|Sanofi CEO Chris Viehbacher|
On the path into emerging markets, drugmakers have stumbled across a thorny regulatory bush here, a pricing sinkhole there--not to mention a couple of big bad wolves in the form of Chinese investigators and Indian patent police. But Sanofi CEO Christopher Viehbacher figures that, whatever the obstacles, the journey will pay off.
"[T]he marketplace will be bumpy on occasions," Viehbacher said in Mumbai today (as quoted by Reuters). "For the longer term I continue to believe in [their] importance [not only] from the healthcare point of view but also from the business point of view."
Sanofi's ($SNY) road has been bumpy of late. Like several other Big Pharma companies, it's under the microscope in China as a corruption probe rages on. Last month, a whistleblower accused Sanofi of bribing more than 500 doctors, and the government quickly pounced. Sanofi is conducting an internal probe as officials look into the allegations. Viehbacher seems sanguine about the situation: "I think the Chinese government's approach to reduce corruption has to be supported by all of us," he said today.
The company recently had a more unique problem in Brazil; after executives there engaged in some number-pumping inventory shenanigans, Sanofi had to clean house--and take a €212 million charge against second-quarter earnings. It was a blow for Sanofi, which is said to be the biggest generics maker in Latin America after a string of deals there over the past several years, including the buyout of Brazil's Medley in 2009. Most recently, it bought the Colombian drugmaker Genfar last year.
Still, the French drugmaker remains on the lookout for acquisitions in emerging markets, Viehbacher says. As Reuters points out, Sanofi is among the rumored bidders for India's Elder Pharmaceuticals domestic business--a deal that could be worth up to $450 million. Viehbacher wouldn't comment on that deal, but he did have a few words for Indian officials, which have revoked Big Pharma patents, granted a compulsory license for a Bayer cancer drug, and slashed drug prices. His thought? India should focus more on improving access to healthcare and investing in innovation, rather than pushing down drug prices.
- read the Reuters news
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