The widely reported slowdown in sales in China noted across most multinational pharma companies deserves a harder look, The Wall Street Journal says.
The WSJ said that overall emerging-market sales for the biggest firms tracked by Sanford C. Bernstein increased by about 5.5% for the year ended the second quarter well below a 9% average in the previous four quarters.
The slowdown in China was blamed on tighter terms and competition in tenders and a shift in the way sales channels work at big hospitals and via doctors as Beijing pursues reforms aimed at cutting growing healthcare costs.
Those trends were compounded this month when China surprised markets and revalued the yuan, the WSJ said, with a knock-on effect in other emerging markets which compete with China in trade on narrow margins easily hit by currency volatility.
According to the WSJ, emerging markets make up a sizeable amount of revenues for multinational firms, particularly for Europeans companies, citing 34% of sales at Sanofi ($SNY) and 26% at Novartis ($NVS).
The newspaper said that of note was the emphasis on sales of new products in China over traditional products, citing an example of Bayer's new blood thinner Xarelto.
Among major companies operating in China, Pfizer ($PFE) saw a 3% drop in constant currency in the second quarter in China, compared to a gain of 12% in the first quarter for a firm that has a high-profile joint venture with Hisun. For European firms, Roche ($RHHBY) saw a 1% gain in constant currency in the second quarter, from a 12% burst in the first quarter.
- here's the story from the WSJ (sub. req.)