In this study, commissioned by the Gemme (French association of generics manufacturers), Smart Pharma Consulting has assessed the evolution of generics manufacturers’ profitability with a special focus on the impact of external factors (click on the links for free access: English version / Version française).
Thus, we have shown that:
- Their profitability has decreased from 9.6% in 2018 to 4.0% in 2021.
- Generics profitability was 2.4 times lower than originators manufacturers one, in 2021.
- When considering the reimbursable retail generics, accounting for ~85% of their sales, average profitability was of 0.3%.
- External factors (i.e., inflation, price cuts and M contribution*) reduced their profitability by ~8 points in 2021.
The situation is particularly absurd, considering that the more generics are sold, the more they generate savings, and the more manufacturers are taxed, through the M contribution*, which reduced their profitability by 4 points, in 2021.
The increasingly precarious situation of generics manufacturers requires from the government to reconsider the M contribution*, as well as the price cuts they regularly impose to generics manufacturers…
… to avoid increasing out-of-stock situations and encouraging generics players to withdraw from the French market.