As a teenager in France deciding how to make his way in college and the world, François Fournier had a surprisingly mature observation about a potential career in health care generally—and in the drug business specifically. “I thought, ‘Whatever the economic environment, people will always need drugs to fight disease’, ” he remembers. “You can always look to the future in this industry.”
From his current position as president for the U.S. and Canada of Swiss-based Galderma SA, Fournier faces a number of competitive and business challenges. But, as he was quick to point out during an interview in his Fort Worth office, the stormy world economy of the past three years has not been foremost among them.
Galderma, a leading provider of dermatological medications and the maker of the successful Cetaphil line of over-the-counter lotions and skin-care products, saw sales grow 19 percent last year, to $1.6 billion worldwide. Fifty-five percent of that business comes in the North American region that Fournier has helmed since June 2009.
The 44-year-old French citizen says the relative “stability and peacefulness” of his company is enhanced by its structure as a wholly owned joint venture between the French cosmetics company L’Oréal and Swiss food giant Nestlé. “We are not exposed to merger and acquisition pressure and other pressures on public companies,” he says. At the same time, unlike its Big Pharma competitors, Galderma is narrowly directed.
“We have a clear strategy. We focus on dermatology,” Fournier says. “Some of our competitors swing back and forth. By being committed and being stable, we are better able to think long-term.”
As a French-born executive in the Dallas-Fort Worth area, Fournier provides an interesting insight into the region’s French business community. He lives in Highland Park and commutes to Galderma’s complex near Alliance Airport. There, the company maintains its U.S. headquarters as well as a distribution center. (It also has a research-and-development facility in Princeton, N.J. It manufactures 60 percent of its products at a Canadian plant near Montreal, and outsources the remainder to U.S. makers.)
One would expect a posting to North Texas to be less stressful than Fournier’s first overseas assignment in 1997. Sent to Jakarta, Indonesia, for another French pharmaceutical company, he endured a financial panic that led to a ruinous currency meltdown and deadly riots that forced him to evacuate the country for a period.
Today’s instant worldwide communications and a host of amenities in DFW have made Texas an easy destination, he says: “Really, there’s been no adjustment.” Between Skype, French news broadcasts via his iPod, and Central Market, he says, “I find all the French things I want—cheeses, wine, everything. It’s amazing.”
Fournier, who does justice to the traditions of French fashion in his perfectly tailored gray pinstripe suit with fine hand-stitching on the notched lapels, says he loves the French cuisine at Rosewood Mansion on Turtle Creek. Abacus is another favorite. When his tastes run to Italian, he favors Lucia, a 36-seat trattoria in Oak Cliff’s Bishop Arts District.
“The guy at Lucia is a Texan, but he’s spent so much time in Italy, he’s cooking like an Italian chef,” says Fournier. The only culinary hardship Fournier says he’s encountered in Dallas is the difficulty of snagging one of Lucia’s scarce tables. “You have to book two months in advance!” he laments.
Drawn to Pharmacy
It’s no surprise that Fournier would judge his current home in terms of its cuisine. Growing up in Rueil-Malmaison, a suburb of Paris, his childhood ambition was to be an “inspector” for the Michelin restaurant guide. “To go undercover to the restaurant and rate the food, for me it was my dream, my perfect job. Good food. Good life,” he says, recalling how well anticipated the annual guide is in France, with people taking close notice of eateries rising or falling from grace in the Guide Michelin.
Fournier, whose mother was a teacher and whose father ran the human resources department of a global bottle-maker, was a carefree adolescent, intense mainly about tennis and skiing. In a country where the educational system encourages students to make career choices earlier than in the U.S., Fournier was influenced by a summer job he took in a pharmacy.
“All my summer vacation after high school, I worked in a pharmacy. I was making good money and I learned about how a pharmacy works,” he recalled. “Pharmacies in France are very well organized, very modern, some of the best in the world. I saw the patients coming in, and it was a great experience for me that I think is still driving me in this work. Patients have the same concerns no matter where you are in the world. If they have an issue, the way they behave—I think it’s the same everywhere.”
A pharmacy degree is a six-year program in France, with the fifth and sixth years spent working in a hospital and in a company internship. Fournier, looking for an international experience during his time at the University of Reims, spent those two years in Germany, before returning to Paris to earn his master’s degree at the HEC Business School.
He went to work as a medical representative for a German pharmaceutical company that’s now part of drugmaker Sanofi-Aventis SA. “Our biggest affiliate was in America, in Bridgewater, N.J., and my dream was to work there,” he says of his thoughts in his 20s. “If you worked in Bridgewater, you were king.”
He soon moved to a manager position at Laboratories Fournier (the name was strictly a coincidence), which is now part of Abbott Laboratories, and launched one of its biggest products, a cholesterol-lowering drug called TriCor, during a three-and-half year period in which he lived in Indonesia and China. Unluckily, his first month as general manager of the Asia division—July 1997—saw the onset of the Asian financial crisis, a contagion of currency devaluations and instability that raised fears of a worldwide economic meltdown.
In January 1998, the Indonesian currency lost 80 percent of its value and, that spring, rioting aimed at the economic control of ethnic Chinese claimed an estimated 1,000 lives.
“For three days I couldn’t reach my neighborhood, and my wife and I were evacuated to Singapore for a while,” says Fournier, who met his wife, a French citizen, in Indonesia, where her father was a military charge d’affaires.
“Things got peaceful very quickly and back to normal just weeks after everyone had run amok,” says Fournier. Still, he says, “the country got poor very quickly.”
Fournier says his team of 50 employees managed to keep sales stable “but with all these problems, we weren’t growing.” By January 1999 he was moved to Beijing, which was beginning to fully embrace Western business. “That year they opened a Starbucks in the Forbidden City,” he says, referring to the historic imperial palace located in the middle of Beijing. “It would be like putting one on the corner of the White House.”
What struck him about China was its “incredible capacity to change and adapt quickly.” His Chinese staff was made up of mostly medical doctors who could earn more working in the industry than in practice. “Many had been in North Vietnam during the Vietnam War,” he says.
“Until just a few years before coming to work for me, they had never eaten meat or seen a banana.”
After China, Fournier went to work for Galderma in Germany. He was awarded three promotions in just five years before being named to his current position as president of the North America region, with more than 600 employees, 220 of whom work in Fort Worth. The company’s U.S. work force has grown by about 110 over the last four years.
“They’ve done very well and that starts at the top,” says Scott Brown, president of the French-American Chamber of Commerce Dallas/Fort Worth, of Fournier. “He’s very hardworking and team-focused. He’s interested in making sure his people are happy. Out of the various leadership styles, he isn’t one to force things from the top. He listens to those around him and, because he knows his business so well, good people gravitate to him.”
The French-American chamber, one of the hubs for the estimated 4,000 to 8,000 French citizens who live in North Texas, honored Fournier in June for his “contributions to strengthening the long-lasting relationship between France and the United States,” as well as his contribution to the local economy. The gala celebrating this achievement, attended by the French ambassador to the U.S. and other French dignitaries, featured a gourmet feast prepared by Bruno Davaillon, The Mansion’s executive chef.
It was the type of evening tailor-made for Fournier. “The French have a phrase for it: he’s a bon vivant,” says Brown. “He likes good food, good wine, good conversation.”
Asked to discuss his career, Fournier makes it clear he prefers talking about his company, which has a low but growing profile due in part to the success of its over-the-counter Cetaphil line.
“Our mission is to meet the expectations of dermatological patients and their physicians. It’s very easy to see if our product is improving the condition. Unlike treating hypertension, the results are visible, quickly,” he says.The company’s prescription products treat acne rosacea, psoriasis, and pigmentation disorder, or, as Fournier puts it, the “bread and butter of dermatology.” But the company also tackles rare conditions, “and there are zillions of them,” he says. “Some are very much shocking. With one, you can have red lines, bars, coming down, as if you are in jail.”
Galderma, which has a 7.5 percent share of the worldwide market in its specialty, spends roughly $200 million a year in research. “This is fundamental research, where you start working with a molecule that might be promising,” he says. The company’s primary research center is located near Nice, France. It also has the R&D unit in New Jersey, and partners on research projects with a number of U.S. universities, including the University of Texas Southwestern Medical Center and Baylor University.
“From the time we have a molecule to the day it might be on the market typically is about 10 years,” he says.
Galderma has its U.S. headquarters in Texas because it began in 1961 as a Dallas company, Owens Laboratories. It was acquired by Fort Worth-based Alcon and renamed in 1972. Five years later, Nestlé took over Alcon and, in 1981, Galderma was reconstituted as a joint venture with L’Oréal, which brought in its French-based research unit.
The company’s Cetaphil line of skin moisturizers and cleaners has a longer history, with the first known use of the name dating back to 1945, Fournier says. “We take a very medicalized approach with Cetaphil. It’s more like a treatment,” he says of the fragrance-free products. “We give you a prescription for your eczema and you can also go to the store and buy a Cetaphil product that will help you, too.”
Galderma uses a variety of strategies to increase sales. “It’s not just one thing. You are doing many things,” Fournier says. Like other drugmakers, Galderma markets directly to patients with product commercials on TV and public service-type ads such as one encouraging teens with acne to seek help at a dermatologist.
Earlier this year, Fournier hired 10 people to form a merchandising team that visits drugstores and other outlets and checks shelves to make sure products are properly stocked and displayed. “I can have the best product but, if you can’t find it at CVS, you will be upset,” he says.
Another approach attracted the attention of the Harvard Business Review in June. It used Galderma’s sale of Epiduo, a prescription acne gel, as a case study for an article titled, “Competing Against Free.” The article points out that Galderma was under pressure to build the drug’s U.S. market because its other acne product, Benzac, was losing patent protection. Adding to the company’s challenges, a competing gel produced by GlaxoSmithKline PLC was providing stiff competition in Europe.
Expecting similar competition in the U.S., Galderma implemented a program to reimburse a patient’s out-of-pocket costs for as long as a year. In exchange for rebate coupons, customers gave the company their e-mail addresses, allowing Galderma to market to them with special offers for its non-prescription products, such as Cetaphil cleansing bars, the study pointed out.
According to the review, GlaxoSmithKline refused to match Galderma’s rebate, which allowed Galderma to gain customers and profitably cross-sell its over-the-counter products. The review suggested that GlaxoSmithKline should have matched Galderma, leaving it in the uncomfortable position of discounting its product without growing share.
Fournier says it’s not uncommon for drug companies to offering various discounts on new products to build business in a tough economy. Typically these are in the form of cards covering the patient’s insurance co-payment, which are distributed through physicians. Although he says he was flattered that Harvard chose Galderma for its case study, Fournier says the company tends to discount less than its competitors.
“My team will tell you, ‘François is lukewarm to using co-pay cards,’ ” he says.
“Nobody can ignore the cost of developing the drug. It’s huge,” Fournier continued, pointing out that regulators today require clinical studies for product registration on 5,000 patients, five times the number required 10 years ago. “I’m not being judgmental. It’s just a fact.”
Fournier says he prefers building “real value” by investing in research and development of the best drugs and products, and educating doctors about their use and benefits. “When you buy a Mercedes you know it has a cost. If it’s offered for free, long-term, you’ll be asking, `Is this really a Mercedes? Is it the quality car I was expecting?’
“If you are in my seat, you can boost sales in the short term by offering for free, but you don’t build the future,” he says.
America’s diffuse managed care system, where medical insurance coverage varies from state to state and insurer to insurer, “is the thing I think about the most when I’m driving home from work,” he says. “It is, in our jargon, market access. I have a managed care team in constant contact with insurers, big time. It’s our biggest challenge now and in the future.”
For future growth, the company is looking toward what Fournier called “aesthetic dermatology,” which he describes as the industry’s fastest-growing segment. “As people are growing older … they want to look as good as they did in the past,” Fournier says.
Late last year, Galderma purchased Sweden-based Q-Med AB, which makes products that smooth wrinkles and enhance breasts. Fournier points to his new hometown as proof of the burgeoning market demand for youthful looks.
It’s proof as well that he’s caught on to one of the defining folkways of his current posting. “Dallas is a good example [of] where women and men want to look good,” he says. “You can’t do all of it by yourself. You go to the dermatologist or plastic surgeon to help you look as young as you like.”