Generics Manufacturers – Why are they at risk in France?

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.

*Safeguard clause