|A pallet of nifurtimox, used to treat Chagas disease and sleeping sickness, is loaded for shipment to El Salvador.--Courtesy of Bayer|
Emerging Markets Sales 2012: €6.17 billion ($8.1 billion)
Percentage of Sales in Emerging Markets: 33.2%
Bayer has deep roots in China. It's been selling drugs there since the 1930s. In 2009, when some other drugmakers were really revving up for emerging markets growth, the German company already counted China among its top three markets. It set aside China as its own operating region, put a regional headquarters in the country, and decided to spend €100 million over 5 years to build up even more. By 2011, Bayer recognized that China was so important to its primary care business that it should move its management to Beijing. And soon after that, CEO Marijn Dekkers said he was aiming for €2.5 billion in pharma sales in China by 2015, up from €926 million in 2010.
So, how's that working out for him? The company has certainly put in the work. It set up a research alliance with Tsinghua University to analyze disease mechanisms and decode drug targets. It has steadily expanded its marketing activities for Glucobay, its China-specific diabetes drug, and Adalat, a cardiovascular remedy. Under its "Go West" program, Bayer trained more than 4,500 doctors and hospital managers in rural China just last year, including 40 from remote clinics in Tibet. And a good chunk of that €100 million investment went to a global R&D center in Beijing.
Bayer HealthCare turned in 15% growth in the Asia Pacific region last year--to €4.2 billion--but it didn't break out figures specifically for China. When asked whether Bayer was on track for its 2015 goal, though, Dekkers said he's sticking to his target. Whether the current brouhaha in China over alleged corruption and overpricing in the pharma industry will cut into that growth and change his mind remains to be seen. Chinese officials visited a Bayer office in China recently, in connection with a "potential case of unfair competition."
China isn't Bayer's only emerging market, of course. Pharma sales for emerging countries overall grew 8% in 2012; recent strong performers include Singapore, Vietnam and Pakistan. In Latin America, Africa and the Middle East, Bayer brought in €2.96 billion. As analysts note, Bayer several years ago targeted Turkey as a growing market. And late last year, the company struck a strategic partnership with Russia's Medsintez to make and commercialize drugs, including anti-infectives and diagnostic imaging products. The two companies plan to build new plants and manufacture from existing facilities. That local production deal puts Bayer in line for more business from the Russian government, which sees manufacturing in-country as a prerequisite for contracts.
And then there's India. The subcontinent makes few of Big Pharma's favorite-market lists these days, now that government officials are tightening up on intellectual property. But Bayer has more reason than most to complain: The Indian government issued its first compulsory license on Bayer's cancer treatment Nexavar, allowing the locally based Natco Pharma to sell a cheap generic despite the drug's on-patent status.
Now, Bayer HealthCare has a new leader to contend with Indian patent issues and Chinese growth prospects--and he comes to the German company after heading up Pfizer's ($PFE) emerging markets business. Dekkers cited his "outstanding international experience" in announcing Brandicourt's selection. With a third of his sales already coming from emerging markets--and that big Chinese growth goal on his plate--Brandicourt will have plenty of international work to do.
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