French Pharma's Forecasted Market Dip



Pharma IQ
03/14/2017

Experts have forecasted that the French pharmaceutical market is heading for a period of stagnation, with the market value set to shrink by $1billion over the next four years.

Research from consulting firm Global data has predicted that the pharmaceuticals market in France is set to decline from $35.5 billion in 2017 to $34.16 billion in 2021, representing a negative compound annual growth rate of 1%.

The company’s latest report states that despite France’s robust public health insurance system and rising elderly population, increasing pressure on pharmaceutical selling prices, patent expiration of branded drugs and foreign exchange fluctuations will place pressure on growth.

The government is currently focusing on the use of generics as a cost-containment tool to reduce healthcare expenditure. Indeed, the generics market is mainly driven by a favourable regulatory regime and a continuous wave of patent expiries, acting as a barrier to pharmaceutical market growth.

France follows external reference pricing, which is linked with other European countries such as Germany, Spain, Italy, and the UK. A price cut by any of these countries’ governments will quickly translate into price reductions in France, and repeated price cuts have curtailed the rise in healthcare spending.

France’s reimbursement policy is grounded in clinical effectiveness rather than the cost-versus-benefit approach that other countries such as the US and the UK employ. This means that pharmaceutical companies take a higher risk in order to see returns on innovative products and new drugs have to demonstrate a level of improvement over existing products, which some perceive as a deterrent to investment.

Healthcare companies looking for opportunities within 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. Financial incentives and tax credits from the French government to support pharmaceutical R&D will promote new prospects for small biotechnology companies, a growing number of which have been operating in France over the past decade.

Recently a personalised medicine project funded by the French Université Paris-Saclay saw researchers discover yeasts with abilities to trigger immune The yeasts produced lymphocyte killers which can locate and eradicate cancerous cells. responses that target cancer. Initial tests were conducted in mice using skin cancer cells.

Clinical trials are underway in the US and according to reports no significant side effects have been located.

With a 12.8 million Euro deficit in France’s 2015 budget, the French government announced on 24th September 2015 plans for the Projet de Loi de Financement de la Sécurité Sociale 2016 (PLFSS; Social Security Finance Bill 2016). For the second consecutive year, the PFLSS cost-containment measures included a heavy focus on drug expenditure.

The healthcare expenditure focus of the 2016 PLFSS set out measures to conserve around 3.4 billion within the budget of the health division of the national Social Security. Of this, 50% of the cost curtailment comes from reducing the National expenditure on pharmaceuticals. According to Dr Errard, President of the French Pharmaceutical Companies Association that represents pharmaceutical manufacturers: … drugs represent only 15 % of the total healthcare expenditure [in France], yet now the authorities are trying to cut their savings by half by targeting on this industry. Dr Errard went on to say:  the important changes that this healthcare system really needs have been delayed year after year. The Federation of Pharmaceutical Unions of France report that between 2010 and 2016 price cuts to pharmaceuticals have risen three-fold.