Christi Shaw: 'Go Long on Value'
I recently met with Christi Shaw, then U.S. Country Head and President of Novartis Pharmaceuticals Corporation, for a free-ranging chat about trust, patient input, delivering value and the role of diversity in creating a new pharma industry. She also told me about her sister who is suffering stage 3 multiple myeloma. Christi made the difficult decision to resign from Novartis at the end of the month to support her sister.
Ulrich: A lot has changed in our industry over the past five years. What do you think has been the most impactful trend?
Christi: As I think about the last five years, relative to the nearly thirty I’ve been in this industry, one big trend stands out: the role the Payer and Pharmacy Benefit Manager have in selecting treatments. That, of course, includes the government since the Affordable Care Act was passed. I spend more time on the Hill than ever before, to make sure the value of our medicines are understood and that innovation can get to the patients that need it most.
Ulrich: Many leaders I speak to say their companies aren’t just drug manufacturers anymore. Some now openly say that they prioritize population health outcomes over branded products and that their role is now to be a trusted partner in healthcare. What does this transformation mean to you?
Christi: If we start with the patient in mind, that is when trust starts to build. Looking across the industry, whether pharma, provider, payer, or patient advocate, we all win when we work together towards this. As a trusted partner, we need to come to the table with solutions that maximize positive outcomes and reduce cost, and I’m happy to say that we have a few examples of this including several outcomes-based contracts within oncology, heart failure and multiple sclerosis.
Take heart failure. We’ve been working with the government over the last year to develop outcomes-based contracts that track the impact of therapy utilization on overall healthcare costs. Heart failure is the number one driver of cost for patients above 65 in America; it costs $30bn every year. If we can reduce this while helping patients live longer and healthier lives, we all succeed. But it also means that if we don’t create outcomes, we need to give the money back.
Ulrich: Let’s talk about how pharma companies interact with their customers. In 2030, will pharma still reach out to physicians through sales reps, and consumers through TV ads?
Christi: When it comes to tech, already today 42% of patients use social media to look up drugs, and over 40% of these patients say that this information informs their health decisions. So when it comes to 2030, I don’t know that people will actually use TVs in their houses.
In terms of the sales force, we must become more efficient and effective. To me, that means hiring people on the street with more scientific knowledge, who are equipped with real-time data to answer physician’s questions. In the longer-term, we won’t have reps or medical field operations, but we will have one human contact for doctors that is the resource for real-time data. Effectively, while digital is obviously increasing, I do not see that human interaction is going to go away.
Ulrich: You’ve talked before about patient centricity and the need to become a trusted organization. What does it mean to translate this global vision in such a huge organization into operational reality?
Christi: A great question. Two years ago, I would have said, “I’m not sure.” But we’ve actually managed to achieve a lot. For starters, we’ve looked at our success, not in terms of dollars, but in terms of the numbers of patients that can be helped.
We’ve also taken steps to understand the patient journey from an emotional standpoint. Our top 120 leaders recently went through a virtual patient day with weighted vests, ankles and breathing through a straw. We wanted them to know what it is to take the stairs or to go grocery shopping as a patient with heart failure.
So they could experience how much pressure we put on patients to self-educate, we also gave them patient education materials and tested them. When we saw that 75% of questions were answered incorrectly, you really realize how much we are expecting from our patients.
The reaction is so palpable; we’ve had participants cry as they see the realism of what patients have to go through.
Ulrich: Could you confidently say that these activities have changed best practice?
Christi: Yes, and I have an example. Something we have changed at Novartis is to include the patient from the beginning of the process to the end. When we start developing a protocol for a clinical trial, we now put patients on the trial steering committee from the very start, taking their input along the way.
It is difficult though. When you see how many amendments you have to make in a trial, and when you know that each amendment will take time and add cost, this naturally leads to a reluctance to involve patients, as people think they will slow down and complicate the process of getting the product to market.
But it is my belief that by including the patient sooner, we will create products that are better designed towards patient needs, and better prepared with patient data that meets the expectation of payers.
Ulrich: We’ve talked about pharma’s reputation, but when it comes to healthcare costs there are obviously lingering concerns about affordability and access. Drug pricing has become a big issue in the presidential campaign. How do you solve the puzzle when it comes to value and price?
Christi: We are in a new dawn of what some are calling the hyper-innovation age. We saw 44 drugs approved in 2014 by the FDA, which was an 18 year high. At Novartis, last year alone, we had 11 FDA approvals. But although you see the innovation, patients aren’t able to access the same level of innovation that they have in the past.
Of course, we should be utilizing generics where possible. We need a patent life for innovative medicines, but when this is over, we need to ensure that generics are available at high quality and affordable cost.
The danger is, when you look at drug pricing in isolation, it has the risk of preventing future innovation from coming to the market. My belief is that patients should have access to innovative medicines as soon as they are available.
In 2014, about $90Bn was saved by drugs going off patent and only $40bn was added to the healthcare system in branded products. That $40bn went somewhere, but now in the age of innovation when we need it, it doesn’t exist. Short-term quarterly or annual measurements of expenditure do not capture this, so we need to shift to a longer-view perspective. We shouldn’t limit innovation when it happens.
Ulrich: One common view is that although pharma does have to cover a lot of sunk investments to get a product to the market, the costs of failure shouldn’t be bundled into the prices of successful launches. We shouldn’t argue to place the burden for failed investments onto the consumer. How would you respond to this?
Christi: I do not believe the consumer should be burdened. If they pay for insurance, they should not be prevented from getting access to innovative medicine. For example, my sister is suffering stage 3 multiple myeloma; there is no stage 4. In order to get her next prescription, she has to wait until she has finished the last one. That has caused her to miss several days, one time six days, until she got the medicine. There is too much bureaucracy around it.
My sister is simply trying to stay alive. We have to better manage innovative products and also recognize that the value of medicine happens over a period of time. Once they go generic, they will remain generic for centuries.
Ulrich: It is 2016, and pharma is still a very male-dominated sector. Why does it take so long to achieve gender parity?
Christi: It doesn’t have to take so long. I have been in this position for two years and right now on my leadership team, 60% are female, and many of them are running billion dollar businesses.
If you look at the decision makers in healthcare, 80% of family healthcare decisions are made by a woman. Our business should reflect that in order to serve these consumers the way we need to; it is a business imperative.
People also have the data on how much better business is done when women sit on the board with men. This conversation also extends to diversity, and when I look at our leadership team, I see that we have over 30% minority talent.
It is so important to have different experiences from a personal and business standpoint. In the years I’ve been working, especially in the last two years at Novartis, I see it being a key competitive performance metric, and it does lead to results.
So what is the challenge? I say it is holding people accountable. There are fantastic women out there; choose them for the top jobs because they are there for them.
Ulrich: I’d like to end on a personal note. What career would you have pursued had you not become a change maker in healthcare at Novartis?
Christi: You know, I truly feel blessed, I’m a farm girl from Iowa and the first person to go to college in my family. In high school, I was an exchange student to Germany and I remember that I left with my father telling me, “what do you want to be when you grow up?”- because you’re going to college, and you’re not staying there forever.
I really thought about what I loved. I saw my father as a businessman, I knew that I’d loved business, and I was pretty good at it, having been in business since I was 13.
But I also wanted to do something for the world. My mother was a big humanitarian, she lived her life as a homemaker but also a philanthropist.
So I came back saying I wanted to be in pharmaceuticals; I wanted to help patients lead a healthier and better quality life. I think it is a great feeling of accomplishment at the end of every year, when I think about how many more patients we have helped than the year before. So I truly cannot think of another job that I would have wanted to achieve. This is really what I wanted to do.
Ulrich: If you had one piece of advice for young graduates who are considering the pharma industry, what would it be?
Christi: The younger generation isn’t making a single decision when they leave college, they have the openness to make several changes throughout their careers.
I think what is open to them in the pharma industry is that you can make changes in what you are doing in your day-to-day and still stay in the same industry. You can be a medical doctor, in clinical trials, in quant, real world outcomes, communications, public relations, finance, legal, general management or so many other roles. You can lead large groups of people or be an individual contributor.
Whatever you’re looking at doing, you can actually come to pharma and have a lifelong career, but change and still be interested day-to-day in what you do.
Ulrich: Thank you Christi.