Cerba - comment
Cerba and other medical laboratory groups experienced a decline in bond prices following a wider circulation of a report released by the IGAS and the IGF (French government entities), which recommended a recalibration of pricing mechanisms across the broader laboratory sector.
We remain short Cerba on the fundamental view that pricing will remain under pressure.
Key recommendations in the report include the dismantling of existing price and volume agreements, granting the National Union of Health Insurance Funds (UNCAM) greater authority to set prices unilaterally, and amending workforce regulations—such as removing the requirement for one biologist per site. Unsurprisingly, the report triggered concern among laboratory unions regarding the long-term viability of laboratories and the potential erosion of professional autonomy. The Order of Pharmacists also expressed some reservations, although it broadly welcomed several of the proposals.
The next steps will depend on the government's response. However, pricing pressure is expected to persist, given the relatively high operational profitability of laboratories, which remains significantly above the average for the wider human health sector.
The report was jointly published by IGAS, which is responsible for oversight of France’s health, social protection, and labour systems, and IGF, a senior advisory and audit body operating under the Ministry for the Economy and Finance.
The full report, in French, is accessible via the following link.