The scenario is turning into a nightmare for the pharmaceutical sector. Biogaran, leader in generic medicines in France, is for sale. Owned by the giant Servier, the subsidiary holds a portfolio of 900 different drugs including amoxicillin, prednisone and metformin. The laboratory alone manufactures 32% of generics on the French market. Four buyers are interested, including two Indian companies specializing in generic medicines.
In the event of a takeover by an Indian company, nothing guarantees the interest in maintaining production on French territory. Currently, 50% of Biogaran production is carried out in France and 90% in Europe. The French number one in generic medicines employs a total of 8,600 people, mainly subcontractors. The government declared itself ” vigilant ” on the sale of Biogaran.
“Nightmare scenario”
This is a “nightmare scenario” for Frédéric Bizard, health economist interviewed by franceinfo. “We risk being swept out of pharmaceutical production in the next ten years if we don’t wake up“, he warns. Biogaran is a leader in a strategic sector for public authorities and in particular for controlling public spending. “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 “, explains Frédéric Bizard.
The economist recalls that India is “the world’s pharmacy, nearly 45% of drugs and mainly generics are manufactured” there. The two other candidates for takeover are investment funds, which is also no guarantee of security for Frédéric Bizard: “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“.
The State does not exclude invoking the question of sovereignty
Roland Lescure, Minister Delegate in charge of Industry, explained Thursday that the State “follows and is very vigilant“on the sale of Biogaran.”If a foreign investor wishes to buy Biogaran, we allow ourselves the possibility of activating the so-called IEF procedure (foreign investment in France, Editor’s note)“, the minister told the press during a trip to Sarthe, to inaugurate a single-use glove factory in Bessé-sur-Braye.
This procedure allows you to “control investments made by foreign companies in France in strategic sectors“. In a context of growing shortages of medicines, manufacturers of generic medicines, essential but unprofitable products, are suffering from an economic model that is running out of steam, the prices set by the French health authorities being, according to them, among the most expensive weak in Europe.
The French economic model not profitable enough
Last September, on franceinfo, the general director of Biogaran sounded the alarm about the difficulties encountered by the subsidiary, notably due to a tax on laboratories. Jerome Wirotius thus claimed to have “very strongly and very strongly alerted the public authorities“that Biogaran could not”neither we, nor the other generic laboratories, will make it another year with a context of low prices, very high inflation and new taxes (…) which are today confiscatory“.
For several years, the laboratory warns that of the 900 drugs it manufactures, more than a hundred are not profitable since countries like France do not buy them expensively enough. This potential sale would further weaken French sovereignty over medicines. With the Covid crisis, Emmanuel Macron nevertheless considered that this was an essential sector.
