France's Pierre Fabre is to shut down a facility manufacturing over-the-counter pharmaceutical products at its Veyron & Froment subsidiary in Marseille. Production will be transferred to the Gien and Chateaurenard sites operated by the parent company.
V&F was acquired by Fabre in 2000 via a holding company before being resold to Pierre Fabre Medicaments, the group's OTC business based in Castres, France. The subsidiary produced mainly OTC products and reported sales of 19 million euros in 2002, while net profits totalled 1.1 million euros. Last year V&F employed more than 100 people, but staff transfers to the Castres site have led to a steady decline in numbers to a current level of less than 40, according to local press reports.
Fabre management has declined to comment on the operation but sources say the company has based its decision, in part at least, on the French government's policy of removing a large range of drugs and medicines from reimbursement lists. In October, 82 products were removed from France's list of reimbursable drug specialties, in the first phase of de-reimbursement due to 'inadequate medical service,' i.e. those older drugs whose efficacy is in question. The products are listed in France's official Journal.
Following its closure, the city of Marseille will be left with just a handful of companies involved in pharmaceuticals. Since the reorganisation of Laphal, the largest drug company in the area is Pharmygiene-Scat, employing around 30 people.