Patient Centric - Pharmaceutical Executive


Patient Centric
Five years ago, in the race to deliver Gleevec, Novartis leaders glimpsed what a pharma company could be. Today, across the company, theyre putting that experience to work.

Pharmaceutical Executive

A continuing question is whether a big merger is in Novartis' future. This past summer, when Sanofi-Synthélabo made its play for Aventis, Novartis was widely discussed as a possible white knight. The deal didn't go through, but it reopened speculation about Novartis' plans—especially in regard to Roche, a company in which Novartis owns nearly a one-third equity stake, but whose management and key stockholders have long opposed large mergers.

Asked if he is looking for a merger, Vasella says, "Not at all." It is not that he is averse to mergers as a matter of principle. He thinks, for example, that the merger that gave birth to Novartis was largely successful. "There is a tendency either to believe in big transactions or completely disbelieve in them," he says. "But the truth is you have to judge case by case."

As for Roche, he says, "It was a financial investment that now looks very attractive. We did it at a time when Roche did not do well and was not seen as a successful company, but that has changed. Roche is doing well and we are happy investors. Even if nothing happens in the foreseeable future, it is a very nice option that we have."

Novartis' one major acquisition this past year was the $565 million cash purchase of Sabex Holdings, a Canadian generics manufacturer. "The generics industry is consolidating rapidly, and a few large players are emerging," says Vasella. "We believe we should be among the leaders in this industry, which we currently are. That requires a geographic expansion but also presence in various forms—for example, injectables and not just pills."

Is there something odd about being both an innovator company and a generic company? Not to Vasella. "From a patient point of view, what you want is the most advanced, best-performing therapy—the best efficacy and side-effect profile," he says. "But if nothing is sufficiently better than a drug that has lost its patent, then you want the best price, and that means the generic. Every company today knows that if I don't innovate I can't live off my old products, because generics will make them obsolete. And from the branded point of view, we want to make generics obsolete by bringing better therapies to the patients. It's a full circle, and I don't see any conflict."

And innovation is the point, says Vasella. "We want to discover drugs that change people's lives and change the way medicine is being practiced," he says. "I think the combination of being engaged for the patient and being competitive with your peers is a very good one."

Paul Herrling, head of global research
Building Access Access to medicine in the developing world is a multifaceted problem, says Paul Herrling, Novartis' head of corporate research. "There are political issues, corruption issues, educational and cultural issues, distribution issues. "One problem is that throughout history the organizations in rich countries that produced new medicines were more or less exclusively pharma companies. States, organizations, and universities did not."

Novartis has long had an interest in medicines for the developing world. Since 2000, the company has distributed free leprosy medication through the Novartis Foundation for Sustainable Development. With Chinese partners, it codeveloped Coartem, an artemisinin-based combination therapy (ACT) for malaria, which it provides to developing countries at not-for-profit pricing through the World Health Organization.


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