In a context of increasing supply tensions and stock-outs, the Social Security Financing Act (“LFSS”) for 2022 added an “industrial criterion” for the pricing of health products.
In addition to the five criteria that the Economic Committee for Health Products (CEPS) must meet in order to set the price of medicines and medical devices, it was specified that the CEPS “may also take into account the security of supply of the French market guaranteed by the location of production sites”.
Legally, this measure – which did not require any implementing legislation – went into effect on December 25, 2021 (see our timeline on the entry into force of the LFSS for 2022).
However, on a practical level, this new measure remained unclear. We can therefore be pleased that some clarifications have been provided by the Government in a press release dated February 17, 2023…although many questions remain.
What will be the benefit to the industry?
The LFSS for 2022 provided that the industrial criterion could be taken into account for the determination of the face price (i.e. the price of sale to the public).
We are therefore surprised to read in the governmental press release that the advantage granted will consist in an increase… of the net price!
Which products will benefit from the “industrial criterion”?
Two categories of products are covered by the government press release:
- products with an innovative character
- products whose comparators are out of stock or at risk of being out of stock
What guarantees will the industry have to provide?
As previously mentioned, the LFSS for 2022 conditions the benefit of the industrial criterion on the establishment of production sites guaranteeing the security of supply of the French market.
The government press release implicitly states that other guarantees than the establishment of production sites may be evaluated by the CEPS.
However, no indication is provided on the nature of these guarantees or on the expected level of supply (stocks, duration).
If the “industrial criterion” constitutes an opportunity for industry, it raises a certain number of questions, including:
- on the one hand, its implementation: quantification of the price advantage, stages of production taken into account, monitoring of industrialists’ commitments, etc.
- on the other hand, to its collateral effects: for example, what will the ex post consequences be if the product that benefitted from the industrial criterion becomes a comparator for a second one?
GD Avocats assists industrialists with their market access issues
and advises them in particular in the context of price negotiations.