Company: SNY
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0001121404-25-000010
Chunk: 27

Company: Sanofi
Filing Date: 2025-02-13
Form: 20-F
Chunk 27
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 of the world could have a material negative impact on our business, in particular the armed conflict between Russia and Ukraine, and the escalation of violence and potential further conflicts in the Middle East. The consequences of these conflicts remain uncertain, and will depend on developments outside Sanofi’s control, including, but not limited to the duration and severity of the conflicts, and the consequences of the ongoing and additional financial and economic sanctions imposed by governments in response. Sanofi faces rising tensions between the US and China, two of our key markets. Trade, economic, technological and military conflicts could disrupt supply chains, raise raw material costs, and affect clinical and manufacturing operations and business strategy. Other related issues have arisen or are arising such as regional instability; geopolitical uncertainties; adverse effects on fuel and energy costs, supply chains, macroeconomic conditions, inflation, and currency exchange rates in various regions of the world and exposure of third parties to gas shortages. Collectively, such unstable conditions could, among other things, disturb the international flow of goods and increase the costs and difficulties associated with international transactions. Unfavorable economic conditions have reduced the sources of funding for national social security systems, leading to austerity measures including heightened pressure on drug prices, increased substitution of generic drugs, and the exclusion of certain products from formularies among others (see “— The pricing and reimbursement of our products is negatively affected by increasing cost containment pressures and decisions of governmental authorities and other third parties” above). The challenging economic environment could also negatively impact our net sales. In regions with high unemployment, rising inflation, or limited third-party payer systems, patients may turn to more affordable generic alternatives, delay treatments, or reduce observance to cut costs. In the United States there has been a significant increase in the number of beneficiaries in the Medicaid program, under which sales of pharmaceuticals are subject to substantial rebates and, in many US states, to formulary restrictions limiting access to brand-name drugs, including ours. Additionally, rising healthcare costs have prompted some employers to transfer a greater share of these costs to their employees, which further decreases demand for brand-name pharmaceuticals and intensifies downward pressure on prices. Our Opella business (which is classified in “discontinued operations” in Sanofi’s income statement following the announcement of exclusive negotiations for the sale of a 50% controlling stake to CD&R, with the transaction expected to close at the earliest in second quarter 2025, see generally “Item 5. Operating and Financial Review and Prospects”) could also be adversely impacted by deteriorating economic conditions,