New Delhi: The pharmaceutical industry has been put on the defensive about the rising prices of prescription drugs after criticism by US President Donald Trump. In an interview, Vasant Narasimhan, chief executive officer, Novartis International AG, talks about pricing issues in the US, how branded drugs have received a new impetus in India, and the Swiss pharma company’s strategy to tie up with start-ups to leverage digital innovation. Edited excerpts:
What’s your reaction to Trump’s continued campaign to lower drug prices?
We are supportive of this. I think it’s all very sensible but the key is going into the details. We are trying to be constructive in this whole discussion. In terms of really figuring out what it means, it’s hard to judge until we see specific policy proposals.
What’s the solution that addresses sustainability?
We would not increase prices for the remainder of this year and that’s really just to wait and see how the environment unfolds. I think we shouldn’t conflate drug pricing with patient affordability. The issue here is how do we make medicines more affordable at the pharmacy counter and how can we address all elements of the system between the rebates that are given in the system, the way insurance is structured to make this a more sustainable approach for patients.
We are focusing quite a bit on cell and gene therapy—a single infusion, single opportunity to give medicine and that has to be taken as a different topic altogether from the rest of chronically given medicines that’s going to be an important topic for us to tackle and educate the public on.
Novartis has exited vaccines, animal health business and you also unloaded your consumer health joint venture with GSK. What is the focus?
Our goal is to be the leading or one of the leading medicine companies powered by data science and digital technologies.
When I think about diversification, I want us to be diversified in the different disease areas we cover in our medicines business, diversified in our platforms of cell therapies, gene therapies, traditional drugs, biologics and then diversify by applying data sciences and digital technologies but also try to use our capital to be diversified across sectors.
You partnered with non-pharma firms such as Microsoft and Google to get into digital health. What has been the progress?
We continue to have partnerships with the big players like Google, Microsoft, Apple. We have a joint fund with Qualcomm so we continue to progress there. We have undertaken a number of partnerships with start-ups that are working in the digital health space.
One of the companies is Pear Therapeutics which has a digital app that acts as a therapy called cognitive behavioural therapy. The US FDA (Food and Drug Administration) has approved it and we will launching this app as a digital therapeutic in the near future.
We launched a partnership with a company called Science 37. We have a few other partnerships as well in the whole area of what we call decentralized clinical trials—how we use technology to bring the clinical trial to the patient at home, so that patients don’t have to go to the hospital over and over again for clinical trial. The third big one is the partnership with a company called Shyft Analytics and we have a couple of other partnerships in the same vein. That is the effort to use digital technologies to enable our sales forces around the world.
So our sales force has the latest artificial intelligence-powered thinking app as to how to spend the day. The last element of this is we launched clinical trials commands centre.
So, this was a system built within the company, which is a machine learning powered system that looks at our all 550 clinical trials around the world and we have a room in Switzerland with big screens that can monitor all of these trials in real time and we predict how these clinical trials are going to perform and then we act on it.
These are the kinds of things we are rolling out. We are just getting started. I am quite optimistic about how we can really scale our digital efforts. The interesting thing is, a lot of it is happening in Hyderabad. So almost of the things are in part or fully spearheaded here in Hyderabad through our teams here in India that shows investment in India paying off to enable our digital revolution.
Is the global generics market under pressure?
Yes. That’s undeniable. The global generics market is certainly facing challenges, particularly, driven by the US.
What is your view on branded versus generic drugs for a country like India?
I think we need both. Generic drugs provide the backbone and that’s true in most countries 80-90% of the volume in many countries tends to be generics, but the key is they also enable new innovation to come in. On our heart failure drug—Entresto—we have had tremendous success. The brand name is Vymada and that’s a nice example; that’s the first new advanced drug in heart failure in 15 years and we see great uptake here with Indian physicians treating heart failure patients to get them best standard of care, what we expect in any part of the world. These drugs have been recommended as the class I recommendation in US and Europe as in heart failure patient should be on this medicine and now that India is taking a similar approach that’s what you should expect for a country like India. It’s our responsibility to come up with access models to enable Indian patients to afford these medicines. Branded medicine is a growing segment. That’s a big shift for us. If I take a 10-year review in India we used to not focus on launching a novel medicine here as aggressively as we are doing now. Now we have built a sales force, we have emerging market brands that can be priced in a way that self-pay market in India can afford the medicines. We believe we can bring new innovations, physicians will use it, patients understand that it’s worth paying for these new innovations. That gives us great excitement about our commercial potential in India.
If the government really wants to address premature mortality from the range of diseases you will have to support the branded medicine.
How do you plan to differentiate your value proposition vis-à-vis other generic companies?
In the generics side our focus is on high quality production and second will be value added medicines in biosimilars. We see over time to try to shift our focus to this harder to make generic medicines where we believe we are uniquely suited. We have larger biosimilars business in portfolios. We believe in this value added medicines; these are medicines that are uniquely formulated for specific patient population which can be a focus in the future.
What do you think about the regulatory environment in India?
I think the regulatory environment has improved for sure. The biggest thing for us is to get more clarity. One continues to be IP. How does the Indian government think about data protection? How can we have our data protection and when our molecules will lose their patent? What is innovation? There are different definitions moving around and what defines patentable innovation and how the Indian government may or may not use compulsory licensing which is important for us as we bring new innovations here. We have done much better on clinical trials landscape here. We are the largest MNC in terms of the number of clinical trials (50-60) conducted in India.