The following is the unofficial transcript of a CNBC interview with Novartis CEO Vas Narasimhan from the CNBC Evolve Global Summit, which took place today, Wednesday, June 16th.
Video from the interview will be available at cnbc.com/evolve.
All references must be sourced to the CNBC Evolve Global Summit.
Julianna Tatelbaum: Vas, a very warm welcome to this special event. Thank you for joining us, Vas Narasimhan, CEO of Novartis. Vas, let me kick off by asking whether or not your view of healthcare as a whole has changed as a result of the events of the last year or so.
Vas Narasimhan: Well, Julianna, great to be here with you, as always, and enjoy the conversation. What I would say is, this last year and a half, I think, has taught us how important a role healthcare companies, healthcare plays for human beings around the planet, and how important it is, not only to tackle pandemics, but I think it's been a stark reminder, with the so-called 'syndemic' that's happened really in developed and developing economies, that are impacting cardiovascular health, oncology, and cancer care, respiratory, other diseases. We've seen this kind of awareness now of the important role that we as an industry play, but also, overall, how society needs to take care of the communities that governments, academia, and companies serve. So I think it's a good reminder for us, and I think there are a lot of important learnings to come out of this pandemic, and also some important technology changes that I think now we have an opportunity to accelerate.
Julianna Tatelbaum: Now, Novartis set out a major strategic transformation plan, back in 2018, just a couple of years before the pandemic hit, and that plan is to make Novartis into a 100% focused medicines company. Does that new strategy still hold?
Vas Narasimhan: Absolutely. You know, we're more committed than ever in our belief that, in being a focused medicines company, we can build strong capabilities across the most important technology platforms in medicine. Over the last three years, we've done about $80 billion in transactions that have really transformed Novartis into a focused player that has a leading position, not only in so-called small molecules, or pills, large molecules, like biologics, but also in these new-world technologies, cell therapy, gene therapy, radioligand therapy, we're also a very large player in RNA therapeutics, and I think as we emerge now from the pandemic, having those technology capabilities are going to allow us to tackle what will again be the greatest challenges facing healthcare around the world, cancer, cardiovascular disease, immunological conditions, amongst others. So I think we're well placed. And the other big transformation, of course, as well, we're trying to be on the leading edge of, is the digital transformation; how do we embed artificial intelligence data science across our entire value chain?
Julianna Tatelbaum: Vas, it's interesting to hear you talk about the role technology can play in the development of new medicines, because healthcare has consistently lagged other sectors in harnessing the power of new technologies like artificial intelligence. Is that finally changing now?
Vas Narasimhan: You know, I think it's been an interesting journey. You're absolutely right. In other sectors, you've seen technology really dramatically improve productivity in those sectors, but typically healthcare has lagged. I see two big shifts happening right now. One is the embedding of AI, increasingly, within the core value chain of companies like ours, research, development, manufacturing, and commercialization, enabling us to make faster decisions, and hopefully get new insights, to find better medicines. At the same time, AI is also getting embedded in healthcare systems, so we can better tailor the right therapy, at the right time, to the right patient, and hopefully, in doing so, also take out some of the waste that we know exists in healthcare systems. The other big transition, and I think, you know, the whole world now knows about RNA, that's happening is what we think of as a therapeutic is dramatically shifting. For the last 100 years, we mostly thought of drugs as pills, and then we learned that medicines could be biological medicines, or protein medicines. Now we're opening up this whole new chapter where we can use gene therapy to potentially cure diseases, cell therapies, where we take cells out of the body, reprogram the cells, and put them back in, to cure cancer, in the case of one of our drugs, or in the case of RNA therapeutics, use very small pieces of RNA – not like the mRNA vaccines, but really small pieces - to block the production of proteins, that could enable us to tackle cholesterol lowering, like a vaccine, as well. So that technology shift is happening at the same time. So you have that AI movement, but also what do we think of as therapeutic medicines?
Julianna Tatelbaum: Well, let's go a little bit further into the way we should think about medicines, moving forward, and talk about the era of one-time therapies, like your gene therapy treatment, or therapy, Zolgensma. Can healthcare systems, in their current forms, absorb the high price tags that are associated with advanced therapies like these? Or do we need to see major changes in the way we think about paying for medicines?
Vas Narasimhan: Well, I think we've been at the front line of this debate, both with our gene therapy, Zolgensma, as well as our cell therapy, Kymriah, for cancer patients. I think first it's worth just taking a moment, especially in a technology audience like this one, just to marvel at the fact that we can potentially cure or dramatically improve the lives of children who are born with a debilitating genetic disease with a single injection, or take children or adults who are at the end of the line on their blood cancer treatment, give them a one-time therapeutic, and achieve durable cures. I mean, we have children now out eight, nine years from their therapy. So that's remarkable. And that's why I think healthcare systems have been so interested in trying to work with companies like ours to find solutions to make these technologies accessible. In our case, our cell therapy is reimbursed in 28 markets, our gene therapy, Zolgensma, now over 10… in 10 countries, and what's consistently the case is, once policymakers understand the value of a one-time therapy, they're willing to reimburse it and make it broadly available. The tricky thing comes from the fact that, at the first year, there's usually not budget space available, and so what we need to do is really help healthcare systems evolve to allow for things like payment over time, or outcomes-based contracts, so if the one-time therapy doesn't work, that there is a mechanism for the healthcare system to recoup some of the cost. We've rolled that out successfully in some countries, in some countries not, but that's going to take a policy shift. And I would predict, post 2025, we're going to see many gene therapies and cell therapies, and I think healthcare systems are going to have to adapt from their traditional model of chronic treatments over decades, to this now one-time therapy world.
Julianna Tatelbaum: Vas, clearly there's a lot of interest in the role technology can play in healthcare. We've got one of our viewers, writing in asking about how technology can play in healthcare. What role do you see telehealth playing in the healthcare space, and what could that mean for improving access?
Vas Narasimhan: Well, I think we've seen, over the course of the pandemic, a dramatic shift. I mean, I… you know, telehealth was always a little bit of a boutique effort, never really got to scale. But then, when the entire healthcare system was forced to shift, forced to move to a virtual world, we saw physicians, in the United States, China, Japan, across Europe, really adopt telehealth at scale. And I think that's now opened up new possibilities to enable patients to get ongoing care in a really, really effective way. So it's quite exciting, I think it's going to become a bigger and bigger part of the healthcare system, of course reimbursement has to be worked out, but we're quite confident that telehealth is going to be important. It also, by the way, enables us to do clinical trials even faster. We conducted tens of thousands of virtual monitoring visits without ever having to have the patient come to the clinical trial site. That's going to enable us to hopefully speed up clinical trials, and bring more innovations to patients faster.
Julianna Tatelbaum: Vas, we've got another question from, this time, Tom Steiner, a viewer of this program, asking about pandemics in the future. Do you expect another pandemic in the coming years, and, if so, how can we prepare now?
Vas Narasimhan: Well, you know, pandemics have been with us for centuries; if you go back into the recorded history, probably on the order of 15 pandemics in the last 200 to 300 years. And so pandemics periodically happen, and they're probably bound to happen again in the future. I was part of the G7 delegation to the Health Ministers' G7 Summit, amongst other… with other biopharmaceutical executives, and we discussed exactly this topic, and coming together to commit to really accelerate the future responses to a pandemic. So we know what the solutions are, it's just very hard to maintain the investments over time. We need world-class surveillance to really identify when viruses move from animal populations to human populations, and we need a policy framework for that information to be very rapidly shared. We need warm preparedness in healthcare systems, we need them to maintain the stock of critical goods that they need to really ensure patient care. And, lastly, we need to keep investing in therapeutics, vaccines, and diagnostics. We know the answers, and we know what needs to happen. The tricky thing, I think, is going to be four, five years from now, often what happens is attention moves away from pandemic preparedness, investments go down, and then the susceptibility levels go up. I'm optimistic, this time, I think this pandemic has really been a wakeup call. I also think we have better technology than we've ever had, from a therapeutics and diagnostic standpoint, so hopefully for the next pandemic, we'll be even better. I still would say it is remarkable that, 18 months from when this virus first emerged, we have billions of vaccine doses produced, multiple therapeutics, and Novartis is playing its part also, producing for some of our partners. We should have over 10 billion doses, we hope, by the end of this year, produced around the world.
Julianna Tatelbaum: It is absolutely remarkable, as you say. Vas, finally, when it comes to Novartis, what are the most innovative new treatments that we can look forward to in the coming years?
Vas Narasimhan: Yeah, we have a lot going on as always, Julianna, we often have a chance to talk about it. Maybe a few really recent things that we have happening, recently at ASCO we released data on our prostate cancer medicine for a therapeutic called radioligand therapy. This is an approach to really bring precision to nuclear medicine, and so basically, we can target a tumor, go with micro doses of radiation to destroy that tumor, and we saw very remarkable results. We expect, you know, a breakthrough therapy designation on this, and I think it's an exciting opportunity for us, in that space, to then expand that across a range of solid tumors, and Novartis is the global leader right now in radioligand therapy. And then, alongside that, we have an exciting launch that's recently happened in Europe, and that will hopefully soon happen in the US, of a medicine called Inclisiran. This is an RNA interference medicine that enables you to reduce cholesterol levels in patients who have a heart attack by 60%, with just two injections a year. Think of it as like a vaccine, hopefully, against heart attacks. If we can get that moving in a population health based approach to healthcare systems around the world, we could impact the leading cause of death and disability, even in the face of a pandemic. It's… it's pretty remarkable that, with that therapeutic, just twice a year, have such a dramatic effect. I think those are just two examples. We keep trying to push the edge of technology. We believe our… think of ourselves as a technology company, and we hope those technologies will bring better and better breakthroughs in the future.
Julianna Tatelbaum: Vas, thank you so much for your time this morning, and kicking off our event here in Europe. Vas Narasimhan, CEO of Novartis.
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About the Evolve Global Summit:
As technology and innovation are redefining expectations for corporations to achieve success and growth in an era of disruption, business leaders are embracing change and transforming their organizations for the future. Most recently, unprecedented and unforeseen challenges due to the global pandemic forced companies to rapidly adapt operations, policies and products to survive—and in some cases, thrive.
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