Generics market on the up in France

Amongst European countries, France is a relative latecomer to the generics market compared to the UK and Germany, for example, but the burgeoning growth of the sector there suggests there are still growth opportunities to be had for companies supplying bulk drug actives into Europe.

Last year, generic sales increased 47 per cent to €1.1 billion, according to the GERS group of generics producers, cited in the newspaper Les Echos. Growth had been even stronger in the previous two years, rising 64 per cent in 2002 and 55 per cent in 2003, but generics now account for 13 per cent of total French drug market by volume and 7 per cent by value. This marks a significant increase from the situation in 2000, when generics had just 3 per cent by both volume and value in 2000.

This is a significant increase, but still falls short of the French government's target of 23 per cent, according to Didier Barret, head of Merck KGaA of Germany's Merck Generiques France subsidiary.

Many contract manufacturers of APIs still regard bulk generic actives as a poor relation to the much more lucrative production of drugs still under patent, but the phenomenal growth in the market for generic drugs has undermined this view at a time when overcapacity and unexpected drug failures have hit the branded CMO sector.

And while players in the generic sector have their own problems, not least of which is competition from companies in countries such as India and China - market research suggests generics are where the action is. For example, Frost & Sullivan recently reported that generics are driving growth in the European API sector, although overall it is forecast to grow slowly, from €4.5bn in 2003 to €5.8bn in 2010.

Earlier this year, the head of the French subsidiary of German generic drugmaker Ratiopharm predicted that the French market would expand to €2.4bn in 2008, as the overall European market doubles from €8bn to €16bn.

One driver behind the change is the European Union legislation introduced last year which means that generics companies can now introduce their products a year earlier than was previously possible, as well as government efforts to increase the take-up of generics in the interests of cutting national drug bills.

Last year, over 20 drugs lost patent protection in France, including AstraZeneca's gastrointestinal treatment Mopral (omeprazole) and Sanofi-Aventis' Stilnox (zolpidem), a sleeping aid. Meanwhile, Merck & Co's cholesterol-lowerer Zocor (simvastatin), which accounts for sales worth €240m a year in France, will come off patent this year, as will Pfizer's leading antidepressant Zoloft (sertraline) with just under €100m in annual French sales.

Overall, new generics to be launched in France this year will address a market worth over €700m, according to Barret.

Helped by this, Merck estimates that the generics market in France will top €1.4bn, an increase of almost 30 per cent, and this boost France third place in the European generics sector to second after Germany and the UK, according to Philippe Ranty, president of Sandoz France, a unit of the world's largest generics company.

Within the French market, Merck is the leader with a market share of 27.8 per cent, followed by Servier's Biogaran (21.8 per cent, down from over 25 per cent in 2003). Sandoz France put in the best growth last year, with sales rising 51 per cent to help it capture 11.9 per cent of the market. The world's second largest generics company - Teva - came fourth with just over 9 per cent share.