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Bureaucratic drug delisting : the French example

par Valentin Petkantchin
jeudi 22 février 2007.

Article published in the EU Reporter (January-February2007, p. 30).

In their endeavor to cut back on costs, public health systems throughout Europe resort more and more to drug delisting. Beyond the fact that they may prove to be inefficient, these measures also reflect an alarming trend towards bureaucratization of healthcare by these monopolistic schemes. France provides a fitting example of this trend.

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In their endeavor to cut back on costs, public health systems throughout Europe resort more and more to drug delisting. Beyond the fact that they may prove to be inefficient, these measures also reflect an alarming trend towards bureaucratization of healthcare by these monopolistic schemes. France provides a fitting example of this trend.

Suppose that your automobile insurance company stops covering some risks such as broken windshield or theft without offering a lower premium or some other benefit in return. You will not hesitate to inquire about the offers made by competing insurance companies, and your insurance company knows that pretty well. Ultimately, it is competition which compels it to offer a coverage that best satisfies your preferences, at the best insurance fee possible.

Unfortunately, this freedom of choice and this competition do not exist in the field of health insurance. In these circumstances, it does not come at all as a surprise that the insured have no say in the matter when delisting is determined in such a bureaucratic fashion.

In France, as regards pharmaceuticals, it is a public agency, the High Authority on Health (HAS), which recommends to the government the delisting of some pharmaceutical products deemed as exhibiting insufficient “medical service rendered.”

Obviously, this does not imply that the medical service is nil, even in the eyes of the experts of the French HAS. But, if the service is insufficient to warrant reimbursement according to them, things can obviously be different from your point of view. In this instance, if you were granted freedom of choice, you could easily inquire whether a competing insurance company cannot offer an insurance policy that better matches your needs.

As the insured cannot benefit from such freedom of choice, they are since 2003 in France but passive witnesses of successive waves of growing intensity of delisting of some pharmaceuticals, while on the other hand they still have to pay the social contributions which allow the functioning of the public health insurance scheme.

The latest wave – advocated by the HAS – sought the delisting from reimbursement of 89 pharmaceutical products. But, the French Minister of Health, Xavier Bertrand, made the distinction between two categories in his announcement on the 25 th October 2006. Some 48 drugs (with no therapeutic alternative) will continue to be reimbursed at the same rate as is currently the case while the reimbursement rate of the remaining 41 drugs will be lowered from 35% to 15%.

However, in spite of the reduced coverage for the insured persons, such measures could paradoxically prove to be utterly ineffective in attempts to curb the deficit of the health insurance scheme in France.

Indeed, when a drug is delisted from reimbursement, its users are strongly inclined in the current scheme to substitute it by a drug with identical therapeutic value, but still reimbursed.

Yet, it turns out to be the case that the latter drug can readily cost more because it is most recent or more effective. Moreover, the change in therapy to which delisting from reimbursement gives rise can carry its own costs in terms of increased frequency of medical consultations, more significant side effects, etc. In brief, instead of making the social health insurance scheme economize on expenditure, bureaucratic delisting may well end up, much on the contrary, in costing more overall.

But, if such measures could prove to be ineffective in containing healthcare costs, the discontent of insured persons can, on the other hand, be real. All the more so as the price is monitored and kept at an artificially low level by authorities as long as a given pharmaceutical product remains reimbursable, but is determined freely on the market once the product is delisted. The price of a delisted drug, at least in the case of France, can accordingly rise in order to regain its market price.

But, in order to conceal the potential drawbacks of delisting to the insured, the French Minister of Health has allegedly already come up with a solution by suggesting that “a new system be worked out which would guarantee that prices do not soar following delisting.”

This solution seems really a facile one, all the more so as an additional intervention in a drug market which is already over-regulated in all European countries, including France, would seem to benefit to patients in the short run through lower prices.

But, it is also a hazardous solution for it is likely to harm the insured in the longer run. Indeed, it tends to hinder the emergence of innovative treatments by penalizing further the pharmaceutical industry and by reducing the incentives to innovate and promote new products on the market.

Instead of the observed inflation of regulations and stifling bureaucratization of the health sector – in France, but also in many other countries –, time has come to contemplate the possibility of opening up the health sector to competition and leaving more room to individual choice as regards reimbursement and coverage.

Valentin Petkantchin, Institut économique Molinari




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