What is the proportion of the Korean market among multinational pharmaceutical companies’ sales?

To answer the question, Korea Biomedical Review has compared the performances of nine large multinational corporations and their offshoots in Korea over the past five years. The result: Korean operations account for about 1 percent of their total turnover on average.

In most cases except for GSK and Novartis Korea, the Korean offshoots’ growth pace moved in step with those of their headquarter offices, according to the analysis.

The analyzed pharmaceutical companies are: Pfizer화이자 Korea (headquarters: Pfizer’s innovative health, essential health division); Novartis노바티스 Korea (Novartis Innovative Medicines’ pharmaceutical division); GlaxoSmithKline글락소스미스클라인(Pharmaceuticals, Vaccines & Consumer Healthcare); Roche로슈 Korea (Roche Pharmaceuticals); Bayer Korea (Bayer Group); AstraZeneca Korea아스트라제네카 (AstraZeneca’s therapy area); Sanofi-Aventis사노피아벤티스 Korea (Sanofi Pharmaceuticals); Boehringer-Ingelheim베링거인겔하임 Korea (Boehringer-Ingelheim’s Prescription Medicines, Consumer Healthcare, Animal Health, Biopharmaceuticals); and Janssen얀센 Korea and Johnson & Johnson존슨앤존슨 Korea (Johnson & Johnson Korea’s Total Pharmaceuticals Therapeutic Area).

*GlaxoSmithKline Korea includes Consumer Healthcare division (2015 ~ 2016) * Johnson & Johnson Korea includes Janssen Korea division * Specific accounting standards may vary from country to country

Assuming the sales of headquarter offices were 100, the share originating from Korean operations were largest at Boehringer-Ingelheim Korea, which accounted for 1.35 percent of total sales, followed by AstraZeneca Korea (1.3 percent), Novartis Korea (1.21 percent), and Pfizer Korea (1.13 percent).

According to the analysis, Boehringer-Ingelheim also had the highest share in operating profit representing 0.31 percent of its headquarter office’s total, chased by Sanofi at 0.29 percent, and Novartis at 0.17 percent.

Pfizer Korea’s sales grew at an annualized rate of 12.9 percent over the past five years, marking the highest growth in Korea. Boehringer Ingelheim Korea (11 percent), Roche Korea (8.7 percent) and Johnson & Johnson Korea (7.2 percent) also reported positive growth.

On the other hand, AstraZeneca, the company with the lowest five-year sales performance, recorded a negative 6.6 percent growth in annual sales. Also, GSK sales revenue declined by 4.8 percent, and Bayer Group’s sales fell 4 percent within the same period.

In particular, both GSK and its Korean subsidiary have recorded the lowest annual sales growth rate in the past five years. Operating profits for GSK headquarters declined at an average annual rate of 22.8 percent, and its operating profit in Korea even dropped by 47.4 percent, more than double the fall registered by its headquarters.

Novartis’ sales grew 39.3 percent from 2012 to 2016, which was an “optical illusion” of sorts, given the company suffered a massive 84 percent drop in turnover in 2011. Pfizer Korea and Bayer Korea also turned their sales losses into gains over the cited period.

In the Korean market, Sanofi-Aventis Korea ranked first in terms of operating profit with 28.46 billion won ($25.16 million), followed by Novartis Korea (14.47 billion won), Janssen Korea (12.43 billion won), Boehringer Ingelheim Korea (10.95 billion won), Pfizer Korea (6.65 billion won), AstraZeneca Korea (3.25 billion won), Roche Korea (2.95 billion won) and GSK Korea (1.65 billion won).

*GlaxoSmithKline Korea includes Consumer Healthcare division (2015 ~ 2016) *Johnson & Johnson Korea includes Janssen Korea division *Specific accounting standards may vary from country to country

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