Improvement of the medical service provided by the medicinal product assessed by the Transparency Commission, as well as the costs involved in the management and delivery of the pharmaceutical speciality '.
31. The drafting of this paragraph is quite similar to that of the decree. The four criteria are found in Article L. 162-16-4 of the Code of Social Security, as well as the taking into account of the selling prices and the grant fees.
32. The period between the entry on the surrender list and the fixing of the transfer price is seventy-five days in the LFSS for 2004 (compared to six months in the draft decree). During this transitional period, the transfer price is, as in the draft order, determined to be the sum of the purchase price and the flat rate. However, the third paragraph of Article 21 of the Law that this transitional rule applies only " For the medicinal products which were included on this list prior to obtaining the marketing authorisation ', in other words, for medicinal products which were previously under ATU. It appears that the other situations are not covered by Article 21: the price of medicinal products with AMM, during the transitional period of 75 days after entry on the return list, is not determined. The Government Commissioner suggested in the session the following interpretation to fill this legal vacuum: in the absence of transfer prices, the drugs in question could not be covered by health insurance. The lack of support would be a way of exerting pressure on the industrialists to seek out the city. Furthermore, the case in which the CEPS would not deliver its opinion within the time limit is not mentioned in the LFSS for 2004 (although it was in the draft decree).
33. The fourth paragraph of Article 21-I of the LFSS explicitly mentions a framework agreement to be concluded between the CEPS and the representative trade unions and which will specify, in particular, the opposition criteria of the Committee. Such a framework agreement has already been concluded between the CEPS and the drug companies for innovative medicinal products repayable in the city and for the period 2003-2006. Article 4 of this framework agreement concerns medicinal products for which the improvement of the medical service rendered (ASMR) is Level I, II and, in some cases only, III. It introduces a " Price deposit " Very close to that provided for by the law for medicinal products which are retracted with AMM. The undertaking may, within one month of the opinion of the Commission on Transparency, request the benefit of an accelerated price fixing procedure and propose a sale price to the CEPS. The framework agreement states that: If, at the end of the two weeks following the week in which the Committee received the request from the undertaking, the Committee did not submit to the undertaking its opposition to that application in accordance with the conditions laid down in the e, the application shall be deemed to be Accepted. "
D. -Impact on the margins of institutions
34. The proposed Order provides that, for drugs under ATU, the transfer price is equal to the sum of the purchase price and a lump sum. In the case of preparations, the transfer price is the sum of the cost of manufacture and a flat rate. The gross margin actually collected by the institutions will therefore be strictly equal to the expected flat margin.
35. The situation is very different for medicinal products benefiting from AMM. Article 21 of the LFSS for 2004 provides that the transfer price of these medicinal products shall include a flat-rate margin " The value of which shall be determined by order of the Ministers responsible for health, social security and the economy taking into account the costs inherent in the management and dispensing of such specialities. ' However, since the transfer price (downstream) is so fixed and the upstream price remains negotiated at the level of each establishment, the device does not in any way guarantee that the theoretical margin provided for in the text will actually be achieved in practice. The actual gross margin has no reason to coincide with the statutory flat margin.
36. In any case, the proportional margin of 15 % is deleted. Consideration would be given to calculating the lump sum on the basis of the number of prescription lines. In this case, the margin per drug would no longer depend on the amount of drugs dispensated.
E. -Health insurance support
37. The Court of Auditors' report on the medicinal product in the hospital states that there is currently no regulatory basis for taking full responsibility for the compulsory health insurance for retroceded medicinal products. The decree fills this legal vacuum. Paragraph IV of new Article R. 5104-111 states, first, that the reimbursement of surrendered medicinal products is carried out on the basis of the transfer price (downstream price) defined above. If the medicinal product is also included on the list of specialities reimbursable to insured persons (Article L. 162-17 of the Social Security Code), which is generally the case, the rate of reimbursement is the one provided for in this list. As indicated above, it appears that drugs with newly listed AMM will not be covered during the 75-day transition period (due to lack of assignment price determination).
38. Article 3 of the draft decree stipulates that drugs under ATU will, for both types of ATU, be reimbursed 100 % by compulsory health insurance. There will be no participation of the insured nor for the ATUs " Nominative " Which will be automatically entered on the return list in accordance with new Article R. 5104-109-IV, or for the ATU " "Cohort" Which are explicitly mentioned in the text of Article 3. Therefore, full support is maintained for ATU.
III. -COMPETITIVE ANALYSIS
A. -The creation of two new
categories of restricted prescription drugs
39. The category " Specialist prescription " Is not completely new, as it already appears in R. 5143-5-5. This provision allowed specialists to be reserved for the prescription of certain drugs listed in one of the former categories. The draft decree goes further, making it " Specialist prescription " A full category. In this respect, the text is consistent with Article 71 (3) (third indent) of the European Directive 2001-83 on medicinal products, according to which the possibility of serious adverse reactions can justify the prescription by
. By contrast, the category " Hospital prescription drug " Is new. By dissociating hospital use and hospital prescription, it aims to reduce the hospital reserve of law. This category recognizes the specificity of hospital physicians for prescribing. This creation introduces a differentiation between physicians of the same speciality according to the method of exercise (liberal versus hospital), whereas there are no studies showing real differences in prescribing behaviour between the two Specialists, depending on whether they are in town or hospital.
41. Furthermore, Article 71 (3) of the European Directive does not mention the hospital requirement among the factors to be taken into account in the definition of the categories of medicinal products subject to a restricted prescription. It refers only to the existence of a treatment that cannot be followed or a diagnosis that can only be made in a hospital setting. More generally, the recent report by the Court of Auditors on the medicinal product in the hospital suggests that, at European level, it is the prescription restricted to specialists (not the hospital prescription) which is chosen in the case of risks Specific to public health. The Court of Auditors also points out that in some countries, such as Germany, the hospital reserve does not
. It cannot be excluded that the introduction of the category of medicinal products with a hospital prescription causes distortions in the health care markets of the various medical specialties, favouring hospital doctors and penalising them. Liberal doctors. However, the extent of this risk depends on the use of this new category. If it is used only for drugs that would have been registered as a hospital reserve, there will be no change from the point of view of competition between liberal and hospital doctors. If, on the other hand, it is used to restrict the prescribing capacity of liberal physicians, then there may be a significant distortion at the expense of this category of physicians.
B. -The
enrollment criteria on the payback positive list
43. The establishment of the list Positive " (i.e. a nominal list of drugs) aims to control the anarchic development of the retrocession and to limit it to what is strictly necessary from a public health point of view. If a medicinal product is not registered or is removed from the list of retrocession, then the laboratory concerned, if it wishes to sell its product, will be obliged to apply for distribution in the city offices (it will then benefit, the case Of the price deposit procedure provided for in the Framework Agreement for 2003-2006 referred to in paragraph 33. In any case, a laboratory will no longer be able to choose the distribution system for its drug. By restricting the retrocession, the state will put pressure on the industrialists to seek distribution in the city. The positive list will delete the " De facto hospital reserve " (drugs approved in communities for which the laboratory does not solicit distribution in the city).
1. Limiting the
retrocession and the risk of discrimination
44. The Council observes that the criteria listed in Article 2 of the draft decree (special distribution or dispensing constraints, security of supply) allow for a broad definition of medicinal products intended to be registered On the list of retrocession and may, depending on its interpretation, be insufficiently effective to effectively limit the retrocession.
45. On the other hand, even if a priori one might think that the approximation of the price control systems for the prices of medicinal products sold in the city will reduce the issue of registration on the back-back list for laboratories, the The transparent, objective and non-discriminatory nature of these criteria is desirable in order to prevent any risk of distortion of competition between the two distribution channels. From this point of view, the broad nature of the definition given in Article 2 of the draft decree does not rule out any risk of discrimination between laboratories as a result of the entry on the return list.
2. Deletion of the back-back list
46. Paragraph VII of new Article R. 5104-109 introduced by the draft decree organises the cancellation of medicinal products which cease to meet the criteria of paragraphs I and II. Paragraph 1 (a) of paragraph VII applies to medicinal products benefiting from AMM. After the Minister has informed the company of his intention to deregister a medicinal product, the company has one month to submit its observations, after which the decision is notified, if necessary. It shall enter into force after a period of six months from the date of notification. The proposed Order adds:
" However, if, at the end of that period, the medicinal product has not been made available in pharmacies, then it meets a need for patients who are not in hospital and who is not covered by other pharmaceutical specialities Available in pharmacies or on the list provided for in Article L. 5126-4 (return list), the cancellation decision may be suspended. "
47. This provision leaves, in a specific case, the leisure to a company not to solicit the distribution in the city and to continue to see its medicine be distributed by the channel of the retrocession, the possibility that one wishes
3. A Regulatory Base for Dual Circuit
48. The Decree does not mention the non-availability of the medicinal product among the criteria for entry on the back-back list (the availability of pharmacopoeia is only mentioned in paragraph VII on the terms of the cancellation procedure, as is the case in To see it). Article 1 (XV) of the draft decree even explicitly provides for the possibility of registering a medicinal product available in pharmacies on the back-back list. The drug is then distributed through the two channels. Article 1 (XV) provides a regulatory basis for the Double circuit ".
49. In the current system, the double circuit is exceptional and derogatory. In fact, the DGSDH circulars of 15 June 1999 and DphM of 1 July 1982 restrict the retrocession to medicines not available in the city (Court of Auditors, page 126). The dual circuit concerns only a limited number of pathologies such as AIDS and hepatitis. It has been requested and obtained by patients' associations for whom the dispensing of drugs in hospital pharmacies is a better guarantee of the anonymity of patients. Other considerations, such as security of supply or opening times, were also highlighted by the associations.
50. Article 1 (XV) of the draft decree therefore, in theory at least, leads to an extension of the field of retrocession, whereas one of the objectives of the reform is to restrict it. However, from the strict point of view of the competitive balance between pharmaceutical specialities, criteria such as the confidentiality of the issue of medicinal products are as objective as that of non-availability in pharmacopoeia. The Council has no objection in principle to such criteria, which are important to patients, to be taken into account.
51. The Council notes that, in the event of a double circuit, the selling prices of the medicinal products (which are covered by the health insurance) will not necessarily be identical in the two circuits. Of course, in both cases, the same actor (the CEPS) will negotiate with the laboratories and the upstream prices (perceived by the industry) should therefore not differ greatly. On the other hand, the margins of Pharmacists and Distributor Wholesalers, on the one hand, hospital pharmacies, on the other hand, have no reason to coincide, with costs and services rendered without the same economic value.
C. -Pricing of drugs under ATU
1. The absence of binding price regulation
52. By abolishing the margin of 15 % on the purchase price, the reform removes the most " Inflationary " The current system. However, for medicinal products under ATU, the new device retains the negotiation of prices at the level of the establishments and the rule on the reimbursement of the purchase price, which does not preclude the risk of cross-subsidisation between medicinal products Retrocids and non-reoceanic drugs referred to in paragraph 21, since the purchase price will have no impact on hospital accounts.
53. It seems that this rule has been maintained for fear that the laboratories will no longer make the most expensive drugs available to French patients. The ATU system promotes rapid access to hospital for therapeutic innovations. It is generally accepted that access to hospital innovations is one of the fastest in the world. It is therefore legitimate to want to maintain the efficiency of this system.
54. However, we have seen in paragraph 25 that the Cohort ATU " Differs little from the drugs that hold an AMM. In particular, Article R. 163-18 of the Social Security Code makes the assessment of the ASMR mandatory for all registered medicinal products in the Community. However, this article contains additional references for reimbursable medicinal products in the city, which relate in particular to the comparison of treatment costs. As a result, the assessment of approved drugs to communities is somewhat reduced compared to reimbursable drugs in the city.
55. The Council is of the opinion that a differentiated treatment of medicinal products with AMM and under Cohort ATU " Is justified only if the ATU regime is truly limited in time and only to the extent that the information available to the administration on the drug is not complete. The ATU regime should not be used to artificially delay the deadline for negotiations with the SPEC. The Council notes that centralised negotiation can, at least in theory, make it possible to take into account consistency with European prices (this consistency is one of the opposition criteria of the CEPS provided for in the framework agreement on Innovative medicines in town), which reduces the risk that a possible inconsistency drives laboratories to not serve the French market.
2. Determining the lump sum amount
in the margin calculation
56. The wording used in the draft decree and the LFSS for 2004 to describe the method of calculating the hospital margin ("taking into account the costs inherent in the management and dispensing of these specialities") Refers to a very flexible form of cost orientation. The aim is to provide hospitals with compensation for the costs incurred by pharmacies for internal use, so that the institutions are not discouraged from performing the retrocession and can do so under conditions Satisfactory to users. But we do not want to go beyond costs, because the retrocession is not intended to be a source of funding for hospitals.
57. Although the current financial weight of the margin (at least one hundred million euros per year) may seem important, it seems that the conditions of reception of ambulatory patients are not always satisfactory (pharmacy difficult to access, poorly located In hospital, etc.). However, there are currently no studies that would attempt to measure the cost of dispensing a drug to an ambulatory patient by a hospital pharmacy. In the absence of such studies, margin level determination may be problematic.
D. -Pricing of AMM-holders
58. For the AMM-owned medicines, Article 21 of the LFSS for 2004 sets up a two-stage system: a centralised negotiation for the transfer price (price) Downstream ") And decentralised negotiations for prices " ".
1. Decentralized negotiations
and the margins of institutions
59. Since the transfer price is fixed, the decentralised negotiation determines the margin of the establishments. The actual value of this margin will not be guaranteed by the future device. If the CEPS opposes the price notified by the laboratory, the transfer price will be decided by the Minister. This price will be uniform across the country. The sale price to institutions will continue to be the result of local negotiations or tenders (at the level of individual hospitals or groups). Therefore, the price paid by the institutions to the laboratories will not necessarily be uniform.
60. The existence of a fixed transfer price will certainly give the institutions more weight in the negotiations with the laboratories. The transfer price plays a role of " Reference price " Or " This is the price that will be paid by the patient (and taken care of by the health insurance). It would be difficult for a laboratory to ask for a higher price because such a price would imply a negative gross margin for the hospital. Under these conditions, the drug would have no interest in selling (backhoe) the drug. Since there is no regulatory provision that contracts it, it is likely that it would simply give up on the purchase and surrender of the drug in question. The transfer price will therefore certainly be a ceiling price.
61. If the gross margin is too low to cover the cost of dispensing, the hospital will not be induced to return the drug. It is difficult at this stage to predict whether the net margin will generally be positive, that is, whether hospitals will be able to negotiate sufficient upstream prices to cover their own costs, taking into account the downstream prices that have been set.
62. Will industry be encouraged to offer hospitals lower prices than transfer prices? In order for them to be of interest, the demand from hospital buyers must be price sensitive. As stated by the Competition Council in its Decision No. 00-D-10 of April 11, 2000, concerning practices identified in the medical optics market, " The social security reimbursement rate may be regarded as a floor price below which a trader has no interest in making an offer, provided that the discount would have no effect on the demand." Application to a laboratory for a given drug depends on the existence of therapeutic equivalents and a number of other factors, such as prescribing behaviours of physicians. Even assuming that there are therapeutic equivalents and without prejudging any anti-competitive behaviour by suppliers, it will certainly be difficult for institutions to obtain prices that are much lower than the transfer price. This is, in any case, what the example of the medical device market tends to show, which is the subject of the Competition Council's opinion No. 2004-A-02
The Interdepartmental Health Benefits (TIPS) tariff for medical devices is terminated by the Minister responsible for health. Institutions negotiate and tender bids with suppliers in markets where, in most cases, several firms are in competition. The decree of 6 July 2000 stipulates that sickness insurance shall reimburse the establishment on the basis of the negotiated price plus 80 % of the difference between that price and the TIPS. In other words, if an institution succeeds in obtaining a lower price than the TIPS, it retains 80 % of the difference, with the remaining 20 % going to health insurance. This mixed remuneration scheme (intermediate between price cap and cost-plus) was supposed to favour the incentives of the institutions to negotiate. Experience shows, however, that private institutions, despite the implementation of tenders and the presence of a plurality of potential suppliers, rarely succeed in obtaining prices below the TIPS. Notice No. 2004-A-02 notes that suppliers adopt the same behaviour by not proposing discounts in relation to TIPS. It states that this similarity of conduct does not in itself constitute evidence of an agreement within the meaning of competition law, such an alignment which can ' Provide suppliers with a simultaneous response to the new regulations ".
64. However, it is likely that the intensity of competition is significantly stronger for medical devices than for retro-oceanic drugs (which are often innovative and unlikely to compete with an equivalent Therapeutic or generic). It is therefore permissible to think that the phenomenon of the attraction of prices negotiated towards the price " Official " Divestiture will be more effective than for medical devices, so that selling prices to institutions will not be far removed from the transfer prices set by the Minister.
65. In summary, once the transfer price has been set at the national level, the rule for retroceded drugs is a pure price cap: hospitals receive a uniform price independent of the purchase price they have obtained. However, the economic margin actually achieved by the institutions has no reason to coincide with the fixed margin provided for in the texts. Manufacturers will know the transfer price, which is determined by the Minister's order, but will not be required to give the institutions the flat margin established by the Minister.
2. Centralized negotiation
A. -The timing of the negotiations: the centralised negotiation
takes account of the outcome of the decentralised negotiations
66. The above reasoning is based on the assumption of the transfer price fixed at the time of the decentralized negotiations. In fact, the timetables of the centralised negotiations, culminating in the price of the transfer (downstream) and decentralised, leading to the price paid to the laboratory by the hospital (upstream), will be very interlinked. Initial negotiation is decentralized; it takes place during the 75-day transition period or, if the drug did not have an AMM, while it was under ATU. Then comes the centralised negotiation, then the negotiations between hospitals and laboratories continue on an ongoing basis (e.g. on an annual basis). Subsequent revisions to the price negotiated by the SPEC may also occur.
67. Moreover, the two negotiations are not independent. Indeed, among the criteria for fixing the transfer price are " Selling prices ". In other words, the outcome of the decentralized negotiations is taken into account in fixing the transfer price. There is therefore some circularity in the device: the selling prices to the institutions are likely to depend heavily on the transfer price (as discussed above), but the transfer price is itself determined in the light of " Selling prices ".
68. Let us remember that the Selling price " Are not uniform and can be very high, especially in the case where the drug was already backcrossed but did not have an AMM (no binding mechanism is foreseen for the ATU). Section 21 of the HFA for 2004 does not specify the exact nature of the relationship between the prices charged and the transfer prices, nor the manner in which a uniform price will be obtained from purchase prices which, in turn, will be variable between establishments. It may be noted that the implementation of the text implies at least a knowledge of the selling prices, which does not appear to be acquired in the current state of the information systems in the
. The time dimension should also be taken into account. An industrialist cannot exclude that the Government, if it finds that the upstream prices are well below the transfer price (which is very unlikely, as has already been seen), does not decide to lower it, reducing accordingly The margin of the establishment and therefore the interest in buying the drug from the industrial rather than the competitors. This anticipation of a possible response by the regulator reduces the incentive for the industry to offer attractive rates. This mechanism is specific to the dynamics of regulation, often referred to as " Ratchet effect, was described by the Competition Council in its Opinion No. 04-A-02 on medical devices: " It is true, however, that the system put in place loses much of its incentive, since market operators are not certain of its sustainability in its various components. Manufacturers or distributors who want lower prices could, in fact, fear that a reduction in the rate of liability will reduce the incentive for private health institutions to buy their products, to the extent that The inability of the Government to credibly commit to not lowering the transfer price further reduces the positive incentives of the price cap.
70. In total, the draft decree establishes a complex game between the three actors (Government, industrialists and hospitals). Implementation of this device should lead to a mixed compensation scheme, intermediate between the two polar cases of price cap and cost-plus.
71. A final remark concerns the criterion of the estimated volumes which is mentioned in the draft decree. The text does not specify how gaps between forecasts and achievements will be addressed. As a reminder, the framework of the Framework Agreement on Innovative Medicines Reimbursable in the City provides for discounts (say ' Conventional discounts ") In case of exceedance, which will compensate for the additional costs incurred by the health insurance, but not by the other payers (mutuals, etc.). However, the examination of this system in the light of competition law will not be subject to this opinion.
B. -The opposition criteria of CEPS
in the future price-filing procedure
72. Without prejudging what the CEPS opposition criteria will be in the context of hospital retrocession, it is interesting to know which ones have been retained for medicines dispensed in pharmacies. The Framework Agreement referred to above (covering the period 2003-2006 and concerns innovative medicines, to ASMR Level I, II or III) states that " The opposition of the committee may be based:
-on explicit public health considerations;
-on the excessive price offered in respect of prices in the four European Union states mentioned above (i.e.: Germany, Spain, Italy, United Kingdom);
-on the incompatibility of sales forecasts with the target population retained by the Transparency Commission;
-on the manifest insufficiency of undertakings made by the company;
- The non-compliance by the undertaking of a commitment made on the occasion of a previous deposit. "
73. As regards the level of the price, the CEPS cannot therefore oppose a price which it would consider " Excessive " In absolute. Only consistency with prices in four European countries is effective against laboratories. Moreover, the seventy-five day period left to the CEPS to exercise its right of opposition may seem very short, given the complexity of the evaluation of the files and the lack of transparency of the " European prices ".
74. The opposition criteria of the CEPS are an essential element of the CEPS's weight in the negotiations with industry. In the only system in force that is comparable to the system envisaged for retrocession, namely the deposit of the price for innovative medicinal products distributed in pharmacies, the criteria of a tariff nature are rather restrictive and the timetable Accelerated procedure is not favorable to CEPS.
C. -Conclusion: the principle of centralized negotiation
75. The absence of quantitative data on prices and volumes of contracted specialties, and more generally the absence of drug coding in the hospital, precludes comparison of price levels in the two current trading systems (centralized and decentralized). The evaluation of the respective merits of the two systems is essentially an empirical question which cannot be decided without a system of statistical information on medicinal products in the hospital, of which the Competition Council can only wish Implementation. General comments should, however, be made.
76. First of all, the Council notes that competition in the drug sector is generally not very intense. It is practically zero for innovative medicines without therapeutic equivalent. In other cases, competition is weakened by voluntary differentiation strategies on the part of manufacturers who " Choose " Indications of the specialities they market through the clinical trials they implement, so that the indications of the medicinal products, even when they are very close, do not recover perfectly. They thus manage to reduce the scope of competition by prices which are in practice limited to generics.
77. Secondly, the Council notes that the payer (the essential health insurance) and the purchasers (hospitals) do not coincide. It is recalled that, under the current system, compulsory health insurance covers the full cost. After the decree comes into force, compulsory health insurance will no longer be the exclusive payer (as the take-over rates may be less than 100 %), but will remain by far the most important.
78. These two conjugate elements (the low intensity of competition for innovative medicines and the centralized funding of retro-oceanic drugs) are two strong constraints that must be taken into account when designing the Regulations and price determination procedures. In the presence of such constraints, centralised negotiation seems to be the most appropriate form of regulation. The proposed reform thus represents an improvement on the current system, characterised by a lack of a binding mechanism at central level and a complete de-accountability of local
. The concomitant maintenance of a decentralized negotiation of upstream prices leaves a space of freedom for hospital buyers; but this space covers only their margin and not the totality of the price. Institutions will be encouraged to negotiate firmly with industry. On the other hand, it is not guaranteed that their net margin will be positive.
Deliberate, on the oral report by Mr Choné, by Mr Nasse, Vice-President, presiding over the sitting, Mrs Mader-Saussaye, MM. Bidaud, Chrear Bournazel and Piot, members.
The Assistant General Rapporteur,
N. Mouy
The Vice President,
P. Nasse
