French Drug Sector "Solidarity" Payments

How the 2.5 billion French franc ($512.3 million) "solidarity" contribution to be paid by 334 French drug firms under the Juppe plan (Marketletter November 20) is to be made, and how each company's payment is to be calculated, remains unclear. The industry association, the SNIP, remains silent.

Jean Marmot, secretary-general of the social security accounts commission, who will decide the payment machinery, was expected to make initial proposals on this "exceptional and provisional" contribution on or about December 20. The problem of equity is intensified by the fact that the government has signed hundreds of individual contracts with the companies over volume sales and drug prices. In addition to payment proposals, Mr Marmot is expected to focus on generic drug development, called for in the Juppe plan, and reimbursement of specialties.

An initial hint of how the payment machinery might work came in a leaked report in the medical daily Impact Medicin. This suggests that the calculation of what each firm must pay will be based only partly on 1995 sales growth, with each company having to repay 3.5%-6% of the value of its reimbursable sales inside France. However, the Social Affairs Ministry says this proposal is "hypothetical," and it is understood that drugmakers are negotiating with the Economic Committee on Drugs. Talks revolve around "a solution which will take into account the actual extent by which each drug company has exceeded its volume sales contracts" agreed in the past year, says a source close to the talks.