Inside Vasant 'Vas' Narasimhan's transformation of Novartis, and more

A common criticism of Big Pharma is they’re not innovative enough—unable to discover enough of new medicines for some of humanity’s biggest killer diseases. The large global drug makers contend that they pump billions of dollars into new medicine development—and use those numbers to justify the prices of prescription drugs. Ergo, lowering prices will eat into revenues, which will compromise drug innovation.

That argument didn’t wash well with sections of investors; as well as consumers, particularly those in the United States, who feel the high prices they pay are fattening Big Pharma bottom lines. The innovation wasn’t enough, particularly when studies revealed that much of the development of discovery of drugs that hit the market didn’t originate in Big Pharma labs but in universities and academic centres.  

Perhaps that was the cue to sharpen focus on pure-play innovation, and build robust prescription pharma pipelines and portfolios. Allied businesses with different cost structures and operating models like consumer wellness, generics and animal health care had to make way for focussed investments on research & development, acquisitions of smaller and nimbler biotech and biopharma players, and collaborations with like-minded drug makers.

On the Forbes India cover this fortnight is a man who embarked on this journey soon after taking charge of the Switzerland-headquartered Novartis in 2018. Over the past seven years, Vasant ‘Vas’ Narasimhan has led the transformation of Novartis into a focussed medicines company rebuilt on the bedrock of R&D and innovation. The 47-year-old CEO, who was in Hyderabad last fortnight—Novartis’s largest hub outside its headquarters in Switzerland—met up with Manu Balachandran and explained how, and why, the drug giant with diversified interests pivoted into a pure-play innovative medicines company.

“Sector-wide, there’s been a recognition that it’s difficult to allocate capital efficiently across different segments of health care and fully invest in the R&D opportunity within innovative medicines,” Narasimhan tells Balachandran. For more on Novartis’s gameplan to innovate for the world with India playing a critical role, go to ‘Innovating For the World, From India’.