France provides a unique environment for dermo-cosmetics companies such as Pierre Fabre, Uriage, and Galderma to thrive in terms of the industry’s historical legacy in the country, abundant natural resources, and a tradition of openness and understanding of dermatology.
[France is] a unique environment for the growth of dermo-cosmetic brands. French dermatologists have a very strong background and understanding of how important the skin is and for this reason are open to prescribing their patients with the highest level of care and products
Sébastien Lucot, Uriage
France’s leading international position in dermo-cosmetics is unquestionable, given the renown of brands such as L’Oreal and Pierre Fabre on the global stage. Following a transitional period after the death of its founder in 2013, Pierre Fabre, France’s third largest pharmaceutical company behind Sanofi and Servier, is focusing on portfolio diversification and international expansion in the coming years to re-establish its position at the forefront of dermatological treatment. According to Eric Ducournau, CEO of Pierre Fabre Dermo-Cosmetics (PFDC), the company is aiming “to further develop all our dermo-cosmetic brands beyond our flagship Eau Thermale Avène that currently represents 50 percent of PFDC turnover.” Ducournau goes on to say that “our number one goal is to create as many new formulas as possible to launch new lines and products worldwide.”
Pierre Fabre, though not unique in having both a dermo-cosmetics and a pharmaceutical division, does appear to have struck a particularly fruitful balance between the two. Indeed, according to the President and CEO of Pierre Fabre Pharmaceuticals Frédéric Duchesne, “diversity, complementarity and overlap are three key words to describe the interactions between the two businesses.” Additionally, having a separate dermo-cosmetics branch allows Pierre-Fabre to negate the sometimes negative effects of prescriptive French healthcare regulation, as Duchesne explains, “over 70 percent of our turnover is non-reimbursed, [meaning that it] is not affected by the shifting regulatory environment” and that “having two businesses has allowed us to compensate for the inevitable ups and downs.”
Like Pierre Fabre, Grenoble-based SME Uriage deal in thermal water-based products but, as a smaller organisation, does not have a dedicated pharmaceuticals division. General Manager Sébastien Lucot does not however see this as a weakness, as Uriage is able to be “a fully integrated company that manages all manufacturing and R&D of all of our brands.” This strategy seems to be paying dividends with double digit growth and EUR 100 million (USD 112 million) in revenues in 2015. Lucot sees France itself as a key contributor to the success of dermo-cosmetics companies, and describes the country as “a unique environment for the growth of dermo-cosmetic brands. French dermatologists have a very strong background and understanding of how important the skin is and for this reason are open to prescribing their patients with the highest level of care and products.”
Another important component common to all successful dermo-cosmetics in France is R&D. The Swiss dermatology specialist Galderma’s research facility in South-eastern France is actually the largest such operation specifically dedicated to dermatology in the world. General Manager Christophe Mosse sees the company’s investment in research as enabling Galderma to become “one of the few dermatological companies able to launch new products in the market,” and successfully navigate France’s sometimes treacherous regulatory framework. PFDC’s Ducournau concurs on the importance of research, explaining that “our clinical trials not only last four to six months longer than the average dermo-cosmetics line but we also dedicate 4.5 percent of our total revenue to R&D.” This intensive research has allowed PFDC to produce what Ducournau calls “truly revolutionary products … like the Avène Tolerance Zero line that uses Sterile Cosmetics technology” and stay ahead of the competition.
Writer: Patrick Burton