“We risk being swept out of pharmaceutical production if we don’t wake up,” warns health economist

Frédéric Bizard, president of the Health Institute, speaks of “a nightmare scenario”. “No long-term visibility”, “taxation that works on the head”, “accounting regulation”, bureaucracy that is too slow… He denounces the absence of a “national health strategy”. “There is no pilot on the plane,” he summarizes.

Biogaran, leader in generic medicines in France, is for sale, Franceinfo reported Thursday April 18, confirming information from the newspaper The echoes. Four buyers are interested, including two Indian companies specializing in generic medicines. “A nightmare scenario”, estimates health economist Frédéric Bizard, professor of economics at ESCP Europe and president of the Health Institute. “We risk being swept out of pharmaceutical production in the next ten years if we don’t wake up”he warns.

franceinfo: What would be the consequences of a foreign takeover of our French leader in generic medicines ?

Frédéric Bizard: It is a nightmare scenario which is taking hold but which was quite predictable since the parent company had announced that it wished to sell its subsidiary to invest in particular in oncology or in any case in innovative specialties.

“Biogaran is about one in six drugs that we consume.”

Frédéric Bizard, president of the Health Institute

at franceinfo

It is also the leader in an absolutely strategic sector for public authorities to control public spending on medicines: generics. Indeed, it is through generics and biosimilars that we manage to absorb the expenses linked to innovation. And it is a strategic issue for the question of its industrial footprint, since this group employs around forty producers in France. It therefore has an indirect industrial footprint since it does not have a factory but employs subcontractors.

What is the risk of India buying Biogaran? ? That of a pure and simple relocation to India ?

You have two candidate profiles: two Indian laboratories and financial profiles, investment funds.

“You should know that India is the world’s pharmacy. Nearly 45% of medicines, and mainly generics, are manufactured in India.”

Frédéric Bizard

at franceinfo

What will these investment funds do, even if they appear more protective? They will try to optimize their investments to sell the company afterwards. And if you want to optimize profits on Biogaran, you have to go produce elsewhere.

During the health crisis linked to Covid-19, there was alarm about the lack of health sovereignty. A few months ago, the government was facing a shortage of medicines, particularly due to the concentration of production of active ingredients in China and India. What is going on ?

All this is linked to the crisis in the healthcare system where there is no pilot on the plane, we have no national health strategy. We do not have a strategic component in the pharmaceutical industry. We are under the control of an essentially accounting regulation, through this Social Security financing law (LFSS) which is a one-year vision where we set a ceiling for pharmaceutical expenditure, and everything that is higher than this ceiling – this is extremely taxed, even if they are generic medicines, in other words medicines which generate savings for Social Security. We have a taxation system that really works on the head. We have no long-term visibility, a bureaucracy which delays access to the market and finally an accounting regulation where you only regulate prices according to the savings you want to generate, without worrying about the economic viability of the products. You don’t need to be an economist to understand that we don’t attract many people.

What can France do?

Either France nationalizes its pharmaceutical industry and says: “I don’t look at my cost because it’s a public production”, but obviously, we are very far from that and we are unable to put it in place. Either you accept the market economy which needs to generate profits and you have prices which are accordingly. I think that Bercy is looking very closely at the Biogaran file, but what can it do apart from demanding compensation for x years in terms of employment, compensation in terms of production? Ultimately, since we are not competitive with a country like India, while we do the same thing as the Indians, we risk being swept out of pharmaceutical production in the next ten years if we do not let’s not wake up.