What's Best For A Pharma CEO, An MBA Or A Medical Degree?
Executive Summary
When it was announced in September that Novartis's chief medical officer Vas Narashimhan is going to replace Joseph Jimenez as the Swiss major's chief executive in February 2018, much was made of the fact that one of the world's biggest pharmaceutical companies will be led by a scientist.
On the face of things, it is not earth-shattering news that someone with a medical background should be at the helm of a science-centered multinational but the majority of pharma companies have tended to plump for CEOs more noted for their commercial experience. Indeed, a quick glance at the heads of some of the biggest companies show that a legal or business background helps if you are in the running for the top job.
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Ian Read, who has been Pfizer Inc.'s CEO for eight years, qualified as a chartered accountant, while Johnson & Johnson's chief executive Alex Gorsky began his career at the healthcare giant as a sales representative with Janssen Pharmaceutica Inc. Kenneth Frazier, who is coming up to seven years as Merck & Co. Inc.'s CEO, was a lawyer representing the firm before he went in-house as general counsel, while Roche's Severin Schwan studied economics and law before being taken on as a trainee in the Swiss major's corporate finance department.
GlaxoSmithKline PLC's new CEO Emma Walmsley has a master's degree in classics and modern languages from Oxford University. Prior to joining GSK in 2010 (becoming head of the consumer healthcare division in 2015) Walmsley worked with L’Oreal for 17 years, holding a variety of marketing and general management roles. And at the end of last year, chemist John Lechleiter stepped down as Eli Lilly & Co. chief executive and was succeeded by Dave Ricks, who has an extensive background in sales and marketing.
Where The Top Pharma CEOs Came From
|
Company |
CEO |
Background |
|
Novartis |
Vas Narashimhan |
science |
|
Pfizer |
Ian Read |
accountancy |
|
J&J |
Alex Gorsky |
sales |
|
Merck |
Kenneth Frazier |
law |
|
Roche |
Severin Schwan |
finance |
|
GSK |
Emma Walmsley |
languages |
|
Eli Lilly |
Dave Ricks |
sales |
|
AstraZeneca |
Pascal Soriot |
science |
The appointment of Narashimhan at Novartis prompted some analysts to ponder whether having a scientist at the top will help the company get even better at selecting compounds for future drug development. Others suggested that he will be able to act as an effective bridge between the research and commercial arms of the company.
So, given the mighty scientific leaps being made by the pharma sector, will we see a shift to more R&D people at the top of the top companies? Scrip asked AstraZeneca PLC CEO Pascal Soriot for his thoughts at the European Society for Medical Oncology meeting in Madrid in September 2017.
Soriot's educational background combines science and business. He was a doctor of veterinary medicine before he decided to do a Master of Business Administration (MBA) degree at HEC Paris. He held a number of roles at Aventis before joining Roche as head of marketing and then becoming CEO of Genentech, where he led the latter's merger with the Swiss group. He was chief operating officer of Roche’s pharmaceuticals division until 2012 when he was poached for the top job at AstraZeneca.
He said, "There is not one single way to do things, you can manage in different ways and it comes down to personality." In Soriot's case, however, "I feel it is important to stay close to the physicians – personally I have known many of them for years, whether in diabetes or oncology, and each time you listen to them, they give a view."
Talking to clinicians "can really help you think things through about pricing, the risks and opportunities. At the end of the day, as CEO you have to make decisions on where you allocate resources and the prices you'll set – it is useful to have a view that has not only been formed from spreadsheets."
Soriot added that while it is good to have that additional voice of physicians, a CEO must have the ability to listen to the whole range of experts in their company, legal and commercial too. As for the AstraZeneca chief, he will remain as one of the few CEOs seen wandering cavernous congress halls, attending sessions and reading posters – "personally, I love it, that's why I'm here," he told Scrip at ESMO.
As for Narasimhan, as well as earning a biological sciences degree from the University of Chicago, he got his medical degree from Harvard Medical School and obtained a master’s degree in public policy from Harvard’s John F Kennedy School of Government. Prior to joining Novartis in 2005, Narasimhan worked as a consultant with McKinsey and at the Swiss giant, he has held a number of commercial as well as development roles.
So does an MBA (as well as Soriot, Gorsky and Ricks have one) count for more than a medical degree when it comes to heading up a big pharma company? Probably not, but a mixture of science and business looks a very useful combination – it has certainly worked for Narasimhan.