French Pharma Market Growth Declining

Despite sales of 101 billion French francs ($20.8 billion) in 1994, French drug market growth has been falling steadily since its 15.6% rise in 1988, says the industry association, the SNIP. From 6.1% growth in 1992 the market rose 9% in 1993, largely due to two flu epidemics. Growth of reimbursable drugs sold in pharmacies was very weak in 1994, following the introduction of government cost controls, at only 2.2%, while self-medication and hospital-only drug sales grew 2.9%.

Foreign-owned companies account for 55% of the French market, of which 21% were American and 34% European, compared to 47% foreign penetration in Germany and 65% in the UK and Italy. The SNIP says French producers' prices in the 1980s were among the lowest in the European Union, close to those of Greece and Portugal, 30% below the then EU average and scarcely over half of German levels. But replacement in France of older, lower-priced products by dearer, newer drugs helped align European and French prices, while prescribing habits created a speed of market penetration more significant than in other EU states.

French R&D spending remains 99% self-financed, and totaled 12 billion francs ($2.4 billion) in 1994. Contrary to the general view, leading French groups have an R&D ratio close to the major internationals, at 15% of world sales. Net profits in France since 1988 have been about 3.5% of sales, but this has started to grow.