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France: the Next Health Tech Nation?

France: the Next Health Tech Nation?
 Angèle Malâtre-Lansac
Former Associate Director - Healthcare Policy

Medical innovation (e.g. new medical devices, e-health and biotechnologies) is spreading around the world, with the aim of providing better care for all. In the long term, innovators in these fields may hold the solutions to today and tomorrow’s main health issues. Simultaneously, health ecosystems must constantly adapt to these many new technologies in order to remain competitive and become stronger.
French authorities seem to have understood the importance of this matter: innovation is presented in the French National Health Strategy as one of the four main challenges the sector faces. What should be the next steps for France to become a leading innovation country in healthcare?

Healthcare: a key business sector for France

First of all, France is home to historical medical industries, especially in the pharmaceutical field, such as Sanofi or Ipsen. This sector represents more than €28.7 billion of exports every year.
French companies in the healthcare sector have a technology-intensive expertise and a strong capacity for innovation, which gives the country a sustainable competitive advantage.
Moreover, France is known worldwide for its excellent scientific and clinical research, thanks to strong institutions like the National Institute for Health and Medical Research (Inserm) or the National Center for Scientific Research (CNRS). According to World’s Most Innovative Research Institutions, a 2017 ranking by Reuters, four French institutions are amongst the 25 best public research institutions in the world, and circa 500 clinical trials were realized on the French territory between 2014 and 2015. An additional French specificity:its network of University Hospital Centers (CHU), which places clinical research at the heart of the medical profession.
France owns another strong asset to massively boost innovation: the National Health Data System(SNDS), which is one of the world’s most important medico-administrative databases. However, much remains to be done for the country to be able to fully take advantage of this lever and facilitate the access to such databases.
France has recently implemented innovative tools to support health innovation. For instance, the French Investment Bank created the “French Tech Acceleration”, a €200 million fund entirely dedicated to the support of healthcare startups. The research tax credit (C.I.R.) also plays an important role: it provides companies with the partial funding of their R&D strategy and encourages them to hire postgraduates or researchers, by including their salaries and associated social costs in the C.I.R.. Thanks to the C.I.R., more than a thousand of PhD students are hired every year in French companies.

Example of a French Health Cluster: the Lyon Area

The area surrounding the city of Lyon has succeeded in creating a strong health cluster, where actors with diverse backgrounds actively work together. Indeed, Lyon gathers key players from all sectors: scholars (from Insa, a French engineering university, or from the second French University Hospital Center, Hospices Civils de Lyon), investment funds (such as Archimed, the first European investment fund for healthcare companies), industrial leaders (Sanofi Pasteur or BioMérieux), etc. This dynamic was largely encouraged by public authorities, as the City of Lyon has labeled healthcare as a priority of its economic development strategy. Overall, Lyon is home to more than 58 770 jobs in the health sector, thus representing 10% of the private sector jobs in the area.

Compared to Other Countries, France is Still Losing Ground in the Innovation Sector

Despite all these assets, France is less and less considered as a welcoming nation for innovation. If France wants to become a leader in biology innovation, it must tackle several challenges:

  • Scientific brain drain. Public scientific research in France suffers from a lack of attractiveness, given the sector’s low salaries and the lack of flexibility between the private and public sectors. This leads many French talents to choose to pursue their careers abroad. 
  • Startup growth. Every year, France creates more startups in the health sector (biotechnologies or medical devices) than the United States does (circa 18 for 1 million inhabitants versus 10 for 1 million inhabitants). However, these young startups soon encounter obstacles to their growth. Indeed, although Bpifrance, the French Investment Bank, offers great help to young entrepreneurs launching their startup, it fails to provide funds in venture and growth capital. Therefore, many French startups prefer to develop their activity abroad.
  • Constraining regulations. France is well known for its dense bureaucratic organization, which also permeates the health sector. Major health agencies such as the French Health Authority (HAS) or the French equivalent of the Federal Drug Agency (ANSM) activate long and heavy procedures for each new product. Thus, health companies and agencies work at a different pace: on the one hand, health companies require a fast return on investment and need to sell their products fast; on the other, agencies need time to assess the security and efficiency of new technologies.

In this context, Institut Montaigne has identified several actions France could undertake to become an innovative nation:

  • Investing in highly-skilled individuals and in their training. French university courses lack multidisciplinarity and do not teach the skills necessary to the apprehension of new medical technologies, especially biotechnologies, new medical devices, digital health and data technologies.
  • Facilitating connections between different actors, in order to create powerful innovative ecosystems, and to foster dialogue and partnerships between private and public sectors to strengthen medical research.
  • Funding the area’s sectors that are most in need, by supporting public research and promising startups.
  • Adapting regulation to innovation, by reevaluating the missions and resources of major regulatory health agencies 
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