Covid-19 pushes France to relocate its pharmaceutical industry

We promise, we relocate. With the Covid-19 pandemic, from entrepreneurs to political leaders, everyone agrees to repatriate factories in France or in Europe, in particular those that manufacture medicines. A shortage of masks, gloves, swabs ... and health has become a question of sovereignty and national security.

"This pandemic has made us aware of our degree of dependence on Asia," explains Philippe Lamoureux, director general of Leem, the professional organization of pharmaceutical companies operating in France. From the President of the Republic to the Minister of Economy Bruno Le Maire, not forgetting Prime Minister Édouard Philippe, everyone talks about economic sovereignty and promises that health will be a priority project. Have yesterday's liberals become staunch defenders of protectionism? Before going to the front of this new economic fight, it is still necessary to count its troops.

How many pharmaceutical divisions in France?

In 2018, the French pharmaceutical industry posted a turnover of 56 billion euros, of which almost half was exported. It employs around 100,000 people at 271 production sites. Good figures a priori. But then what's wrong? Why do 80% of the drugs consumed in France come from Asia? Where does this feeling that French drug companies are losing ground come from?

"Let us not hide our faces: we have become subcontractors", explains Philippe Lamoureux, Out of 61 marketing authorizations on the European level in 2019, only five drugs were produced in France. This places France in sixth place in Europe, far behind Germany (20), Ireland (15), Italy (11), the United Kingdom (10) and the Netherlands (9). "Ten years ago, he notes, France was in first place." A first place won in the past thanks to new drugs developed on the territory. Today, France mainly manufactures old medicines.

Sacred decline for the nation of Pasteur! However, France is home to one of the global giants in the sector. Sanofi is, in fact, considered to be the eighth laboratory in the world in terms of turnover. And the multinational does not miss an opportunity to display its patriotism. Eighteen of its forty European factories are located in France. "We produce in Europe for Europe, in Asia for Asia, in America for America ...", specifies Philippe Luscan, vice-president in charge of industrial affairs. And to insist: "I have been pleading for 30 years to tie production sites to territories. I have never believed in France without a factory or in omnipotent China. The Covid crisis reinforces my convictions in defense of a national industry. "

Sanofi wants to build a global giant

The health crisis confirms Sanofi's industrial choices. On February 24, the company announced the creation of a new company with the ambition of becoming number two worldwide in the manufacture of active pharmaceutical ingredients (API), behind the Swiss Lonza Group. APIs (Active Pharmaceutical Ingredient) are the chemical or biological substances of the drug, which are at the heart of the therapeutic effect. They are mainly made in Asia.

The new entity promoted by Sanofi, headquartered in France, brings together six European factories and more than 3,000 employees. It targets a turnover of one billion euros and an IPO in Paris by 2022. "Our calculation is strategic before being economical, insists Philippe Luscan. Certainly, our manufacturing costs will be higher than in Asia, between 10% and 15% but this is the price to pay to maintain a pharmaceutical industry in Europe. "

For industrialists, the Covid-19 crisis illustrates the limits of a model based on unbridled demondialization. "It is dangerous to be dependent on a single production site, explains Jacques Zagury, director of health policy, public affairs and communication at the MSD laboratory (Merck Shape & Dohme, a subsidiary of Merck & Co). However, that would not have been no sense to bring everything back to Europe, you just have to diversify your supplies. "

MSD manufactures curare, an essential substance for muscle relaxation of intubated patients. He faced exceptional demand. In April, MSD increased its deliveries by twelve just for France. "Our teams in the Netherlands connected 24 hours a day, and we were able to transfer products originally intended for China to France." What lessons has he learned from this crisis? "We worked faster with the national health authorities to reduce delivery times. This shows that we can make efforts in the regulations. For example, should we absolutely have a notice written in French for all medicines?"

Protect the existing industrial fabric

In the eyes of Nathalie Coutinet, health economist at the University of Paris 13, it would be folly to relax the regulations. "Let's not forget that the WHO considers the drug to be a potentially dangerous product." For her, the problem is elsewhere. "Before talking about relocation, let's first try to preserve the existing industrial fabric." The researcher refers to the Famar plant in Lyon, which manufactures Nivaquine (Chloroquine sulfate) and Largactil (Chlorpromazine), two drugs currently tested against Covid-19. In receivership since June 2019, Famar is still waiting for a buyer.

Nathalie Coutinet also evokes the case of the Sperian factory in Plaintel in Brittany, which made masks. It was closed by the American Honeywell in 2018. "We must stop this game of massacre, which consists in taking into consideration only the shareholder value of the laboratories and not their public utility. In France, Sanofi is the second distributor of dividends behind Total ", protested Nathalie Coutinet.

Forcing companies to produce 30% in Europe

So should we trust industrialists to repopulate France with factories? "Certainly not, says Jean-François Oudet, clinical researcher. They must be forced by law to produce 30% of medicines on the territory if they want to have access to the European market. Otherwise, the unrestrained competition will resume its rights and companies will continue to flee Europe to make more money. "

If, as the President of the Republic has been hammering out since the start of the pandemic, France is at war with the virus, should it not make sure to manufacture its weapons itself? If not, is it not assured defeat or technological dropout? For Jean-François Oudet, it is not enough to manufacture medicines on the old continent, we must stay in the race for research. "If we miss the turning point of big data and artificial intelligence, we will lose the economic battle and therefore our sovereignty. The champions of tomorrow will be the owners of medical data. It is thanks to them that they will discover new drugs. " 

Some figures to understand: in 2018, France announced an effort of 1.5 billion euros in research on artificial intelligence against more than 70 billion dollars for China and 11 billion dollars for the United States.

Does this historic crisis not oblige all actors, industrial and political, to take new paths? Like that traced by the 1,200 American hospitals (one third of American beds) which created in 2018 Civica Rx, a non-profit company responsible for manufacturing quality generic medicines in the United States, at the lowest possible costs . On April 15, 2020, an MEP asked the European Commission if this model could inspire him. We are watching for Brussels' response.

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