Company: SNY
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0001121404-25-000010
Chunk: 316

Company: Sanofi
Filing Date: 2025-02-13
Form: 20-F
Chunk 316
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 consistent with evidence obtained in other areas of the audit such asinternal company communications and presentations and external communications. We involved our professionals with specializedskills and knowledge to assist us notably in the assessment of the discount rate used by management.                                                                                                                                                                                                                                                                                                                                                                                                                              |

Valuation of the provisions for rebates relating to Sanofi’s business in the United States – Medicaid, Medicare and Managed Care

| Descriptionof the Matter               | As described in Notes B.13.1. and D.23. to the consolidated financial statements, products sold in the United States are covered byvarious Government and State programs (of which Medicaid and Medicare are the most significant) and are subject to commercialagreements with healthcare authorities and certain customers and distributors. Estimates of discounts and rebates incentives(hereinafter the “Rebates”) to be provided to customers under those arrangements are recognized as a reduction of gross sales inthe period in which the underlying sales are recognized. Provisions for the Medicaid, Medicare and Managed Care Rebatesamounted to €1,193 million, €722 million and €1,097million, respectively, at December 31, 2024. The Rebates estimated bymanagement are based on the nature and patient profile of the underlying product; the applicable regulations or the specificterms and conditions of contracts with governmental authorities, wholesalers and other customers; historical data relating tosimilar contracts; past experience and sales growth trends for the same or similar products; actual inventory levels in distributionchannels, monitored by Sanofi using internal sales data and externally provided data; market trends including competition, pricingand demand.The principal considerations for our determination that auditing the provisions for Rebates relating to the Company’s business inthe United States is especially challenging and required complex auditor judgment related to the significant judgment bymanagement due to significant measurement uncertainty involved in developing these provisions. These provisions are estimatedbased on multiple factors as described above. |
| How We Addressedthe Matter in OurAudit | Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overallopinion on the consolidated financial statements. These audit procedures included obtaining an understanding of the process andassessing the design and testing the operating effectiveness of controls relating to management’s estimates of the provisions forRebates relating to the Company’s business in the United States, including controls over the assumptions used to estimate theseRebates. These procedures also included, among others, developing an independent estimate of the provisions for Rebates byutilizing third party data on inventory levels in distribution channels, volume, changes to