Country Reports : France: The French Pharma Revolution - Pharmaceutical Executive

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Country Reports : France: The French Pharma Revolution


Pharmaceutical Executive


Pros and Foes of the system

"France has kept up with the world market albeit with some notable differences, namely in terms of our social security and healthcare systems", explains Jean Pierre Cassan, honorary chairman of the LEEM: "French people have always received good healthcare: you can see your doctor when you want, we have access to the drugs we need, and our generous system caters for all, even the very poor."


Breakdown of turnover in France in 2007 + Export
While the Assurance Maladie and the Sécurité Sociale have guaranteed growth and stability in the healthcare industry, France, like many mature markets, is currently confronted with chronic deficits due to longer life expectancy, demographic imbalance, and rising treatment costs. With blockbusters' patents expiring and poor pipeline issues, newly introduced cost containment efforts are changing the market: stricter price controls, promotion of the use of generics and OTC products promotion.


Véronique Robours-Mory, General Director of Nordic Pharma France & Belgium
As a result, French market segments are reacting unequally. While generics, OTC and hospital markets are still growing very fast (between 12% and 15%), the market for prescription drugs sold in pharmacies shrank in 2009 by 0.8% and the overall market slowdown should continue until 2012, directly impacted by a €400 million ($480 million) saving plan mainly targeting reimbursable prescription drugs. A direct consequence is the mutation of marketing organizations with drastic cuts in the number of medical visitors, and a market reorganization along the lines of high tech expensive drugs and "low cost" products.

Valuing Innovation

In a context of regulated prices and cost containment, pricing is obviously significant. Finding the right balance between the system's sustainability and fair prices rewarding innovation is critical.

French authorities tried to put a pricing system that would focus on innovation and reward real improvement compared to past treatments. AFSSAPS, France's pharmaceutical equivalent to the USFDA, looks to provide a completely transparent view of their operations, which, according to its director Jean Marimbert, is "a necessary action if we want the outside world to trust [us]."

"It's simple to explain as the market place doesn't work for drugs for quite serious reasons. Primarily, the end-user does not have to pay in our market, so logically when you do not have to pay price does not have an influence. Somebody must interfere in a situation like this which is where CEPS comes in," explains Noel Renaudin, president of the CEPS (health products' economic committee) the organization in charge of setting the prices.

Renaudin explains: "We reward innovation by pricing through assessment that has been centralized under the High Authority for Health (HAS). When a drug looks to come to market, the company who produces it asks for an evaluation from the commission. There are three criteria in this discovery process, the first of which is satisfaction of medical demand in the market. Secondly, the improvement of medical benefit which we obtain by comparing the new drug against already available options. The grades for this level range from I-V where I means significant step forward for medicine and V indicates no improvement. Lastly, the distinguishing characteristics and size of the target population are examined."

"Thus for innovations that are considered to be important enough we accept to pay what we refer to as the 'European price' so that the developer is appropriately rewarded. The discussion in this scenario is not necessarily about the price as it lies within the European standard but rather the volumes and conditions. If the new drug does not offer anything interesting in comparison to those already on the market, then we should have to pay less."

Renaudin believes: "The best approach is to reward innovation through merit rather than allowing money to go indifferently to whatever drug comes to market." The system not only looks great on paper; it actually works and Renaudin has been praised by the industry for his innovative approach.

Véronique Rebours-Mory, general director of Nordic Pharma France and Belgium, points out the environment's challenges, which go beyond getting a fair price for your drugs but also include a negotiation on volumes and target population. "The competition in this market is becoming increasingly difficult each day and the authorities put a lot of pressure on the sector...for each product there is a strict price negotiation which is long and difficult. If we sell more than planned we have to give some money back.... Having said that, it's undeniable that the French market is still very attractive and the continuous growth of Nordic Pharma France proves that."

According to Rebours-Mory, France is now leading the group in terms of revenues and has become Nordic Pharma's most dynamic subsidiary. Since 2003 Nordic Pharma has launched more than 10 products in oncology, gynecology and rheumatology on the French market, "but not every new player is as successful as us", she notices.


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