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France Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Sep 2011, Pages: 92
Business Monitor International's (BMI) France Pharmaceuticals and Healthcare Report (Q4 2011) 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 under 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 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: EUR30.00bn (US$39.79bn) in 2010 to EUR29.62bn (US$42.36bn) in 2011; -1.3% in local currency terms and +6.5% in US dollar terms.
- Healthcare: EUR228.90bn (US$303.63bn) in 2010 to EUR234.72bn (US$335.68bn) in 2011; +2.6% in local currency terms and +10.6% in US dollar terms.
- Medical devices: EUR10.13bn (US$13.43bn) in 2010 to EUR10.42bn (US$14.90bn) in 2011; +2.9% in local currency terms and +10.9% in US dollar terms.
Business Environment Rating: France scores well in BMI’s Q411 Business Environment Ratings (BERs) and is ranked fourth in its Western European matrix of ten countries. However, its reward profile of 61 out of 100 is considerably less attractive than its risk score, which scores 77.
Key Trends & Developments
- French multinational drugmaker Sanofi recorded Q211 sales of EUR8.35bn (US$11.94bn), a 0.5% increase on sales of EUR8.31bn (US$11.02bn) recorded in Q210. While this translates as a recovery (Q111 net sales fell by 1.5%), BMI notes that following a 10.6% decline in net income in Q111, Sanofi's profits continued to recede, with the company recording a 13.2% (EUR2.15bn, US$3.07bn) fall in net income in Q211, down from EUR2.48bn (US$3.29bn) in Q210.
- In August 2011, with the aim of improving patient safety and restoring confidence in the country's drug regulatory process, the French government announced a series of proposals that will comprise a bill altering the working practices of drug companies operating in the country.
BMI Economic View: Flat growth in the second quarter and a deteriorating global economic backdrop have prompted BMI to revise down the French real GDP growth forecast to 1.7% this year, from 2.2% previously. This places France's medium-term budget deficit forecasts and sovereign creditworthiness into yet further question, as it looks increasingly difficult for the economy to grow out of its debts. In turn, this could force the government's hand on the fiscal front earlier than previously expected.
BMI Political View: While the case against former IMF Chief Dominique Strauss-Kahn in the US has now been dropped, BMI still does not see much potential for him to run as a candidate in next year's French presidential election. Though President Nicolas Sarkozy's popularity remains weak, the recent political upheaval for the Socialist party will nonetheless result in a close-run election in 2012. However, irrespective of who wins, BMI sees little room for the new government to avoid more pronounced fiscal tightening at home in 2012.
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