Merck ($MRK) detailed losses in Venezuela last year and added that sales as of the second quarter in the country had turned 'negligible' as a full-blown economic crisis hits harder since oil prices collapsed early last year.
To be sure, every multinational has remarked for the past two quarters on losses connected to sales in Venezuela mainly related to the collapse of the bolivar exchange rate on a plunge in prices for the country's key export, crude oil.
But Rob Davis, executive vice president and chief financial officer at Merck, provided the extent of the damage for the company last year at approximately $210 million. He also signaled that the situation on the ground is at a standstill on sales.
"As you will remember, we scaled back our operations in Venezuela toward the end of last year and therefore recorded negligible sales from the country in the second quarter of this year," Davis said in reply to an analyst question on the July 29 earnings call.
In May, reports surfaced indicating doctors were striking. They could not find medicines for patients and Indian drug companies were pursuing complex barter deals through government channels for crude oil in return for continued drug shipments and to recoup overdue bills.
Adam Schechter, executive vice president and president for Global Human Health, said that outside of Venezuela in constant currency the company reported emerging market sales rose about 6%.
"So we continue to have good growth in the emerging markets. And if you look at China, we had 11% growth ex-foreign exchange. So, the growth, albeit not as good as it was a couple years ago, it continues to be robust," Schechter said.
"With that said, lumping emerging markets together today is not a good idea, because you have very different dynamics in terms of what is occurring in a market like China versus what is occurring in a market like Russia or what is happening in Argentina."
He did note that Januvia (sitagliptin) is a key product for the company in emerging markets with double-digit growth in many locations. What's more, he said China represents a major opportunity for the product as it wends its way through the National Reimbursement Drug List (NRDL) process.
"We really have not gotten NRDL approval for Januvia in China yet. So once that is achieved I think that represents another opportunity for us for growth of the Januvia franchise outside of the U.S.,” Schechter said
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