Sanofi cuts costs to cope with Euro trouble

We all know that, like its Big Pharma colleagues, Sanofi-Aventis has been on a cost-cutting drive: restructuring, consolidating, and cutting jobs. But will European healthcare cuts force the French drugmaker to reduce spending--and payrolls--even more?

Apparently, Sanofi CFO Jerome Contamine believes continued reductions are the company's only choice. After all, it's expecting lower revenue from European governments that, because of budget deficits and economic crisis, are slashing healthcare spending. "The way to cope with that is to continue to cut costs," Contamine told attendees at a Goldman Sachs conference in Los Angeles (as quoted by Bloomberg).

Specifically, Contamine mentioned marketing cuts. "We are merging sales forces, we are reducing sales forces, having a multiproduct sales force," he said. "We will continue to do that."

European drug-spending cuts have been all over the news lately, with Greece's 27 percent reduction only the most dramatic. Germany is planning to force drug-price reforms; Spain has announced it will slash drug spending; and as Bloomberg reports, France is looking at healthcare-spending cuts, too.

And these price cuts come at a time when drugmakers have been overhauling their sales models, making sweeping changes that have claimed thousands of jobs. Big Pharma has shed sales reps, consolidated sales forces, migrated some doctor-detailing to the Internet, and so on. Those changes are continuing. So stay tuned.

- read the Bloomberg piece

ALSO: Sanofi-Aventis said France's health-cost regulator has issued a recommendation stating its heart drug Multaq has important medical effects, which means the state will reimburse 65 percent of the cost of the medicine for all patients in need of the drug. Report