A hall more imposing than a cathedral. Shelves as far as the eye can see, a ballet of forklifts. The French drug manufacturer Upsa stores here, in the suburbs of Agen (Lot-et-Garonne), all of its raw materials, soon to be transformed into tablets, pills or syrups. On the floor, too heavy to find another place, the aptly named “big bags” (big bags, literally) catch the eye. Giant shopping bags, each filled with 600 kilos of the white powder that has attracted all the attention of the public authorities after the health crisis: paracetamol. On the labels, distant origins. India and the United States mainly, China too. Labels soon to be marked “Made in France”: barring unforeseen circumstances, from 2026, the powder should come from Isère and Haute-Garonne, where two subcontractors, Seqens and Ipsophenebuild factories.
Relocating the production of active pharmaceutical ingredients, these molecules at the heart of our medicines, 80% of which are purchased outside Europe: at the end of the first lockdown in 2020, this had been one of the great promises of the President of the Republic Emmanuel Macron. At the top of the list, paracetamol, the most consumed treatment by volume in our country (538 million boxes sold in 2023). More than a symbol, even if strong tensions are now affecting other medicines. At the height of the health crisis, the rationing of this common painkiller in pharmacies had stunned the French. The stock shortages on formulations intended for children during the “triple epidemic” of flu, Covid and bronchiolitis in the winter of 2022-2023 too.
Ironically, Rhodia, bought in the meantime by Seqens, was the last in 2008 to dismantle its French factory and transfer its production to China. The consequence of the recurring price cuts, decided by the public authorities in the name of the necessary control of health expenditure. Since then, priorities have changed and the time has come for “health sovereignty”. But achieving this goal remains a challenge, even for paracetamol, one of the most advanced projects. The imperative to balance public accounts has never been so pressing and the State is today torn between its multiple objectives – supporting French producers, while making savings. Manufacturers must juggle with the contradictory injunctions of administrations with competing objectives, and the political uncertainty since the dissolution of the National Assembly does not help. Particularly for a medium-sized company like Upsa, for which painkillers represent 80% of the portfolio. “We are at a key moment for the commitment of public authorities to sustainably defend 100% French production of paracetamol,” summarizes Laure Lechertier, the Agen group’s market access director.
Reduced environmental footprint
The adventure began in June 2020. At the instigation of the Elysée, Seqens, Sanofi, the market leader with its Doliprane, and Upsa, number two with its Dafalgan and Efferalgan brands, were asked to undertake work to relocate the paracetamol sector “within three years”. At least three more years will be needed. “The starting point was the development of a competitive process with a reduced environmental footprint. We spent several months in research and development to arrive at a technology that we patented, which uses less water and energy and produces less waste,” recalls Gildas Barreyre, the secretary general of Seqens. The project appealed to the two laboratories and the State, each of which assured the manufacturer of active ingredients of their support.
The stars are aligned. The public authorities are opening their wallets wide. The future factory will be financed up to 30% to 40% by funds drawn from the France 2030 envelope. Sanofi and Upsa are committing to purchase volumes for several years, and Upsa is also providing funds to Seqens. To reconcile 100% French with the need to diversify its suppliers, the group is also taking a stake of 500,000 euros in the capital of the start-up Ipsophène, based in Occitanie. The promise of this young shoot, also supported by the public authorities: “A manufacture of paracetamol from basic ingredients sourced only in France and Europe, and which, for the first time, will not generate any ultimate waste, thanks to an innovative synthesis method”, assures Jean Boher, its president. Until now rather discreet, he says he is now ready to deliver to his customers from the beginning of 2026.
The fact remains that producing in France has a cost. Manufacturers are taking advantage of this new government priority to reopen the issue of drug prices. After reductions in 2014 and 2015, of around 15% in total, the State had imposed a few months before the start of the health crisis an additional reduction of 10%, which was to apply from 2020. As the relocation project must now be supported, the government is granting a moratorium on this reduction until the end of 2024, at 76 cents manufacturer price excluding tax for a box of eight 1-gram tablets. “This was an essential condition for the success of the project,” insists Laure Lechertier.
Four years later, what will become of this agreement? Upsa, whose activity is based 80% on painkillers and their various variations, has made 100% production in France a commercial and political argument. The 350 million boxes (including 300 million of paracetamol) sold each year in France and around the world continue to be manufactured by its 1,700 employees in Agen, on the laboratory’s two sites in the urban area. But the energy crisis has passed and on the national market, profitability, which was already “very low” on treatments for adults, is constantly diminishing. The pediatric line, however, is showing losses. To ensure its profitability, the group is counting on exports, to countries where prices are higher. What will happen from 2025, with rising costs and an active ingredient that will soon have to be paid for more, if the price of paracetamol-based painkillers were to fall again?
Reconnecting with old habits
Since the beginning of the year, the group has been in discussions with the public authorities, particularly with the Economic Committee for Health Products (CEPS), the interministerial body responsible for setting drug prices. Paracetamol is one of these so-called “mature” treatments whose prices have been continually lowered by the public authorities in order to save money and finance innovative molecules, which are increasingly numerous and more expensive. The temptation is great to return to these old habits, and negotiations are still ongoing, as the deadline approaches…
One thing is certain, the same price will apply to all players who market paracetamol in France – including those who produce abroad, with much lower costs. In 2021, still to support manufacturers playing the relocation game, the government had voted in the framework of the Social Security financing law for 2022 an article opening the possibility of specifically reassessing the price of molecules produced in France. However, the CEPS had then interpreted this text… in its own way. “It considered that only recent treatments could benefit from it, which does not fully correspond to the intention of the legislator”, noted parliamentarians in a report devoted to drug shortages published last year.
On the historic Upsa site, very close to the Agen rugby stadium, a sweet smell floats in the air. A strawberry scent, symbolizing the group’s renewed ambitions in pediatrics. In 2022-2023, when parents were running from one pharmacy to another to find paracetamol for their children, it was the Agen region that was called to the rescue. Market leader Sanofi was unable to meet demand linked to the triple epidemic, and the public authorities turned to Upsa, which then redirected 1 million doses of its pediatric Efferalganmed intended for export to the national market. “A responsible corporate gesture given the context,” emphasizes Laure Lechertier. It was also an opportunity to pass on a few messages about the financial sustainability of this activity, about the importance of supporting alternative suppliers in the face of a leader (Sanofi) that is almost hegemonic in this segment and… of grabbing a few market shares.
Since then, Upsa has been trying to relaunch its pediatric syrup in France. Its formulation, with a caramel flavor and only suitable for use from the age of 4 months, has been revised. A new product that can be used from birth and with a strawberry flavor, better suited to the taste buds of toddlers, has been developed and recently authorized by the National Agency for the Safety of Medicines. The syrup production lines are currently being modernized. Here too, the State has made its contribution, as well as to other projects of the group, this time via the France 2030 plan.
Promises
Not without a contradiction, the public authorities sometimes seem to take back with one hand what they give with the other. Because, at the same time, a mechanism called the “safeguard clause” has grown in size. Here, it is no longer the companies that need to be safeguarded, but the accounts of Social Security. Each year, Parliament votes on a spending envelope for medicines: if it is exceeded, the pharmaceutical industry reimburses the difference. A mechanism invented in 1999, but never really activated until 2021. Since then, innovative and expensive medicines have flooded the market, leading to a significant overrun of the envelope. However, the tax is shared across the entire sector – including manufacturers of mature products whose growth is low or zero… “The levy is mainly based on turnover achieved in France. Ours is not growing on the domestic market, but we still paid 7 million euros last year. This is penalizing for our investments”, regrets Laure Lechertier.
Roland Lescure, the (resigned) Minister Delegate for Industry, had committed to capping the overall amount of this clause. Only 1.6 billion euros would be recovered from an expected overrun of more than 2 billion euros for 2023 and 2024. But this cap was an oral commitment: the entire sector remains in suspense on the choice of the future government, and on its willingness to keep – or not – this promise, and to renew it in 2025.
The same contradictory injunctions are being played out at the European level. On the one hand, the Commission is launching work to combat shortages and stock-outs: identifying a list of essential products, creating an “alliance for critical medicines” to secure supplies and support relocations, etc. On the other hand, Brussels is adopting a directive imposing extended producer responsibility for water quality. As such, manufacturers will no longer only have to purify their discharges, but also contribute to financing the decontamination of drug residues that end up in wastewater, after being eliminated by patients. “We do not yet have an impact study for France, but in Germany, the amount of this tax has been estimated at nearly 1 billion euros for the entire sector,” worries Laure Lechertier.
One last contradiction? While health safety and sovereignty have become major concerns, producers who play the 100% French game do not have the right to indicate “Made in France” on their packaging in a visible way. This would be considered a promotional argument, and the regulations prohibit it…
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