France wants to save money on drugs. That's not unusual. It's proposing new plans to pump up use of generics. That's not unusual either. What's less common is that Bristol-Myers Squibb ($BMY) is threatening layoffs at two French factories in retaliation.
In fact, Bristol-Myers says, if the government goes through with its pro-generics plans, its sales in France would plummet. So, according to local labor leaders, 550 jobs would be immediately cut at its plants in Agen, which now employ 1,400 people. Like so many other layoff threats in France, the news touched off local protests. Some 2,000 people showed up to march Agen's streets, with a black coffin bearing the letters "BMS" in tow, the Wall Street Journal reports.
The two plants produce a range of paracetamol-based painkillers--that's acetaminophen to U.S. readers--sold under the brand name Dafalgan, among others. The products made there are mostly sold in France, and they bring in about €180 million a year, the WSJ notes. Together with Sanofi ($SNY), Bristol-Myers enjoys a practical duopoly on parecetamol products because most doctors prescribe their branded drugs, rather than the generic versions already on the market, the Journal says. Sanofi itself turns out paracetemol at two plants in the country.
But the French government wants to put paracetamol on its list of drugs subject to automatic generic substitution. A consumer would then go to a pharmacy with a prescription for Dafalgan or one of its variants, and come away with a copycat version. A common-enough occurrence in markets like the U.S., where payers push generic drugs as much as possible and automatic substitution usually begins as soon as copies appear.
Bristol-Myers maintains that the substitution plans would take a serious toll on its sales. Even after cutting 550 jobs, its plants in Agen would find it tough to compete, the company told labor leaders, the WSJ reports. In addition to promising layoffs, the company has also called a halt to a €60 million ($81.2 million) investment in the two plants planned for this year and next.
The company wouldn't comment for the WSJ. As for the French government, the Health Ministry's drug safety agency, ANSM, told the Journal that its decision about pareacetemol is imminent.
Sanofi has had its own problems with job cuts in France. After months of negotiating with French officials about its plans to centralize R&D operations--and cut jobs in the process--Sanofi grappled last fall with another round of worker strikes at sites around France. Sanofi CEO Chris Viehbacher had agreed in 2012 to scale back Sanofi's job cuts in its home country--to 900 jobs, compared with union estimates of 2,500--but pledged to consolidate several research sites into a few French clusters.
- read the WSJ piece
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