Search

 

Cablegate: France's Pharmaceutical Industry Says Biotech, Generics Key

VZCZCXRO9390
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHFR #2285/01 3530928
ZNR UUUUU ZZH
R 180928Z DEC 08
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 5078
INFO RUCPDOC/USDOC WASHINGTON DC
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHGV/USMISSION GENEVA 2974
RHEHAAA/WHITE HOUSE WASHINGTON DC

UNCLAS SECTION 01 OF 02 PARIS 002285

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD FR
SUBJECT: FRANCE'S PHARMACEUTICAL INDUSTRY SAYS BIOTECH, GENERICS KEY
TO COMPETITIVENESS

NOT FOR INTERNET DISTRIBUTION

1. (U) Summary: Lack of innovation, due in part to pricing and
information controls, has caused the French pharmaceutical industry,
once a world leader, to fall behind its competitors. The French
government has taken steps to support the industry, rewarding
innovators and promoting research and development through tax
incentives. But the French pharmaceutical industry wants to
convince the GOF that France can become a major center of
biotechnological research and development, and the EU's leading
generics producer. The pharmaceutical industry association LEEM,
which includes U.S. companies, told us recently that U.S. firms
willing to invest in biotechnology in France would be welcomed with
open arms. End summary.

FRENCH PHARMACEUTICALS INDUSTRY: A SNAPSHOT
-------------------------------------------
2. (U) Historically one of Europe's premier prescription drug
producers, the French pharmaceutical industry has witnessed slowing
growth, down to 3% in 2007 from double-digit growth rates in the
1990s. Following the removal of 400 products from the GOF's
reimbursable medicines list in an effort to cut healthcare spending,
sales of reimbursable medicines fell for the first time in a decade.
With one of the highest per capita consumption rates of medicines
in the world, France has also sought to reduce pharmaceuticals
expenditures by curbing prescription drug use, which in the recent
past has accounted for 20 percent of healthcare spending.

3. (SBU) Claude Bouge, Economic Affairs Director of the French
Pharmaceuticals Association LEEM, told us that although the current
pharmaceuticals market is "not magnificent," experiencing slowing
sales and a loss of attractiveness, the health sector is high
value-added and remains one of France's major assets. He warned,
however, that unless the government acts quickly on a number of
measures to bolster the pharmaceuticals industry, the sector could
witness a significant decline in the years to come. Bouge noted
the growing number of layoffs of sales representatives (Pfizer
recently let go 500 employees in France out of a total of 3,000
staff) as evidence of current big pharma challenges. Bouge welcomed
President Sarkozy's move to increase tax incentives in favor of
research and development (see para 4), but cautioned that the French
Government needed to go further, or watch its six-billion euro trade
surplus plunge to what trend lines indicate could become a
five-billion euro trade deficit within the next five years.


EFFORTS TO INCREASE INNOVATION, IMPROVE R&D IN FRENCH
PHARMACEUTICALS
--------------------------------------------- --------
4. (SBU) While general drug consumption remains high, regulations
in the pharmaceuticals industry, such as a complex and unpredictable
tax system that punishes growth and, potentially, innovative
companies, have delayed the introduction of more innovative
medicines. Following the lead of the EU, former Prime Minister
Jean-Pierre Raffarin and industry leaders initiated a Strategic
Council for Health Industries (Conseil Stratgique des Industries de
Sant - CSIS) in 2004 to promote France's attractiveness,
particularly in the biotech sector, through an annual meeting of all
health stakeholders, both public and private. These meetings have
succeeded in speeding up the process of introducing pharmaceutical
products on the French market. The CSIS has also played a role in
influencing the GOF to introduce, and increase, tax incentives in
favor of research and development. Industry associations, such as
AGIPHARM (Association des Groupes Internationaux pour la Pharmacie
de Recherche), an association of North American pharmaceutical
companies established in France, are also advocating for increased
research and development budgets, and a policy environment more
favorable to innovation.

5. (U) The GOF's tax incentives to promote research and development
are at the heart of the current policy to improve France's
competitiveness. The research tax credit ("Credit impot-recherche")
has been multiplied by 1.6 between 2007 and 2008, bringing the total
cost of the scheme to some 3.3 billion euros in 2008, according to
Ministry of the Economy forecasts. Large companies of more than
10,000 employees will receive some 39 percent of that sum.

RESTORING THE COMPETITIVENSS OF FRANCE'S PHARMACEUTICALS MARKET
----------------------------------------
6. (SBU) In addition to the research tax credit and creation of the
CSIS, the French government has accelerated market authorization for
medicines, from most to least innovative, and taken steps to expand
the generics market in an effort to boost industry competitiveness.
However, LEEM's Economic Affairs Director Bouge says that if France
is to remain competitive, the government must improve the innovation
environment for the biotech sector. (American biotech firms would
"receive the red carpet treatment" were they to invest in France, he
said.)

PARIS 00002285 002 OF 002


On generics, Bouge said that although only one in five reimbursable
drugs in France is generic, compared to 60% and 70% in Germany and
the UK respectively, the GOF has been pursuing an aggressive
generics policy that has produced results in a short period of time.


Comment
-------
7. (SBU) Despite complaints on tax policy, our conversations
indicate the pharmaceutical industry does not/not believe the GOF
intends to balance its health care books on the back of
pharmaceutical companies. The industry rep with whom we met spoke
convincingly of a government that understands that a thriving pharma
sector is important to the country's long-term interests. Given
ongoing budgetary pressures though, we can expect continued
differences between industry (including U.S. pharmaceutical
companies) and the GOF over the valuation of innovation as captured
in GOF reimbursable medicines policy.

STAPLETON

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO:

 
 
 
 
 
 
  • Pacific.Scoop
  • Cafe Pacific
  • PMC