1.1 Definition and scope of study

Pharmacies are physical outlets for the sale of medicines and body care products. Pharmacy is the specialty that brings together pharmacists working in these places, intermediaries in distribution to the public.

The players involved in the French pharmacy market are pharmaceutical laboratories, wholesaler-distributors, the French government, regional health agencies, pharmacies and groups of pharmacy chains.

The global market for drugs at producer prices is growing rapidly. According to IQVIA, it has grown by over 12% in 2021, to exceed $1,400 billion. It is expected to continue to grow at a CAGR of 5.70% over the period 2022-2028, reaching $2,067 billion in 2028. [GlobeNewswire]. This growth is particularly evident in global spending by the pharmaceutical industry, which has been rising steadily since the pandemic. On a European scale, France ranks second in terms of the number of pharmacies(21,760 in 2022), behind Spain and ahead of Germany.

The French market has been undergoing major restructuring since the health crisis.Growing since 2015, it has seen a particularly sharp increase post-health crisis, with market sales rising from €39.77 billion in 2019 to €47.808 billion in 2022, representing a 20% increase in3 years . Since the outbreak of the coronavirus, pharmacists' dispensaries have been called upon to help on the anti-pandemic front, whether for advice, tests or vaccines. [Insee]

Today, pharmacies are gradually moving towards digitizing their processes. Customers seem ready to give pharmacists a greater role in looking after their health.

Finally, the traditionally standardized offering is beginning to diversify, notably within pharmacist groups. These cooperatives now have a dual mission: to negotiate competitive prices with wholesalers and laboratories, but also to develop brands with shared values, with a view to creating a brand image and a unique offering.

Another complex issue is the remuneration of pharmacists, threatened by falling drug prices. A reform of pharmacy remuneration has therefore been put in place between 2018 and 2020 to protect the profession by introducing three new dispensingfees per prescription, which can be added together to compensate for the drop in sales margins.

1.2 A global pharmaceuticals market that continues to grow despite the health crisis

Size of the global pharmaceuticals market

In ****, the global pharmaceuticals market grew at a steady pace, driven by dynamic sales in many emerging markets (***) and, to a lesser extent, in Europe.According to IQVIA, it will grow by over **% in ****, to exceed $*,*** billion. This sharp acceleration is due to the marketing ...

1.3 The French pharmacy market

Size of the French pharmacy market

In the Insee nomenclature, pharmacies are recorded under NAF code **.**Z: retail sale of pharmaceutical products in specialized stores. Insee has produced the following graph, which shows the evolution of sales excluding VAT for this activity over the period ****-****.

Pharmaceutical retail sales excluding VAT ...

1.4 Before and after the health crisis for pharmacists

The changing image of pharmacists

During the Covid-** health crisis, pharmacists were on the front line. They played a key role throughout the crisis, which improved their image among the French. Indeed, **% of patients say they have a more positive image of pharmacists than before. **% of them say they have an ...

1.5 Foreign trade in French medicines

The French pharmaceutical industry has a strong international outlook, with almost half of its revenues generated by exports every year.

Value of French exports of pharmaceutical preparations France, *****-****, in billions of euros Source: ****

After strong increases in **** and ****, French exports of pharmaceutical preparations stalled in **** (***), reaching a value of ** billion ...

2.1 Drug consumption in France

As a result of the health crisis, sales of medicines have risen by more than **% worldwide in ****, according to IQVIA estimates. The pandemic led to a sharp rise in demand for vaccines in many countries around the world. Over the medium term, the global pharmaceuticals market had already grown at a ...

2.2 The French and pharmacy

Vaccination against Covid-** is one of the most effective measures for reducing severe forms and deaths due to Sars-CoV-*. To improve accessibility to the vaccines, French pharmacists were authorized to prescribe and administer them in March ****. The PharmaCoVax study, which aims to assess the satisfaction of users who have benefited from ...

2.3 Demand expectations

Expectations for the future of the industry

The survey also reveals French people's opinions on the future of the industry.

Demand opinion on potential developments in the pharmacy sector France, ****, in % of favorable opinions Source: ****

For the possibility of remote ordering and in-store collection, the percentage of favorable respondents rises to ...

2.4 Targeted drugs and the risk of stock-outs

The leem report shows that the majority of pharmacies' supplies are for the same drugs.

*Sales expressed in manufacturer's prices excluding tax

Source: ****

The market has become concentrated around the main drugs, and pharmacists' demand, which follows prescription demand, has been refocusing on a smaller number of drugs over the ...

3.1 The French pharmaceutical industry value chain and drug production

Drug industry value chain

Source: ****

The Leem report breaks down sales of drugs at manufacturer's prices sold in pharmacies, according to whether or not they are reimbursable.

Sales of pharmaceuticals at manufacturer's prices excluding VAT France, ****-****, in billions of euros Source: ****

The market is recovering slightly after a ...

3.2 Pharmacies in France

The number of pharmacies in France is falling

The number of pharmacies in France has been falling steadily for over ** years. In ****, the network will consist of **,*** dispensaries, down *. *% on **** and **% on ****. The pharmacy market is undergoing major restructuring.

number of pharmacies France, ****-****, in thousands Source: ****

These closures reflect the ...

3.3 The financial structure of pharmacies

The Pharm'Exco website provides detailed average data on margins, fixed costs, payroll, EBITDA and management remuneration for pharmacies, according to sales and location. As this content is very dense, it will not be fully reported here, and only the national averages will be extracted in the table below.

Source: ****

Breakdown of ...

3.4 The boom in e-parapharmacy and new distribution channels

E-pharmacy boom

Online sales of parapharmaceutical products have grown strongly during the health crisis, despite the lag in the industry (***). Sales on the Santé Discount platform, for example, jumped by **% in **** , and the pure player estimated sales of around *** billion euros in ****, representing a further increase of **%. [***]

Pharmacist groups are also ...

3.5 Pharmacy groups and brands

Pharmacist groups are collectives of dispensing pharmacists. They come together to cooperate and develop their business, but also, in some cases, to share a common concept, in which case they are referred to as XXL pharmacies, green pharmacies, etc.

Pharmacy groups

The first advantage offered by pharmacy groups is greater competitiveness ...

4.1 Consumer price index for drugs

The Leem report compares the cost-of-living index, which rose by **% between **** and ****, with the public price index for drugs (***), which fell by **.**% over the same period.

change in the consumer price index for drugs France, ****-****, base *** in **** Source: ****

This drop can be explained by the fact that theprice index for ...

4.2 Supply trends: towards digitalization of the business

Pharmacies lag far behind in digitalization

Pharmacists are still lagging far behind when it comes to digitalization. The restrictive regulatory framework for online drug sales in France, the need for investment in terms of both time and money, and a reluctance or inability to use technology are all factors holding back ...

4.3 Offer typology

Offer typology by business sector

Source: ****

5.1 General regulations

Restrictions on installation and sales

Ordinance no. ****-* of January *, ****, known as the "maillage territorial des officines" ordinance, ensures the harmonious distribution of pharmacies across the country. Thus, the creation must respect: * dispensary for every *,*** inhabitants (***) and * dispensary for every additional *,*** inhabitants. The population taken into account is that resulting from ...

5.2 Pharmacy remuneration reform

Reform of regulations governing creations, transfers and groupings

Following on from the law of January **, ****,Ordinance no. ****-* of January *, **** has several objectives:

Clarification of the provisions relating to the conditions for authorizing the opening of pharmacies, by way of creation, transfer and regrouping ; Provisions to encourage the establishment of pharmacies ...