As a reminder, with the aim of regulating health insurance expenditures, paybacks may be negotiated between the French Economic Committee for Health Products (CEPS) and pharmaceutical companies, known as “product paybacks” or “conventional paybacks”[1]. They are governed by article L. 162-18 of the French Social Security Code (CSS) and can take various forms[2].
These remain confidential[3] and lead to a discrepancy between the “face price”, corresponding to the retail price, and the net price, which is defined as the price after deduction of product paybacks paid to the French National Health Insurance Fund (CNAM).
In rulings handed down at the end of 2023, the Versailles and Paris Administrative Courts of Appeal provided some interesting clarifications on CEPS’ obligations regarding price/volume paybacks.
Paybacks can only be applied to sales generated for indications for which the price has been fixed
In the Takeda case[4], the pharmaceutical company contested the amount of over 9 million euros in paybacks charged to it for sales of the ENTYVIO pharmaceutical product in 2017. In that year, the pharmaceutical product was included on the “en sus” list for treatment of ulcerative colitis (RCH) and benefited from derogatory financing for Crohn’s disease (MC). Paybacks were applied to sales for both indications.
The Versailles Administrative Court of Appeal upheld Takeda company’s argument that price amendments should be read in conjunction with the corresponding ministerial inclusion decrees, which differentiate depending on the therapeutic indication. Thus, as the MC indication was not included on the “en sus” list until after the amendment serving as the basis for the contested paybacks, only sales for the RCH indication had to be considered.
The judge specified that, since the price agreement stipulated that sales would be recorded based on quarterly declarations made to Grouping for the development and production of statistics (GERS), and since the French Minister had not demonstrated that these data did not correspond to those produced by Takeda (from GERS and Medicalisation of Information Systems Programme (PMSI) databases), the data produced by the pharmaceutical company should be used to calculate the paybacks.
The Administrative Court of Appeal therefore upheld the first instance judgment[5] ordering the recovery of 9 million euros in paybacks to Takeda, wrongly calculated on sales of ENTYVIO in the MC indication.
Conclusion: sales generated for an indication outside the scope of the price agreement must be excluded from the calculation of paybacks, even if this indication is reimbursed. The Takeda case involved derogatory financing. In our view, this solution is applicable to sales generated under the hospital list (liste “collectivités”) (since the price is not fixed by agreement).
However, in the event of an extension of reimbursable indications, the CEPS is not obliged to review the price/volume clause (medical devices (MDs))
In two Cook France rulings[6], the pharmaceutical company contested the CEPS’ application of a mutualised paybacks clause, which remained unchanged despite the extension of reimbursable indications for its product (and hence the increase in sales).
The Paris Administrative Court of Appeal ruled that the CEPS was under no obligation to renegotiate price/volume paybacks clauses for MDs in the event of an extension of the reimbursable indications. The judge considered that this was simply an option for the CEPS.
Reading the judgment, however, it appears that the pharmaceutical company could have requested a revision of the price in the light of changes in the target population.
These rulings open up a series of reflections:
- for agreements already signed: should we systematically oppose the payment of paybacks on indications outside the scope of the agreement? How should sales generated under different indications be split?
- but also for future agreements: what clauses should be included in the agreement to protect against unforeseeable sales fluctuations? How can we resolve the main areas of disagreement with CEPS regarding the calculation of paybacks?
[1] In 2021, this represents an outpayment of 15.3% of reimbursed expenditure, or nearly 29 million euros, according to the CEPS Annual Report for 2021 (the latest published report).
[2] First-box paybacks; price/volume clauses; daily treatment cost (CTJ), dosage or treatment duration clauses; good use clauses; caping or flat-rate financing clauses; performance or results clauses.
[3] Purpose of article 2 of the price agreement signed between CEPS and the pharmaceutical company.
[4] Versailles Administrative Court of Appeal, December 20, 2023, Takeda France, no. 21VE02141.
[5] Cergy Pontoise Administrative Court, June 3, 2021, Takeda France, no. 1811733.
[6] Administrative Court of Appeal, December 29, 2023, Cook France, no. 23P00909 and no. 22PA04005.
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