A Status Report on the Health Care Sector in France

Abstract

Nearly 10 per cent of the Gross Domestic Product (GDP) in France is spent on health care. Twenty per cent of this budget is spent on medicines, more than in many of the Organisation for Economic Co-operation and Development (OECD) countries including the US, UK and Canada. The pharmaceutical industry in France is the third largest in Europe and adopted product patents even before the TRIPS agreement. Strict regulatory measures govern the pharmaceutical industry in France. The branded drugs are costlier compared to the generics. In order to control costs and promote generic drugs in the prescription, the government has introduced several regulatory measures, which even other OECD countries have not fully implemented yet. Of the total turnover of the pharmaceutical industry, turnover from the domestic sales has been declining while the exports turnover has been increasing. The balance of trade in pharmaceuticals has been positive. The French have also been filing a large number of patents, second only to the US; and they rank higher than the US in patents granted. In order to compensate the firms for the loss of time in the patent application process, the French government grants a five-year term of exclusivity for companies satisfying certain criteria. Though this could delay the entry of generics, for pharmaceutical companies it provides an extended period of power over the product. The industry has also responded by investing in R&D to improve further. In conclusion, the government plays a significant role in providing health care and regulating the pharmaceutical industry.