Dan Vasella (57th Program for Management Development, 1989) has experienced first-hand the anguish of seriously ill patients and their families—first when he lost an older sister to lymphoma and later as a practicing physician in his native Switzerland. Both his years in medicine and the business career that followed have focused on helping people. So when researchers at Novartis came up with a drug that promised a breakthrough in treating a rare form of leukemia, he told them to move ahead with it as quickly as possible, even though some colleagues questioned his decision to pour costly resources into a drug meant for a relatively small number of patients. "If your goal is to reduce suffering and cure diseases, you are much more likely to do things that are not primarily based on a narrow definition of 'good business,'" says Vasella. "If you can improve the way medicine is practiced, I believe you will also make money."
With sales up 21 percent to $5.7 billion in the first quarter of 2003, Novartis—the Basel-based multinational created in 1996 by the merger of Ciba-Geigy and Sandoz and now the sixth largest pharmaceutical company in the world—is doing just that. And Gleevec—the first "designer drug" for patients with chronic myeloid leukemia (CML) that targets cancer-producing molecules and "fixes" the malfunction while leaving healthy cells intact—has grown into the company's second biggest-selling product.
But before Vasella could accomplish any of this, he had to reconcile the diverse cultures of Sandoz and Ciba-Geigy. His first task was to define the new company's mission, values, and core strategy and communicate them across the ranks. While identifying and retaining best practices from each organization, he also introduced new ones, including a worldwide evaluation and compensation system. Today, all Novartis employees have at least 10 percent of their pay based on performance. Although those that didn't like the changes often left, the rest became supporters and carriers of the new culture.
Many of the skills the soft-spoken Vasella called upon as a physician are equally useful in running a giant corporation. "After diagnosing a situation, you have to act diligently and often quickly—sometimes with only 80 percent of the facts," he points out. "And in both a hospital and a business, you have to rely on cross-functional teams." It is that cross-functional approach that lies at the heart of Vasella's management philosophy.
At Novartis, clinical researchers from various disciplines work in formal teams with members of the marketing group, hammering out goals and determining resources, work assignments, measures of success, and even rewards and recognition for a job well done. "It is the only method that works if you want to move in parallel paths and not just in a sequential way," contends Vasella, who credits this well-tuned infrastructure with the company's ability to launch Gleevec just thirty-two months after it entered clinical trials. The same rapid development has also been true for many other Novartis drugs. The company has launched ten new ones since 2000—three times more than its closest rival.
To continue that momentum, Vasella recently oversaw the opening of a new research center in Cambridge, Massachusetts, that will focus on genetics and molecular biology. The Kendall Square location was specifically chosen, Vasella explains, to draw on the rich pool of world-class scientists working in the area's universities and hospitals.
While leading-edge research and development are vital to Vasella's strategy and vision, compassion through community outreach is also an essential element of the company's mission. To offset the high cost of Gleevec, for example, Vasella put in place an assistance program for uninsured, needy CML patients, guaranteeing that no one would be denied this therapy for economic reasons. On a broader front, Novartis has joined with other pharmaceutical companies to institute a comprehensive discount plan in this country and abroad that helps elderly patients with incomes below the poverty level. As a result, about 1 million participants in the United States alone receive a 25- to 40-percent discount on their prescriptions for a wide variety of illnesses. Internationally, the company provides free leprosy medication, has a program to sell its new malaria therapy at cost in partnership with the World Health Organization, and contributes tuberculosis treatments to developing countries.
"That said," observes Vasella, "our entire industry has a problem, since we continue to be seen as a cost factor rather than a value factor. In fact, most medicines reduce overall treatment costs. Mortality rates for cardiovascular disease, hypertension, asthma, and various infections have been reduced between 40 and 70 percent over the last forty years thanks in large part to more effective and safer drugs. We need to do a better job of communicating all this to governments and the public."
Vasella decided to leave the practice of medicine because he wanted to explore areas that would enable him to have a more far-reaching impact on the world. "Leading a global pharmaceutical company like Novartis has been the perfect opportunity for doing that," he says. By exchanging his white coat for a business suit, Dan Vasella has succeeded in bringing together the best of both worlds.
Earlier education
University of Fribourg and University of Bern, 1979
M.D.
Lifelong impact of HBS
"HBS exposed me for the first time to a truly interactive and lively teaching style that fosters debate based on facts and rational thinking. It enhanced my confidence, so that even as a physician, I would be able to compete in business and make lifelong learning a passionate experience."
- Governor, The Peres Center for Peace
- Member, Advisory Group, The World Bank
- Founder, Children in Need Foundation
Advice to current students
"While facts and knowledge are important, interpersonal skills, respect for others, and the ability to establish mutual trust are equally significant—and sometimes more so—as you move ahead in your career. To succeed in any endeavor, make sure that people share the same aspirations, purpose, and values, so that they work together as an aligned team."