Almost one and a half years after the launch of the sector inquiry (see here), the French Competition Authority ("FCA") has released its conclusions on the functioning of competition in the pharmaceutical sector.
The FCA's recommendations mainly focus on increasing competition for over-the-counter pharmaceuticals at the retail level and the revision of the remuneration scheme of wholesalers.
While supporting the preservation of pharmacists' monopoly in selling prescription medicines, the FCA formulated a number of recommendations aimed at (i) enhancing competition between pharmacists and (ii) decreasing the prices of over-the-counter pharmaceuticals.
The FCA further recommends that pharmacists be empowered to provide certain medical acts and services (including vaccinations, detection of certain diseases, basic medical advices, and delivery of prescription drugs in case of benign diseases).
Disconnecting the wholesale margin from the price of pharmaceuticals
The remuneration level of wholesalers has been repeatedly called into question, as it is would not compensate for the public service obligations imposed upon wholesalers. The wholesale margin, which exclusively relies on the pharmaceuticals' prices, does not take into account the significant logistical costs borne by wholesalers as a result of their public service obligations.
The FCA therefore proposes to modify the calculation of the wholesale margin, so as to determine it on the basis of either:
Considering the significant financial impact it might have on the French public health insurance system, the FCA recommends that a thorough analysis be carried out before introducing such a modification of the wholesale margin calculation.
The FCA also issued some recommendations regarding biomedical laboratories, including encouraging the creation of large groups of biomedical laboratories, authorizing them to extend their geographical footprint, and authorizing price discounts offered to other biomedical laboratories and public hospitals.
While the government is likely to take over some of the FCA recommendations, such as the extension of the pharmacists' scope of activities, it might prove more reluctant as regards the opening up to competition of over-the-counter pharmaceuticals.