➤ By 2025, Novartis aims to increase access to innovative therapies for patients in low- and middle-income countries by 200%.
➤ Hewlett Packard collaboration applying artificial intelligence to data analysis of the spread of dengue fever may be expanded to other diseases.
➤ Investors expect Novartis to demonstrate socially beneficial actions.
Lutz Hegemann, Novartis group head of corporate affairs and global health
Lutz Hegemann, Novartis AG's group head of corporate affairs and global health, spoke to S&P Global Market Intelligence about the Basel, Switzerland-based pharmaceutical company's environmental, social and governance targets ahead of its eighth annual investor day.
With racial disparities in health leading to an estimated $93 billion in excess medical care costs and $42 billion in lost productivity globally, this issue remains the cornerstone of the company's efforts. Novartis has reached 29 million patients to date this year via its access to medicines program, and in July the company also announced a 10-year commitment with historically Black colleges and universities to address the causes of U.S. healthcare disparities.
The following is an edited transcript of the conversation.
S&P Global Market Intelligence: Did Novartis take ESG seriously before it was on other companies' radar?
Lutz Hegemann: It's fair to say that very early on we took this topic very seriously. It's also linked to the nature of our business, because pharmaceutical business[es] inherently have a very strong social component. Society expects us to develop safe and effective medicines that we make available to as many patients as possible, and to run our business ethically. We are constantly trying to push the boundaries here to be a step ahead.
How does the collaboration with Hewlett Packard Enterprise Co. relate to medicines access?
There's two elements to our strategy: one is the access to our core portfolio [of drugs]. But then we also have the access principle, where we committed to look at global access across the entire value chain. We are focusing on a few global health priorities where we feel that we are well-positioned scientifically to make a big impact.
But there are new emerging health threats — dengue fever being one — which I think also speaks to the connectivity between climate changes and the impact of planetary health and human health. We have a drug development candidate for dengue fever and we need to understand how the disease is evolving. It is one of the diseases that is really on the rise and where we feel we need better data to drive healthcare interventions.
The vision is that this is the first disease where we collaborate, but that this will translate into other global health priorities as well.
You have been successful in driving access to medicines in lower-income countries, but how can this be improved in the U.S., where Black women with cancer are 40% more likely to die?
We need to go much, much deeper. And I think it's fair to say that COVID has shed a light on those health disparities that have existed for centuries, I would argue, and it's really complex.
What distinguishes us from other approaches is that we acknowledge that we don't have the answer but we need to work together with those communities to define what matters to them. We invested half a year in just listening, having a dialogue [about] 'What is it that limits your ability to access healthcare?' Because you can have big commitments to include more diverse patient populations in your clinical trials, which without doubt is one element, but is it ultimately going to move the needle and are you ultimately going to accomplish that goal if you don't go deeper?
We are now starting this very comprehensive collaboration with 27 Black colleges and universities that aims to empower African American students, looking into the underlying causes of this health disparity through research on data standards. For instance, most data standards were established in Caucasians and they may not apply to Black and brown communities physiologically.
It touches medical science, it touches education, it touches society at large. And this is where we want to devise a more holistic approach, rather than just focusing on one [key performance indicator] and trying to give it a quick fix. Because that's not going to work, it's not going to be sustainable.
When it comes to ESG, do your investors care most about the environmental, social or governance aspects of Novartis' actions?
I think it's the 'S' [of ESG]. I meet very often with investors and it's always very clear that yes, the 'E' and the 'G' are important, but it's almost more a license to operate. The differentiating factor truly comes through access and innovation, and the priorities that our investors expect from us are no different from what society at large expects from us.