Sanofi chief bucks conventional pharma wisdom
Last week, the market researchers at Datamonitor took issue with Big Pharma's current emerging-markets love affair, saying sales there are necessarily lower-margin and thus not up to the task of filling in for patent losses. But Sanofi-Aventis chief Chris Viehbacher--who faces a major loss to the patent cliff, the megablockbuster blood thinner Plavix--takes issue with that assessment. In fact, in a recent interview with the Financial Times, Viehbacher takes issue with plenty.
First, emerging markets: "In emerging markets, we have more or less the same profitability as in Europe," Viehbacher says. Yes, gross margins are smaller, but spending is lower, too, he says.
Next, U.S. healthcare reform. Drugmakers have been downplaying any sales boost. But Viehbacher simply confirms the obvious when he says that it's in the drugmakers' best interest for more U.S. folks to have better insurance coverage. "If your customers can't afford your product, you can't stay in business," he told the FT. "So, I think, longer term [reform] actually strengthens the U.S. market."
Third, in an industry where executives at least pay lip service to being "all about the science," Viehbacher bluntly says that Sanofi's scientists had too much control before he took the CEO office a year ago. "We had really a scientific organization that really lived within its own walls," he said. "[V]irtually no contact with our commercial organizations. ...[T]here were a lot of fundamental strengths that weren't being realized."
Of course, Viehbacher's opinions are borne out in his company strategy. One of his hallmarks has been forging partnerships with a slew of other companies, from development deals to marketing arrangements. And he's done plenty of those deals in emerging markets. Check out the article and interview excerpts for more. And if you're into video, Viehbacher dishes to Jim Cramer on CNBC as well.