Reference ID:
10PARIS237
   
Created:
2010-02-26 12:07
   
Released:
2011-08-30 01:44
   
Classification:
UNCLASSIFIED//FOR OFFICIAL USE ONLY    
   
Origin:
Embassy Paris

              


VZCZCXRO4176

OO RUEHIK

DE RUEHFR #0237/01 0571207

ZNR UUUUU ZZH

O 261207Z FEB 10

FM AMEMBASSY PARIS

TO RUEHC/SECSTATE WASHDC IMMEDIATE 8414

RUCPDOC/USDOC WASHDC IMMEDIATE

INFO RHEHAAA/WHITE HOUSE WASHDC

RUCNMEM/EU MEMBER STATES COLLECTIVE


UNCLAS SECTION 01 OF 02 PARIS 000237

 

SENSITIVE

 

SIPDIS

 

STATE FOR EB/TPP/IPE JOELLEN URBAN

STATE PASS USTR

COMMERCE FOR ITA

 

E.O. 12958: N/A

TAGS: ECON ETRD EIND EINV EUN KIPR FR

SUBJECT: FRANCE SPECIAL 301 2010 ANNUAL REVIEW

 

Refs: A) Paris 336 B) Paris 1499  C) Paris 1560  D) Paris 1267  E)

Paris 1729

 

PARIS 00000237  001.2 OF 002

 

 

¶1. (SBU) Summary.  Post has reviewed PhRMA's Special 301 submission

on France and recommends against inclusion of France on the 2010

Special 301 Watch List.  France has, in fact, improved the

pharmaceutical R & D environment and post sees no evidence of lack

of IPR protection or market access.  France has also been at the

forefront of copyright protection and anti-counterfeiting on the

Internet,  establishing Europe's first graduated response

enforcement mechanism and a public-private sector charter against

online counterfeits.  End summary.

 

PhRMA Concerns

--------------

 

¶2. (SBU) As we reported in 2009 (ref A), France is cutting costs on

state health insurance spending on pharmaceuticals, making for a

challenging environment, particularly for less innovative

prescription drugs.

Pricing and distribution margins on non-reimbursable pharmaceuticals

are unregulated in France.  Pharmaceutical companies that do not

seek to include their products on the list of drugs to be reimbursed

by the state health insurance can market products immediately upon

receipt of market authorization (either via the centralized European

procedure or via national procedure).  The GOF is employing

different strategies to limit the cost of its reimbursable drug

program, including aggressive use of generics and campaigns to

reduce consumption.

 

¶3. (U) Companies wishing to get a drug included on the reimbursable

list first approach France's "Transparency Committee."  Made up of

epidemiologists, pharmacologists, medical doctors and other experts,

the Committee assigns an "innovation" rating from ASMR I to ASMR V

(I representing a "major therapeutic advance," V "no treatment

benefit") based on clinical criteria.  Once the ASMR rating has been

assigned, price negotiations with the Economic Committee for Health

Products (CEPS) ensue.  Innovative outpatient drugs are considered

in an accelerated process, which who is now extended to all the

drugs up to ASMR III and some low-cost ASMR IV drugs.  Maximum delay

for setting a price during the registration of a new drug is 180

days.  According to a 2008 working paper by the Institut de

Recherche et Documentation en Economie de la Sante (IRDES), the

average was 164 days in 2007.

 

¶4. (U) IRDES also noted that the structure of pharmaceutical sales

in France has changed in recent years to favor more expensive

products.  IRDES concluded that French patients and doctors both

"seem to prefer innovative and expensive drugs, even when less

expensive ones are as effective," and that the possibility of higher

prices for innovative specialties "makes France an attractive

location for the early commercialization of innovative therapies."

Therefore, notwithstanding the GOF's cost-cutting measures and

reliance on generics, innovative new drugs benefit from accelerated

access to the reimbursable list and are still preferred by doctors

and patients.

 

¶5. (SBU) Furthermore, as noted favorably in PhRMA's Special 301

submission, President Sarkozy personally re-convened the relatively

inactive Strategic Council for Health Industries (ref B) that

brought together himself, five government ministers, and 15 CEOs of

major U.S. and other foreign pharmaceutical and medical device

companies to discuss how the health sector can become an engine of

economic recovery in France.  During the meeting, the GOF announced

it will begin to allow pharmaceutical companies to charge two prices

for drugs: one fixed price for drugs reimbursed by government health

services and an unregulated price for non-reimbursable drugs and/or

exports.  This pricing strategy would prevent parallel imports that

undercut market strategy and sales in export markets, a key issue

for U.S. firms.  Sarkozy and the CEOs also signed an agreement for a

newly-established 140 million euro (USD 208 million) investment fund

for innovative firms in the medical biotech sector.  Finally, the

GOF mandated that there be counterfeiting specialists in all

pharmaceutical companies capable of providing information in real

time, and over the Internet, to authorities at ports and airports.

 

 

¶6. (SBU) These measures, along with the fact that no pharmaceutical

companies have requested post's assistance with IPR or market access

issues, support post's conclusion that France should not be included

on the Special 301 Watch List for failure to protect the

intellectual property rights of, or allow market access for,

pharmaceutical products.  When asked throughout the year about

PhRMA's longstanding concerns, American firms operating in France

responded that they are able to work with the applicable

 

PARIS 00000237  002.2 OF 002

 

 

constraints.  While some companies such as Abbott Labs choose to

create a larger base of operation in Ireland than in France, these

decisions are based on Ireland's more liberal fiscal policies, good

transportation connections, and English-speaking population rather

than a lack of market access in France.

 

France's Aggressive Copyright Protection

----------------------------------------

 

¶7. (U) In other areas, such as copyright protection, France has also

been a trailblazer in 2009.  The GOF passed the "Creation and

Internet law" that introduces a new legal framework to deter and

sanction online piracy. (Ref C and D)  A signature feature is the

graduated response ("three strikes") to illegal downloading wherein

a public authority (HADOPI) will issue escalating warnings to

illegal downloaders that, if unheeded, could result in a cut-off of

Internet access.  Despite strong political opposition and repeated

legal challenges, a reformulated version of the three-strikes

provisions will go into effect in 2010, with the first warnings to

be issued this summer.  The GOF also convened a commission to

develop a legal alternative to illegal downloading and financing

cultural content creation (ref E).  Unfortunately, one idea

developed was to tax online ads (the "Google tax") as a way to

compensate authors (mainly publishers) for their losses.  This idea

is still alive in 2010.  President Sarkozy is taking an

anti-competitive approach and French authorities are now studying

whether Google abused its dominant position in the online

advertising market.

 

Anti-Counterfeiting Efforts

---------------------------

 

8.. (U) France also developed Europe's first charter against

counterfeiting on the Internet, signed by Minister of Economy

Christine Lagarde, major trade federations (Unifab), individual

corporations (Nike, Chanel, and L'Oreal), and two e-commerce

companies (Priceminister and 2xmoinscher).  Although nonbinding, the

charter calls for better methods to detect fakes and to inform

clients of the e-commerce companies' obligation to guarantee the

authenticity of goods sold on their sites.  While American giants

Ebay and Amazon did not sign, the charter demonstrates that the

government takes an active role in promoting anti-counterfeiting

efforts.

 

9.. (SBU) Comment:  France is at the forefront of IPR protection in

Europe and may, in the case of aggressive three strikes laws, may be

more stringent than the U.S.  France's national health insurance

cost containment efforts do not deny adequate and effective IP

protection to the U.S. pharmaceutical industry, nor do they prevent

fair and equitable market access.  Post will continue to support

U.S. pharmaceutical industry efforts to expand markets in France,

but recommends against France's inclusion on the 2010 Special 301

Watch List.

 

PEKALA