The French Pharmaceutical Market Expected to reach $48.2 billion in 2020, Finds New Report

France has a mature healthcare market, based on its high healthcare expenditure and pharmaceutical production. The increasingly elderly population is expected to drive the growth of the pharmaceutical market; however, an increasing focus on generics to reduce healthcare expenditure will balance this out.

The French pharmaceutical market was valued at $48.9 billion in 2008 and an estimated $45.9 billion in 2013. It is expected to grow at a Compound Annual Growth Rate (CAGR) of 0.7% from approximately $46.2 billion in 2014 to $48.2 billion in 2020.

The public health insurance system was established in 1945, and by 2011, approximately 97% of the population was covered under Statutory Health Insurance (SHI), divided into three main schemes: general, agriculture, and non-salaried and non-farming (World Bank, 2014p). This universal healthcare coverage is expected to continue to drive the French pharmaceutical market. The increasingly elderly population is also fueling pharmaceutical market growth, accounting for 17.6% of the total population in 2013 and expected to increase at a CAGR of 1.5% to 19.7% by 2020 (INSEE, 2014f).

The government is focusing on the use of generics as a cost-containment tool to reduce healthcare expenditure. It introduced a scheme in September 2012 to increase the use of generic drugs, under which patients who agree to generic substitution will not be required to pay for their drugs. The substitution rate increased from 71% to 84% in one year as a result: a cost saving of approximately €200m ($270m) (Thomson, et al., 2013). In 2008, generic drugs accounted for 9.4% of the pharmaceutical market in terms of value and 21.7% in terms of volume, increasing to an estimated 15.3% and 27.7% respectively in 2013 (ANSM, 2013). However, this is expected to act as a barrier to the growth of the pharmaceutical market.

The French medical device market was valued at $12.7 billion, which increased to $15.5 billion in 2013. It is projected to grow at a CAGR of 5.1% from $16.2 billion in 2014 to $21.8 billion in 2020. In 2013, In Vitro Diagnostics (IVD) accounted for 15.3% of the overall medical device market, followed by cardiovascular devices (11.4%), ophthalmic devices (10.7%), orthopedic devices (8.4%) and hospital supplies (7.4%).

A transparent and efficient regulatory system combined with organizational reforms in the national regulatory agency will attract the trust of pharmaceutical and medical device companies and positively influence the French healthcare market.

In France, the National Security Agency of Medicines and Health Products (Agence Nationale de Sécurité du Médicament et des Produits de Santé, ANSM) is the main regulatory authority for pharmaceutical products and medical devices. It came into existence on May 1, 2012 when it replaced the French Agency for the Safety of Health Products (Agence Française de Sécurité Sanitaire des Produits de Santé, AFSSAPS). Its scope has been extended to include monitoring authorized medicines, promoting quick access to innovative drugs, and promoting academic research on medicine safety.

The ANSM authorizes product approvals under the national or community procedure through the European Medicines Agency (EMA) and issues licenses for manufacturing, importing, exporting, and conducting clinical trials. Approval for new drugs or medical devices requires the execution of Good Manufacturing Practice (GMP) and compliance reviews by the ANSM. The ANSM also plays a crucial role in assessing the benefits and risks associated with the safe use of health products. It maintains transparency by publishing committee proceedings, agendas, minutes and all drug withdrawals online. Legally, assigning broad responsibility is expected to increase the industry’s trust in the regulatory system and provide professionals and the public with information which will facilitate decision-making regarding any new Marketing Authorizations (MAs) (ANSM, 2014a).

The French healthcare system offers universal insurance coverage, but the economic crisis and high public debt are forcing the government to cut healthcare reimbursement.

The French healthcare system is well-developed and offers universal healthcare coverage to all citizens. The public insurance system is built on the principle that everyone must contribute to the health insurance scheme according to their income and receive care according to their needs, regardless of their place of residence. By 2011, approximately 100% of the population was covered under SHI, which covers a broad range of basic medical services such as hospital care, rehabilitation or physiotherapy, ambulatory care and diagnostic services. Healthcare expenditure is rising due to the large and growing elderly population, and the government introduces periodic reforms to address this. Cost-cutting measures in 2011 included drug price cuts and the strengthening of generic provision. In 2011, the government reduced the reimbursement rate for non-serious disease to 30%, down from 35% in 2010 (PPRI, 2012).

The market for complementary Private Health Insurance (PHI) also is well-developed, and covers user charges that are not eligible for reimbursement by SHI, such as co-payments for psychologist or dietician consultations. In 2012, SHI covered approximately 95% of the population (Thomson et al., 2012).

Political instability, a rising unemployment rate and net debt and falling GDP are affecting the economy, but government initiatives are expected to bring stability.

France was the world’s fifth-largest economy in 2013 with a Gross Domestic Product (GDP) of $2.7 trillion, placing it below the US, China, Japan and Germany (IMF, 2014a). In 2013, it was the second-largest economy in Europe behind its main economic partner, Germany (CIA, 2014).

In France, the unemployment rate increased from 7.4% in 2008 to an estimated 10.6% in 2013 (World Bank, 2014a). In 2013, there were approximately 2,481,000 people unemployed, representing an unemployment rate of 9.3% of the working population (INSEE, 2014m). The overall increase in the unemployment rate is due to the eurozone crisis and resultant drop in major industrial activity.

Government net debt amounted to approximately $2.4 trillion in 2013, having increased by approximately $636 billion from 2008 at a CAGR of 6.4% due to the high unemployment rate and increased healthcare expenditure, forming a barrier to economic growth. In 2008, GDP per capita was $45,789, which decreased to $43,000 in 2013 at a negative CAGR of 1.2% due to the global economic downturn and subsequent reduction in economic activity (IMF, 2014b). This indicates the decreasing size of the economy, related to the monetary value of all production activities.

The government is taking steps to improve economic conditions, having released a stimulus package in February 2009 of approximately $33 billion, intended to boost growth and employment through investment in infrastructure projects and tax relief for the business sector (BBC, 2008). It has also made changes to monetary policies and taxation by increasing the top corporate and personal tax rates (CIA, 2014).

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