|Medical examination to diagnose leishmaniasis at the Cha de Esquecido health center in Brazil--Courtesy of Gil Corre/Sanofi|
Emerging Markets Sales 2012: €11.14 billion ($15 billion)
Percentage of Sales in Emerging Markets: 31.9%
Sanofi ($SNY) hasn't wasted much time dithering in emerging markets. The company spent €39 billion on deals in emerging markets over the past four years. It now has 40 manufacturing sites in emerging countries, and nearly half of its consumer healthcare sales come from those countries. Thousands of doctors in rural China and India have been trained by Sanofi reps. Overall, Sanofi's emerging markets sales grew by 10% last year to €11.14 billion. Now, those countries contribute almost 32% of Sanofi's worldwide sales.
The French drugmaker has been a fixture in most developing countries for decades. But its full-scale gallop across the emerging markets began several years ago, when CEO Christopher Viehbacher took over. Faced with an imposing patent cliff, Viehbacher turned to a series of diversification moves to gird the company for the inevitable. Sanofi bought the Czech generics leader Zentiva, the Mexican pharma Laboratorios Kendrick and Brazilian generics maker Medley. It snapped up Indian vaccines maker Shantha Biotechnics and Indian nutraceuticals maker Universal Medicare. And in 2012, the company wrapped up its latest emerging markets deal: Colombian-based Genfar, with operations in Peru, Venezuela, Ecuador and 10 other Latin American countries. Viehbacher says he's still on the lookout for emerging markets deals; in fact, Sanofi is reportedly eyeing a deal for India's Elder Pharmaceuticals.
And while Sanofi has diversified into emerging markets, it's also diversifying within them. The company is as likely to make headlines for building a facility in Morocco as it is for rolling out new products in China or Brazil. Its latest additions to international manufacturing include four plants in China--and one each in Vietnam and Algeria.
Sanofi has used a variant of the "second brand" strategy to keep costs down in poorer countries. For instance, it sells both branded Plavix and its generic version, clopidogrel, in Indonesia, and it's experimenting with two malaria drug pricing tiers in Morocco. But one of Sanofi's key strategies is using public health initiatives, coupled with capital investment, to build up its customer base and build relationships with local officials. The company recently announced plans for a new $95 million plant in Algeria, its third in that country and its biggest in Africa. While the plant is going up, Sanofi will be sending a mobile clinic around the country to improve screenings for cardiovascular disease, diabetes and cholesterol. The company will also be working with public health officials to monitor influenza activity. The company sells CV drugs and has a big diabetes business--plus, it's the biggest seller of flu vaccinations in the world. But if patients don't know they're sick, and if they don't understand how treatment might help, that product lineup won't sell.
Sanofi has also made its mark through doctor-training programs. Its Prayas program in India, launched in 2009, married local manufacturing contracts and new generic-drug rollouts with a massive plan for physician education. The company recruited city doctors to mentor rural practitioners, aiming to conduct workshops with 100,000 of them by 2015. Three hundred reps were charged with keeping village pharmacies stocked. In 2011, Sanofi rolled out a doc-training initiative in China, planning to train 10,000 doctors. And this year in Morocco, the company opened a new €20 million logistics center and rolled out a slate of collaborations with local officials: training programs for doctors and nurses in diabetes, epilepsy and mental health; a series of upgrades to Moroccan treatment facilities; and disease-awareness campaigns for patients. Plus, the company signed on to help train regulatory technicians and managers as a boost for the local pharma industry.
Sanofi has been swept up in the Chinese corruption scandal; like several of its rivals, the drugmaker faces whistleblower allegations that it bribed doctors to prescribe more of its drugs. An inventory problem in Brazil cost it more than €200 million in charges for the second quarter of 2013. But Viehbacher says his enthusiasm for emerging markets is undiminished. "The marketplace will be bumpy on occasion," he said recently in Mumbai. "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."
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