Purchasing cooperative, commitment to volumes… How hospitals succeed in lowering the price of medicines

Medicines cost Social Security around 25 billion euros per year. In a context where the French are aging and where innovative medicines are increasingly expensive, hospitals are banking on unity to still succeed in negotiating with manufacturers.

Medicines are products that are constantly at the heart of intense commercial negotiations which amount to tens of billions of euros. The key to negotiating discounts from the very powerful drugmakers is to also be very powerful. The 18 French cancer centers have therefore joined together.

The Unicancer network buys 1 billion euros worth of medicines for them each year. “Having a strike force, through the volume of purchases but also our reputation from a scientific point of view, helps us to be able to negotiate with laboratories that have an international dimension”explains Sophie Beaupère, the general director of Unicancer.

To have a match against these American, British or Japanese behemoths is to have weight. And it works when there is competition between laboratories for the same drug, explains Luc Delporte, purchasing director at Unicancer.

“There are molecules whose price has been divided by ten in 5 years.”

Luc Delporte, purchasing director at Unicancer

at franceinfo

Being in a network is therefore the solution to negotiate step by step in this international market: “The attractiveness of Unicancer means that we have a lot of laboratories fighting to enter our markets, and therefore offering us very attractive prices.adds Luc Delporte. There are molecules whose price has been divided by ten in 5 years.”

Savings for Social Security

Breaking prices is also the objective of Walid Ben Brahim, who heads UniHa, a purchasing cooperative which brings together 1,000 French hospitals. For certain generics, reductions go up to 80%: “For a medicine that we could pay 100 euros, its generic costs 20 or 30 euros to the establishment. So these are significant savings for hospitals.“ Unicancer thus saved 18 million euros in 2023 compared to the prices displayed by the laboratories, and UniHa, the hospital purchasing center, 100 million euros. Ultimately, these are savings for Social Security and its policyholders.

But hospitals are unable to obtain these very significant discounts for all medications. To do this, a drug must be produced by several laboratories at the same time to ensure competition. This is the case for chemotherapy, for example.

Commitments on volumes but also over time

On the other hand, reductions cannot be negotiated in the same way for innovative medicines protected by a patent. With a single manufacturer, even if it is difficult, Walid Ben Brahim, the general director of UniHa, still manages to obtain a 5 to 10% discount. This may not seem like much, but for very large volumes of medicines purchased, the bill is affected.

“Some therapies are very expensive for establishmentsexplains the director. They can sometimes cost several hundred thousand euros, or even several million euros, so we can arrive at discounts at the end which represent significant financial volumes for hospitals.“ In fact, these are gene therapies which are now sold for more than 2 million euros per treatment per patient. Against cancer, “Car T” cell therapies cost more than 300,000 euros and certain immunotherapies more than 200,000 euros.

If drug manufacturers are lowering their prices so much, it is for two reasons. This makes it possible to win the French hospital market, which gives them the assurance of selling lots and lots of goods. But there is also an industrial interest: a large order allows predictability of activity over several months for factories. Thus, explains Walid Ben Brahim, the commitment is made on volumes but also on duration. “As the industry must adjust its production cycle, if a hospital commits to purchasing 100 pallets of a medicine, and he actually does it, he will benefit from an end-of-year discount”, he explains.

Thus, the industrial benefit for pharmaceutical laboratories is accompanied at the same time by savings for hospitals and the “Secu”. This year, the government hopes to make a billion euros in savings on Social Security medicines, which represents around 25 billion euros each year.