Covid-19 has uncovered weaknesses in Frances pharmaceutical sector. With 80 percent of medicines manufactured in Asia, France remains highly dependent on China and India. Entrepreneurs are now determined to bring Frances laboratories back to Europe.
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As a result of the Covid-19 pandemic, French pharmaceutical companies and political leaders are in agreement about the importance of repatriating production to France or Europe, especially those that manufacture drugs. With an ongoing shortage of masks, gloves, swabs… health has become a question of sovereignty and national security.
From the French President Emmanuel Macron to the Minister of the Economy Bruno Le Maire to Prime Minister Édouard Philippe, everyone is talking about economic sovereignty and promising that health will be a priority.
"This pandemic has made us aware of our degree of dependence on Asia," explains Philippe Lamoureux, managing director of Leem, the umbrella organisation for pharmaceutical companies operating in France.
France is now a subcontractor
In 2018, the French pharmaceutical industry had a turnover of €56 billion, almost half of which were in exports. It employs around 100,000 people at 271 production sites. Good figures in principle, but why do 80 percent of the medicines consumed in France come from Asia? Where does this feeling come from that French drug companies are losing their foothold?
"Let's not hide the facts: we have become subcontractors," explains Lamoureux, speaking with FRANCE 24. Out of 61 European marketing authorisations in 2019, only five drugs were produced in France. This puts France in sixth place in Europe, far behind Germany (20), Ireland (15), Italy (11), the United Kingdom (10) and the Netherlands (9).
"Ten years ago, France was in first place,” says Lamoureux. This was a first place won thanks to new drugs developed inside the territory. Today, however, France mainly manufactures old drugs.
France is home to one of the world's giants in the sector: Sanofi. It is considered to be the eighth largest laboratory in the world in terms of turnover. And the multinational company does not miss an opportunity to show its patriotism. Eighteen of its 40 European plants are located in France.
"We produce in Europe for Europe, in Asia for Asia and in America for America," says Philippe Luscan, Sanofis vice president in charge of Industrial Affairs speaking with FRANCE 24. "For 30 years, I have been pleading for production sites to be linked to the territories. I have never believed in a France without factories or in an omnipotent China. The Covid crisis reinforces my convictions in the defence of a national industry."
Sanofi is building a global giant
The coronavirus pandemic has reinforced Sanofi's vigour. On February 24, 2020, the company announced the creation of a new offshoot with the ambition of becoming the world's second largest manufacturer of active pharmaceutical ingredients (APIs), after world leader the Swiss Lonza Group. APIs are the chemical or biological substances in medicines that are the key to their therapeutic effect. They are currently predominantly manufactured in Asia.
This new company has its headquarters in France and has six European plants with more than 3,000 employees. It is targeting sales of one billion euros and an IPO on the Paris stock exchange by 2022.
"Our calculation is strategic before being economic," insists Luscan. “Admittedly, our manufacturing costs here will be higher than in Asia, between 10 and 15 percent higher, but that's the price we have to pay to maintain a pharmaceutical industry in Europe."
For manufacturers, the Covid-19 crisis illustrates the limits of a model based on unbridled globalisation. "It is dangerous to be dependent on a single production site," says Jacques Zagury, director of health policy, public affairs and communication at the MSD laboratory (Merck Shape & Dohme, a subsidiary of Merck & Co) speaking with FRANCE 24. “However, it would make no sense to simply repatriate everything to Europe. We just need to diversify our suppliers."
MSD manufactures curare, a substance used for relaxing tracheal muscles for intubation. There has been exceptional demand for it because of the pandemic. In April, MSD had 12 times its normal orders for France alone.
"Our teams based in the Netherlands were working day and night, and we were able to transfer products originally destined for China to France," says Zagury.
What lessons does he believe the crisis has taught his industry? "We worked faster with the national health authorities to reduce delivery times. This shows that we can make efforts in terms of regulations in emergency situations. For example, is it absolutely necessary to have a French-language leaflet for all medicines destined for hospitals?"
Protect the existing industry
However, according to Nathalie Coutinet, a health economist at the University of Paris 13 speaking with FRANCE 24, it would be madness to relax regulations. She adds: "Let's not forget that the WHO considers drugs a potentially dangerous product."
For her, the problem lies elsewhere: "Before talking about relocation, let's first try to protect the existing industry."
Coutinet is referring to the Famar factory in Lyon that manufactures Nivaquine (Chloroquine sulphate) and Largactil (Chlorpromazine), two drugs currently being tested in the fight against Covid-19. Famar has been in receivership since June 2019 and is still waiting for a buyer.
Coutinet also mentions the case of the Read More – Source
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