Boston, MA -- (SBWIRE) -- 04/16/2014 -- A number of biologics will lose patent protection between now and 2015, which means that France's biosimilar substitution legislation will pave the way to cost savings in the healthcare system. However, we question the strength of this legislation, as development and manufacturing costs for these products are high and therefore actual cost savings secured through biosimilars may ultimately be limited. Furthermore, ongoing safety concerns may act as a barrier to the prescription of biosimilars

Headline Expenditure Projections

- Pharmaceuticals: EUR33.75bn (US$44.55bn) in 2013 to EUR33.02bn (US$41.94bn) in 2014; -2.2% in local currency terms and -5.9% in US dollar terms.
- Healthcare: EUR243.76bn (US$321.76bn) in 2013 to EUR250.01bn (US$317.51bn) in 2014; +2.6% in local currency terms and -1.3% in US dollar terms.

Risk/Reward Ratings: France is ranked fourth out of the 15 markets in BMI's Western Europe Pharmaceutical Risk/Reward Ratings (RRR) matrix for Q214, with a composite score of 70.9 out of the maximum 100 points. The country's Reward profile remains considerably less attractive than its risk score, reinforcing our view of the country's potential due to a stronger emphasis on the regulatory environment, which we regard as a major factor affecting the business environment for drugmakers, rather than on the basis of real opportunities for higher per-capita drug consumption.

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Key Trends And Developments

As of January 1 2014, pharmacists in France have been legally permitted to substitute a biosimilar for an originator biological medicine. This follows the signing of the 2014 Social Security Financing Law in December 2013, which allows for the automatic registration of a biosimilar on the biosimilar register as soon as its marketing authorisation has been granted by the French National Agency for Medicines and Health Products Safety (ANSM).

In Q413, multinational drugmaker Sanofi recorded sales of EUR8.45bn (US$11.53bn), a 0.8% decrease on reported basis terms (+6.5% in constant exchange rate (CER) terms). Exchange rate movements had a negative effect of 7.3 percentage points largely due to the depreciation of the Japanese yen, US dollar, Brazilian real, Venezuelan bolivar, Australian dollar, South African rand and Russian ruble against the euro. In the fourth quarter, sales for Sanofi's pharmaceuticals business (the company's largest division by revenue) were EUR7.05bn (US$9.62bn), an increase of 0.7% on a reported basis (8.4% CER terms).

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