French Pharmaceutical Market Grows 2.5% Y/Y to 27.1 Bil. Euro in 2009

French pharmaceutical grew by 2.5% year-on-year (y/y) in 2009, to 27.1 billion euro (US$37.7 billion), according to the latest figures published by French drug regulator AFSSAPS. The retail pharmaceutical market only grew 1.2% y/y to 21.4 billion euro while sales in the hospital sector jumped 7.4% y/y to 5.7 billion euro during 2009. The strong growth witnessed in hospital sales is mainly attributable to the high demand for influenza A/H1N1 (swine flu) vaccines, which are categorised under hospital sales, in 2009. When taken apart, the growth in sales of hospital drugs only rose 3.4% y/y. In the retail market, public spending on reimbursable medicines accounted for 92% of retail sales, and grew by a slight 1.3% y/y to 19.8 billion euro over the period. The moderate trend is also witnessed in volume terms as retail sales evolved by only 2.5% y/y in volume terms over 2009.

Cardiovascular drugs remained the most commonly prescribed retail drugs in France during 2009, followed by anticholesterol treatments, analgesics, respiratory medications, and drugs for digestive problems. The table below offers a detailed listing of the leading therapeutic classes by sales and includes both reimbursable and non-reimbursable medicines.

In the hospital sector, cancer treatments rank in first position in terms of amount spent as they account for almost one-third of spending on medicines in the in-patient sector. Chronic and serious illnesses continue to account for many of the leading therapeutic drug classes purchased for hospital use. The influenza A/H1N1 (swine flu) pandemic contributed to the strong growth in the hospital sector where vaccines made their entry in the Top 20 therapeutic classes, after their sales grew 797.5% y/y as a result of the large stock of influenza A/H1N1 jabs purchased by the French government.

The French regulator AFSSAPS also reports that the share of generics in the pharmaceutical market reached 23.7% in volume and 10.9% in value in 2009. This good performance is due to the success of the generic substitution policy at pharmacy level and to the launch of new generic versions which contribute to the expansion of the French répertoire of substitutable products.

Outlook and Implications

The moderate growth experienced by the French pharmaceutical market is a result of several measures which have contributed to contain growth in volume and value terms. Sales in volume grew 2.5% y/y in 2009, after a reduction of 3.1% y/y in volume in 2008 and a 1.9% y/y increase in 2007. This was directly induced by various cost-containment measures introduced by the government to contain spending, including pro-generics policies, the authorisation of the dispensing of bulk drugs in retail pharmacies and the reimbursement cut of certain drugs of insufficient therapeutic value (see France: 9 July 2010: French Public Insurer Estimates Savings Linked to Use of Bulk Medicines at 105 Mil. Euro in 2009). In terms of pricing, the public health insurer CNAM recently reported that drug makers had to face a 2.6% y/y decrease in pharmaceutical prices in 2009 after a comparable cut of -2.3% y/y and -2.5% y/y in 2008 and 2007, respectively (see France: 24 September 2010: Drug Spending Rises 2.5% Y/Y to Around 35.4 Bil. Euro in France During 2009). Pro-generic policies contribute to lower prices in the pharma sector in France where generics now account for 23.7% of the total market and 12% of the reimbursable drug market in volume. The intensification of the generic substitution policy and the adding of new active ingredients to the French répertoire of substitutable products will no doubt continue to encourage the use of generics in France where new generic groups for anti-cholesterol drug atorvastatin (Lipitor, Pfizer, U.S.), cancer drug docetaxel (Taxotere, Sanofi-Aventis, France), Parkinson's disease treatment pramipexole (Sifrol/Mirapex, Boehringer Ingelheim, Germany) and blood-pressure treatment telmisartan (Micardis, Boehringer Ingelheim, Germany) were recently added to the substitution list (see France: 8 October 2010: Docetaxel, Pramipexole, Telmisartan Among New Generic Groups Created Under Substitution Scheme in France).

Cancer drugs remain the leading therapeutic drug class purchased for hospital use. Their cost is in majority borne by the public health insurer CNAM which tends to fund the most expensive drugs on top of the hospital budget. In 2009, spending on fully reimbursed cancer drugs grew to reach 1.038 billion euro in the in-patient sector, up 6.5% compared with the amount spent by the CNAM on top of the hospital budget in 2008. Antineoplastic agents also weighed on spending in the retail sector as their sales grew 24.1% y/y in 2009 to 474 million euro. This is mainly due to the launch of Nexavar (sorafenib, Bayer, Germany) for the treatment of hepatocellular carcinoma and advanced renal cell carcinoma and to a continued growth linked to the marketing of several other drugs during the last three years.

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