2023 Senior Management Personnel Changes of Multinational Pharmaceutical Companies in China, what's behind it? - III

On January 5, 2023, Pfizer announced a personnel appointment in China, appointing Davin Cheung as the Head of China Basic Business, reporting to Pfizer China's President, Peng Zhenke.

The considerations behind this personnel adjustment were made clear in Pfizer's appointment announcement: for mature products that are no longer strategically suitable for Pfizer's promotion, the China Basic Business department led by Davin Cheung will be responsible for their commercialization cooperation strategies and execution. By collaborating with external third-party partners for compliant promotion, they aim to help partners improve their commercial capabilities, efficient disease and patient education, and maximize the market potential of Pfizer's mature products.

Focusing on core and blockbuster products while handing non-core products to others, Pfizer's strategy is clear. Davin Cheung revealed three key strategies, which can be seen as a refinement of Pfizer's overall strategy. The first point emphasizes establishing long-term and stable partnerships with local companies: actively seeking outstanding domestic enterprises in various therapeutic areas to find the most suitable partners, building long-term and stable cooperative relationships to complement each other's strengths, such as channels, professional promotion teams, and patient platforms, expanding the coverage of mature products to benefit more patients.

This already signals a significant workforce adjustment by Pfizer this year. At the end of November, Pfizer dissolved its vaccine team in China and outsourced the 13-valent pneumococcal vaccine, which is Pfizer's only vaccine product in China, to Keyuan Trading under Shanghai Pharmaceuticals. The personnel adjustments related to the vaccine line were hinted at as early as June when Zhang Lingyan, the General Manager of Pfizer China's Vaccine Division, resigned and was succeeded by industry veteran Yang Bei.

Prior to the layoffs in China, Pfizer had undergone significant restructuring in its Vaccine Division. The division was divided into three departments: North China, South China, and Market Platforms, each with appointed sales leaders.

However, with Pfizer experiencing a sharp decline in vaccine and antiviral drug sales, the company announced plans to reduce $3.5 billion in annual costs by the end of 2024. Based on the need to cut costs, Pfizer's wave of workforce reductions has swept across various divisions globally: 791 Pfizer employees in New Jersey were laid off, a factory in Newbridge, Ireland, laid off 100 people, and 500 positions were cut in the UK.

It is not only Pfizer that is implementing cost-cutting measures among multinational pharmaceutical companies. On November 6, Sanofi entered into a strategic partnership with Shanghai Pharmaceuticals, with both parties announcing extensive cooperation nationwide in key disease areas across all channels in an official press release. Shanghai Pharmaceuticals will leverage its strong terminal network and capabilities in medical retailing to enhance the accessibility of Sanofi's products.

According to an industry insider, the changes in business models by Pfizer and Sanofi indirectly triggered a wave of personnel changes at the level of divisional general managers. The core of both companies' strategies is cost reduction and efficiency improvement.

In correspondence with this, on September 18, Sanofi sold 11 central nervous system drugs to a UK pharmaceutical company. The divested products cover four treatment areas, including mental health, anti-anxiety, anti-epileptic, and antipsychotic therapies, which are non-core businesses for Sanofi.

On the second day of Sanofi's announcement of a major global management restructuring, September 1, Sanofi announced a significant restructuring of its China organization. Four new management positions were established, including the appointment of Swann Schwoebel, the former President of Sanofi China, as the President of Sanofi Greater China. He will lead the overall business of Sanofi China, including the specialty care, vaccines, and general medicines divisions.

Unlike other multinational pharmaceutical companies exercising caution in the Chinese market this year, Sanofi's series of personnel adjustments in China were made with a strong belief in long-term investment in the Chinese market, as emphasized by Sanofi's CEO, Paul Hudson. In 2022, Sanofi's sales in China amounted to €3.123 billion, with a year-on-year growth of 6.2%. The Chinese market is Sanofi's second-largest market globally. Sanofi's expectations for the Chinese market include launching 25 new drugs in China by 2025.

Related reading: 

2023 Senior Management Personnel Changes of Multinational Pharmaceutical Companies in China, what's behind it? - I (echemi.com)

2023 Senior Management Personnel Changes of Multinational Pharmaceutical Companies in China, what's behind it? - II (echemi.com)

2023 Senior Management Personnel Changes of Multinational Pharmaceutical Companies in China, what's behind it? - IV (echemi.com)

2023 Senior Management Personnel Changes of Multinational Pharmaceutical Companies in China, what's behind it? - V (echemi.com)

2023 Senior Management Personnel Changes of Multinational Pharmaceutical Companies in China, what's behind it? - VI (echemi.com)