In recent times, French pharma industry associations have been arguing vociferously about the need to proactively ‘re-industrialise’ French pharma to counter the distortionary impact of protectionist policies and massive state subsidies in rival markets.
“France’s industrial fabric risks being systematically hollowed out if we don’t act fast to mitigate recent US and Chinese policy moves,” declares Laurence Peyraut, director general of LEEM (Les Entreprises du Médicament), the primary professional federation representing French drugmakers. Peyraut particularly highlights the manner in which the global pharmaceutical sector has committed over USD 500 billion in new American investments in the wake of President Trump’s tariff threats. “Barely a decade ago, our country enjoyed a significant life-sciences trade surplus; yet this year, we are likely to register a deficit for the very first time, echoing the sorry trajectory of the automotive sector,” she bemoans.
Didier Véron, president of the G5 Santé, a strategic think tank composed of the leadership of the country’s eight most influential homegrown healthcare entities, concurs that the time has come for a collective wake-up call. “The sad truth is that France has already slumped to sixth place in Europe for pharmaceutical exports and ninth for trade balance, ceding ground to peer markets such as Italy and Belgium, let alone America and China,” he warns.
Meanwhile, he frets that prevailing economic headwinds – from inflation and rising energy and raw material costs on the one hand, to price erosion and slim margins on the other – may compel local drug manufacturers to relocate their production to cheaper regions such as South East and Far East Asia. “Industrial activity ordinarily provides the basis for prosperity, high-quality employment, and economic security, yet France’s pharma and medtech sector may soon be staring at a sobering future whereby it is the international markets that sustain our growth, at the expense of our own nation’s health sovereignty,” Véron worries.
Closer scrutiny, however, reveals a far rosier picture. “If you analyse the data collected from the past couple of decades, direct employment in pharmaceutical production facilities has remained remarkably stable at approximately 40,000 positions with virtually no outright plant closures over that time period,” observes Fabien Riolet, general manager of Polepharma, an association representing France’s entire pharmaceutical manufacturing ecosystem, spanning supply and fabrication through to packaging and distribution. And while there have undoubtedly been instances of divestments of French facilities by big-brand laboratories, these have almost always been acquired by other parties, notably a new breed of upstart contract manufacturing organisations (CMOs).
Sustained Investment
Equally fascinating has been the endurance of investment flows into French pharmaceutical manufacturing, as documented by the National Productive Investment Observatory. “Rather than newbuild and greenfield investments – that is constructing facilities from scratch, which can be a formidable task in a highly regulated sector like pharmaceuticals – we’ve witnessed plenty of capacity extensions and expansions, generating significant investment activity,” reveals Riolet.
“Consider a practical example: a 2,000-employee injectable manufacturing facility requires EUR 100 million annually merely for maintenance: not for capacity expansion, but merely for maintaining regulatory and technical compliance standards. This alone generates substantial subcontractor activity and expenditure,” he reasons.
One drug developer that has certainly been pulling out all the stops to deepen its in-country manufacturing footprint is the Danish diabetes and obesity specialty player, Novo Nordisk. “We’re proud to say we’ve executed what constitutes one of the largest industrial investments in pharmaceutical manufacturing history. In January 2023, we announced a EUR 130 million investment, followed by an additional EUR 2.1 billion commitment in November of the same year, confides Etienne Tichit, the company’s general manager and corporate vice president. When combined, this represents one of the most substantial pharmaceutical investments in France, potentially ranking amongst the largest industrial investments across all sectors in the country,” he exclaims.
Such an investment requires approximately 2,000 construction professionals to execute the project, which will double Novo Nordisk’s Chartres facility from 110,000 to 230,000 m2, while creating some 500 additional permanent positions and bringing their total workforce to over 2,300 employees. “Presently, this facility serves around ten million patients across 85 countries. Our objective is to expand its reach to at least 15 million patients, with all next-generation semaglutide and GLP-1 therapies for diabetes and obesity originating from France, thus positioning our country as the global production hub for breakthrough cardiometabolic treatments,” enthuses Tichit.
Meanwhile, Anglo-Swedish innovative biopharma, AstraZeneca, has steadily converted its Dunkerque site into one of our most advanced manufacturing facilities worldwide, generating more than EUR one billion in global sales annually. “Nowadays it employs around 800 people and serves as the global centre of excellence for our inhaled pressurised-metered dose inhalers (pMDIs) used in respiratory medicine. This state-of-the-art facility manages everything from formulation to assembly and packaging and represents one of our flagship capabilities,” says the company’s country president, Anne-Laure Dreno.
Nor is it just Big Pharma that has been splashing the cash. France’s state-owned human plasma entity, LFB Group, recently raised eyebrows by placing a strategic EUR 750 million investment in a new, fully integrated facility in Arras. “Doing so shall unleash us to increase our plasma fractionation capacity from 1.2 to 3.4 million litres per year, effectively tripling our output by 2030,” attests Jacques Brom, the group’s CEO.
“This latest investment should round out and complement our already considerable existing French industrial footprint comprising fractionation in Les Ulis, purification and fill & finish in Lille, and secondary packaging in Carvin, alongside our monoclonal antibody contact manufacturing capability in Alès, which is also set to double in scale,” he adds.
Sound Logic
What could possibly explain this French investment influx at a juncture when competition from other potential destination countries is ramping up, and heavyweight pharma markets are increasingly going head-to-head in a bid to entice in big-ticket FDI? “From a purely pragmatic and economic standpoint, there tends to be a strong rationale to stick with your legacy assets because pharmaceutical production depends on know-how that cannot easily or rapidly be replicated,” opines Karine Duquesne, general manager of dermatology specialist, LEO Pharma.
“At our Vernouillet site, for example, the manufacture of injectables is so complex that it takes around two years to train a new operator to full proficiency. This makes production not only an investment in infrastructure but also in people, whose expertise is indispensable to ensuring quality,” she elaborates. Consequently, France continues to hold a central place in LEO Pharma’s global footprint. The Vernouillet site near Dreux, the company’s first plant outside Denmark, established more than 60 years ago remains its largest manufacturing facility. “It’s actually our only site in Europe producing syringes and injectables, with around 70 percent percent of its output exported globally,” confirms Duquesne.
Then there is the time-tested reliability and security of a supporting infrastructure and fabrication ecosystem that a lower-cost host country might lack. “France guarantees one of the most dependable contexts for pharmaceutical manufacturing, and I say that after spending two decades across multiple plants. The regulatory authorities are competent, the infrastructure is robust, and the surrounding network of suppliers, distributors and operators creates conditions that can properly support quality and safety,” details Damien Parisien, CEO of the contract manufacturing and development organisation (CDMO), Benta Lyon. “These elements really matter in highly regulated, strictly controlled, and potentially high-risk sectors like this,” he insists.
“Producing locally hands us full control over every stage of manufacturing, from the sourcing of ingredients and packaging to production in clean rooms under medical-grade conditions, all under the supervision of the Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM) and the Haute Autorité de Santé (HAS). This proximity safeguards both the quality of our medicines and the sovereignty of our processes,” agrees Pascal Houdayer, CEO of Laboratoires Boiron, a global leader in homeopathy.
It simultaneously translates into a potential reputational dividend when it comes to selling the end product. ‘Made in France’ has become a recognised symbol of trust internationally. “In markets such as China, Brazil, and Colombia, the fact that our products are manufactured in France carries considerable weight with doctors and healthcare professionals. For us, it is not only a mark of quality but also of credibility,” affirms Houdayer.
Such attributes are especially relevant for an entity like Boiron, whose niche category of homeopathy lies outside the scope of classic, mainstream medicine. The company presently employs more than 1,500 personnel across five French production sites covering a wide range of formats, from homeopathic granules and globules to creams, gels, and pills, as well as a facility in Montévrain specialising in sterile single-dose units and paediatric medicines.
“The Made in France label still carries significant weight internationally, even if pricing on the French market is lower than in many other countries,” concurs Damien Parisien. “In the minds of the consumer it signifies superiority of raw materials and processes, high-level handling, and sophisticated competencies,”
Testament to this elevated quality and rigor of French manufacturing processes is the ecological aspect which is fast becoming a competitive advantage and key differentiator when exporting product to CSR-conscious markets. “French manufacturers are being held to a high standard of environmental responsibility as Europe accelerates its decarbonisation ahead of other major economies,” explains Thomas Courbe, director general for Enterprise within the Ministry of Finance and Economy. “Medicines produced in Western Europe generate, on average, half the carbon emissions of equivalent products manufactured in Asia and France is positioned at the vanguard of this transition to environmentally conscious manufacturing through the introduction of a raft of green industry legislation,” he points out.
To assist with this, the government has established a specialised one-stop shop for healthcare industries – covering both pharmaceutical and medical device manufacturers – to facilitate their environmental efforts. “This includes substantial financing for non-profitable decarbonisation investments, ensuring that sustainability initiatives do not compromise competitive positioning,” confirms Courbe, noting that almost two-thirds of decarbonisation investments are hardly commercially viable without public intervention.
As a result, in-country pharma manufacturers have been registering notable sustainability gains. “Since 2020, we have eliminated 8,500 tonnes of CO2 emissions annually from our Chartres facility through energy efficiency improvements, renewable energy adoption, and process optimisation,” proudly reports Novo Nordisk’s Etienne Tichit.
Meanwhile, SEQENS, a fully integrated CDMO notable for having acquired CELLforCURE, the former Novartis cell and gene therapy manufacturing site in Les Ulis, has been making it a point of principle to trailblaze a more sustainable industrial model.
“Our environmental performance now extends well beyond CO₂ reduction. Water use and treatment have become equally critical, and managing how we consume, recycle, and preserve this resource across all our sites is a key priority. Frankly our goal is to unite technological innovation with environmental responsibility,” outlines the manufacturer’s CEO, Pascal Villemagne.
Such sophistication of process is “ultimately being converted into strategic advantage creation and situating French drugmakers ahead of the game with the advent of EU-wide regulations such as the Carbon Border Adjustment Mechanism (CBAM) and the Net Zero Industry Act, which enables member states to reward environmental content in public procurement decisions,” believes Courbe. “Recent provisions even indicate that companies investing in environmentally sustainable production could even benefit from greater pricing protection, aligning environmental policy with healthcare priorities,” observes Duquesne.
Health Sovereignty
The global move towards near- and friend-shoring is also driving French pharma’s manufacturing renaissance. “We are witnessing a rebalancing of global manufacturing networks,” reflects Polepharma’s Fabien Riolet. “The pandemic exposed the vulnerabilities of excessive dependence on Asia, prompting a clear move towards regionalisation. Cost efficiency remains vital, but supply security, innovation capacity, and intellectual property protection have become equally decisive.”
“Rather than a full reshoring of production, what is emerging is a hybrid model that combines the competitiveness of Asian manufacturing with the resilience and proximity of regional partners in Europe, the United States, and Japan,” conjectures Pascal Villemagne.
“For SEQENS, this shift aligns perfectly with our positioning: a globally integrated organisation with strong local presence, capable of combining flexibility, quality, and security of supply: precisely what our clients now value most of all in a strategic CDMO partner.”
A flagship example of this strategy has been the company’s paracetamol project in Roussillon where they are finalising the construction of a new API plant, an investment to the tune of EUR 100 million. “Beyond its scale, this project embodies our contribution to France’s and Europe’s industrial sovereignty, reinforcing local manufacturing capabilities and restoring strategic autonomy in the production of essential medicines,” affirms Villemagne.
“Projects like this are highly symbolic and meaningful because France had long ceased paracetamol production through economic logic, prioritising cost optimisation and their revival demonstrates that new factors are now firmly at play,” believes Riolet, pointing out that not just SEQENS but also UPSA and Sanofi have returned to the business of manufacturing paracetamol locally.
Of course, this is all heavily buttressed by a welter of government stipulations and incentives. “Despite the well-known challenges of taxation, French policy makers have changed tack and have started offering clear advantages – from tax breaks to co-investment initiatives – to those companies willing to contribute to national health sovereignty and Europe’s strategic balance,” affirms Karine Duquesne.
Indeed, the incumbent Macron administration has reduced production taxes by EUR 14 billion annually, specifically targeting manufacturing activities in a fundamental shift in approach to industrial taxation. Concurrently, the Finance Ministry has significantly reduced corporate income tax rates while maintaining the labour cost reductions introduced in 2019, resulting in French manufacturing labour costs sustaining a level below those of Germany.
At the same time, industrial sovereignty clauses have gone mainstream. “Article 65 of the Social Security Finance Bill (PLFSS) has evolved from permissive to mandatory consideration of supply security guaranteed through production site location. We now require comprehensive supply chain descriptions in economic interest notes accompanying all applications, enabling assessment of attractiveness and industrial sustainability implications,” recounts Virginie Beaumeunier, President of the Economic Committee for Health Products (CEPS), the country’s pricing and reimbursement negotiator.“Laboratories seeking price recognition for domestic production must from now on submit detailed applications processed by the General Directorate of Enterprises. Maximum price valorisation for localisation considerations reaches 15 percent above traditional CEPS methodology,” she confirms.
Naturally, drugmakers willing to play ball can reap handsome rewards. Skyepharma, a renowned specialist in the production of complex oral solid forms, presents a case in point. “France 2030 has placed a strong focus on health sovereignty, including the relocation or reinforcement of production for around fifty essential medicines where dependence on imports remains high,” explains the company’s CEO, Sébastien Mas. “We took the strategic decision to align closely with this agenda which also extends to biomedicines and other complex therapies and were subsequently selected under the France 2030 re-localisation programme for essential medicines. This meant we received EUR 1.6 million in public support to strengthen our manufacturing capacity,” he recalls.
Competitive Edge
At the same time, many locally embedded drugmakers have been smart about differentiating themselves from low-cost competition and have set about carving out niches in advanced and highly complex forms of manufacturing. For Skyepharma, cultivating competence in high-potency compounds has become a significant point of distinction. “We recently opened a new 450 m² high-potency zone dedicated to medicines to be handled with particular care. It is a fully contained and segregated cGMP environment designed for highly potent oral drugs, including oncology treatments, and is equipped to handle OEB 4 and 5 substances that require a very strict level of protection and operational control,” details Mas.
Meanwhile, the company has been steadily sharpening its capabilities in advanced oral technologies, such as modified-release systems designed to control drug absorption over time, targeted-release platforms, tab-in-tabs and multi-layer tablets. “This distinctive positioning has been central to our strategy for several years, and we remain committed to high-value development rather than large-volume, commodity production. Our teams work with academic partners and technology hubs to advance new oral delivery approaches that address the complexities our clients face. Many come to us with issues related to delayed absorption or specific release profiles, as well as bioavailability challenges,” he recounts.
Other actors rely more on agile business models and precision. “France is home to our specialised manufacturing and distribution centre in Nanterre, which exports many of our rare disease medicines worldwide. Unlike large-scale pharmaceutical plants, production here is defined by short, highly specialised series with limited shelf lives, requiring us at times to urgently ship only a few units to places as far apart as Japan or Argentina,” narrates Jean-Claude Roche, General Manager at Recordati Rare Diseases. “This kind of agility and precision is distinctive to rare diseases and a source of pride for us.”
Benta Lyon’s differentiation, for its part, derives from the breadth of its capabilities and the way it sits within a single industrial platform. “A molecule that exists both as a tablet and a syrup can be produced within the same site, which spares clients from managing multiple manufacturers and strengthens cost efficiency. The scale of our plant and the technologies we operate allow us to respond to a wide range of needs, and the fact that we manufacture in France provides an additional level of reassurance,” says Damien Parisien.
“Our international clients often emphasise the combination of French manufacturing standards combined with the agility of a midsized CDMO capable of managing several dosage forms at one site. Being able to produce tablets, syrups, creams and soon injectables in one location reduces complexity and cost while preserving a clear quality benchmark.”
Looking ahead, robotisation, automation, and digitalisation, will also likely be decisive in French drug manufacturer’s ability to sustain a competitive edge. “When it comes to incorporating the next level of innovation, we see machine learning and artificial intelligence as representing a critical priority. The larger manufacturers are already managing to maintain run substantial AI programmes, and one of the challenges for Polepharma involves helping to democratise the adoption of these technologies across smaller laboratories and CDMOs,” attests Riolet.
Biomanufacturing: The next frontier
Another, still largely untapped, opportunity for French industry is establishing a competitive foothold in biomanufacturing. “France’s pharmaceutical production heritage was built upon the fabrication of chemical entities for therapeutic treatments, yet the prevailing drug development landscape is now driven by biological modalities — antibodies, RNA-based therapies, and similar technologies. This transformation requires existing production facilities, originally designed for chemical synthesis, to adapt their capabilities or build new infrastructure, which requires time and significant upfront expenditure,” muses Nicolas Bardonnet, general manager at Promega, a consultancy that has been supporting client manufacturers in how to accomplish such a transformation.
“We have been training our clients in how to verify the biological activity of the products they manufacture. Producing an antibody is not enough — its functionality must be confirmed. For chemical products, mass spectrometry or chromatography typically sufficed, but for antibodies and RNA therapies, biological activity must be demonstrated,” he explains.
Little wonder then that it tends to be only the larger, most powerful, and most high-performance of the local labs that have so far ventured across the Rubicon. “Today, only around ten percent of the biomedicines used in France are produced locally – 47 products in total, including 23 blood-derived therapies, 12 vaccines, eight antibodies, and four microbiota-based treatments,” notes Laurent Lafferrère, director general of France BioLead, an entity established to specifically support domestically implanted manufacturers to close the gap.
“Biologics account for around 30 percent of the global pharmaceutical market, 40 percent of newly approved drugs, and nearly 60 percent of those in development, yet they remain costly. Moreover, without a strong domestic manufacturing base, countries lose control over supply, pricing, as well as the broader economic value generated by innovation and skilled employment. Therefore, there exists considerable desire and impetus on the part of the State to see more of these medicines being produced domestically,” he affirms. Indeed, a full EUR 800 million has already been allocated towards strengthening national capabilities in biotherapies and biomanufacturing as part of the wider Santé 2030 strategy to accelerate innovation and local production.
In fact, many insiders believe that it is only a matter of time before this segment of manufacturing really takes off locally. “Our calculations project that our country will be producing around 60 biomedicines by the end of the decade 2030 with the strategic focus concentrated on oncology, rare diseases, and neurology,” forecasts Thomas Courbe. “After all, some 800 therapeutic candidates are currently in various stages of development and testing, reflecting a dynamic response from industry, with 42 biotherapy production projects already receiving active state support,” he reasons.
Moreover, many of the requisite ingredients to enable such a paradigm shift are apparently already in place. “France’s forthcoming biomanufacturing strength rests on the depth and diversity of its supporting ecosystem. The country hosts numerous Centres of Excellence dedicated to training the next generation of biomanufacturing professionals, ensuring a highly skilled workforce whose competence is recognised by peers,” argues Lafferrère.
And beyond major pharmaceutical players, the country has built a dynamic network of CDMOs and specialised suppliers that form the backbone of industrial production, as well as the sort of network of suppliers and engineering firms that can underpin the entire value chain. “French companies such as Verdot and Pierre Guérin, renowned for their bioreactor technologies used by leading global manufacturers like Samsung, exemplify the country’s industrial expertise. At the same time, international groups such as Merck and Sartorius have expanded their footprint in France, reinforcing the country’s technological base and contributing to a fully integrated biomanufacturing landscape,” he conjectures.
Furthermore, certain players are already beginning to stand out from the crowd. “We have bet big on a significant part of our future growth coming from bioproduction,” confides Skypharma’s Sébastien Mas. “We launched the Skyehub Bioproduction model with MaaT Pharma in 2022, our first biotech resident, for whom we built a dedicated and fully equipped cGMP facility on our site, reputed to be the largest facility entirely dedicated to microbiota-based therapies. Their teams work independently while relying on our industrial and quality systems, which allows us to collaborate closely on how their microbiome science is translated into reliable oral products. This set-up remains unique in the CDMO space and has generated strong interest from other biotechs and some non-biotech companies looking for a tailor-made, dedicated facility,” he reports.
“A watershed moment has been reached. When we started out, no CDMO in Europe was able to manipulate a full ecosystem microbiome therapy because of the complexity of producing drug candidates using live bacteria. A decade later and we’ve submitted our Marketing Authorisation Application to the EMA for Xervyteg®, which, if approved, would become the first micro-biotherapy authorised in Europe, and the first microbiome-based therapy worldwide in oncology,” continues Hervé Affagard, CEO and co-founder of MaaT Pharma.
For others, it will no doubt be more of a long march. “We’ve just invested more than EUR five million to bring injectables onto our site for the first time. Until now, our operations have covered solid forms, semi-solids and non-sterile liquids. The new sterile area, developed in partnership with Melchior Santé Animale, will allow us to produce animal health injectables and vaccines,” declares Benta Lyon’s Damien Parisien.
“This represents a first step, but a significant one from a technical perspective, requiring new equipment, new processes and a higher level of control. Effectively it extends the scope of our activity into a field that combines classical pharmaceutical manufacturing with biologically oriented products and heralds our future. It will be a stepwise process, but the momentum is already with us and our local industry sector,” he concludes.
