Sanofi Restructures China Operations into Three Global Business Units Amid Strategic Realignment

　　【Pharmaceutical Network Corporate News】On May 19, multinational pharmaceutical company Sanofi announced that its organizational structure in China would be aligned with the global framework, implementing a comprehensive responsibility system under global business units. The company will restructure its China operations according to three core global business units—specialty care, general medicines, and vaccines—and appoint corresponding leaders.
 

Henriette Tschudin, the current President of Sanofi China, will serve as the General Manager of the China region within the Global Generics Business Unit and as the President of China. This business unit is responsible for teams covering cardiovascular and mature products, primary healthcare, diabetes, commercial affairs, and retail.
 

Wang Baikang, the current General Manager of the Specialty Care Business Unit, has been appointed as the General Manager of the China region for the Global Specialty Care Business Unit. The portfolio under his purview includes Dupixent, rare diseases and rare hematological disorders, as well as new product planning and business innovation teams. Meanwhile, the China team of the Global Vaccines Business Unit remains largely unchanged.
 

It is understood that previously, Sanofi’s business in China was mainly divided into two segments: pharmaceuticals and vaccines. Following this adjustment, Sanofi will formally establish a global organizational structure composed of three core business units. The specialty care segment covers immunology, rare diseases, hematology, and neuro-oncology; the general medicines segment covers diabetes, cardiovascular diseases, and mature products. The consumer healthcare business will operate independently.
 

In fact, the trend of this adjustment was revealed in December 2019. On December 9, 2019, Sanofi CEO Paul Hudson announced a new strategic framework—“Play to Win,” stating that it would lead Sanofi into the next cycle and establish three global business units for generics, specialty drugs, and vaccines, as well as an independent consumer healthcare division.
 

Moreover, this is not the first time Sanofi has implemented major adjustments for its China region. In 2019, Sanofi China underwent at least three significant restructuring initiatives, including a leadership change in which He Enting, former President of Sanofi Brazil, was appointed as President of Sanofi China within the Global Business Unit for China and Emerging Markets; the Central Nervous System, General Medicines, and Diabetes business units in China were separately split or reorganized; and the Sanofi China Diabetes business unit was divided into two teams responsible for oral medications and injectables, respectively.
 

The author notes that, behind this, Sanofi’s performance in China has seen a gradual slowdown in growth in recent years. In terms of Sanofi’s growth rate, it declined from 15.1% in 2017 to 8.8% in 2019. In the first quarter of this year, Sanofi’s revenue in China even experienced negative growth, dropping by 14.4% year-on-year.
 

Sanofi’s first-quarter financial report revealed that the decline in its China revenue was primarily driven by the impact of volume-based procurement, which led to a significant increase in sales volume but a decrease in revenue for major products such as Plavix (clopidogrel) and Aprovel/Aprovel Plus (irbesartan/irbesartan-hydrochlorothiazide). Revenue in the first quarter fell by 13.2%. Specifically, Plavix’s sales revenue dropped by 53.5%, while the year-on-year decline in sales revenue for Aprovel and Aprovel Plus also exceeded 30%.
 

Regarding Sanofi’s recent structural adjustments, industry observers believe the move is likely aimed at alleviating performance pressure in its China region. Against the broader backdrop of policy influences such as volume-based procurement and consistency evaluation, companies are taking additional actions to adapt to regulatory and market changes in China and ease performance pressures. Beyond Sanofi, numerous other multinational pharmaceutical companies—including Pfizer, Roche, and AbbVie—have also made adjustments to their operations in China and even globally.
 

In May, Pfizer adjusted the structure of its Anti-Infectives team, spinning off Tygacil (tigecycline for injection) and Vfend (voriconazole tablets) from their original product lines to enable the team to focus more sharply on specialized segments. Zithromax (azithromycin), affected by volume-based procurement (VBP), failed to win bids in the VBP process and may shift its focus to the retail or primary care markets.
 

Roche also recently announced plans to inject an additional $180 million into its Asia-Pacific production base and R&D center for Roche Diagnostics in the Suzhou Industrial Park, further deepening the strategic layout of its diagnostics business in China. This business segment saw a 5% growth in the first quarter of 2020, close to the 7% growth of its pharmaceuticals division, and may become a key focus area for Roche.
 

AbbVie completed the $63 billion acquisition of Allergan, integrating AbbVie’s blockbuster drugs Humira, Imbruvica, and Venclexta in immunology and hematologic oncology with Allergan’s global brands in neuroscience and other therapeutic areas.
 

Overall, market competition among multinational pharmaceutical giants will intensify in the coming period, accompanied by more frequent strategic adjustments.