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Sanofi Forms New BU for China and Emerging Markets: An Interview with Olivier Charmeil
戴佳凌·2019-04-10
PharmaDJ
Sanofi is doubling down on its bet in China by forming a new business unit for China and Emerging Markets.



Olivier Charmeil at CHIC Conference 

EVP, China & Emerging Markets, Sanofi

Source: Sanofi


China has become the second-largest pharmaceutical market in the world in recent years and is on track to keep on growing. The government is reforming its regulatory system to shorten the approval process for novel drugs and to eliminate “drug lag” in the country. An awareness of rare diseases has led to a dozen orphan drugs approved with data in the global trials, but the National Medical Product Administration (former known as CFDA) still requires post-market studies to prove efficacy and safety. Meanwhile, a stricter reimbursement system is being enforced in 11 cities to control soaring healthcare expenses.

 

Seeing those opportunities and challenges, Sanofi is doubling down on its bet in China by forming a new business unit for China and Emerging Markets. At a recent China Healthcare Investment Conference in Shanghai, PharmaDJ’s Editor in Chief sat down with Olivier Charmeil, Sanofi EVP, China & Emerging Markets, to discuss China’s role in Sanofi’s big picture. 


Can you tell us more about the newly formed China & Emerging Markets unit? What’s its mission? As the leader of this new unit, what’s your strategy to expand Sanofi’s business in emerging markets? 

 

Olivier Charmeil

Emerging markets, if I step back, will be important for Sanofi. It's basically about a third of our total sales and we have been growing very consistently in the last few years. We are the largest company in emerging markets. We think that there's still a lot of potential for us, but as we move forward, you know that we have been in China since 1982.  

 

We think that China is a little bit different because you can argue that it's not any more an emerging market. We wanted to make sure when we created this China and emerging markets global business unit that China will present it to the management board of Sanofi, and since the mid-'90s, China has been growing very fast. We look at China not just for the next two or three years. We look strategically to the next 10 to 15 years.

 

We wanted to make sure when we created this China and emerging markets global business unit that China will present it to the management board of Sanofi ... We look at China not just for the next two or three years. We look strategically to the next 10 to 15 years. -- Olivier Charmeil, Executive Vice President, China & Emerging Markets, Sanofi


I mentioned in the panel a little bit earlier that I come to China every six weeks, and I'm not focused on the day-to-day operations. I'm focused on the next 10 or 15 years. I think that China, given its size, geographic and population, will manage its health care differently, and we want to be part of the story. There's a lot of smart people here, of course, but for us China is a strategy country and we want to make sure of that. We want to continue to invest so that we have three manufacturing facilities. We continue to invest.  

 

I was in the Beijing facility two days ago, and I was happy to see that our first filling line for our diabetes drug Lantus is already in operation, and the first cartridges are going to be filled by the end of this year for the Chinese market.  

 

So, you see for us, we want to make sure that we have the manufacturing capability, the R&D center. And you know that beyond the center that we have in Suzhou, we have one also in Chengdu, a clinical operation with the objective to have more than 300 data scientists in the future. That will be able to run some operations globally from Phase I to Phase IV. 


Olivier Charmeil (Right) and Jialing Dai (Left)


As you know, China is reforming its regulatory system. How do you think these changes will shape Sanofi’s business model in China?

 

Charmeil

My takeaway is I've been here now for two weeks, and it's obvious that now things have significantly changed in terms of the famous time lag for new products between the US and China, which is not going to exist anymore in the future. And I can tell you that even internally, I think we can bet that within a few years, you could have new products reaching the market at the same time in the US as in China, which is a fundamental change.

 

The second thing is that of course the world is not going to change overnight, but we have been observing also some acceleration of products that are yet not registered in China. So, there are many, many fast-track reviews through clinical trial waivers, and we are benefiting from that. And we think that we will continue to. We have nine products potentially that could benefit from clinical trial waivers.

 

So, it's really an acceleration of the registration of some of our products. In other words, beyond the strategic intent, now it's being implemented.

 

The second important thing that you know of course that with regard to rare diseases there's been significant change beyond the regulatory aspects. There's been a new list of rare diseases that was issued in May last year. And second, you know that guidelines and diagnostics also were disclosed in February.

 

So, we see potentially that, again, here things are moving.  

 

The next thing is going to be access, because rare diseases, such as oncology products, are products that are, in terms of price, much higher than primary care. And what I've been observing since last week is that the question of access is of course a question that is very much debated. A basic insurance mechanism can cover a lot of the cost, but significant co-pay will still exist.

 

So, we have been discussing and I've been hearing a lot of conversation about supplemental insurance, which is probably not easy for rare diseases. So, there's tension in the health care system in China where on the one hand there is more and more coverage, and on the other hand, a strong desire to get access to innovation. And I think all stakeholders have to find a way that the patients get access to innovative drugs and that the innovative companies get their fair part of the investments they have been making.

 

So, there are a lot of initiatives, and disease insurance, also. We hear and we see a lot of things, and I think that since the two last years have been very focused on the improvement of registration, our view is that there will be, again, a lot of conversation on access.

 

Is the rare disease business going to play a bigger role in China?

 

Charmeil

Rare disease is going to be an important part of our strategy. Aubagio in MS was approved in July 2018, and there will be new products that are going to be approved in the upcoming months. The question beyond registration is also going to be about the access. So, reimbursement is going to be key, but I understand, based on what was said by the National Health Council, that reimbursement is going to happen when the national reimbursement drug list is  amended. 

 

For us also, you probably remember that we made the acquisition of a biotech, Bioverativ, 14 months ago, as a portfolio in rare blood disorders. And of course, we are busy discussing with the authorities about making sure that we bring those products as soon as possible to the Chinese patients, and this is why last week I was in Tianjin where I visited one of the hospitals. More specifically, we have products for hemophilia A and hemophilia B, two products that are called Eloctate and Alprolix.  

 

How do you see the GPO pilot system in 11 cities?

 

Charmeil

We’re looking into it. And you mentioned volume-based procurement in 11 cities.  There is a need to find headroom for innovative products in oncology products or rare disease products. To balance the high price, you need to find headroom, and we understand the established-product portfolio is going to be impacted by the financial price.

 

So, we understand the evolution. The second thing is that what is important is that things are transitioned at the right speed. There are a couple of elements that are important. Ensuring continuity of supply is something that is very important. The second important element is making sure that Chinese patients get access to the right quality. And the last element which is very important as well is freedom both for the patients and for the physicians to get access to high-quality drugs.

 

We will see. You probably heard a lot of conversation about a reimbursement standard. Again, I think the system needs to transition and at the right speed so that at the end of the day, the patients continue to get access to high-quality drugs. And on the other hand, that some headroom is found in order to fund the innovative drugs.  

 

What is China’s percentage of Sanofi's global revenue?  

 

Charmeil

It's around 7 percent. It's a very large operation here. We have more than 9,000 people, close to 10,000. We want to continue to invest. As I was mentioning a bit earlier, we take a long-term view about China. This is why we have those three manufacturing capabilities, and we'll continue to invest.  



We have one manufacturing facility in Beijing that is mostly dedicated to Lantus, our basal insulin, with a small presence in solid form as well. We have Hangzhou where we manufacture our solid dosage forms. And we have vaccines. Vaccines is important, and we are based in Shenzhen.  

 

And on top of that, as we just discussed, we take a long-term view about China, the global research institute in Suzhou, the clinical operation center in Chengdu and the innovation center that we have created in Shanghai.

 

So, you understand that we are moving from in China for China, which was a little bit of our concept, to in China for the world. We see that in the long run. A research center like Suzhou or Chengdu, our clinical operations center, but also our innovation center, also is going to be very focused in the short to medium term. But you can have a much greater ambition and think that at some point, those units are going to serve the world.  


So, you understand that we are moving from in China for China, which was a little bit of our concept, to in China for the world. We see that in the long run. A research center like Suzhou or Chengdu, our clinical operations center, but also our innovation center, also is going to be very focused in the short to medium term. But you can have a much greater ambition and think that at some point, those units are going to serve the world.  --Olivier Charmeil


I was told that Sanofi welcomes a new China Country Chair. Can you share with me more information about this new face in China?

 

Charmeil

Absolutely. Let me introduce Pius S. Hornstein, PhD (now he has a Chinese name). He's a Swiss German.  


Pius S. Hornstein

Country Chair, Sanofi China

Source: Sanofi


And he spent some time in Brazil. He was very successful in Brazil, which is a very large affiliate for us. It's our second-largest affiliate in emerging markets. He arrived at the beginning of the year. I think China is such an important country for us, and of course it's such a complex environment that he has spent a lot of time in the last few weeks understanding the Chinese markets, the culture.  

 

We pay a lot of attention to making sure that when the country chair transitions from one country to the other, that they understand the culture. And now, since the beginning of March, he's fully on board. He was telling me the other day that he has interviewed more than 100 people since he came on board. He wants to visit all our regional offices in the upcoming months. I can tell you that he has a high level of energy, and I think also a high level of ambition for our staff and what we do in China.  

 

A lot of multinational companies are partnering with some Chinese locals—for example, Alibaba, Tencent—for some digital marketing. How do you see these digital tools to help business?  

 

Charmeil

For us, digital is important. I meet with those guys, I meet with them every time I come here. We made the decision a couple of months ago to build here an innovation center that we have in Shanghai. We want to make sure that we continue to move fast, and we have identified a couple of areas where we think that digital is going to play an important role.

 

You know that we signed a partnership with Alibaba two years ago, which is very much oriented towards its partnership around prescription management to make sure that we ensure proper traceability of drugs, which is very important to our industry. And we also get access to a platform to make sure that the patients get access to the right information. So, it's a little bit dual purpose. On one hand traceability, and on the other hand what I would call business management platform.  

 

The second field we think is going to be important and where digital is going to bring some value is definitely the partnership that we have signed with Ping An. We think that one of the challenges of the health care system in China is going to be related to disease management, making sure that patients not only get access to the drug, but also that in their journey, the adherence is met.  

 

So, we are working with Ping An to develop a disease management platform that will make sure that not only the patient, but also the health care system, are running the most efficient way. The objective is to deliver on patient health outcomes and also make sure that there is a positive outcome for the system.  

 

Do you have anything else you want to share with our readers?  

 

Charmeil

No, I think we are very excited by what we do. You see that we take a holistic approach for China. It's not only about the commercial operation. This concept of in China for China is an important one for us, and we understand that now we go beyond this concept and it's in China for China and for the world. 


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戴佳凌 个人用户

不吃鱼,中意Arsenal和Daft Punk,主业聊天,副业写作,做过电子乐,朋友都叫我DJ,但是不会打碟。

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