France's Senate cuts wholesale drugs tax

France's Senate has voted to reduce the special tax on wholesale drugs, as part of the Social Security Finance Bill (PLFSS) for the fiscal year 2007 (which begins January 1). The new rate will be 0.21%, down from 0.28%, although there were calls for the tax' abolition on the grounds that the exceptional circumstances for which it was originally levied have passed, and the French pharmaceutical industry is experiencing an investment slow down.

The government's spending proposals were the subject of a furious debate in the lower house Chambre des Deputes, where the initial plan was for non-clinical health spending to be restricted to 0.8% growth for 2007. This was subsequently raised to 1.1%, at a cost of 200.0 million euros ($256.3 million), following protests from within the governing UMP coalition and from health care professional organizations. However, as the original figure relied upon extending pressure against doctors to prescribe drugs "unnecessarily," tighter price controls and greater prescribing of generics, it is not clear how the extra money and the wholesale tax cut will be financed.