Novo CEO Lars Sorensen: China Drug Sales Set To Bounce Back
Sales to China by Denmark's Novo Nordisk, the world's biggest supplier of insulin, are set to bounce back after a one-off fall in the third quarter, the Danish drugmaker's chief executive said on Monday.
China, faced with rising rates of diabetes, has been one of Novo's fastest-growing markets recently, with sales increasing by around 20% annually. But Novo's Chinese juggernaut went into reverse last quarter when sales fell 3%.
"This is a once-off in connection with the implementation of healthcare reform," Lars Sorensen told Reuters on the sidelines of a pharmaceuticals conference in London.
Looking out a few years, he is confident that strong growth will return in the sections of the Chinese drugs market that Novo addresses, although it is unlikely to be at past rates of around 20%.
"We would be anticipating in the short to medium term growth rates around 15% and long term, as the Chinese market becomes the second largest pharmaceutical market in the world, we'll get down to lower growth rates," he said.
"The numbers are getting bigger and bigger, so growth rates will be coming down."
Novo is not alone is seeing a slowdown in emerging markets this year. AstraZeneca, for example, saw emerging market sales growth slip to 7% in the third quarter from 10% in the second and 13% in the first.
Nonetheless, Sorensen remains a bull of emerging markets and said his company was increasing sales forces in several key countries, including China, Brazil and Mexico, while also setting up a new insulin factory in Russia.
Growth is stalling in Big Pharma's traditional European and North American markets as many top-selling drugs lose patent protection and cash-strapped governments slash the price they will pay for treatments as part of an austerity drive.
By contrast, the booming middle classes of Asia and Latin America are widely forecast to offer robust growth for makers of prescription drugs.
By 2015, emerging markets are set to account for 28% of global pharmaceuticals spending, up from 12% in 2005, while the United States and Europe combined shrink to 44% from 61%, according to IMS Health.