Reuters Health Information: France uses tax to put pressure on hepatitis C drug prices
France uses tax to put pressure on hepatitis C drug prices
Last Updated: 2014-09-30
By Natalie Huet
PARIS (Reuters) - France will tax drugmakers whose costly
hepatitis C drugs threaten to throw off course its healthcare
budget, the government has said, heaping pressure on
pharmaceutical companies like Gilead Sciences to cut their
The Socialist government said it had designed a "progressive
contribution scheme" ensuring all patients can access new and
more effective treatments against the liver-destroying virus,
while limiting the burden of these drugs on state finances.
The government will selectively tax drugmakers when the
total cost to the state from their hepatitis C drugs exceeds a
certain amount each year, Health Minister Marisol Touraine said,
as she unveiled the country's 2015 social security budget bill
If social security spending on hepatitis C drugs exceeds 450
million euros ($567 million) in 2014, the makers of those drugs
will be taxed based on the revenue they had reaped in excess of
that cap, the ministry said in a presentation.
In 2015, the tax will apply beyond a 700 million euro cap,
Details of the new tax should be presented to lawmakers in
October and a vote on the budget is due by the end of the year.
Some 200,000 people in France are infected with hepatitis C
and treatments for the virus could cost the state-run healthcare
system as much as 1 billion euros this year, according to
reports in newspapers Le Monde and Les Echos.
The ministry declined to comment on any estimates.
LOWER CURE RATES
With its move, France is raising pressure on U.S.
biotechnology company Gilead, which obtained regulatory approval
for its hepatitis C drug Sovaldi in Europe last January, but is
still negotiating its official price in France with
representatives of the economy and health ministries.
A representative for Gilead in Europe could not immediately
be reached for comment. Gilead has argued that Sovaldi's price
is comparable to older medicines that require longer treatment
duration with much lower cure rates and nasty side effects.
Sovaldi cures well in excess of 90% of patients in as little
as eight weeks of treatment. But its price has fueled sharp
criticism from governments and private insurers alike.
Sovaldi currently costs around 56,000 euros ($70,000) in
France and $84,000 in the United States for 12 weeks of
treatment. The U.S. price works out to as much as $1,000 per
Sovaldi is on track to be one of the world's biggest-selling
drugs, set to rake in close to $12 billion in revenue in 2014 -
its first full year on the market - according to forecasts
compiled by Thomson Reuters Cortellis.
Rivals Merck & Co and AbbVie are also racing to develop
next-generation hepatitis C treatments that cure most people of
the virus in a shorter timeframe.
Hepatitis C virus, or HCV, is spread through blood, often
via contaminated needles, and causes cirrhosis and liver cancer.
Approximately 150 million people in the world live with the
infection, most of them in low and middle-income countries.