2014-01-03 12:45:20 - New Healthcare research report from Business Monitor International is now available from Fast Market Research
While regional growth is showing signs of improvement, we expect France's economic activity will lag behind its regional peers, restrained by persistently high levels of unemployment and ongoing competitiveness issues. We forecast zero real GDP growth in 2013 and just 0.5% in 2014. As a result, we expect the government to engage in more concerted fiscal consolidation over the coming quarters - with a heavy focus on the pharmaceuticals and healthcare sector, and a particular focus on medicine prices.
Headline Expenditure Projections
* Pharmaceuticals: EUR34.72bn (US$44.09bn) in 2012 to EUR33.75bn (US$44.89bn) in 2013; -2.8% in local currency terms and 1.8% in US dollar terms.
* Healthcare: EUR237.74bn (US$301.93bn) in 2012 to EUR243.06bn (US$323.77bn) in 2013; +2.2% in local currency terms and
7.1% in US dollar terms.
Full Report Details at
- www.fastmr.com/prod/754722_france_pharmaceuticals_healthcare_rep ..
Risk/Reward Ratings: France continues to rank second out of the 14 markets in BMI's Western Europe Pharmaceutical Risk/Reward Ratings (RRR) matrix for Q114, with a composite score, at 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.
Key Trends And Developments
In Q313, multinational drugmaker Sanofi recorded sales of EUR8.43bn (US$11.52bn), a 6.7% decrease on reported basis terms (+0.6% 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. Additionally, Sanofi's revenues were hit by a 7.2% dip in vaccine sales following the manufacturing problem at a Toronto plant that delayed the supply of paediatric vaccines to the US. In the third quarter, sales for the Pharmaceuticals business (the company's largest division by revenue) were EUR6.67bn (US $9.11bn), a decrease of 5.2%, attributed to generic competition in the US and EU (EUR191mn, US $261mn).
In October 2013, the French authorities recommended UK-based GW Pharmaceuticals' cannabis-derived medicine Sativex (tetrahydrocannabinol+cannabidiol). The authorities recommended Sativex to treat patients suffering from spasticity due to multiple sclerosis (MS) in the country. The company will now work with the French National Agency of Medicine and Health Products Safety (ANSM) to determine country-specific requirements. After finalising these, the company can expect to receive a national marketing authorisation for Sativex in France. Sativex will be commercialised in the country by GW Pharmaceuticals' European partner Almirall.
BMI Economic View: From a regional perspective, signs of growth are creeping into eurozone leading and coincident indicators, suggesting that the start of a protracted recovery is in motion. Real GDP readings for the second quarter of 2013 were stronger than expected, with Germany expanding by 0.5% y-o-y, and France by 0.4% y-o-y. Nonetheless, the eurozone is not out of the woods yet. The current pace of growth is still well below that required to bring down the persistently high levels of unemployment across the region, and the rigidities of France's labour markets tend to delay a recovery in job creation post-recession for almost a year longer than its peers. Furthermore, in light of our forecast for France's budget to arrive at 4.2% of GDP in 2013, there is still substantial fiscal consolidation ahead if France is to meet its revised budget goal of 3.0% of GDP by 2015, posing an ongoing threat to fragile household consumption -historically the core driver of the French economy.
BMI Political View: President Francois Hollande's popularity remains at rock bottom, as the struggling leader fails to convince the public that he can bring France out of its current crisis. Attempts to divert attention away from domestic issues have largely failed: on the foreign policy front, his modest popularity boost from France's intervention in Mali has faded following the recent foray into the Syrian conflict, where France was left standing alone after the US turned the decision to go to war over to Congress. Fundamentally, Hollande's popularity will fail to improve until he can convince the electorate that his administration has the solutions to turn the struggling economy around.
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