Policies and Legislation

First posted: 16/08/2012

First posted: 16 August 2012 

France has a coherent generic medicines policy, however there is no generic medicines competition within the existing regulatory frameworks [1]. Instead, there is competition by discounts to wholesalers and to pharmacists in France [2]. Although discounts of 10.74% are legally allowed in France, actual discounts vary from 20% to 70% of the wholesaler selling price [3].

France has deployed several different incentives to encourage physicians to prescribe generic medicines. These range from compulsory prescription guidelines, to visits from representatives of the social security system to explain the advantages of prescribing generic medicines [1].

Monitoring of pharmaceutical expenditure and consumption is done by the social health insurance (Délégués d’Assurance Maladie, DAM) and the French Medicines Agency (Agence francaise de sécurité sanitaire des produits de santé, AFSSAPS). A typical feature of the French system is agreements between the social health insurance and physicians and pharmacists, e.g. with pharmacists to reach a certain generics substitution target, and with physicians to prescribe cost-effectively [4].

International non-proprietary name prescribing (INN) has been limited in France in light of opposition by physicians who value their prescribing freedom and their tradition to prescribe brand-name medicines. Additional remuneration if physicians attain specific generic medicines prescription rates appear to have had little impact in France [5].

Pharmacists earn the same margin in absolute terms on originator and generic medicines in France, however, they are entitled to higher discounts on generic medicines than on originator medicines. [5]. Both physician and patient may oppose generics substitution [6].

There are no incentives for patients to demand generic medicines as co-payments are covered by the private insurance of patients in France [5].

Intellectual property
To compensate for the delay between the date of filing the patent application and the date of marketing authorisation of the medicine, patent protection could be extended by up to seven years. This legislation was introduced in France in 1990, three years before the implementation of the EU Supplementary Protection Certificate for a maximum period of five years in 1993. The concept of a generic medicine has only been defined as recently as 1997 [5].

Medicine prices in France tend to be lower than in other EU countries [5]. Generic medicines need to be at least 30% cheaper than the originator medicine [7].

In 2005, the government imposed an additional price cut of 10% on existing generic medicines and the price of new generic medicines was set at 40% below the price level of the originator medicine. In 2006, the minimum price difference between originator and generic medicines increased to 50%. Additionally, prices of off-patent medicines were reduced by 15–19% in 2006 [5].

Since 1994, the state and the National Union for the Pharmaceutical Industry (SNIP) have periodically signed ‘framework agreements’. In the framework agreement signed in June 2003 for the 2003–6 period, the pharmaceutical industry and the state undertook to foster the rational use of drugs and the development of generic drugs [8].

The French Government has created a fast-track registration system with lower registration fees in order to expedite price and reimbursement decisions on generic medicines [1].

Reference pricing
A reference pricing system (RPS) Tarif Forfaitaire de Responsabilité by active substance was launched in 2003 for those active substances with generic medicine substitution rates of less than 45% [5] and consists of a list of 207 generics groups, ‘le répertoire’ [6]. The average price of generic medicines determines the reference price (RP) [5]. The list and reference prices are the responsibility of the Economic Committee for Health Care Products (CEPS) [6].

Following the implementation of the RPS, the price of 65% of originator medicines dropped to the level of the RP. Furthermore, as reference groups are organised by active substance, re-allocation of demand away from a RPS group to patented medicines with a similar therapeutic indication seems to have occurred [5].

In the government plan to reduce the deficit, all RP levels and the prices of originator products (‘princeps’) in a generic drug group were reduced by 15% at the beginning of 2006 [6].

Abandoning the 45% mark, the Generics Follow-up Committee (Comité de Suivi des Génériques), which sets the RPs, now considers generics penetration below 60% after one year on the off-patent market as the cut-off point for under performance [9].

International price comparison
Medicine prices in France are set according to the average prices in four reference countries–Germany, Italy, Spain and the UK–for identical or comparable products [10, 11].

Incentives for physicians
In France there are no prescribing budgets for physicians, however, there are prescription targets with financial incentives [4].

In France, physicians have tended to be reluctant to prescribe generic medicines because they value their prescribing freedom, are visited by originator medicine companies, and are used to prescribing brand-name medicines [5].

Physicians are not obliged by law to prescribe generics [6], however they have some incentives to prescribe generic medicines:

  • Clinical guidelines have been implemented, but no sanctions have been imposed on noncompliance with guidelines [5].
  • Physicians have been allowed to prescribe by INN since 2002. An agreement was struck with physicians’ unions that raised physician fees for patient visits by Euros 5 in exchange for writing at least 25% of prescriptions by INN. No specific penalties for failure to adhere to this agreement were specified. INN prescribing has not been successful to date, with an INN prescription rate of around 7% in the year leading up to May 2005 [5]. Physicians have not met this 25% target, and there seems no sign of pursuing this [9].
  • Patients have a financial incentive to register with a ‘gatekeeping’ GP who determines access to specialist services. As they aim to provide efficient healthcare services, gatekeeping GPs may generate savings by prescribing generic medicines [5].
  • Physicians are contacted by local authorities with a view to encouraging generics prescribing.
  • Physicians are assisted in their prescribing behaviour by a quarterly medicine database published by the Social Security [5].
  • In 2006, restrictions were placed on the number of visits that originator medicine companies can make to physicians for specific categories of brand-name medicines [5].

The health insurance funds also sign a general agreement with physicians’ unions on the application of guidelines to increase economic efficiency in prescription and to promote prescription of generics [6].

In 2009, DAM started concluding individual contracts with physicians in addition to the existing framework agreement with the physician’s association. Representatives of the DAM visit prescribing physicians, to inform them about measures for more rational use of medicines and give them advice [4].

Incentives for pharmacists
The pharmacy sector is highly regulated. France prohibits horizontal or vertical integration of pharmacies, or ownership by non-pharmacists. France has also established rules on the distance between pharmacies and the number of inhabitants per pharmacy in order to control the distribution of pharmacies in the country [12].

Generics substitution has been allowed in France since 11 June 1999 (Art. L5125-23 of the public health code–Code de la Santé Publique, CSP) [6], unless the prescribing physician specifically prohibits substitution. In the case of substitution, the pharmacist is obliged to inform the patient who can refuse substitution. When the physician prescribes a branded originator medicine that is out of patent or a branded generic medicine, the pharmacist can dispense any generic medicine without reference to the physician. If the prescription is issued by INN, the pharmacist may dispense any generic medicine. In 2006, the government set an objective of attaining a generics substitution rate of 70% [5]. In 2010, the generics substitution rate by pharmacists averaged 80% nationally [13].

Until 1999, pharmacists were paid by means of a regressive margin on public prices of medicines, thereby restricting the development of the generic medicines market. Since 1999, pharmacist remuneration consists of a fixed sum of Euros 0.53 per prescription item and a sliding scale margin—26.1% of the amount of the ex-factory price excluding VAT below Euros 23 and 10% of the amount above Euros 23 [5].

To make the dispensing of generic medicines neutral from a financial perspective, pharmacists are guaranteed the same absolute margin in Euros on generic and originator medicines if a 35% substitution rate between generic and originator medicines is attained. If this target rate is not achieved, pharmacists’ compensation is supposed to be reduced, although this has never actually happened [5]. However, when the reference price becomes applicable to a generic pharmaceutical class, there is no longer any incentive for the pharmacist, whose margin will be based on a percentage of the generic’s ex-factory price, which is 30–50% lower than that of the equivalent brand-name pharmaceutical [6].

A financial incentive to dispense generic medicines has been created with pharmacists being entitled to receive discounts of up to 10.74% of the ex-factory price for generic medicines compared to discounts of 2.5% for originator medicines. In practice, these discount ceilings were not adhered to. In 2004, estimates of discounts awarded to pharmacists amounted to 45% for generic medicines and 6% for originator medicines. Consequently, pharmacists are included in the Jacob law which regulated discounts awarded in the distribution chain to a maximum of 20% in 2006 and 15% in 2007 [5].

The health insurance funds sign agreements with pharmacists to promote generics substitution [6].

As of 2008, according to the ‘Chatel’ Law No. 2008-3 of 3 January 2008, the maximum discount/rebate for reimbursable generics is 17% of the ex-factory price, whether or not it is directly supplied to the pharmacist and the pharmacist can also benefit from the wholesale margin [6].

Incentives for patients
Patient co-payment consists of a fixed amount per prescription of Euros 0.5 per package with an annual ceiling of Euros 50 since 1 January 2008 [6], and a proportion of the public price which varies according to the type of medicine. Patient co-payments are generally covered by an additional private insurance taken out by the patient [5]. The percentage co-payments are therefore too modest—only 1.2% of the cost of the drug in 2008 [14]—and subject to significant exemptions to actively influence drug consumption by patients [7].

In 2005, patients suffering from a chronic illness and who regularly take an originator medicine were contacted by the third-party payer to inform them of the existence of a generic drug equivalent. In the first instance, patients were sent a personalised letter. If consumption patterns did not change, patients received a telephone call. This policy measure follows experiments indicating that nearly half of patients started using a generic medicine after they had been contacted (Medical Insurance, 2005) [5].

The social health insurance DAM organises information activities targeted at patients [4].

Policy analysis

Key factors aiding the development of the generic medicines market

  • Since January 2002, physicians are allowed to prescribe a drug by its generic and not its brand name, which was not previously the case [8].
  • Some policy measures to encourage physicians to prescribe generic medicines have been taken in recent years [5].
  • Generics substitution by pharmacists is allowed [9].
  • Substitution of generics for originator medicines is financially attractive to pharmacists [5].
  • Information activities have been organised for patients [4].

Key factors hindering the development of the generic medicines market

  • In the 1990s, the French generics market was inhibited by legislation extending the period of patent protection, low medicine prices, the prescription of brand-name medicines by physicians, and a financial disincentive for pharmacists to dispense generics [5].
  • Prices for generics are relatively low compared to other European countries [9].
  • The law prohibits the automatic substitution of one biological medicine for another without the consent of the treating physician. The reason given is that innovator biotech products and follow-on medicines are not identical [5].
  • Generics have tended to lose their price advantage compared with originator medicines as a result of the RPS [5].
  • Medical students are not taught to prescribe by INN at medical school.
  • Prescribing by INN is voluntary for physicians in France [9] and there are no other major incentives for them to prescribe generic products.
  • There are no incentives for patients to opt for cheaper generic medicines [5].


1.  Bongers F, Carradinha H. European Generic medicines Association (EGA) Health Economics Committee. How to increase patient access to generic medicines in European healthcare systems. 2009 Jun.

2.  Dylst P, Simoens S. Generic medicine pricing policies in Europe: current status and impact. Pharmaceuticals. 2010;3:471-81.

3.  Kanavos P, Taylor D. Pharmacy discounts on generic medicines in France: is there room for further efficiency savings? Curr Med Res Opin. 2007;23(10):2467-76.

4.  Vogler S, Schmickl B. Rational use of medicines in Europe. Gesundheit Österreich GmbH/Österreichisches Bundesinstitut für Gesundheitswesen (GÖG/ÖBIG). 2010 Feb.

5.  Simoens S, De Coster S. Sustaining generic medicines markets in Europe. 2006 Apr. [monograph on the Internet]. Brussels, Belgium, European Generic medicines Association (EGA) [cited 2012 Jun 10]. Available from: www.egagenerics.com/doc/simoens-report_2006-04.pdf

6.  Van Ganse E, Chamba G, Bruet G, Becquart V, Stamm C, Lopes S, Marty C. Pharma profile France. Pharmaceutical Pricing and Reimbursement Information (PPRI). 2008 Jul. Available from: tp://ppri.oebig.at/Downloads/Results/France_PPRI_2008.pdf

7.  Kanavos P. Generic policies: rhetoric vs. reality. Euro Observer. 2008;10(2):1-12.

8.  Sandier S, Paris V, Polton D. Health care systems in transition: France. WHO Regional Office for Europe. European Observatory on Health Systems and Policies. 2004;6(2):1-156.

9.  Österreichisches Bundesinstitut für Gesundheitswesen (ÖBIG). Surveying, assessing and analysing the pharmaceutical sector in the 25 EU Member States. 2006 Jul.

10.  Mrazek MF. Comparative approaches to pharmaceutical price regulation in the European Union. Croatian Medical Journal. 2002;43(4):453-61.

11.  Vogler S, Habl C, Leopold C, et al. PPRI Report. European Commission, Directorate-General Health and Consumer Protection and Austrian Federal Ministry of Health, Family and Youth. 2008 Jun.

12.  European Commission. DG Competition Staff Working Paper. Pharmaceutical Sector Inquiry Preliminary Report. 2008 Nov 28. Available from: ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf

13.  Mutualité Française. Favoriser les génériques dans tous les départments. [Promote generics in all departments]. [monograph on the Internet]. Paris, France, Mutualité Française [cited 2012 Jun 10]. French. Available from: www.mutualite.fr/L-actualite/Kiosque/Revues-de-presse/Favoriser-les-generiques-dans-tous-les-departements/(language)/fre-FR

14.  European Federation of Pharmaceutical Industries and Associations (EFPIA). The pharmaceutical  industry in figures. 2010.

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