Pricing of medicinal products

The price of a reimbursable medicinal product is set by agreement between the exploitant company and the Economic Committee for Health Products or, failing agreement, by decision of that Committee. Article L. 162-16-4 of the French Social Security Code lists the criteria: the improvement in actual clinical benefit, the price of medicinal products with the same therapeutic aim, the forecast or actual sales volumes and the foreseeable and actual conditions of use. The price of non-reimbursable medicinal products dispensed in community pharmacies is unregulated.

Course of the negotiation

The negotiation opens after the opinion of the Transparency Committee, which sets the actual clinical benefit and the improvement in actual clinical benefit. The company files a price application together with its sales forecasts. The Committee weighs the rating obtained against the prices of comparators and, where the improvement is significant, against the prices charged in other European States. Directive 89/105/EEC requires Member States to decide on price and reimbursement within set time limits, which frames the overall length of the procedure.

List price and net price

The price published in the Official Journal is often not the one actually borne by the national health insurance system. The confidential rebates paid by the company reduce the real cost, which makes it possible to reconcile a high list price, useful as an international reference, with controlled net expenditure. This duality must be borne in mind in any economic analysis, whether valuing an asset or calculating a loss.

Price in patent litigation

Generic entry generally triggers a reduction in the originator’s price that is difficult to reverse afterwards. In an at-risk launch, this price erosion is a major head of loss if the patent is held valid and infringed, alongside lost sales. It also weighs in the balancing of interests carried out by the court hearing an application for provisional measures. The assessment of lost profits must then reason on net prices and on the price trajectory the medicinal product would have followed absent infringement.

Key points

The price of a reimbursable medicinal product is administered and negotiated, and depends first on the improvement in actual clinical benefit. List price and net price should always be distinguished, and that distinction built into loss calculations. Where generic entry is threatened, the price effect must be documented before any application for provisional measures.

---

This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats acts in pharmaceutical patent disputes and on the medicines regulatory questions that accompany them, from the marketing authorisation to the supplementary protection certificate.

Pharmaceutical patents and medicines regulation · Pharma case law · Tell us about your situation