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Last Updated: Wednesday, 19 January 2005, 23:55 GMT
Profile: Novartis chief Daniel Vasella
By Jorn Madslien
BBC News business reporter in Basel, Switzerland

Daniel Vasella is in reflective mood.

Daniel Vasella in his office at the Novartis headquarter in Basel
When you experience disease and death early on, you realise that time is not endless

As chairman and chief executive of Novartis, the world's fifth largest drug company, the 51-year-old medical doctor is acutely aware of both his powers and his responsibilities.

Dr Vasella comes across as gentle and philosophical, even humble.

Yet he also reveals a pragmatic approach to life and business.

Travelling salesman

Dr Vasella was a late entrant to the world of private enterprise.

2004 results
Sales rose 9% to $28.25bn
Net profits rose 15% to $5.77bn

While still in his early thirties, he was a physician, having risen to become head of a hospital.

But his world crumbled: the young doctor suffered a breakdown that would force him to reconsider everything.

Psychotherapy proved to be the answer. He now describes it as a life-saving experience that freed him from his past.

"It is not a crisis, it is a recognition of who you are, what you like, how you want to live your life," he says.

So he made a decision, which at the time must have seemed more foolhardy than gutsy. In 1988, he quit his job at the hospital and moved to New Jersey to become a travelling salesman for the Swiss drugs firm Sandoz, pitching medicines to general practitioners.

Dr Vasella soon rose within the ranks at Sandoz, working in brand and product management before returning to Switzerland in 1992 to take charge of world marketing. Two years later he was crowned as Sandoz's chief executive.

Novartis employees in the laboratory
You obviously have to enjoy business, have a successful company and make money, but it cannot be the end goal
Dr Daniel Vasella
Novartis

By then, Dr Vasella's entry into the pharmaceutical sector had come to dominate his life.

Powerhouse

In 1996, the young looking doctor announced big news at a hastily organised press conference at London's City Airport: a new global pharmaceutical giant had just been created following the merger of Ciba-Geigy and Sandoz.

And he would be in charge.

Critics pointed out that Dr Vasella was relatively inexperienced, and there were also accusations of nepotism; his wife of 27 years, Anne-Laurence, is the niece of a former Sandoz chairman.

But nine years later, Dr Vasella has won over most of his critics by building Novartis into a pharmaceutical powerhouse to be reckoned with.

Last year, he was named "the most influential European business leader of the last 25 years" in a poll of Financial Times readers.

Then, in October, he was appointed president of the International Federation of Pharmaceutical Manufacturers and Associations.

Accountability

Dr Vasella's success has brought him considerable personal wealth. In 2003, his basic salary of $ 2.2m was part of a $14.4m pay package which made him one of the best paid bosses in Europe.

Daniel Vasella in his office at the Novartis headquarter in Basel
"Profits provide freedom"

This enables him to live an enviable existence on the edge of Zugersee lake, a 90-minute commute from Basel.

But he is not one for the high life, preferring skiing or scuba diving with his three teenage children, or riding his motorcycle.

Money, he insists, is not the main driving factor in his life. "You obviously have to enjoy business, having a successful company and making money, but it cannot be the end goal," he says.

Instead, he is driven by a sense of purpose that has largely evolved from a cruel string of personal tragedies.

When he was eight, he had tuberculosis and meningitis and was kept out of school for a year. When he was 10, one of his older sisters died from cancer. His father died when he was 13, then years later his other sister died in a car accident.

"When you experience disease and death early on, you realise that time is not endless," Dr Vasella says.

Wealthcare

Dr Vasella has a firm focus on the needs of patients - or customers - though he also firmly believes that investors' profit requirements have to be met.

"I have modified my position to say that the customer comes first, but I'm also working for shareholders," he says.

To this end, Dr Vasella has pushed through some radical changes that have rocked the Swiss establishment.

At Novartis, old style, incestuous boardroom arrangements - which in the past tied Swiss business and banking tightly together - have been discarded in favour of strict and transparent corporate governance rules that invite scrutiny from the outside. Internally he encourages open debate.

"Showing weakness among good people builds trust," Dr Vasella declares. "Transparency is an outstanding mechanism to keep you on the right track".

For Novartis, the right track is the fast track. Having emerged pretty much unscathed from last year's lost takeover battle for the Franco-German drugs firm Aventis, Novartis is currently the fastest growing of the industry's giant firms, and very profitable at that.

Healthcare

Dr Vasella truly believes his aggressive drive for commercial success is what enables him to release his compassionate energy.

"Money is a tool. It's a real tool. If I sign a deal for $2bn or $3bn, it's abstract."

Daniel Vasella in his office at the Novartis headquarter in Basel
Showing weakness among good people builds trust

If money can move mountains, then Novartis is well placed to take on the job. Its cash reserves run into billions of dollars.

"So the question comes up about what do you do with it," Dr Vasella says. "It raises the question of accountability, and to whom?"

Novartis has never been coy about its relentless search for new blockbuster drugs, and to this end the group spends vastly more on research and development (R&D) than its drug-industry rivals.

Consequently, its pipeline is full of promise for patients suffering from hypertension, cancer or diabetes.

"I don't care about technological progress as such. Only if mankind can take advantage is it important," he insists, feverishly defending the industry's oft criticised tendency to channel R&D budgets into searches for new drugs that will enjoy commercial success, rather than for drugs treating patients with rare ailments.

"Profits provide freedom," he points out. When deciding on where to channel its R&D budgets, Dr Vasella explains, Novartis goes "medical need, but also economic need".

"I find this legitimate. It makes sense, ethically and financially."

Drugs for the poor

This free market formula may work in a wealthy society, but it falls apart when it comes to the search for malaria drugs, anti-retroviral drugs or other medicines for developing world diseases, Dr Vasella acknowledges.

But that, he insists, is not merely the fault of pharmaceutical companies. Rich Western nations and corrupt governments in poor countries should also be blamed for any failure to help.

"I think it's a common responsibility," he says, insisting both Novartis and many of its competitors are pulling their weight.

For instance; Novartis and the Novartis Foundation for Sustainable Development provide free treatment for all leprosy patients in the world. Malaria drugs are provided at cost via the World Health Organisation. In the US the company provides social investment to improve healthcare for some of the 36 million people without health insurance.

"Is it perfect? It is not perfect, but we also have to learn to move ahead with things that are not perfect. I think it is better to do something than nothing," Dr Vasella says.

"I think shareholders can protest if they don't like it, but you know, they don't."


SEE ALSO:
Novartis forecasts record sales
20 Jan 05 |  Business


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