(Corrects the last paragraph to say GlaxoSmithKline's China
sales expected to slow)
* Continues to look for M&A opportunities in emerging
* Pharma firms should support China's efforts to curb
By Sumeet Chatterjee
MUMBAI, Sept 30 French drugmaker Sanofi SA
will not be deterred from expanding in emerging
markets through acquisitions despite government crackdowns on
pricing and closer scrutiny of western pharmaceutical companies'
business practices, its CEO said.
Multinational drugmakers such as Pfizer Inc, Sanofi
and AstraZeneca PLC have depended on rising demand in
emerging markets as sales in the developed economies slow due to
a wave of patent expirations on top-selling drugs.
"Emerging markets has six billion people and I think the
marketplace will be bumpy on occasions, but the need for
healthcare is undeniable," Sanofi Chief Executive Chris
Viehbacher told reporters in Mumbai on Monday.
"For the longer term I continue to believe in the importance
(not just) from the healthcare point of view but also from the
business point of view in emerging markets," he said.
Sanofi's India unit was believed to be one of the bidders
for the domestic drug formulations business of India's Elder
Pharmaceuticals Ltd for $400 million-$450 million,
sources had told Reuters in July.
Viehbacher declined to comment on the Elder deal, but said
the company would continue to look for acquisition opportunities
in the emerging markets, which accounts for a third of Sanofi's
revenue, including in India.
Western drugmakers who covet a bigger share of India's
fast-growing $13 billion drugs market have been frustrated by a
series of decisions on intellectual property and pricing.
India in August revoked a patent granted to GlaxoSmithKline
for breast cancer drug Tykerb, a decision that followed
a landmark court ruling disallowing patents for incremental
innovations that was a blow to global pharmaceutical firms.
The decision was the latest in a series of rulings on
intellectual property and pricing in India that have frustrated
attempts by Western drugmakers to sell their medicines.
Viehbacher said instead of focusing on lowering prices of
drugs, the Indian authorities should focus on improving access
to quality healthcare and invest in innovation. India spends
about 5 percent of its gross domestic product on healthcare.
The pharmaceutical industry should support China's efforts
to curb corruption, Viehbacher said, with a crackdown on bribery
in the country's drug sector hurting sales at a number of firms.
With China's healthcare spending forecast to nearly triple
to $1 trillion by 2020 from $357 billion in 2011, according to
consulting firm McKinsey, China is a magnet for makers of
medicines and medical equipment.
However, a string of investigations and visits by
authorities to the China-based offices of global firms has
prompted businesses to step up internal compliance and rein in
"I think the Chinese government's approach to reduce
corruption has to be supported by all of us. As companies, all
of us are absolutely proactively cooperating with the agencies
who are investigating," Viehbacher said.
Sanofi said in August that one of its 11 regional offices in
China had been visited by the State Administration for Industry
and Commerce (SAIC) in Shenyang, but added it was not aware of
the purpose of the visit from the agency.
GlaxoSmithKline, the group at the centre of the
furore, has suffered the most. Industry insiders expect its
China drug sales growth to slow sharply or even reverse in the
third quarter after a 14 percent year-on-year rise in the three
months to end-June.
(Reporting by Sumeet Chatterjee; editing by David Evans)