Following is the transcript of a First On CNBC interview with Chairman & CEO of Johnson & Johnson, Alex Gorsky at the China Development Forum in Beijing. The interview was broadcast on CNBC on 27 March 2018.
All references must be sourced to a "CNBC Interview'.
Interviewed by CNBC's Martin Soong.
Martin Soong (MS): China obviously a key market for J&J. Now you've got what looks like a trade war brewing. President Trump fired the first shot return salvo from China. Pretty modest. How concerned are you?
Alex Gorsky: China is a very important market force when you think of 1.4 billion people when you think about the technology, when you think about the aging population, when you think about an increasing middle class, we think that it represents really significant potential for us. And look, it's our hope that you know what we're seeing right now we start to learn a lot more. It's early days we've really early announcements just like everybody else. We're going to have to dig in and learn more, but at the end of the day we think that having first of all, fair equitable trade around the world is in everyone's best interest, Johnson and Johnson's, but I think for all companies and all countries.
MS: You've invested quite significantly already in China. Are you concerned that the Chinese government possibly in retaliation could slap investment restrictions on U.S. businesses from pumping further money into this place?
Alex Gorsky: Well we have been in China for quite a few years in fact for over 30 years we are here back in the early 1980s. We have a very significant presence across all of our different businesses more than 10,000 employees. I think more than 60 sites. And look, it's certainly our hope that we're going to be able to work with government officials both in the U.S. and China to find again, the right path forward to work our way through the current issues.
MS: Do you feel today 2018 where we're sitting now that J&J is playing on a level playing field with local Chinese pharma?
Alex Gorsky: We've been really encouraged by many of the changes and the adaptations that we've seen on behalf of the Chinese government over the past several years whether it's in regulatory procedures for example in the approval of pharmaceuticals we're seeing now much more of a willingness for example to think about using data from around the world, to think about reviewing drugs particularly lifesaving medications and a much more timely way. In fact we just made an investment in a company here in China Legend pharmaceuticals that offers really promising new therapy in CAR-T treatment. So it's a new way of basically utilizing your body's own immune system to defeat a condition like myeloma.
So we're very encouraged by many of the changes that we're seeing, there's still work to be done in areas such as IP and others. But again, we're hopeful that we can continue to have a productive and important dialogue going forward.
MS: Foreign pharma in China, not so long ago really caught in the crosshairs. Enforcement crackdowns probes corruption probes GlaxoSmithKline et cetera. Pharma seems to have weathered that. But for J&J itself it very recently defined monopolistic pricing on your on your contact lenses.
You know that earlier this year right your diabetes, one of your diabetes applications they pulled pricing on it so that local companies could compete as well. One of the risks going forward, I think for American companies including, maybe especially for pharma, I don't know is, one way China could hit back is to make it a lot tougher in terms of probes, enforcement actions et cetera. If that does happen, what's J&J's… how do you play defense?
Alex Gorsky: We always want to play offense and so that calls for making sure that we've got great products that are right for the market, following the appropriate marketing practices, you know according to the local laws and compliance which we always try to do. And again to continue to work with our customers, and the government here in China to be successful. And I think that if, again, if you look at overall at our track record over the past 30 years what we've been able to do in terms of building our business, in terms of building relationships, investing here locally. In fact, we're in the process right now of building at least three new facilities and Xian, in Shanghai and in Suzhou, both manufacturing as well as research and development. And I think that kind of collaboration builds on overall better understanding and I think better positions us for the future.
MS: And you're pretty confident that all those projects are going to continue without a hitch?
Alex Gorsky: Well, as I said earlier it's still early days but we're hopeful with it. We try to really take a long term view and we take that in the way that we develop our products. We take it in the way that we've invested here in China and that's both looking back but it's also looking forward.
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