Published By : 23 Nov 2015 | Published By : QYRESEARCH
Curbs were imposed on money transfers made out of Venezuela in 2014, when the Latin American country fell short of foreign exchange. Since then, the pharma companies and their subsidiaries operating in Venezuela have been rendered incapable of repatriating their profits.
Venezuela has often been named as the worst-managed economy in the world and has gained only a deepened crisis after the crude prices fell. Crude was, till date, their prime export.
The list of pharma companies being affected by the move are multiple Indian companies, including Dr. Reddy’s Laboratories Ltd., Glenmark Pharmaceuticals Ltd., and Sun Pharmaceutical Industries Ltd. The list also includes multinationals such as Teva Pharmaceuticals Industries Ltd., Bayer AG, Abbott Laboratories, Sanofi AG, Novartis AG, Pfizer Inc., and Merck and Co. Inc.
Lutz Hegemann, Novartis’ global development head, said that his company is trying to curtail its financial exposure to Venezuela, as the nation is currently experiencing the worst economic crisis post the crude price fall.
He added that Novartis is, however, not planning to completely remove its operations in Venezuela, while acknowledging the bad shape that the Venezuelan economy. The company’s move comes due to the fact that methods similar to Venezuela’s have not been experienced yet.
Over 95% of the foreign exports income earned by Venezuela comes from Crude oil. After the global crude oversupply, the nation ended up owing major global pharma companies nearly US$3.5 bn, which the nation has only approved to be settled via foreign currency and debt payments in minor sums.