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France Pharmaceuticals and Healthcare Report Q3 2011
Business Monitor International, June 2011, Pages: 93
Business Monitor International's France Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on France's pharmaceuticals and healthcare industry.
BMI View: France is one of the leading global pharmaceutical markets by size, propped up by its large population, of just short of 63mn. The French are traditionally fond of patented and branded drugs and are also large consumers of medicines on a per capita basis. In fact, the generous reimbursement system in France has partly been blamed for the over-consumption of pharmaceuticals in the country. However, factors such as the upcoming patent expirations and the need for fiscal austerity will continue to weigh on the French pharmaceutical’s annual growth rates.
Headline Expenditure Projections
- Pharmaceuticals: EUR30.23bn (US$39.21bn) in 2010 to EUR30.16bn (US$43.13bn) in 2011; -0.2% in local currency terms and +10.0% in US dollar terms. Forecast up moderately from Q211 due to readjusted historical market size.
- Healthcare: EUR228.59bn (US$303.21bn) in 2010 to EUR234.72bn (US$335.65bn) in 2011; +2.7% in local currency terms and +10.7% in US dollar terms. Forecast up moderately from Q211 due to macroeconomic factors.
- Medical devices: EUR10.13bn (US$13.43bn) in 2010 to EUR10.42bn (US$14.89bn) in 2011; +2.8% in local currency terms and +10.9% in US dollar terms. Forecast up moderately from Q211 due to macroeconomic factors.
Business Environment Rating: France remains ranked fourth in our latest update of the Business Environment Rating (BER) matrix for the ten Western European countries, as its composite score stands at an unchanged 67.1. However, this high ranking is propped up more by the strong regulatory environment, rather than by real opportunities for higher per-capita drug consumption, which is reflected in the fact that France’s risks score is considerably higher than its rewards profile figure.
Key Trends & Developments
- A recent survey has revealed that the French biotechnology sector made good progress in terms of fundraising and product pipelines in 2010, partly owing to support from the government. The survey found that venture capital (VC) funding in the French biotechnology sector registered a 56% growth to EUR148mn (US$210.46mn) in 2010, compared with a 65% drop in 2009. French state innovation agency Oseo made an investment of EUR42mn (US$59.73mn) in 344 projects in 2010. More than 263 companies responded to the survey, which was carried out by France Biotech, the French association of life science companies.
- Anglo-Swedish pharmaceutical company AstraZeneca is seeking protecting its patent for the blockbuster heartburn and stomach ulcer drug Nexium (esomeprazole) in France, reported Reuters in March 2011. The company underwent an initial hearing for a patent protecting the drug in a French court on March 17 2011. Two units of Ratiopharm, a subsidiary of Israeli generic drugmaker Teva and the French firm Ethypharm, has confronted patents protecting the drug. Nexium generated sale of US$5bn in 2010.
- In March 2011, France-based BioMérieux has entered a partnership with French speciality pharmaceutical company Ipsen for the development of theranostics to treat hormone-dependent cancer. The companies will work together to establish a companion drug and diagnostic test, particularly for the prevention and treatment of prostate and breast cancer, as well as neuroendocrine and pituitary tumours.
- In May 2011, Sanofi-Aventis's shareholders have approved a proposal submitted by the board to shorten the company's name to Sanofi and use it with immediate effect. The board proposed a name change because a six-syllable name is difficult to pronounce in several countries, such as China, according to CEO Chris Viehbacher. The new name is shorter, simpler and easier to pronounce. A new company logo has also been approved.
BMI Economic View: Following GDP contraction in 2009, French economy grew in 2010 and is expected to continue doing so in 2011. In fact, it is the predominantly domestic-demand driven performance of core eurozone economies, including France, that is particularly encouraging and chimes with our long-held view that the outlook for the single-currency bloc was significantly more constructive than markets assumed at the time. French household consumption – in addition to capital investments – remained the key drivers of growth, which will be an encouraging sign for the consumption of medicines paid for by out-of-pocket sources.
BMI Political View: While France’s economic growth appears assured, the generosity of the country’s pharmaceutical reimbursement coverage has been highlighted as one of the reasons for over-consumption of medicines. This area is likely to come under increased scrutiny in the coming years. In fact, as has been the case in many other European countries, the French authorities have been forced to introduce fiscal austerities in a bid to contain debts, with some of such measures already negatively impacting pharmaceutical and healthcare spending.
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