a16z Podcast: The Science and Business of Innovative Medicines

In this episode, Vas Narasimhan, CEO of Novartis, discusses managing the balance between science and the business of pharmaceuticals. He emphasizes the importance of building R&D expertise over decades in therapeutic areas, with a focus on continuously filling the pipeline with new medicines. Narasimhan also outlines the need for pharmaceutical companies to exit areas where they cannot sustain long-term growth, illustrating this with Novartis' recent decisions to make significant exits. The conversation delves into how CEOs navigate the challenging decisions of what to invest in and what to discontinue, stressing the critical role data and technology now play in these processes.

Narasmihan shares insights into current trends in innovative medicines, including cell and gene therapies, RNA-based modalities, and the importance of moving away from MeToo drugs to more transformative therapies. The discussion reveals that despite advancements in technology and science, success rates for bringing drugs to market remain static at about 5%. He highlights Novartis' current focus on areas like CAR-T therapies and RNA interference as examples of the forefront of modern medicine that offer great potential for treating previously difficult conditions.

The conversation explores the current inadequacies in large-scale clinical trials and how technology could streamline processes to improve efficacy and reduce costs. Narasimhan discusses how Novartis is looking to utilize real-world evidence, advanced data science, and AI to potentially transform clinical trial designs. The ideal model would involve integrated health records and ongoing assessments of trial participants to glean insights on efficacy as trials progress, rather than relying solely on the traditional and often lengthy methods.

Narasmihan articulates a vision of the future where the application of engineering principles becomes integral to drug development, moving away from bespoke methods to more modular, iterative designs. He discusses how advances in areas like AI and machine learning can enhance the engineering approaches to drug manufacturing and development, ultimately striving for efficiency and higher success rates. This engineering mindset is crucial as Novartis aims to harness technology to solve complex medical problems.

In the concluding part of the conversation, Narasmihan reflects on leadership within the pharmaceutical industry. He stresses the need for leaders to cultivate curiosity and empower their teams to have open dialogues and allow for failure. This is vital for fostering a culture of innovation, particularly in the face of the fast-moving complexities within the health and therapeutic sectors. He emphasizes that effective leadership goes beyond technical skills and focuses on leading people, with a call for multidisciplinary exposure in order to navigate the challenges faced by today’s pharma landscape.