A difficult balancing act

With drug development, you fail more often than you succeed, says Daniel Vasella. Novartis

Novartis boss, Daniel Vasella, says his business is about bringing to market innovative drugs which can change people’s lives.

In the second part of an exclusive interview with swissinfo, he talks about the diseases he would like to cure and the difficulty of striking the right balance between doing good and doing business.

He also discusses the merits of intellectual property rights and identifies the strengths and weaknesses of the Swiss educational system.

swissinfo: Which diseases would Novartis particularly like to cure?

Daniel Vasella: Cancer is one area where we have lots of resources invested. Cancer is, of course, not one disease but many diseases so it’s like a trench war. You find a cure or a therapy for one and then you have to take the next one. Another area where we are very engaged is cardio-vascular disease, which is still the biggest killer in the developed world. For the developing world we have a malaria drug and we have leprosy drugs which we give away for free and then we’ve started a new research institute in Singapore dedicated to the diseases of the developing world – and we will be concentrating mainly on tuberculosis and dengue in the first instance.

swissinfo: With cancer, the name of Novartis is clearly associated with Gleevec. When did you first realise that this was going to be a breakthrough in medical treatment?

D.V: The first time I saw the clinical data, when the first 40 patients were tested and showed a really remarkable response, it was pretty clear to me that here we had something very exceptional.

swissinfo: Can you describe something of the excitement of that realisation?

D.V: First I called to ask Jörg Reinhardt [- head of development at Novartis -] if there had been a lab error, if he’d double checked the data and he said “No, No, it’s true. These are real data” so I said that we really have something very exceptional here and the analogy that came to my mind was really Sandimmune for transplantation. These are these kind of drugs where when they come to the market they change the way medicine is being practised and so I think here we had the potential and unless we would see unexpected toxicity later on in bigger trials which always can happen, I knew that from an efficacy point of view it would work.

swissinfo: What are some of the pressures of drug development?

D.V: The biggest pressure is that you do fail more often than you succeed so we still have only one out of ten thousand substances which eventually makes it to the market. Even in the last phase of clinical development, the success rate is only about 70 per cent and you have to spend hundreds of millions by then. It’s indeed a tough business.

swissinfo: How difficult is it to find the right balance between doing good and doing business?

D.V: It is a constant challenge. We have economic objectives and we have ethical objectives and they are partially overlapping. The areas of overlap between the two have constantly increased in recent years and companies have increasingly recognised that their behaviour – their socially responsible behaviour – is essential for sustainable business results and success so it is a dialogue within the company and of the company with society.

swissinfo: How do you feel about developing countries using their rights under World Trade rules to declare public health emergencies and either buy the drugs cheaply or make their own?

D.V: I think that is something which is within the rules of WTO and which I would entirely support. It is inconceivable that in a health care crisis, where there is an epidemic, people would not get access to a drug while they could get treatment if there were cheaper versions. Having said that, I think one would have to make sure that there is no abuse of the system neither with regard to the number of countries eligible or the number of diseases covered by this measure nor regarding the value of the patent as a basic protection tool. The patent is such an incredible invention which has been paving the way for investing in R&D and bringing new products to the market. That should not be undermined.

swissinfo: What do you say to people who argue that Novartis and other companies are making huge profits because drug prices in general are too high?

D.V: Obviously we are a profitable industry which has been one source of criticism. However, this profitability has allowed us to take considerable risk and invest ever increasing sums in discovering and developing drugs and has provided a dramatic improvement in medicine and medical treatment over the last 40 years.

Pharmaceutical companies are accused of concentrating on lucrative “lifestyle cures”. One thinks of the vast investment in obesity drugs. You have mentioned the fact that there are people starving. What do you say to that?

D.V: Obviously it looks like a perversion when you look at the lack of food in other countries. Is it justified to develop a medication to avoid obesity? I would say yes because obesity creates secondary diseases. People say that impotence drugs are lifestyle drugs. I’m not sure that someone who is impotent would agree. I would really differentiate between what is lifestyle – hair growth products, for example – and others which are more in the grey area or clearly in a medication area.

swissinfo: Last year, you decided to make the Boston area your new research hub. Does this mean serious research can only really take place in the United States?

D.V: No, not at all. We have had traditionally our biggest and most important research centre in Basel and that will not change, at least not in the near future. We’re building up in Basel. We’re transforming this whole site into a site of innovation and knowledge, a site which is focused on people and not so much on industry as it was historically. We have, however, decided to make the incremental investment mostly in Cambridge, Massachusetts, to build a new centre because there we have access to not only world class academic institutions but especially to their students and young researchers. We need to tap intellectual power wherever it is.

swissinfo: Can the Swiss education system still provide the talent that you need?

D.V: It’s a question of quantity and quality. From the point of view of quality, we get very good students in Switzerland but quantitatively it’s a very small number compared with what we need. We have no choice but to go and recruit elsewhere. But we must make sure that we strive for excellence in certain fields and that the universities don’t compete with each other to duplicate and triplicate and then not have enough resources in place. We need to make sure that Switzerland, Swiss companies and the Swiss universities can compete with the best in the world.

swissinfo: What’s going to happen in drug development in the next 10-20 years?

D.V: You can only talk about the future that’s already started. We are seeing that therapies have become more targeted, that understanding more about genetic make-up and also the molecular biology of cells allows us to design drugs more specifically to a certain disease. I think this trend will continue and prevail as we move forward. That also will in turn have a consequence that the segments of patients treated with a certain drug will become smaller, so I think we will see more fragmented markets but from the point of view of safety and efficacy probably better drugs.

swissinfo-interview: Vincent Landon

Key facts

Novartis was created in 1996 by the mergers of the two Basel companies Ciba and Sandoz.
It is the sixth largest pharmaceutical company in the world, with a market share of 4.2 per cent.
In 2002, Novartis made a profit of SFr7.3 billion ($4.7 billion) on sales of SFr32.4 billion.
Daniel Vasella was appointed chief executive of Novartis in 1996. He became chairman of the board in 1999.
He is also a member of the board of Pepsico and of the supervisory board of Siemens.
He has just written a book “Magic Cancer Bullet” which documents the challenges of bringing the revolutionary Gleevec drug to market.