France Focus: Power without responsibility?

pharmafile | October 27, 2014 | Feature | Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing |  France, Lantus, Sanofi, Servier, hollande, perindopril, report 

Population: 65.8 million (2013)

Government: Unitary semi-presidential constitutional republic

Leader: François Hollande of the centre-left Socialist Party

Gross Domestic Product: $2.6 trillion (2012)

Life expectancy: 79 for men, 85 for women (2012)

Currency: Euro (€)

Healthcare spend: 11.8% of GDP (2012)

Industry: Fifth largest pharmaceutical market in the world

Lobby group: Les Enterprises du Médicament (LEEM)

Research spend: $4.16 billion on pharmaceutical R&D (2012)

France’s top pharma companies

Sanofi

2013 turnover: $32 billion

Biggest drug: Lantus (insulin glargine)

Not just France’s biggest pharma firm, but the fifth biggest pharma company in the world.

Sanofi’s current form emerged from Sanfoi-Synthelabo’s acquisition of Aventis in 2004, and the company changed its name to simply ‘Sanofi’ in 2011 – though the history of the many companies it has acquired over the years can be traced as far back as 1718 with the founding of Laboratoires Midy, which was acquired by Sanofi in 1980.

Diabetes in particular remains a key focus for the company, with its insulin product Lantus being its best-selling drug by a considerable margin and the recent signing of a $925 million deal to market MannKind’s Afrezza, the world’s only approved inhaled insulin.

Lilly’s basal has outmatched Lantus in recent trials, however, bringing the drug’s continued dominance into question.

Servier

2013 turnover: $5.3 billion

Biggest drug: perindopril

France’s largest independent pharma company and its second biggest pharma firm overall, Laboratoires Servier seems unable to escape bad press even post-Médiator. Recently it was found to have breached the ABPI’s code over failure to disclose trial data and fined €331 million by the European Commission for delaying generic versions of its drug perindopril.

The public face of much of this controversy was Dr Jacques Servier, who founded the company in 1954 and remained president until his death at the age of 92 in April 2014. He refused to take his company public and put a large amount of its turnover into research and development.

Despite the controversy Servier continues to prosper, with a turnover in excess of $5 billion in 2013 and a string of deals with other companies over the last couple of years, including Amgen, Curie-Cancer, and CTI BioPharma.

Ipsen

2013 turnover: $1.5 billion

Biggest drug: Decapeptyl (triptorelin)

Ipsen traces its history back 1929. Its three main focuses are endocrinology, uro-oncology, and neurology, and it also has a significant presence in primary care.

Although not yet a true world player, and lagging far behind Servier and Sanofi even in France, the company has stated the bold ambition of being “among the top 10 pharmaceutical companies in the world, in terms of growth and profitability”, and recent moves by the company have certainly demonstrated strong growth intentions.

Its neurology arm received a boost lately with the acquisition of UK life sciences firm Syntaxin, and recently Ipsen joined several other European pharma firms by opening an R&D centre in Cambridge, Massachusetts in order to grow its presence in the US market and enhance its research collaborations with nearby hospitals, biotech companies and universities.

France’s healthcare was named the best in the world by the World Health Organization in 2000, and the country’s system seems to have lost none of its sheen in the years since – it was named the best for retired expats by International Living’s Annual Global Retirement Index as recently as July 2014.

Trust in the healthcare system leads to a culture of heavy medicines consumption, but the pharma industry itself has recently been rocked by damning scandals and radical reforms, both in France and across the globe. This may change the attitudes of both the people and the government towards medicines in the future.

The country’s pharmaceutical industry has long been one of the biggest in both Europe (second in market size only to Germany) and the world. This is largely thanks to it being home to Sanofi, the world’s fifth largest pharmaceutical company, which helps France rank fifth overall in the world according to IMS Health’s 2012 global rankings.

This however, was a fall from third in 2007, and France is expected to slip down a further place to sixth by 2017 – thanks mainly to the rise of the so-called ‘pharmerging’ markets of China, Brazil, Russia and India.

The industry is supported by a well-rounded healthcare system – in the WHO’s ranking, France scored highly on myriad factors including overall level of health, health inequalities, health system responsiveness, and the distribution of the health system’s financial burden.

But when France’s most recent president François Hollande took office in May 2012, he inherited a health system that was spending too much and still reeling from scandals involving the diabetes drug Médiator and PIP’s breast implants. Hollande needs to solve these problems whist ensuring that France does not lose the national health service it holds so dear – no easy task.

An over-reliance on healthcare?

Part of the problem stems from France’s notably high healthcare spend, which was 11.8% of its GDP in 2012 (the UK spent around 10% in the same period). This is used to fund France’s extensive healthcare reimbursement system, where the state health system pays money back into citizens’ accounts after they have paid for a service, such as a GP visit.

Reimbursement rates depend on the service, but are usually around 70% – although this can rise up to 100% for people in certain circumstances such as those with serious illnesses. Citizens pay around 6-7% of their income towards healthcare cover, but most also have supplemental insurance that can top up all reimbursement rates to 100 per cent.

One of the new government’s cost-cutting measures has been to introduce a new, stricter method of deciding on reimbursement rates and pricing for drugs – a Relative Therapeutic Index (ITR).

The ITR is based on how the new medicine compares with other similar treatments (regardless of whether or not they have been approved), the clinical relevance of its primary and secondary trial endpoints, and the validity of its methodological studies.

If a drug is approved for reimbursement it will retain this status for five years before having to be evaluated again. Drugs usually have a reimbursement rate of 65%, but this can be as low as 15% or as high as 100% depending on the benefit, cost, and innovation of the treatment.

To keep costs down and give patients more access to innovative medicines, products considered of low or moderate value may even have their rate cut or be removed from the list altogether.

The system is still fairly generous overall, however, when compared to famously strict counterparts like the UK’s NICE – according to the French lobby group LEEM there were 10,496 pharmaceutical products on sale in France in 2010, compared to 4,963 in the UK.

The French state pays for far more than just the most important and impactful drugs – the rate of medicines removed from the list for ‘insufficient medical value’ has been surprisingly high in the past, with up to 150 removed in 2010, and some forms of alternative medicines, such as homeopathy and acupuncture, can even be reimbursed on the system.

This is taken by some commenters to be indicative of a culture that relies heavily on pharmaceuticals as solutions to any and all maladies, to the extent that people are often likely to take drugs they do not need – a book by French medical specialists Philippe Even and Bernard Debré, released in 2012, claimed that half of medicines sold in France could be useless, or even bad for patients’ health.

There are over 23,000 pharmacies in France – double the number in the UK – and its per capita consumption of medicines is one of the highest in the world, making it an attractive market for pharma companies.

France’s high depression rates – with around one in five people having an extended period of depression in their life according to a 2011 WHO survey – means that anti-depressants are a particularly large part of the market, as are psychotropic drugs as a whole. France’s regulator the ANSM has found that one in three adults use some form of psychotropic drug on an occasional or regular basis.

Scandals and scrutiny

The government is perfectly aware of this problem, and Hollande intends to reduce drug consumption as part of his healthcare reforms – possibly by introducing quotas on reimbursement of medicines.

Any intervention now may be slightly too late, though. The dangers of this relaxed attitude to medical consumption were already thrown into sharp relief following the market withdrawal of Servier’s Médiator (benfluorex) in 2009, which also put France’s permissive drug regulation system under heavy scrutiny.

Médiator was marketed as a diabetes drug, but was more frequently prescribed off-label for weight loss. Concerns that Médiator could provoke cardiac valve damage had first been raised in the late 1990s, but France took years longer to act than other markets, such as the US, Spain, and Italy. By the time French authorities finally intervened there were over 300,000 active prescriptions and the drug was estimated to have contributed to as many as 2,000 deaths.

Questions as to why it took so long for French regulators to act exposed many deep-rooted flaws in the country’s pharma industry, and its questionable relationship with regulators and healthcare professionals.

Much of the blame was directed at Servier itself which allegedly marketed the drug as a diabetes treatment to avoid scrutiny, while encouraging the off-label use without warning healthcare workers of its safety issues – all claims that the firm stringently denies.

Its founder and president at the time, Dr Jacques Servier is also reported to have had close connections within the French government. In fact the former French president Nicolas Sarkozy had previously been his lawyer. Dr Servier died earlier this year in April.

The scandal also drew attention to the leniency of the French regulator itself, the Agence Française de Sécurité Sanitaire des Produits de Santé (AFSSAPS), and how it was laced with conflicts of interest.

Voting members of the AFSSAPS approval committee often also held positions in the pharma companies they were regulating, for example, with no penalties for not declaring this. The regulator also derived 80% of its funding from pharma companies via taxes.

The events shattered the previous trust in the pharma industry in France, and matters were not helped by the concurrent scandal surrounding the French company Poly Implant Prothese (PIP), whose breast implants were found to be made from potentially unsafe industrial silicone.

Regulation reforms

The public outcry over Médiator (and a looming election) led to Sarkozy’s government quickly implementing the sweeping ‘Reform du Medicament’, which aims in part to sever the ties between pharma companies and the rest of the healthcare industry while shaking up the country’s regulation system.

Hollande’s government has since set out to further strengthen these new regulations. As part of the reforms the AFSSAPS has been remodelled into the Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM). This new regulator has a more integrated structure, with the regulatory, evaluation, monitoring, control and inspection teams working more closely together than in its predecessor.

It also has a broader remit including new powers and duties in assessing drug risk and benefits and promoting public education about drugs. The government funds the ANSM, preventing it from relying on money from pharma companies as was the case with the AFSSAPS.

The ANSM will also work to the reforms’ new conflict-of-interest and transparency rules. These new rules are notably strict, even within the context of the EU and the US’ current drives for more industry transparency.

Pharma companies now must disclose every single payment to any individual or company that helps facilitate their service delivery and must apply for special visas in order to advertise their product.

Visits from pharma representatives to hospitals are limited, and pharma companies are banned from funding medical education. A significant new power for the ANSM is the ability to request that drugs be clinically tested as better than existing treatments for a condition, rather than just better than placebos, before approval.

In fact, although most drugs will still go through the EMA instead of France’s own regulator, the French government has announced that it will seek to block drugs approved by the EU that do not meet these standards, and in the wake of the Médiator scandal many other previously-approved drugs currently on the market are being re-evaluated under this strengthened pharmacovigilance.

Increasing competition

Further adding to the market access difficulties firms may face in the future is Hollande’s focus on cutting costs through increased competition, particularly by focusing more on generic substitution – a way to increase savings while preserving the reimbursements French people are now so used to.

Substitution in the country is currently at a notably low rate. Only a quarter of drugs sold in France are generics, compared to two-thirds in Germany and the UK. The government now wants to increase the substitution rate from, but faces an uphill battle in a country more comfortable with buying branded medicines.

This environment, with little regard for generics, has led to several cases of pharma companies in France seeking to denigrate generic versions of their products or offer benefits to pharmacists for choosing their brands over generics. Sanofi, Schering-Plough (now wholly own by Merck) and Janssen are among the companies the French Competition Authority (FCA) has launched enquiries into for this over the last few years.

Many in the industry are opposed to the plans – for example, factory workers held protests after Bristol-Myers Squibb warned that it may cut jobs because of wider generics use.

The government and the FCA contend, however, that increased use of generics would in fact fuel innovation by allowing the savings to be pumped back into the industry. In its 2013 report on the matter the FCA suggests a number of ways to achieve this – including discounts for pharmacies favouring generic products, balancing the obligations of wholesale distributors and other intermediaries, and authorising online sales.

France has had to face a lot of questions about its healthcare and pharmaceutical industries over the last few years – some which strike at core cultural values ingrained in the country. In many ways the industry and the government are still trying to pick up the pieces and realign the system for a more sceptical environment, while seeing the country overtaken in world rankings by emerging markets.

Hollande’s policies look to have brought costs down and reduced the healthcare system’s shortfall, but it is too early to tell whether this will have a noticeable impact, and pharma companies will still be keeping a close eye on France’s future.

While it may be damaged for the moment, though, the strong foundation that France’s industry is built upon will likely mean that it will remain one of the world’s biggest for years to come.

George Underwood