CBI MARKET survey:

The PHARMACEUTICAL PRODUCTS market in FRANCE

CBI MARKET SURVEY

THE PHARMACEUTICAL PRODUCTS MARKET IN FRANCE

Publication date: February, 2010

Report summary

This CBI market survey discusses the following highlights for the pharmaceutical productsmarket in France:

  • France, together with Germany, was the largest pharmaceutical market in the EU in 2007, accounting for approximately 18% of the EU pharmaceutical market. Between 2003 and 2007, France’s consumption of pharmaceutical products increased by an annual average rate of 4.6%, amounting to €25.5 billion in 2007.
  • The share of generic medicines is low in France; they only accounted for around10% of the French pharmaceutical market in 2007. In the same year, France was the fifth largest market for generic medicines in the EU, amounting to €2.4billion, which accounted for 8.8% of the total EU market.
  • In 2007, France was the largest producer of pharmaceutical products in the EU, accounting for approximately 21% of total EU production. France’s production increased by an annual average rate of 2.3% between 2003 and 2007, amounting to €34.3billion in 2007.
  • France was the third largest EU importer and accounted for 11% of total EU imports in 2008. Between 2004 and 2008, French imports increased by an annual average rate of 9.2% in value and 7.7% in volume, amounting to €11.6billion or 182 thousand tonnes in 2008.
  • Developing countries accounted for a very small share of 0.4% of total French imports in 2008. Nonetheless, imports sourced in these countries increased by a significant annual average rate of 0.4% between 2004 and 2008. India and Brazil were the main developing country suppliers in 2008.

This survey provides exporters of pharmaceutical products with sector-specific market information related to gaining access to France. By focusing on a specific country, this survey provides additional information, complementary to the more general information and data provided in the CBI market survey ‘The pharmaceutical products market in the EU’, which covers the EU market in general. That survey also contains an overview and explanation of the selected products dealt with, some general remarks on the statistics used, as well as information on other available documents for this sector. It can be downloaded from

1Market description: consumption and production

Data concerning consumption and production of pharmaceutical products in France are derived from the European Federation of Pharmaceutical Industries and Associations (EFPIA). The latest report from this organisation (The Pharmaceutical Industry in Figures, 2009Update) provides data as of 2007. Data for previous years are derived from previous editions of this report. Please note that data for both consumption and production of pharmaceutical products are given at ex-factory prices.

Consumption

France, together with Germany, was the largest pharmaceutical market in the EU in 2007, accounting for approximately 18% of the EU pharmaceutical market (at ex-factory prices). Between 2003 and 2007, France’s consumption of pharmaceutical products increased by an annual average rate of 4.6%, amounting to €25.5billion in 2007. France’s pharmaceutical consumption increased at a lower rate than the EU’s pharmaceutical consumption, which increased by an annual average rate of 7.3% during the review period.

Please note that data on consumption of specific pharmaceutical products are fragmented and cannot be presented in a structured manner. Additional information can be found under the section ‘Trends in consumption’.

Generic medicines

In 2007, France was the fifth largest market for generic medicines in the EU, amounting to €2.4billion, which accounted for 8.8% of the total EU market. Between 2005 and 2007, the generic medicines market in France increased at a rate of 13%. In spite of being one of the largest pharmaceutical markets in the EU, generic medicines in France only accounted for 10% of this market in 2007. In Germany, the largest generic medicines market in the EU, the value share of generics was 30% in the same year.

The share of generic medicines is low in France because French legislation used to inhibit the use of generics, through the extension of the period of patent protection, as well as by low originator medicine prices, incentives for prescription of brand-name medicines by physicians, and a lack of financial incentives for pharmacists to dispense generic medicines. Most importantly, the French pricing reference system caused generic medicines to lose their price advantage in comparison to originator medicines. Nevertheless, a few recent measures have aided the development of the generic medicines market. Some policies encouraging physicians to prescribe generic medicines were introduced, and dispensing generic products has been made financially more attractive to French pharmacists.

Market segmentation

The French pharmaceutical market can be segmented in two distinct – but interlinked – manners: the dispensing method and the channels through which pharmaceutical products are dispensed to patients.

Regarding the dispensing method, the French market for pharmaceuticals consisted for 82% of prescription products, whereas 18% was non-prescription products in 2008.The channels through which pharmaceutical products are dispensed to patients are divided into two categories: general access pharmacies and hospital pharmacies. Other retail channels exist - only for non-prescription pharmaceutical products – but they account for a small share of pharmaceutical products dispensed in France, as indicated below:

  • General access pharmacies:In France, pharmacies remain the largest channel for the distribution of pharmaceutical products in the French pharmaceutical market. However, the role of pharmacies is decreasing compared to previous years. The recent availability of certain non-prescription products in parapharmacies, grocery outlets and health food shops is the main cause of this development.
  • Hospital pharmacies: they usually handle more complex pharmaceutical products, with specific indications which require stricter safety regulations and patient compliance. Most of the products in these pharmacies are single-dose or unit dose. Hospital pharmacies are usually located in the premises of hospitals, with trained personnel, quality assurance and adequate facilities. In some countries, hospital pharmacies are only used for inpatient treatment and the products channelled through hospital pharmacies in those countries are not available for outpatients. In France, hospitals are allowed to dispense pharmaceutical products to both inpatients and outpatients.
  • Other retailchannels:Certain non-prescription products are now sold in parapharmacies, often part of supermarket, which is a new development in the French pharmaceutical market segmentation (Association of European Self-Medication Industry - AESGP, 2009). Taking into account a ruling by the European court of Justice on the distance-selling of non-prescription and non-reimbursable medicines over the Internet, it seems possible that non-prescription products a French pharmacist can sell via the Internet, if the product is authorised in France. In addition, the pharmacist is responsible for the website, as well as the sales and distribution of non-prescription medicines.

According to EFPIA (2008), the shares of each segment of pharmaceutical sales in France amounted to approximately:

  • Pharmacies (general access): 81%
  • Hospital pharmacies: 19%
  • Other retail channels: 0%

Trends in consumption

  • Consumer behaviour:France has one of the highest per capita consumptions of pharmaceutical products in the world. Access to doctors and, therefore, to prescription medicines is very easy. In fact, a growing number of infections hasbecome resistant to antibiotics and, as a result, the French government is currently attempting to limit healthcare and pharmaceutical expenditure (Espicom, 2007 and 2009).
  • Generic medicines: The market for generic medicines in France is expanding and is expect to continue expanding rapidly in the next few years. This development is boosted by government incentives and the loss of patent protection for multiple high-volume products (Espicom, 2009).
  • Non-prescription medicines:The stagnating market for non-prescription products is also set to expand as a result of government moves to end reimbursement for a wide range of products assigned a low medical value rating(Espicom, 2009). In terms of value, the top-selling non-prescription medicines in France are those to treat respiratory diseases, followed by analgesics and those to treat digestive diseases (French Association of Self-Medication Industry– AFIPA, 2009).
  • Forecast non-prescription medicines: In the coming years, sales are expected to increaseslightly. The government is expected to continue its de-listing from prescription lists in order to promote self-medication.In turn, consumers are becoming more familiar with self-medicating products. Self-service could also indicate a decrease in price of non-prescription medicines, as manufacturers try to attract potential buyers (Euromonitor, 2009).

For more information on trends for pharmaceutical products, please refer to the CBI survey ‘The pharmaceutical products market in the EU’.

Production

In 2007, France was the largest producer of pharmaceutical products in the EU, accounting for approximately 21% of total EU production. The second largest EU producers in 2007was Germany, accounting for a 16% share of total EU production. France’s production increased by an annual average rate of 2.3% between 2003 and 2007, amounting to €34.3billion in 2007. The increase in France’s production of pharmaceutical products was in line with the development of total EU production, which increased at an annual average rate of 3.5% during the review period.

France has approximately 340 pharmaceutical companies, of which all are member of the Association of Pharmaceutical Industry (LEEM). Of these companies, twelve are specialised in the production of generic medicines and are members of the Generic Producers Association. Manufacturers which specialise in non-reimbursable products are members of the French Association of Self-Medication Industry (AFIPA)(Pharmaceutical Pricing and Reimbursement Information - PPRI, 2008).

Regarding generic medicines, the largest company in France is Merck Generics (Merck AG Group), followed by BIOGARAN (Servier Group) and Sandoz (Novartis Group) (PPRI, 2008).

Please note that data concerning the production of specific product groups in France are not available.

In addition to its production, France’s pharmaceutical industry Research and Development (R&D) in 2007 was estimated at €4.2billion, accounting for 18% of total EU pharmaceutical industry R&D. The UK, which had the leading pharmaceutical industry R&D, accounted for a share of 29% of total EU R&D in 2007.

Leading pharmaceutical companies in France:

  • Beaufour-Ipsen SA -
  • Laboratoires Juva Santé -
  • Laboratoires UPSA -
  • Sanofi-Aventis -

Trends in production

  • International competitiveness:Although many multinationals have strategic manufacturing sites in France, the country is gradually losing competitiveness to EU countries which offer more attractive business environments (e.g. Ireland) and to East Asian and South American countries,which offer lower production costs (Espicom, 2009).
  • Acquisition by multinationals:Increasing international competitiveness has resulted in many smaller independent producers in France being acquired by multinational groups. Fournier Pharma, for instance, has been acquired by Belgium’s Solvay, while Negma-Lerads has been acquired by India’s Wockhardt (Espicom, 2009).
  • R&D: Due to an international tendency of multinationals to concentrate pharmaceutical research in their home country or in the USA, France has been losing its role as a research site, with the exception of oncology-related research which, due to a national cancer plan, has remained strong in the country (Espicom, 2009).

For more information on trends for pharmaceutical products, please refer to the CBI survey ‘The pharmaceutical products market in the EU’.

Opportunities and threats

+Francehas remainedthe largest EU market for pharmaceutical products. Moreover, the French population has one of the highest per capita consumption of pharmaceutical products in the world.

+Although still limited, France is also increasing in importance as a market for generic medicines. In fact, the French generic medicines market is increasing at constant rates and is expected to continue increasing in the next few years, which provides good prospects for exporters of pharmaceutical products in developing countries. The market for generic pharmaceuticals is expected to grow in the coming years.

-At the same time, however, France is the largest producer of pharmaceutical products in the EU, which means that a high proportion of the pharmaceutical products consumed in the country is domestically produced and represents a threat to exporters in developing countries,who aim to access the French market.

Exporters should take into account that the same trend can be an opportunity for one exporter and a threat to another. Please, review these opportunities and threats according to your own situation. Chapter 7 of the CBI market survey ‘The pharmaceutical products market in the EU’ presents an example of an analysis of whether a trend/development is an opportunity or a threat.

Useful sources

  • European Federation of Pharmaceutical Industries and Associations (EFPIA) -
  • Pharmaceutical Pricing and Reimbursement Information: France -
  • L’assurance maladie - – France’s social health insurance system (website in French only)
  • The Business Monitor publication ‘The French Republic Pharmaceuticals & Healthcare Report 2008’- provides forecasts on the French pharmaceutical and healthcare industry.
  • Espicom - – the pharmaceutical and medical device knowledge centre.
  • Furthermore, French trade associations mentioned in Chapter 6 of this survey can be useful sources of information.

2Trade channels for market entry

Trade channels

The trade structure for pharmaceutical products across the EU is mostly similar, but reveals slight variations according to the diverse pharmaceutical and healthcare systems existent in each country. These variations hardly affect an exporter’s market approach, since they are related to the way pharmaceutical products are domestically dispensed to the end-consumer. Some of the specific characteristics of the French pharmaceutical trade channels and trends therein are outlined below:

  • According to the National Association of Full-line Pharmaceutical Wholesalers, the pharmaceutical market in France is highly concentrated. Fourwholesalers dominate the market. Groupe O.C.P, part of Celesio has a market share of around 37%, while Alliance Santé, part of Alliance Boots, controls 28% of the market. The largest French player, Reseau C.E.R.P., controls 25% of the market. Phoenix Pharma controls about 8% of the French market.
  • The pharmaceutical wholesaling industry in France employsapproximately 15,400people all over the country. Product deliveries are made on a frequent basis (up to four times a day) and within a short time. Each wholesaling outlet delivers pharmaceutical products to an average number of 110 pharmacies, compared to 200 in Germany and in the United Kingdom (PPRI, 2008). France has 17 full-line pharmaceutical wholesalers and 188 warehouses (+13 overseas), which are part of a multi-channel distribution system (The European Association of Pharmaceutical Full-Line Wholesalers, 2007).
  • Because of French legislation, which prohibits drugstores, supermarkets and internet pharmacies to sell pharmaceutical products, pharmacies are the channel which holds the de facto monopoly in distribution to the end-consumer. French pharmacists can also purchase products directly from the manufacturer, which is common practice for products with a high turnover, but eliminates the role of wholesalers (PPRI, 2008).
  • In addition to pharmacies, hospitals are also permitted to sell some pharmaceutical products to outpatients (besides products which are conventionally used for inpatients). These products consist of treatments for severe conditions (for which the treatment has been initiated in the hospital) such as cancer, AIDS and hepatitis. Nonetheless, they are increasingly available in general access pharmacies as well. In more isolated locations, doctors can also dispense pharmaceutical products directly to patients (PPRI, 2008).

Please, refer to the CBI survey ‘The pharmaceutical products market in the EU’ for further information on EU pharmaceutical trade channels.

Players of interest to exporters in developing countries:

  • National Association of Full-line Pharmaceutical Wholesalers -
  • OCP (a subsidiary of Celesio) - wholesaler
  • Alliance Santé – pharmaceutical wholesaler
  • Reseau CERP - – pharmaceutical wholesaler
  • Phoenix Pharma - - pharmaceutical wholesaler

Price structure

Pricing and reimbursement of pharmaceutical products in the EU are issues of national competence. Therefore, the EU consists of 27 different pricing and reimbursement systems.

In France, statutory pricing is in place for reimbursable pharmaceutical products and some hospital-only products. Prices are set at the ex-factory level and pharmacy retail prices for reimbursable pharmaceutical products, including margins on wholesalers and pharmacists. At the ex-factory level, price negotiations exist between the Economic Committee for Health Care Products (CEPS) – the organ which sets the prices for reimbursable pharmaceutical products in France - and pharmaceutical manufacturers.In these negotiations, a four-year agreement named ‘accord cadre’ is reached, where prices are made consistent with the prices of similar pharmaceutical products in Germany, Spain, Italy and the United Kingdom.

Free pricing is in place for non-reimbursable pharmaceutical products and for most of the products approved for hospital use and non-prescription pharmaceutical products.

Different prices apply throughout the various trade channels. The margins applied to pharmaceutical products in France can be expressed in the following manner:

  • Wholesaler: regressive margins (€ 0-22.90: 9.9%; € 22.91-150.00: 6.0%; >€150.00: 2.0%)
  • Pharmacist: regressive margins (€ 0-22.90: 26.1%; €22.91-150.00: 10.0%;> €150.00: 6.0%) + a flat fee of € 0.53 per package
  • State (Value Added Tax - VAT): a discounted VAT of 2.1% (reimbursable pharmaceutical products) and 5.5% (non-reimbursable) are applicable to pharmaceutical products (the standard VAT rate is 19.6%)

Generic medicines

The pricing of generic medicines in France works in the following manner:

  • Ex-factory price of a generic medicine: ex-factory price of the original pharmaceutical product multiplied by 0.5
  • Pharmacy retail price of a generic medicine: ex-factory price + wholesale margin + pharmacist’s margin (same as for the original product).

For further information on price structure of pharmaceutical products in France, please refer to:

Selecting a suitable trading partner

Finding a trade partner in France does not deviate from the general EU method as described in the EU export guidelines. French importers look for new suppliers in developing countries by visiting the country of interest, through recommendations or through trade fairs. The most common ways for developing country exporters to approach French customers are through direct (e)mail, personal visits as follow-up, inviting potential French customers to visit them, building a network and visiting international trade fairs.

After obtaining contacts, evaluating potential trade partners should be done according to criteria such as information quality, geographic coverage; the kind of trade relation the partner is interested in, the position of the partner and the financial status and credibility.