JPM: With new ethics plan, Novartis chief puts his money where his mouth is

Novartis CEO Vas Narasimhan 2019
Novartis CEO Vas Narasimhan has served in the role since February 2018. (Novartis)

SAN FRANCISCO⁠—Novartis' history of scandals—and apologies for those scandals—might make anyone skeptical of CEO Vas Narasimhan's pledge to make trust a top priority. But now, the company is taking the promise a step further. Into Narasimhan's own pocket, in fact.

In a report to be released this month, Novartis will roll out a set of objectives designed to improve its standing with society, focusing on ethics, access to medicines, global health and corporate citizenship, Narasimhan said at the J.P. Morgan Healthcare Conference on Monday.

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Building trust with society “is not something that we do on the side,” he said. “This is core to our strategy.” 

It'll be part of Narasimhan's compensation package, too, the CEO said Monday. The new objectives will appear on the scorecard Novartis' board uses to determine Narasimhan’s total pay. The rest of the drugmaker's executive committee will see those goals in their own compensation deals, the CEO said.

The commitment comes after multiple mistakes at Novartis in recent years. After bribery allegations and other controversies dented its reputation, Narasimhan said at last year's JPM meeting that he had compliance and ethics at the top of his to-do list.

Several months later, the company stepped into a fresh data manipulation scandal on new gene therapy Zolgensma. Over the summer, the FDA disclosed that Novartis had known in March about data manipulation at its new gene therapy unit AveXis. Rather than immediately notify the agency, Novartis dug into the details itself before alerting FDA officials. In the meantime, the FDA approved Zolgensma in May without knowing about the Novartis probe.

When the FDA announced in July it was itself investigating the data problems and considering penalties, Novartis said it followed its own protocols in handling the allegations. Later, the company changed its policies to alert authorities sooner. Meanwhile, the company dismissed AveXis scientists involved in the manipulation and folded that company’s quality team into its own. 

RELATED: FDA ready to crack down as Novartis reveals manipulated Zolgensma data   

Those events didn't do much to rehab Novartis' reputation. Now, Narasimhan has created a committee of executives to keep an eye on its compliance efforts and general good citizenship, which the new objectives are also designed to address.

One goal the CEO highlighted Monday is reducing the time lag between a new drug's launch in the U.S. and its launch in the world’s poorest countries. Novartis wants to get that delay down to three months, Narasimhan said.

The company also plans to roll out a blueprint for access to new technologies such as gene therapy that have great scientific promise but come with high costs. It's pledging $100 million toward malaria R&D and wants to achieve carbon neutrality in five years, among other goals outlined Monday.

Before the Zolgensma data scandal, the company in March 2018 appointed Shannon Klinger as its chief ethics, risk and compliance officer. With the appointment, Novartis placed more focus on the issue that’s lingered for several years. Klinger is now the company's general counsel, while Klaus Moosmayer serves in the ethics, risk and compliance role.

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