France Pharmaceuticals & Healthcare

Summary

The French pharmaceutical market is experiencing a significant slowdown as a result of disciplined cost-containment measures. The trend has been apparent since the beginning of 2006, and sales of reimbursable medicines fell in July for the first time in ten years. Nevertheless, the sector is buoyant and is by no means in terminal decline. Indeed, the French drug industry association LEEM even acknowledges that the French pharmaceutical industry progresses cyclically, with boom followed by regression, leading into growth again. In volume terms, 2.7bn packs of medicines were dispensed in France in 2005, which was a 3.4% increase on the previous year.

Late in 2005, the government removed some 400 products from the reimbursement list in an effort to cut healthcare spending by EUR3.5bn (US$4.35bn) by 2008. Primarily as a result of this, the country is expected to keep healthcare expenditure within budget this year. However, the French consume significantly more pills and have more injections than their Western European neighbours, leading to calls for the nation to stop overmedicating itself, particularly with psychotropic drugs.

The adjusted Business Environment Rankings for Western Europe reveal that France is placed equal third with the UK and Italy, and behind Germany and Switzerland. The country scores well in market size and long-term politics, but is let down by market growth. On account of major local players such as Sanofi-Aventis , the domestic sector threat is high.

Demonstrating accounting transparency, the French government and the pharmaceuticals industry agreed in June 2006 that the cost of medicines dispensed from hospitals to patients should be limited. The industry will pay back any money it earns through hospital pharmacies dispensing medicines to non-hospitalised patients once predetermined growth targets are exceeded - the French parliament has set 1% annual growth as the target for the period 2005-07.

Reflecting European reorganisation of drug production in the context of the greater clarity of national policy, France's pharmaceutical exports rose 9.2% in 2005 to EUR16.7bn (US$21.3bn), which was nearly double the expected increase. It is the reports view that exports from France will remain buoyant, albeit increasing by a lesser degree compared to last year. A conservative 5% annual increase is forecast and exports are expected to reach US$27bn by 2010.

Key Benefits of Report

• Rely On Our Independent 5-Year Forecasts As A Benchmark
  to test other views - a key input for successful budgetary and strategic business planning.
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  through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments
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Scope of Report

An at-a-glance perspective on latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The SWOT outlines strategic factors which affect BMI’s forecast analysis, and taken together with BMI’s Economic and Business Environment SWOTS, give a complete overview of market climate.

Outline of market characteristics, growth factors, leading therapeutic segments and a competitivness of the market.

Guide to and analysis of country intellectual property developments and pricing & reimbursement issues, which constitute the regulatory make-up of the market.

Focus on government healthcare reforms, epidemiological trends, company M&As, product launches, market entries, FDI activity, R&D and patent legislation.

5-Year Forecasts to end-2010 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:

• Drug market expenditure (US$bn); drug expenditure per capita (US$); as % of gdp
• Prescription drug market (US$bn)/as % of total market; sales by alimentary tract/metabolism; antibiotics, cardiovascular, central nervous system, oncology, musculoskeletal and respiratory system
• OTC market (US$bn)/as % of total market (sales by analgesic, cough and cold, digestives, skin treatments, vitamins and minerals)
• Generics market (US$bn)/ as % of total market
• Health expenditure (US$bn, % of gdp and per capita); public sector health expenditure as % of total; number of hospitals; beds, hospital admissions, doctors, births and deaths per 000 population

Forecasts based on bespoke BMI economic modelling, using historical data sets of macroeconomic and industry variables to derive rigorous statistical relationships, anchored in advanced linear regression techniques.

BMI forecasts for all headline macroeconomic indicators, including:
Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against US$, government expenditure, external debt

Intelligence on the market position of major MNC power houses and indigenous companies. BMI profiles key research-based companies. Company SWOTS are provided for all key strategic players, complete with a company activity overview, its leading products and analysis of business opportunities.

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