With transactions of over $70 billion inked in the last two years, Swiss drugmaker Novartis is morphing into a complete medicines company. It exited areas like eye-care devices and consumer health and focussed efforts on the innovative and generic drugs space. Vasant (Vas) Narasimhan, Novartis global Chief Executive Officer, speaks to BusinessLine on running a global operation while adapting to local requirements and the ‘unbossed’ culture in the company, among other things. Excerpts:
What does growth look like now for Novartis globally and in India, following the series of transactions?
Last year saw outstanding financial performance, with great sales growth, profit growth and strong cash flow growth. 2019 also saw a record number of approvals, six new drug approvals, one of the most, if not the most, in the history of the industry. I think it shows the innovation power of the company.
India continues to be critical for us. It’s one of our largest sites in terms of people, over 8,000. It’s one of the few countries we have operations in drug development, research, manufacturing, business services and a large commercial organisation. We have the whole business cycle here. Launching new medicines has become part of our standard operations in India.
About 15 innovative products are in the global launch pipeline during 2019-2021. How does India fare, has it scaled the intellectual property (IP) hurdle?
We continue to hope that India will strengthen its IP policies and make it more predictable. It’s not preventing us from bringing new medicines to the country. I don’t think it’s a hindrance. In a globally competitive environment, if India wants to continue to attract investments, it’s important to have a very strong IP framework. In general now, in trade deals, IP will be an element.
How do you balance innovation with the high price tag it puts on medicines?
In India, we have demonstrated how you can use innovative models to provide broad access to many millions of patients through a combination of emerging market brands and tiered-pricing based on income. You do not have to compromise on IP to broaden access. In the long run, for India to be a leader in the innovation-driven economy, IP protection will be important.
Will the gene therapy drug Zolgensma, the costliest in the world, be brought to India?
Our long-term aspiration is to bring the gene therapy drug around the world. But first we need the infrastructure to handle this complex technology, a rare disease framework, and at our end a model to provide access. We need all three to be in place to bring access to this therapy.
Brexit is through and campaigns like “America First” and Make in India” put regional priorities above all else. How do international companies adapt to these demands?
The most important thing for us is to keep advocating solid international trade frameworks. As a global company, we operate in nearly 150 countries, our supply chains are global, my belief is that global trade has made the world a wealthier place, it has lifted hundreds of millions out of poverty and we need to continue to have a strong global trade framework.
As we now get into this new framework of more bilateralism or unilateralism the world has to keep pushing to have free and open trade, free and open movement of talent and people for us to be successful in the long term.
After the recall of Ranitidine and Valsartan (linked to impurities in material sourced from China) and now the Coronavirus outbreak, are companies recasting strategies to not depend on just one or two markets for supplies?
With API (Active Pharmaceutical Ingredients) manufacturing, it’s important that we have multiple sources of supply. As a company that sources API, we need to ensure that our suppliers have the latest testing capabilities and also are holding themselves to the highest standards.
At Novartis, we now test all incoming supplies from API manufacturers. The recent nitrosamine impurities experience has shown us that we need to test and be aware of what is coming in. In the past we assumed that testing was happening.
How is the ‘unbossed’ culture panning out?
Our culture movement is going very well. In India we are 75 or 80 per cent millennial, so that’s (unbossed campaign) very popular. Globally we find that having a shift from bosses thinking of themselves as bosses to being coaches, instead, who enable others (works). People are feeling more accountable for their work and it’s actually helping us perform better.