Tak­ing the pulse of a grow­ing mar­ket

Health­care gi­ant’s boss keen to have China mar­ket’s lat­est up­dates

China Daily (USA) - - Q&A WITH CEO - ByWUYIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

Olivier Brandi­court, CEO of French health­care gi­ant Sanofi has a very tight sched­ule dur­ing his trip in China. In the early morn­ing, he had break­fast meet­ing with young tal­ent in China, the largest mar­ket for Sanofi’s emerg­ing mar­ket.

He would like to have de­tailed knowl­edge of the Chi­nese mar­ket’s lat­est up­dates, he says, and wants to ex­pand the French health­care com­pany’s cov­er­age in the coun­try, as he stresses sev­eral times.

A doc­tor trained in Paris with 28 years of ex­pe­ri­ence in the health­care in­dus­try, Brandi­court has played var­i­ous roles in multi­na­tional health­care cor­po­ra­tions. On many oc­ca­sions, he saw im­por­tant col­lab­o­ra­tions be­tween for­eign health­care com­pa­nies and China’s lo­cal ones be­fore he joined Sanofi in 2015, in­clud­ing the launch ofHisunP­fizer Phar­ma­ceu­ti­cal Co Ltd in 2012andBayer’s ac­qui­si­tion of 100 per­cent of the shares of China’s pri­vately-held Di­hon Phar­ma­ceu­ti­cal Group.

Brandi­court re­cently talked with China Daily about the com­pany’s strat­egy. The fol­low­ing are edited ex­cerpts from the in­ter­view.

What are the ma­jor driv­ers of growth for Sanofi af­ter it re­struc­tured in 2015?

Sanofi’s long term strat­egy rests on four pil­lars: re­shape the port­fo­lio, de­liver out­stand­ing launches, sus­tain in­no­va­tion in R&D and sim­plify the or­ga­ni­za­tion.

In 2015, we set out a strate­gic roadmap for the next fiveyears. The health­care in­dus­try is un­der­go­ing a trans­for­ma­tion un­like any­thing we’ve pre­vi­ously seen. Con­tin­ued con­sol­i­da­tion in the sec­tor has cre­ated a more com­pet­i­tive environment over the last few years and, at the same time, sci­ence has never been more ex­cit­ing.

What are the pri­or­i­ties for Sanofi af­ter re­struc­tur­ing?

The com­pany will re­main di­ver­si­fied, but with a port­fo­lio re­fo­cused on ar­eas where we can win and in­no­vate to im­prove the lives of mil­lions of peo­ple.

By build­ing on the suc­cesses of prod­ucts which give Sanofi strong ad­van­tages, weare con­fi­dent that Sanofi will be well­po­si­tioned for sus­tained, longterm Olivier Brandi­court, growth. Sanofi is also seek­ing ex­ter­nal op­por­tu­ni­ties to en­hance its growth pro­file.

What does the Chi­nese mar­ket mean to Sanofi?

China ac­counted for about 5 per­cent of Sanofi’s 2,218 mil­lion eu­ros in sales last year. It is a very im­por­tant emerg­ing mar­ket for us. As Sanofi’s third-largest mar­ket, China is def­i­nitely im­por­tant. Net growth of the Chi­nese mar­ket is be­tween6 per­cent and 7 per­cent, which is faster than that of many other coun­tries.

We have been mak­ing great ef­forts to drive growth in China and bring­ing new prod­ucts to the mar­ket here.

In the past 15 years, par­tic­u­larly af­ter 2009, China has achieved great progress in med­i­cal ser­vices, such as ex­pand­ing cov­er­age of med­i­cal in­sur­ance. This is a great achieve­ment and we want to be a part of it.

How does Sanofi strengthen its pen­e­tra­tion in county-level mar­kets in China?

Sanofi is the first multi­na­tional phar­ma­ceu­ti­cal that ex­panded into county-level mar­kets through an in­de­pen­dent busi­ness unit. In the fu­ture, we would like to con­tinue to ex­pand our mar­ket in coun­ties in China. Now we have cov­ered 1,200 coun­ties in China.

I know that about 900 mil­lion res­i­dents, or 70 per­cent of China’s en­tire pop­u­la­tions are liv­ing in coun­ties, so we re­ally hope that we can con­tinue to par­tic­i­pate in the mar­ket and make a dif­fer­ence.

What is your view on the pric­ing sys­tem of medicines in China?

We know that in Oc­to­ber 2015, the cen­tral gov­ern­ment started to let prov­inces de­cide their own medicine ap­proval and pric­ing. A com­plete pric­ing sys­tem is yet to be es­tab­lished. We have also seen that pol­icy mak­ers will give guid­ance on pric­ing of some medicines for cer­tain dis­eases, such as can­cer.

What is your opin­ion on price negotiations be­tween the au­thor­i­ties and for­eign phar­ma­ceu­ti­cals in a bid to en­able more users in China to get ac­cess to them?

If we have proper prod­ucts to be in­cluded in the negotiations, weare ready for negotiations, which will po­ten­tially bring sig­nif­i­cant growth of vol­ume. I would likely to stress prod­ucts for treat­ment of chronic dis­eases in China, a very im­por­tant field, with 290 mil­lion car­dio­vas­cu­lar pa­tients, and 114 mil­lion di­a­betes pa­tients, 10 per­cent of the en­tire adults pop­u­la­tion. These pa­tients need ad­e­quate treat­ment.

What are your plans for launch­ing new medicines in Chi­nese mar­ket?

Five of our six im­por­tant prod­ucts will be launched in China by 2025. Two are di­a­betes-re­lated, which is ex­pected to be launched in China af­ter 2019, and the other is ex­pected to be launched in China af­ter 2020, af­ter we ap­ply for ap­proval. An­other is used to treat rheuma­toid arthri­tis.

It is ex­pected to be launched in China in the next few years. We plan to ap­ply for ap­proval for the launch of a mon­o­clonal an­ti­body de­signed for the treat­ment of atopic der­mati­tis and asthma. Pralu­ent is also a very im­por­tant prod­uct that can lower your “bad choles­terol” to the level of that at your birth time.

How is the progress of Sanofi’s de­vel­op­ment of vac­cines for Dengue and Zika?

Sanofi Pas­teur an­nounced the first dengue vac­cine ap­proved in­Mex­ico in De­cem­ber 2015, and in April 2016 the first pub­lic dengue im­mu­niza­tion pro­gram started in the Philip­pines us­ing Sanofi Pas­teur’s tetrava­lent dengue vac­cine, Deng­vaxia.

Sanofi Pas­teur is also work­ing on a vac­cine for Zika. We an­nounced a Co­op­er­a­tive Re­search and De­vel­op­ment Agree­ment with the Wal­ter Reed Army In­sti­tute of Re­search on the co-de­vel­op­ment of a Zika vac­cine can­di­date, which opens the door for a broader col­lab­o­ra­tion with the US gov­ern­ment.

Zika virus is closely re­lated to dengue; it be­longs to the same Fla­vivirus genus and is spread by the same species of mosquito. The de­vel­oper can change the “coat­ing” of Dengue vac­cines when de­vel­op­ing the Zika vac­cine.

Of course the de­vel­op­ment pro­ce­dure takes more time than just say­ing this, but we are look­ing at ways to get a Zika vac­cine into the clin­ics as soon as pos­si­ble.

How would you de­scribe your work­ing style and lead­er­ship style?

I think it is quite im­por­tant to un­der­stand a mar­ket by vis­it­ing it in per­son and do­ing on-site re­search.

For ex­am­ple, I visit China from time to time all through these years. I vis­ited a com­mu­nity health cen­ter in China two days ago, and I find it great.

The en­tire ex­ec­u­tive com­mit­tee has been there to see how it works, too. In this way, I could feel the ob­vi­ous dif­fer­ences and im­prove­ments be­tween the cur­rent com­mu­nity health cen­ter and what I saw in 2011 and 2012. I think fo­cus­ing on ar­eas where we have the ad­van­tages is im­por­tant to busi­ness suc­cess.

In China our strate­gies have three fo­cuses: to strengthen our core busi­ness of suc­cess­ful prod­ucts; to ex­pand cov­er­age to more coun­ties, and ru­ral pop­u­la­tion; to in­no­vate and fo­cus on de­vel­op­ment.

Cy­cling, sail­ing, trekking and jazz mu­sic

As a vet­eran in the health­care sec­tor, what views can you share with your coun­ter­parts in China?

One topic we might dis­cuss is whether ap­proval of a medicine to be launched in a mar­ket should be linked to the medicine’s pric­ing.

Ap­proval of a medicine and pric­ing of it should be sep­a­rated. Ap­provals should be made base­donits ef­fec­tive­ness, safety, and proven data to sup­port these con­clu­sions, while pric­ing of a medicine, in­clud­ing whether it is cov­ered by med­i­cal in­sur­ance, should de­pend on the value the medicine brings to the med­i­cal sys­tem.

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CEO of French health­care gi­ant Sanofi.

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