French Independents Are More Dynamic Drug Firms

French independent pharmaceutical companies have increased sales growth faster than their competitors, according to a study from the Eurostaf market research agency. Eurostaf has reviewed 51 companies - from Servier with sales of 7 billion French francs ($1.4 billion) to Saunier Daguin with 10 million francs turnover - which account for 20% of the national drug market.

In the period 1990 through 1993, these medium-sized companies have seen sales increase by around 8.3% compared with the market average of 6.3%. Their share of added value (36%) is also higher than the 30% market average. The study suggests, however, that these companies are vulnerable, given that of their 20 leading products, many are vasodilators or venotonics, two types of product whose usefulness is always being questioned and which the government may remove from reimbursement from one day to the next.

Eurostaf also notes that profits for these independent companies in 1993 only accounted for 3% of sales compared with 5% for the sector as a whole. The author of the study, Jean-Rene Edighoffer, reports that these companies have good levels of productivity and manage labor costs well but they manage their return on capital far less well. It is also noteworthy that some of the most profitable independents are among the smallest - for example Crinex, Serozym, Medix, Elerte and Gerda.