Following the foundation stone laying ceremony for a new insulin facility by Sanofi on Monday, the head of the French pharmaceutical company has urged the federal government to discuss the exact implementation of the so-called location clause. Speaking to the “Frankfurter Allgemeine Zeitung” on Wednesday, Garijo noted that project planning began more than two years ago, stating that the healthcare reform with its tightened conditions occurred in the interim. Rather than merely criticizing, the Sanofi chief wants to sit “at the table” with the federal government to seek solutions, calling the existing proposals for the location clause a “good start.”
The specialized committee, commissioned by the Federal Ministries of Health and Economy in late September, presented proposals for this clause. Under this system, the manufacturer’s margin could be reduced for companies that conduct research and production within Germany. The conditions for this reduction include having a production that accounts for over a third of the revenue generated in Germany, or operating a plant deemed essential for supply. Starting in 2027, the manufacturer’s margin for patented medicines is set to initially rise to 15.5 percent.
Looking at the increasing competition from China and the United States, Garijo demanded the creation of generally better location conditions across Europe. She stated, “Only in this way will we become stronger and catch up in innovation, creating a long-term secure ecosystem.” Instead of relying only on country-specific programs like “Invest in Germany,” she prefers a broad “Choose Europe” program that supports investments across the entire EU.
Generally, Sanofi aims to invest more heavily in regional supply chains to prepare the company to be more robust during times of geopolitical conflict. The company is currently establishing another insulin production site in China, which is scheduled to operate concurrently with the new plant in Frankfurt. Garijo announced that the two facilities will work together very closely to share knowledge and data.
The French company is currently undergoing a strategic transformation. The drug Dupixent, used to treat asthma and dermatitis, is currently the company’s sole major growth driver, but its patent is set to expire in five years. This creates pressure for Sanofi to boost its innovation pipeline through internal research and acquisitions. “Our top priority is to refill our pipeline with a good balance between internal innovations and partnerships,” Garijo explained.
In June, the Spaniard appointed a new head of research, alongside Paulo Fontoura. This new leader has already started the work of organizing the research programs. Garijo also pointed out that Sanofi must begin preparing for the expiration of Dupixent’s patent after 2031 in order to sustain growth and secure profits.
Before the new strategy is finalized by the end of the year, Garijo intends to focus on areas where Sanofi is a leading company: immunology (alongside dermatology and respiratory diseases), rare diseases, and vaccines.
