Welcome back. You're watching our conversations here from Davos 2025 and we've been speaking with a whole host of global CEOs across different sectors to get a flavor and a feel for what the year ahead looks like, but more importantly, what will be the mega trends that will shape consumption going forward. Joining us now is the global CEO of Novartis, Vas Narasimhan. Vas, always a pleasure. Great to have you back with us here on CNBC TV18.
Before I talk to you about Novartis, I have to talk to you about what's happening in the world today and you know, President Trump's decision to withdraw from the WHO, not entirely surprising, but a big setback as far as healthcare is concerned.
Yeah, I think it's consistent with the general pullback from multilateral agreements. You saw also the actions on OECD on the climate pact. I think it certainly will have an impact on the WHO given how large a funder the US government is. I think what will be critical is to find ways for the most critical health programs to continue, whether that's monitoring for future pandemics or also critical programs in infectious disease in developing countries. I think it can be managed. It was managed in 2020, but it certainly is a blow to the WHO.
You know, as we see this play out, do you believe that the role of the private sector to sort of provide that bridge, so to speak, in being able to address global health challenges will only increase now?
It might increase. I think anyway, the source of R&D was our sector. Novartis is one of the largest investors in medicines for tropical medicine and neglected diseases, $250 million commitment, large-scale efforts in Africa and India as well. But you know, I do think there's going to be a gap because I think our private sector can only do so much and I think we have to do it in partnership. I think what will need to happen is government will have to step in now as these multilateral institutions take steps back.
Yes, that certainly is going to be the case that we cannot have the private sector fill the gaps that governments like the US leave behind. But Vas, let's talk about the outlook for 2025. You know, what's it looking like at this point in time? What do you see as the big opportunities?
For Novartis, we're actually expecting a really great year. I mean, 2024 was really one of our record years, both in terms of financial performance and our pipeline. We expect 2025 to continue that trend. We've really guided to consistent growth through the end of the decade. We're launching 10 new medicines. So, there's a lot to be excited about for us right now. A lot of our focus is just getting the next wave of innovations forward, some of our new technologies. But I think it's a very exciting year for us.
An exciting year, but what about India? The last time we spoke, you had announced your decision to review Novartis India. You have almost a 71% stake there. Has there been any decision or are you closer to taking a decision on what happens there?
I think we're not closer. We continue the process. I think the process is ongoing. I mean, our commitment to India is clear. We have 10,000 people in Hyderabad, fully integrated, as you know, into our operations. And I think from a market standpoint, we continue to watch and wait to see how the Indian pharmaceutical market will evolve. It's still a relatively small market versus our other global markets. I think, hopefully, as the government continues to invest in healthcare, continues to invest, maybe, in new drugs and new innovation, that market will come. It's probably still 10 years out, realistically. I think it's still some ways to go.
Still 10 years out, you think?
I think so. I think when I look at the scale of some of these other markets, you know, if you think about Novartis' scale, Novartis is a $3 billion business in Japan, a $4.5 billion business in China, and a $500 million business in India. So, I think that gives you a sense of the scale of difference. And so, I think that will take time, but I think it will come. I mean, I recently spent 2 weeks in India, and I really get a sense of the energy, the booming middle class. I think it will come, but it's going to take some more time.
You know, specifically, marketing tie-ups in India, because when we last spoke, you said you don't necessarily want to put more feet on the ground, but you're looking at more marketing tie-ups at this point in time?
We, as you know, we've done a few. We did one with Dr. Reddy's. We have now the sale of the private limited organization. I think for now we feel like we have the right footprint to launch the medicines that we want to come to market with. We've really now focused the launches to medicines we think we can launch in the private sector successfully. So, I don't think there's a need for more tie-ups at the moment. I mean, what's interesting now is of course with some of the dynamics in the US and China, I think there is now more opportunity for specialist firms in India to take up some of that slack. Whether that's contract research organizations, contract manufacturing organizations, supporting our research labs. So, that's where we actually see an expansion. One of the important expansions we have now is in research. Novartis is now actually bringing fundamental research — I made that announcement last year. Now it's really moving forward. Bringing research into the country. And I think that will hopefully build a stronger ecosystem for drug discovery in the future.
You know, since we're talking about drug discovery and the conversation here is either about Trump or about AI. So, I want to understand from you what the implications will be of using AI as far as drug discovery is concerned. I mean, how hopeful do you feel and what are we talking about realistically in terms of timelines?
I mean, I'm cautiously hopeful. I think we have really wonderful partnerships with Google DeepMind, Isomorphic Labs recently won the Nobel Prize. We're big partners with Palantir and Microsoft. So, we really invest a lot in AI and R&D. But I think the reality is given clinical trial timelines, it will take 5 to 7 years before we really know. But I think I'm hopeful. If we could accelerate even a little bit the process of finding a new drug or increase the probability of success a little bit, it has such a massive impact when you're investing $10 billion in R&D. If we're 10% more efficient, that's a big impact. So, I'll take it as it comes. But we're going to see how it goes.
