Pfizer And Sanofi China GMs Disagree On Commercial Models – PharmAsia Summit Shanghai
This article was originally published in PharmAsia News
Executive Summary
Pfizer Inc.’s Wu Xiaobing and Sanofi China’s Fabrice Baschiera discuss how their companies are creating value for patients and payers in China during a keynote panel during the PharmAsia Summit in Shanghai.
SHANGHAI -- Although China is often seen as mainly a market for branded generic products, more pharma companies are planning commercial strategies around innovative products and pursuing creative ways to create more value for patients and payers.
Innovative products will continue to be Pfizer Inc.’s mainstream business in China, Pfizer China Country Manager Wu Xiaobing said during a keynote panel during the PharmAsia Summit in Shanghai, Sept. 26.
“This is a unique phenomenon in China,” he said. “The question is how to accelerate the new innovative products coming to China.” The future looks good for innovative products for the No. 1 pharma company in China, he said.
“The good news is once you get in, the growth is very long lasting. In many cases headquarters will ask, ‘What are the peak sales for a certain product?’ We say we never see peak sales, because everything is growing double digit.”
Branded generics and innovative products require separate strategies, Wu said, noting that Pfizer’s joint venture with Zhejiang Hisun Pharmaceutical Co. Ltd. will be a “game changer” in China, with Hisun-Pfizer Pharmaceuticals Co. Ltd. developing, manufacturing and commercializing off-patent products in China and global markets.
Wu also highlighted Pfizer’s focus on cardiovascular solutions through its partnership with China’s Ministry of Health to develop a program aimed at cutting rising mortality rates by stressing education and screening and preventative medicines. The public-private campaign “Bending the Curve” conducts large-scale screening on populations with high-risk factors to improve education and patient compliance (Also see "Pfizer Joins China’s Health Ministry To Bend Curve Of Soaring Chronic Diseases" - Scrip, 10 Sep, 2012.).
“The disease management is important to us,” Wu told PharmAsia News in an earlier interview. “In both Beijing and other cities, we support a project called Hospital to Homes, in which community clinic healthcare workers provide home visits to enhance patient education.”
Fabrice Baschiera, Sanofi’s general manager for China’s pharmaceutical operations said that Sanofi, which is ranked No. 3 in China among MNCs, would continue to have a separate strategy in China that was unique to other markets in the rest of the world.
“We believe that having a diversified business gives us access to different business,” he said, noting that in China, Sanofi’s business is 63% pharmaceuticals, 12% vaccines, 12% diabetes, 9% consumer healthcare and 4% animal health. The company’s emerging market sales overall grew at 10.1% in 2011 at €10.1 billion.
“We need to have a local presence,” he said, characterizing China as Sanofi’s second home market. “We have to understand that multinationals have access to a very small portion of the country. It is less than half. This means that we still have another 600-700 million patients [to reach].”
Commercial Model Broken Or Simply Evolving?
However, the old model of simply adding sales representatives to grow product revenues will not be enough, particularly for innovative products, where the biggest external barriers were reported, said George Baeder, Asia Life Sciences practice leader for Monitor Group, during the plenary session (Also see "China Sees Increasing Appetite For Innovative Products – PharmAsia Summit" - Scrip, 25 Sep, 2012.).
When asked whether they believed the commercial model was broken, the two China GMs differed in their opinions.
Sanofi’s Baschiera disagreed with Baeder’s assessment that the commercial model was broken: “I think it is in constant evolution,” he said. “I think the market is more complex. If you want to go deeper into the market you can’t have one product for one sales force. It’s not working anymore. You need to have a different approach.”
Sanofi’s approach has been to diversify and focus on patient and doctor education. “You need to have a portfolio approach rather than a single product approach…to create value for the physicians and the patients there where the medical education is the major driver,” he explained. He pointed to the diabetes market as an example, noting that Sanofi has almost tripled its share in the diabetes market in China over the last 4 years as a result of its efforts.
Backed by 64% growth for the world's best-selling insulin Lantus and 23.7% sales growth for Plavix (clopidogrel), the top prescription drug in China, the French company reported Q1 China results with 24.1% sales growth over the same period last year, and topping last year's overall growth rate of 18.59% (Also see "Sanofi Makes Up Ground On AstraZeneca: An Overview Of Big Pharma In China" - Scrip, 15 May, 2012.).
Pfizer’s Wu disagreed with Baschiera, saying that to some extent, the commercial model is broken.
“There is some truth there, because in the past five years the sales revenue is more generated by adding more sales reps. Therefore the number of sales reps is growing very fast. But the productivity is definitely declining,” he said.
Speaking to market expansion out of tier 1 cities, Wu argued that this will provide a challenge to companies following the old commercial model. With 160 cities in China with populations of over 1 million, Wu asked, can companies afford to put sales reps in every city and how fast can they put them in place?