I recently met with CSL CEO, Paul Perreault for a frank conversation on the need for pharma to connect with patients, drug pricing and lessons big pharma can learn from CSL.
Paul Perreault, CEO, CSL and Managing Director of biotherapies company CSL Behring, often receives messages from people celebrating the great landmarks in their lives. There is nothing so very extraordinary about that – except these are from patients whom he has helped during his time in the business.
“I wasn’t always an executive, so I started in the business, and I know patients and their families personally, across the country,” he begins our conversation. “At different levels of jobs that I’ve had in the organization, I’ve interacted with patients on a very direct and one-on-one level. And I was around when there were shortages of products for patients, and patients were getting sick, and some died. And I was trying to access products for these patients - even from competitors, because it was about taking care of the patients. And today, I get pictures and postcards of them, their graduations from high school, and weddings, and these sorts of things.”
All this means that, while Perreault obviously drives CSL's patient-centric strategy at the executive level, there is something deeper going on for him. “I have a personal stake in this,” he says simply. The company is a global leader in plasma protein biotherapeutics, which are used to treat serious and rare conditions such as hemophilia and von Willebrand disease, immune deficiencies and genetic emphysema. “I tell people that they should work every day like a patient’s life depends on it because it usually does,” he continues. “The medicines we make are non-discretionary; these are life-saving, life-extending products.”
And I was around when there were shortages of products for patients, and patients were getting sick, and some died. And I was trying to access products for these patients - even from competitors, because it was about taking care of the patients.
Bigger players in the pharma industry can learn much from a company like CSL, he believes, not least in terms of zeroing in on core competencies. “I think it’s about the focus,” Perreault begins. “In order to make a difference, you have to focus on things that you really understand well.”
Perreault has been quite vocal about the need for innovation – but warns against “grasping at straws to try to grow”. “If you’re struggling for growth, or you don’t have a solid growth strategy, people tend to do things like multiple acquisitions,” he suggests. “And when they buy things, they’re a lot of times buying things they don’t necessarily understand deeply.”
Paul suggests that CSL’s world-class expertise in coagulation and immunology has led to deep understanding of the science in these areas. “We tend to really focus on those areas to try to bring the next generation of these products in,” he says. “That’s what I mean about innovation because we do understand the science deeply, and I think that’s important: the science is what’s going to drive further innovation into this area.”
As part of this approach, he insists it is important not to get distracted by whatever hot topic has gripped pharma in any given week. The company has not been tempted to go into immuno-oncology, for instance, preferring to licence to Janssen an antibody it had developed. “They can bring this product forward much faster than we can,” he adds.
Getting out to see patients is another area where he believes pharma can improve. “I’ve been in other pharma companies before, and I see where people get into rooms, and they start talking about how they’re going to impact the market, and what the next product is going to be, and all the rest,” he explains. “But they never actually connect it back to the patient, and go out and talk to the communities, and the patients, and understand what their needs are. We can’t sit in a conference room and understand what the needs are if we haven’t actually gone out and talked to the customer.”
Hearing the patient
In the rare disease space, it is not uncommon for patients to know more about their condition than doctors themselves do. “They spend a lot of time actually researching it themselves, so when they go to the physician, they are armed with a lot of information because a lot of times they’ve been misdiagnosed or undiagnosed, and have searched for years to try to find the diagnosis,” he continues.
This means that pharma does have a role in educating patients – but can also act as a facilitator, adding value for the community. “Many hemophilia patients have never met another patient with hemophilia,” he says. “So we, as a company, try to connect them, and we do that through our website, and we have a ‘moms-to-moms’ program, where mothers can talk to other mothers with boys with hemophilia. We run events where families can meet each other and talk about their disease.”
CSL staff – including sales reps – are involved in these and other efforts, volunteering for events such as bike rides and walks. This is all part of the process of creating a patient-centric company, he believes.
Perreault tries to ensure that a personal narrative thread runs throughout the business. For example, CSL has a number of products based on plasma proteins, and local patients interact with donors at the company’s network of plasma collection centers. “Patients and their families will come in and speak to the donors about the importance of donating plasma, and the life-saving therapies that are being created - almost literally from the vein of the donor, then delivered back to the vein of the patient,” he explains. “So it’s a very complete circle in that way.”
CSL also hosts patient tours at its manufacturing sites, and Perreault recalls a global finance conference in Germany which was addressed by two patients. “It was enlightening for them to hear the patients, and it was really meaningful,” he says. “Without patients, we don’t have a business. And you go to different countries around the world and they say: ‘Well, the government is a big customer of ours’. And I say: ‘the government is not the customer actually - governments don’t buy anything unless there are patients in need’. It all comes back to the patient.”
Adding value, balancing price
Pharma’s contribution is largely measured in dollars, of course. Healthcare systems all over the world are under budgetary pressure, and companies must be clear about what they are offering.
“You need to bring products that are bringing additional value to patients over what’s currently available,” Perreault begins. “And with that, I think you have to price appropriately.”
The fact that medicines are only about 10-20% of the total healthcare cost does not stop pharma being constantly pressured on price.
“We’re an easy target, and I understand that, because we send a bill every month to the pharmacies, and to the hospitals, and it’s easy to find us - we don’t move around. But the healthcare system itself has so much waste, and a complexity, that it’s hard to pull other costs out of the systems.”
Pharma needs to adapt to the reimbursement problem – and other challenges, such as how to maximize efficiency while maintaining its patient focus. Using iPads with doctors, or making use of webinars and teleconferences, has helped CSL engage stakeholders in a variety of different ways, Perreault adds.
“The sales environment is changing, but it’s also an interesting point for us because we’re not in primary care,” he explains. “So we’re not trying to reach thousands of general practitioners or family practitioners. We’re very focused on these areas of either hematology or immunology where we don’t have massive sales forces to reach the audience we’re trying to get to. So it’s really an interesting way that we’ve adapted.”
Having staff on the ground is still vital, however. “This is a people business, and you do have to have that face-to-face,” he says. “And those relationships, the understanding of what the customer actually needs is really the imperative that we need to try to drive forward. It’s not just going out, and just canvassing the area with tons of sales people. It’s really a focused effort to bring quality information, quality science to the physicians in that one-on-one environment.”
Perreault tells me Apple and Google are companies he thinks have seen the importance of successfully reinventing themselves for a changing world, and believes that pharma could learn from them, re-learning skills. “It’s about really re-segmenting the business, and re-segmenting the markets that you work in,” he suggests.
There is much to learn from within pharma too, of course. AstraZeneca’s Pascal Soriot and Fred Hassan, former CEO of Schering-Plough, are fellow CEOs whom he admires, and are among the people he has taken “bits and pieces from” over the years. Intriguingly, another person he talks to regularly is Tom Gorman, CEO of pallet shipping company Brambles. This may seem like an odd fit but there is a lot of common ground. “We both happen to be Americans that are running Australian-based companies,” Perreault says. “Tom and I have a lot in common in that sense, because you have different attitudes around the world, and as a global organization, you really have to make sure that you’re paying attention on a global basis.”
But in the end, however you structure your business, it all comes back to the real customers, he insists. “We have to deliver on our promise to patients, and work every day like their lives depend on it, because they are depending on us to make sure that these products are accessible, that they’re constantly looking at innovating the product – and, hopefully, cures one day,” he tells me.
“If you want to work at CSL, pay attention to the patient,” he concludes our chat. “If you don’t want to work at CSL, just tell me that the patient doesn’t matter, and I’ll help you find a job somewhere else.”