France has become an attractive overseas acquisition market for Indian pharmaceutical companies, of late. After Ranbaxy's acquisition of RPG Aventis and Zydus Cadila's Al Pharma acquistion, other Indian pharma companies like Unichem Labs, Wockhardt, and Sun Pharma are in acquisition talks with French generic companies.

According to an estimate, France has about 10 good generic companies for sale, which are attractively priced compared to companies from other markets like UK, or Germany. France is the world's fifth largest generics market after US, Japan, Germany and UK.

"We are in acquisition talks with French generic companies. France is one of the largest pharmaceutical markets in Europe and in the world. Despite being a small country, French pharmaceutical market is considered equivalent to Canadian pharma market. It makes sense to set up a manufacturing base in France," said Dr. P A Mody, chairman, Unichem Ltd.

The current pharmaceutical market in France is estimated to be around euro 550 million, which is expected to zoom five folds by 2010, said industry sources.

A major factor for this bullishness is the French Government's efforts towards reducing the healthcare costs of its citizens by encouraging increased use of generics. There is already a high level of government-reimbursement on healthcare, which has given patients and physicians little incentive to cut consumption.

A recent survey by the Organisation for Economic Co-operation and Development (OECD) revealed that pharmaceuticals accounted for more than 10 per cent of total health spending in most countries, but that in France they accounted for over 20 per cent of healthcare spending.

According to the French pharmaceutical industry body, LEEF (Les entreprises du medicament), since 1995, France has been the leading drug producing nation within the European Union.

On a national basis, France remains the third largest producer of pharmaceuticals worldwide and it has been attempting to maintain its strong position despite an unfavourable economic climate.

European comparisons carried out by the industry have shown that French prices are around 15 per cent lower than those in the UK and Germany.

Moreover, companies can eye other critical European markets after setting a base in France. "As the French regulatory rules are on a par with the global standards, a manufacturing base in France could cater to other major European countries as well," said Dr. V V L N Sastry, country head, First Call India Equity Research.