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Leading Innovation

Daniel Vasella: September 13, 2006; Running Time: 1:03:24

About the Lecture

About the Lecture

Since innovation is “not necessarily always predictable,” Daniel Vasella declines to discuss it in a systematic way, and instead, focuses on a case study of one of his company’s flagship pharmaceuticals, Gleevec. The discovery, development and marketing of this drug, which fights the rare chronic myeloid leukemia (CML), may point to some of the things Novartis does right, suggests Vasella.

Many significant drugs result from years of basic research that takes place outside of industry. Pathbreaking work that occurred decades ago uncovered chromosome damage in patients with CML, and revealed an abnormal protein secreted due to this mutation. In the early 1990s, Novartis began the creative work of trying to block the signal of this cancer-causing protein.

After testing numerous compounds, Gleevec was synthesized in 1992, and “then the problems started,” says Vasella. When the drug was delivered intravenously, there were toxic effects, and they couldn’t reproduce results from cell cultures. With 100 researchers laboring on the problem, recounts Vasella, “marketing said, ‘stop this damn thing.’”

Despite the setbacks, “We persisted,” says Vasella. Indeed, the first clinical human trials, on 31 patients, were so spectacular -- 100% remission rates -- that Vasella didn’t believe the data. The company moved into frenetic pitch to complete the additional clinical trials necessary for FDA approval, and then on to production. Employees volunteered to work in 24-hour shifts, seven days a week. Vasella faced another issue: “We had to come up with a way we’d make money,” since CML affected a relative handful of patients globally. And the fewer the patients, the higher the price of the drug, potentially keeping it out of the hands of those who most needed it. The company decided to subsidize the cost of Gleevec for patients of little means. In spite of this, Gleevec “has surpassed all expectations.” Sales this year alone will exceed $2.4 billion.

What elements might have led to this triumph and Novartis’ more recent successes? Vasella cites “intrinsic motivation” in each Novartis staff member, high standards, savvy risk-taking and persistence in both research and marketing, and a company culture that brings out the best in everyone.

Lecture Details

Location: E51-115

About the Speaker

Daniel Vasella

Chairman and CEO, Novartis

Daniel Vasella, M.D., was appointed Chairman in April 1999, having served as CEO and Head of the Group Executive Committee since the merger that created Novartis in 1996. Previously, Dr. Vasella was CEO of Sandoz Pharma Ltd. and a member of the Sandoz Group Executive Committee.

As CEO, Vasella created the Novartis Institute for BioMedical Research and moved the company’s research headquarters to Cambridge, Massachusetts, to be closer to top scientific talent as well as patient and hospital networks. He also established The Genomics Institute of the Novartis Research Foundation, which is focused on developing therapeutics from the data generated from the mapping of the human genome.

Vasella has implemented pioneering initiatives to ensure access to medicines, which include the founding of the Novartis Institute for Tropical Diseases for research on neglected diseases of the developing world, and the International Patient Assistance Program for the breakthrough cancer drug Gleevec®/Glivec™, an agreement to supply the novel malaria treatment Coartem® at cost to the World Health Organization and a pledge to donate the drug therapy needed to eradicate leprosy worldwide.

In 2003, Vasella was awarded The CancerCare Human Services Award and also the Harvard Business School’s Alumni Achievement Award. He holds the rank of Chevalier in the Ordre National de la Légion d’Honneur (France). Vasella is a member of the Board of Directors of PepsiCo, Inc., United States. In addition, he is a member of the Board of Dean’s Advisors at the Harvard Business School. He is also President of the International Federation of Pharmaceutical Manufacturers Associations.

Daniel Vasella

Vasella's Novartis profile

About the Host

About the Host

MIT Sloan School of Management

The MIT Sloan School of Management, based in Cambridge, Massachusetts, is one of the world’s leading business schools — conducting cutting-edge research and providing management education to top students from more than 60 countries. The School is part of MIT’s rich intellectual tradition of education and research.

MIT Sloan began in 1914 as engineering administration curriculum in the MIT Department of Economics and Statistics. The scope and depth of this educational focus have grown steadily in response to advances in the theory and practice of management to today’s broad-based management school.

A program offering a master’s degree in management was established in 1925. The world’s first university-based executive education program — the MIT Sloan Fellows — was created in 1931 under the sponsorship of Alfred P. Sloan, Jr., an 1895 MIT graduate who was then chairman of General Motors. A MIT Sloan Foundation grant established the MIT School of Industrial Management in 1952 with a charge of educating the “ideal manager.”