Top Grade in Generics — Jeff George, Sandoz
In today's generics business, there is no sense of
entitlement—profit margins are middling, product timing is defiantly of the moment, and
every last inch of commercial turf is contested. For Sandoz' Global Head Jeff George, the
appropriate response to all this market mayhem is to invest each of his waking moments with a
sense of urgency. "The first asset required of a leader in the generics business today is:
you've got to have drive." Precisely because the barriers to entry in generics are so
low, he says, maintaining a competitive edge often depends on distinctive individual character
traits like energy, passion, analytical clarity, and that sheer will to win.
Jeff George, Global Head, Sandoz
At age 39, George occupies a pivotal role in the industry,
leading a high-profile business with nearly $9 billion in annual turnover and a workforce of
approximately 26,000 people located in over 140 countries. Sandoz, a division of Novartis, ranks
a close second to global leader Teva in annual sales of generics. The business has a large
footprint. Sandoz manages an inventory of some 25,000 SKUs with an annual production volume of
49 billion tablets and injectables manufactured at 45 different sites in 17 countries; some of
this activity is conducted in cooperation with external partners, of which there are more than
200. Six percent of the world's population—420 million people—was given a
Sandoz medicine last year and the company is now closing in on serving 500 million patients.
The position he holds within Novartis is commensurate to the
responsibility. George is the youngest member of the Novartis Group's Executive Committee
and reports directly to Novartis CEO Joe Jimenez. George considers both Jimenez and incoming
Novartis Chairman Joerg Reinhardt as key mentors, as Reinhardt was instrumental in recruiting
George to Novartis in January 2007 to head the Western and Eastern European vaccines business.
More recently, Jimenez and former Chairman and CEO Dan Vasella have been major influences, as
George worked for Jimenez first at Novartis Pharma and then assumed the larger role at Sandoz.
Family background and a diversity of positions in his early
career helped smooth George's transition to the "c suite." His father, Bill
George, led the device manufacturer Medtronics for many years. George obtained a Harvard MBA and
then took his first post as a consultant at McKinsey & Company, which led to assignments in
the retail consumer business, ending up as head of strategy and business development for a
division of Gap Inc., where he was instrumental in building the Banana Republic brand.
This retail background did more to prepare him for his
current role in pharmaceuticals than might commonly be assumed. "My experience allowed me
to see that a key sweet spot for the pharmaceutical industry lies at the nexus between
healthcare and retail. Healthcare today is an increasingly consumer-driven business, one in
which pharmaceuticals are required to demonstrate value to many stakeholders beyond the
physician. Understanding retailing is helpful to make the case for medicines in an environment
where patients and payers have real choices." George notes that he applies the lessons he
learned from retail by constantly underscoring Sandoz' association with and commitment to
quality. "I've made it clear to everyone that we live or die on this—it's
central to our business mission and reputation."
Since assuming the top job at Sandoz in October 2008, George
has pursued a strategy to grow and transform the generics business through innovation—in
products, process, technologies, and people. "It may seem counter-intuitive, but the
generics business today is where new ideas on how to create operational efficiencies, expand
patient access and market cost-effective product solutions for payers are all coming
together," George says. He notes that the generic business itself is consolidating to
become more competitive in global markets. "In 2000, the top four generics companies
together had only a 13 percent market share; today, it's approaching 30 percent. So you
have to innovate to survive."
Under his leadership, Sandoz has built on its historic base
in INN generics to establish an unrivaled position in complex, differentiated generics that
carry a heavy dose of science, often developed in cooperation with the patented, R&D side of
the Novartis business. These differentiated generics provide that coveted "blue ocean"
space—where Sandoz can stand alone, ahead of the competition—by requiring more
costly science and extra regulatory hurdles, or by being hard to manufacture.
Biosimilars, injectables, and specialty drugs like
ophthalmics and dermatologics now account for roughly 45 percent of Sandoz's sales, up from
30 percent when George came on board in 2008. Sandoz has captured the number one global sales
position in each of these categories, supplementing organic growth with a targeted acquisition
strategy, where Sandoz has bought leading-edge companies in dermatology (Fougera, in 2012),
injectable oncologics (EBEWE Pharma, in 2009), and respiratory care (Oriel Therapeutics, 2010).
Sandoz has notched a particularly strong performance in
biosimilars. The company began prepping for a stake in this area way back in 1996 and was the
first big industry player to introduce a biosimilar, launching its version of Pfizer's
Genotropin in Europe in 2006. Partly because of that foresight, Sandoz over the last five years
has quintupled sales in this segment to secure a 50 percent share of the regulated worldwide
Another element in George's innovation agenda is making
Sandoz a leader in access to medicine among underserved populations in the developing world.
"The cost benefit ratio from use of quality generics is second to none, and our price
points bring the Sandoz product line in reach of 90 percent of the world's
population." Specifically, he sees long-term commercial potential for the company in
Africa, where Sandoz is testing out new, needs-relevant approaches to drug distribution and
patient education. There is an element of altruism here that is unusual for a generic company,
but George stresses that every access initiative pursued by Sandoz is designed ultimately to be
profitable, in keeping with the parent company philosophy that only those programs that can pay
their own way will remain sustainable in the face of economic downturns or management changes.
"I made three trips to Africa last year and will go
again at least twice this year. All the factors for success are there, including a growing,
youthful population; expanding investment and strong GDP performance; and huge unmet medical
need, particularly for high quality, affordable drugs. I'm convinced governments,
providers, and patients will remember who pioneered in investing in sub-Saharan Africa's
health infrastructure—I want that company to be Novartis."