Bristol-Myers Squibb France 2009 - BEST in FRANCE

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9 Δεκ 2012 (πριν από 4 χρόνια και 6 μήνες)

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Bristol
-
Myers Squibb France


53
years down the road

Presented by:

Lena
Denstad
, Clarence Lim & Kerry Lau

Research Objectives


Why did Bristol
-
Myers Squibb come to France?


What was Bristol
-
Myers Squibb’s entry strategy?


What are the key benefits or

constraints in operating in France?


What are the key lessons

for other companies

coming to France?

Agenda


BMS


Worldwide


Why France?


Entry Strategy


BMS


France


Key Benefits & Constraints


Case Study


Key Takeaways


Looking Ahead

Bristol
-
Myers Squibb Company


WORLDWIDE


Headquarters: New York City


Key business: Biopharmaceuticals


Total Sales: US$20.6 billion


Pharmaceuticals: 86%


Nutritionals : 14%


R&D Investment: US$3.59 billion


Employees: 30,000


Subsidiaries: 50


Ranked one of the top 10 pharmaceutical

companies in the world.


… to become more agile, entrepreneurial and

accountable to achieve our goals.

Source: BMY 2008 Annual Report: Chairman and CEO Message

Product Lines


Cardiovascular and Metabolic


Pain


Oncology


Central Nervous System


Virology and Pathology


Immunology

$6,228

$5,603

$2,882

$1,149

$1,290

$1,292

$2,153

Who are the customers?

Decision
Influencers

Doctors

Patients

Insurance
Companies

Politicians
&
Regulators

Key Opinion
Leaders

Entry Strategy into France


Why France?


US, France and Japan key pharmaceutical markets to be present in.


Medical care = Top notch


Facilitates the ability to conduct clinical trials




Entry Strategy:


1935: Dr. Camille Bru
founded l’UPSA

(Union de Pharmacologie
Scientifique Appliquée)

1956: Squibb establishes


its production in France.

1960: Acquired 2 small French
Pharmaceutical companies



for distribution channels.

1989: Bristol
-
Myers mergers

with Squibb to form



Bristol
-
Myers Squibb.

1993: Creation of l’Institut
UPSA de la Douleur.

1994: UPSA becomes a 100%
subsidiary of Bristol
-
Myers
Squibb.

Bristol
-
Myers Squibb Company


FRANCE


Headquarters: Rueil
-
Malmaison


Total Sales: 10% of global sales


Pharmaceuticals:

1 billion


Nutritionals :

22 million


Distribution Facilities:


Fontenay


Production Facilities:


Agen


Epernon


Meymac


Employees: 3,100

Agen

Epernon

Meymac

Rueil
-
Malmaison

Integration of Corporate Values

to BMS France


Le Petit Village
Gaulois



Small village resistance to every change (especially from the U.S.)



BMS corporate values


Patients are the heart of BMS


Honor, integrity, respect, excellence, diversity


Not hard to integrate to French culture



Responsabilite

Social de
l’enterprise

(BMS Foundation)


Global initiative, BMS France employees are involved


TULIP
-
NGO (France NGO linked with US NGO)


Involvement brings across corporate values to French employees

Our mission is to extend and enhance human life by providing the highest
-
quality pharmaceuticals and health care products.

France: Key Benefits & Key Constraints


Market


Political, Legal & Regulatory


Economic


Infrastructure


The French as a Consumer of

Medical Goods






Comprehensive healthcare systems


Loyal to brands


Price is not a primary factor of consideration


Share of generic drugs in 2007: 9.5%


Believe that everything can be treated

with pills and cough mixtures.


French customers are not so different

from others especially

with specialist products.

France: Country of hypochondriacs

Source:
Euromonitor

Market

Political, Legal
& Regulatory

Economic

Infrastructure

France: Key Benefits & Key Constraints

Market

Political, Legal
& Regulatory

Economic

Infrastructure

Key Benefits:


4th highest per capita consumptions of medicines in the world ($398).


3rd largest market in the world for pharmaceutical products (next to US and Japan).


The biggest market in Europe for pharmaceutical products.


“Critical mass”: 63 million consumers as of 2008.

Key Constraints:


Threat of generic drugs.


Increasing complexity of the distribution
channels .


Increased regulation on the roles of the decision
influencers.

French Healthcare System


Biggest public spending on healthcare in Europe: 11% of GNP


French


all insured under “General Regime”


Couverture

Maladie

Universelle

(CMU) system


Poorest (1.1 million; 7.1% of population)


Private Insurance


87% of population


Result: Debt of

5.5 billion in early 2000s


Social Security Reform in 2004,

putting procedures and conditions in place


Limited consultations/year


1 doctor/patient


Prescription guidelines given to physicians


Do not have freedom to prescribe what they want


Patients and payers have also become

decision influencers

Source: © 2009 AFP (
Mychèle

Daniau
)

Une feuille de soins de la Sécurité sociale

Market

Political, Legal
& Regulatory

Economic

Infrastructure

France: Key Benefits & Key Constraints

Market

Political, Legal
& Regulatory

Economic

Infrastructure

Key Benefits:


President
Sarkozy

publicly announced in Nov 2009 that the pharmaceutical industry is the
way to build strong economy.


Reforms introduced include: 30% credit tax for R&D in France.


60% credit tax if partner with public research organisations



Contract Research Outsourcing (CRO).

Key Constraints:


Complex
labor

laws.


Specific measures
favoring

generic drugs.


Difficult to predict new “temporary” taxes. Makes it difficult to plan ahead.


High social security costs.



Taxe

Professionnelle
” : Tax on the amount of fixed assets.



Maybe removed next year.

R&D Process

Patent
Application

Pre
-
Clinical
Development

Clinical Trials

Registration: New
Drug Application

Source:
http://www.ispor.org/htaroadmaps/france.asp#1

& LEEM (the pharmaceutical industry association)

10 years of R&D

2
-

3 years of Administrative Procedures

Marketing
Authorization

(EMEA or AFSSAPS)

AFSSAPS: l'Agence française

de sécurité sanitaire des produits de santé

SMR & ASMR
assessment

Registration on the
Refundable List

(Ministerial
Decision)

Reimbursement
Rate

(UNCAM Decision)

Price

(Negotiation with
the CEPS)

Publication on the Official Gazette

BMS France’s MAIN role

Key Benefit(s):


Good caliber of doctors and hospitals to conduct
clinical trials.


Once approved by Transparency and Pricing
committee


Good for 5 years


U.S. have to renegotiate every year
.

Key
Constraint(s):


Approval process for pricing = 240 days

(vs. 180 days on average for Europe)


Level
of sales controlled by parliament based on
budget.
If
exceed budget,
pharmaceutical industry
need to reimburse government 70% of exceeding
sales.
Rebate
used as extra income for social
health care budget.

Market

Political, Legal
& Regulatory

Economic

Infrastructure

France: Key Benefits & Key Constraints

Market

Political, Legal
& Regulatory

Economic

Infrastructure

Key Benefits:


Connections with EU countries
-

Italy, Spain, UK, Belgium and Germany.


Helps BMS to be strong in other markets like Africa.

Key Constraints:


As a result of the financial crisis → Cut in costs.


Make savings on drugs.


France’s 2008 budget limits the growth rate for pharmaceutical

costs to just 1.4%.


France: Key Benefits & Key Constraints

Market

Political, Legal
& Regulatory

Economic

Infrastructure

Key Benefits:


Very good infrastructure.


High standard of hospitals and doctors → France
# 2 in terms of clinical trials (after the US)


2,200 per year, 23% in cancer


Highly recognised competency, high ethical standards → High quality products.


Special to France
-
> pain business.


Educated labour force. (
Grandes

Écoles
)

Key Constraints:


Quality of Universities: Not comparing well
with the rest of the world.


Late in biotechnology.

Case Study

Management of the disengagement
of two production facilities in France.

BMS World’s Future Outlook

Global Pharmaceutical Industry


Growth slowing down


2009
-
2013: CAGR 3
-
6% vs. 1999
-
2007: 9.8%


Need to develop more innovative products


Overcapacity


17% of pharmaceutical production are to lose patents from 2009
-
2012


Drugs for common ailments already developed

BMS Worldwide


Big move from OTC to
BioPharma



6 specialized departments


Launches of promising drugs set in 2010/2011



offset loss after
Plavix

and
Avapro

patent expirations (2011/2012)



From big to medium
-
sized company


Announced additional 10% workforce cut on December 2008


50% of worldwide manufacturing shut down


Will bring about estimated $2.5 billion cost savings each year

Case: Disengagement of

Production Facilities


Production cut by half


Production volume moved to Agen; balance to be
outsourced to Italy plant.


380 to be laid off, offered many internal transfer
possibilities with Agen plant.


100 employees accepted transfer package.


Search for company to take over sites and
employees


Did not find for Epernon, continuing discussions for
Meymac


Coll
aboration with local and political authorities

Epernon

to be closed end of 2009
&

Meymac

mid
-
2010

Process Undertaken for Disengagement


2 documents required
-

Economic justification & Social measure that will support employees




“Work counsel”


communication before decision




Announced layoff on September 2008


Build up inventory to buffer against potential strikes


February 2009: Around 150 out of 250 went on strike for
Epernon

and 100 out of 180 for
Meymac


Finished consultation mid
-
March 2009 (around 6 months from layoff announcement)


Restructuring currently for field force


Perception or Reality?


US: You can replace striking workers


France: You cannot


operations
stop.



Big strikes mainly in public companies


Only 10% of French workers are
unionized


Culture of labor relations


Need for openness and transparency


Agreement need not be reached


Announcement can be for
information purpose


Plant closing process
-

same timeline
length all over Europe

Source: http://en.wikipedia.org/wiki/Trade_union

Strikes everywhere!

Mr. Jean
-
Luc Fleurial, VP of Human Resources (BMS, France), on Labor in France

BMS Future Operational Coverage

FRANCE

Agen

Epernon

Meymac

Rueil
-
Malmaison

Essential Advice

Understand taxation and legalities before dealing with the government and administrative
processes. Get good tax and legal advisers!

There are different governments to deal with in different regions in France…

All regions compete to attract new companies
-

Find out each region’s benefits and regulations.

Understand the health system and how pricing is defined.

Enter the country through alliances or make acquisitions to understand
the market well, difficult to do green
-
field.

Make sure the criteria you use are in line with those of Transparency Committee.

Have continuous discussions with the government on unmet needs.

Be transparent with your employees and the government.

In a Nutshell


The biggest advantage of France is the
size and sophistication of its market.


Costs maybe relatively higher


BUT when quality is considered,

France is still cost
-
competitive.


Despite complexities in the business
environment, doing business in
France is not as difficult as it seems.

Understanding is key!

Looking ahead…


Dr. Marion Bamberger, Executive Director for Institutional Affairs, on BMS France’s Future


What kind of new prices is BMS going to have?


How will it maintain its evaluation with the Transparency
Committee?


Is scientific evaluation going to be moved to the EU body?

In 10 years time, will this be decided on the EU level?

Acknowledgment & References

Secondary Research


Global Investment Opportunities Special Report: Pharmaceutical Industry, Lombard Street Research, 2009


Global Pharmaceuticals Industry Profile,
Datamonitor
, November 2008


Pharmaceuticals in France Industry Profile,
Datamonitor
, November 2008


Consumer Lifestyles


France,
Euromonitor

International, November 2008


The Pharmaceutical Industry in Figures, EFPIA (The European Federation of Pharmaceutical Industries and Associations), 2009


Bristol
-
Myers Squibb Co. in OTC Healthcare,
Euromonitor

International, May 2009


http://www.apmhealtheurope.com/story.php?numero=L14225


http://www.internationaltaxreview.com/?Page=10&PUBID=35&ISS=24523&SID=701387&TYPE=20



http://www.pharmafocus.com/cda/focusH/1,2109,21
-
0
-
0
-
NOV_2009
-
focus_news_detail
-
0
-
493403,00.html


Wikinvest

-

BMY

We would like to acknowledge and thank:



Dr. Benoit
Gallet
, VP Corporate and Business Communications


Mr. Jean
-
Luc
Fleurial
, VP Human Resources


Mr. Emmanuel
Blin
, VP Commercial Operations


Mr. Bruno
Lauras
, VP Finance and Administration


Dr. Marion Bamberger, Executive Director for Institutional Affairs


Mr.
Jehan
-
Yves
Drouin
, VP Market Access


For their time and help in this research project.

Thank you for
your attention.

Questions?