The pharmaceuticals market in France will decline from $35.5 billion in 2017 to $34.16 billion in 2021, according to the research and consulting firm GlobalData, which has released a 259-page report called “CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – France.” This scenario represents a negative compound annual growth rate of 1% during that time period.
GlobalData’s February report cites positive factors in France’s pharmaceutical market, including the country’s “robust public health insurance system and rising elderly population, tax incentives, a substantial skilled workforce and high public healthcare expenditure.”
“Numerous incentives, such as the abolition of corporate tax and the Research Tax Credit to support research and development, are enhancing the competitiveness of healthcare enterprises and will help to sustain the pharmaceutical market,” said Joshua Owide, GlobalData’s Director of Healthcare Industry Dynamics.
However, increasing pressure on drug selling prices, patent expiration of branded drugs and foreign exchange fluctuations are interfering with growth. Furthermore, the French government is currently focusing on the use of generics as a cost-containment tool to lower healthcare expenses. Driving the generics market is a favorable regulatory regime and a continuous wave of expiring patents, which are serving as a barrier to drug market growth.
According to Owide, “While patented drugs dominate France’s pharmaceutical market, the volume of prescribing attributed to generic drugs will shift closer to levels seen in the rest of Europe, restricting French market growth.”
France entered the generics market relatively late, as compared to the United Kingdom and Germany. In 2008, generic drugs made up only 21.7% of France's drug market in terms of volume. This number had increased to 30.2% by 2013, the GlobalData report said. The volume of the generic drug market increased from 23.6% in 2009 to 36.3% in 2016.
Because France follows external reference pricing, which is connected to other European countries, including Germany, Spain, Italy, and the United Kingdom, a price reduction by any of these countries’ governments will rapidly lead to price reductions in France. Multiple price cuts have limited the rise in healthcare spending.
In France, the healthcare reimbursement policy is based on clinical effectiveness instead of the cost-versus-benefit approach that other nations, such as the United States and the United Kingdom use. Because of this approach, drug companies take a higher risk in order to see returns on innovative products. “New drugs have to demonstrate a level of improvement over existing products, which can be seen as a deterrent to investment,” the report said.
GlobalData recommends that healthcare companies seeking opportunities in the French market should focus on the growing demand for innovative medicine and biotechnology, which will “enable new therapies to command a premium price and influence the value of the market.” It concludes that financial incentives and tax credits from the French government to support pharmaceutical research and development will enhance new prospects for small biotechnology companies. Many of these companies have been operating in France over the past 10 years.
Ilene Schneider is the owner of Schneider the Writer (www.schneiderthewriter.com), a firm that provides communications for health care, high technology and service enterprises. She has edited or written for numerous technical publications, as well as serving as a publicist for various medical, biotechnology and pharmaceutical companies.