After that, prices can rise at the same rate as inflation. Provincial governments negotiate further discounts on drugs. The French health-care system, which covers the entire population, decides which drugs are eligible for reimbursement and sets reimbursement prices. The government contracts with the pharmaceutical industry to set an annual ceiling on total drug spending. If this is exceeded, drug companies make payments to cover the shortfall.
Drug companies set their prices freely.
Reimbursement in the national health-care system, however, is controlled based on an evaluation of a drug's therapeutic value. All drugs in the same therapeutic class are reimbursed at the same price. Also, limits on total spending for prescription drugs are enforced. The national health-care system limits prices to the average charged in 12 European countries. Drugs priced higher than this average are removed from the reimbursement list.