Alex Gorsky

Denise Pellegrini on this weekend edition of Bloomberg Best. By late this year, early next year, we should be in a position to begin reviews with regulatory authorities. Johnson and Johnson on the race for a COVID nineteen vaccine. It's going to be very important as we think about, you know, returning to a new kind of normal. CEO Alex Skorski says,

resistance to a vaccine will paid. I had a bicycling accident where I had to get some stitches in my hand, and of course when I went to the local hospital, I made sure that they were our teachers. And the importance of product loyalty when you're CEO, all this and more coming up in the next hour of Bloomberg Best And of course, the race for a cure or a vaccine for COVID nineteen is one of the biggest stories

we've been all over here at Bloomberg. Yeah, exactly, the NAT We've had a chance to hear from the chairman and CEO of Johnson and Johnson all about it, And David Rubinstein spoke to Alex Gorsky on the David Rubinstein Show Peer to peer conversations about it, And David begins here by asking Gorsky about efforts to beat the pandemic. Now, some people say the most commonly spoken words in the English language today are can you hear me? Because of

the zoom phenomenon. But I assume in your case, the most commonly asked question of you is when is the vaccine coming? So you must get asked this about every hour on the hour. So why don't I just do

this as well? When is your vaccine coming? Well, like, it's usually about every fifteen minutes actually that I get asked that, and uh, And let me start by saying I could not be more proud of the incredible work that our scientists and our engineers have been doing over the past nine months to to put us into the position that we are today with a vaccine. I mean to think that, you know, what would ordinarily take five or seven years, we've been able to do in you know,

a matter of months. Is quite remarkable. And uh, you know, without the heart their hard work and dedication. You know, probably forty thousand of our hundred fifty employees, mostly in our factories and facilities and our laboratories have still been working and um and they've been going literally around the clock to make that possible. And look, we still have a lot of work to do, but we made a lot of progress and uh, and we'll be finding out

a lot more in the coming weeks and months. But you know, consistent with what we talked about just recently when we announced the start of our Phase three trial, we would expect by late this year early next year, we should be in a position to begin reviews with regulatory authorities to see if our vaccine UH is in fact safe, effective, and and something that could be considered for an emergency use use authorization here in the United

States and more likely around the world. So even if you have emergency use authorization to be realistic about it. It's not going to be ready until next year, is that right? I think I think that's a good time frame to be planning on. Uh, you know, and and again a lot of it's going to depend on what we find in phase three and David, as you know, that can depend on the incidence of the virus of course, because that has an impact on the statistical analysis that

you'll be using in your study. It's going to depend on how well our vaccine is actually doing in the study and what kind of efficacy rates hit. But I think for planning purposes, if you think about late and early one, I think those are the kind of timelines that are likely most realistic. Okay, now there, You and a number of other CEOs of vaccine manufacturers have issued a letter saying basically, you don't want to be politically pressured to have a certain date and so forth. And

can you articulate why you felt the need for that letter. Well, look, we think this is an incredibly important time for the pharmaceutical industry, let alone each of our companies, and it's absolutely critical during a time when unfortunately everything becomes politicized, that we rely on data that we rely on science, that we rely on well established regulatory guidelines to guide all of our decisions regarding the development and the actual

utilization of these vaccines. And we thought that collectively making a very explicit statement about our commitment are pledged to following those established guidelines was very important to to maintain the trust, to maintain the confidence of people around the world regarding the safety and efvocacy and and actual accessibility of these vaccines. In a recent survey, I read that that was done of Americans that only are yet prepared

day to take a vaccine if it's available. Is that a surprise to you that so many people are not yet ready to take it? Is that because of the perceived politalization of it? Well, they they have. Unfortunately, No, it's not a surprise, and it's it's actually fairly consistent in fact, with what you see with the annual flu vaccine that can range from anywhere from about and perhaps in some of the best states as high as forty forty or and and I understand some of the skepticism

and cynicism. There's a lot of misinformation and there's a lot of concern about that people genuinely have. Uh, you know, based upon some of the readings that you can find out there. But I think that demonstrates is just how important it is for us to number one, to work closely with health care authorities, whether it's the CDC, BARDA, the n i H, the f d A agencies outside the United States to follow those appropriate protocols. I think. Secondly,

it's going to take a lot of education. Uh. And and that's by the way, not only the responsibility I believe in the pharmaceutic coal industry, but it's going to require the government. It's going to require perhaps even businesses other stakeholders to make sure that we are sharing the facts. Look, I'm cautiously optimistic that as we provide more data, more information, uh, that as you know, people see the potential impact, positive impact that this could have in terms of returning back

to a more normal state. Uh in some way that you know, people will you know, find the comfort and confidence uh to have a vaccine, because ultimately that it's going to be very important as we think about, you know, returning to a new kind of normal. Now, the federal government has poured billions of dollars into getting the vaccine developed and provided you and other companies with that money

to help you facilitate the production of this Uh. Do you think that the taxpayers should get a benefit by either getting very low cost vaccines or free vaccines? We have, David, Look, I think it's in the bloks best interests that we're

seeing this kind of public private partnership. I mean, there it would be very difficult for us to make the kind of advancements and accelerate the timelines that we're doing right now were it not for the partnership that we're saying, not only in terms of funds being provided, but in terms of literally the day to day interactions that are taking place between regulators and scientists across many of these platforms.

You know, in our case, from the very beginning, we've made a pledge that we would do this on a not for profit basis. And uh, yes, we are working with the government and we've accept the government funds, but we also recognize that as Johnson and Johnson the world largest healthcare company, that's important for us at this very unique time to do it on a not for profit basis so that we can give as many people access around the world as possible. Uh. So that's the approach

that we're taking. Now, there's a fear in some circles that wealthy people will get the vaccine quicker than people that are not wealthy, And you have with other CEOs and other health care officials and the Bill Millan, the Gates Foundation signed a letter essentially saying, you're committed to making certain that it doesn't go only to wealthy people and only the people in the United States. Can you explain why you wanted to have that letter and how

you're going to make sure that happens. Well, look, we're the only way we're going to beat this virus is if we have global distribution, and no one is safe, frankly, if the entire world is not provided access. And so we are absolutely committed to doing this in a very ethical,

in a very just way. Uh and uh. And we worked very hard to make agreements clearly with governments like the United States and Europe, Japan, the developed countries, but we're also working hand in hand with other pharmaceutical companies, the Bill and Milinda Gates Foundation to ensure the developing countries also have got access. So, as we talked today, the big news is that President Trump and the First Lady have contracted the coronavirus. Uh. Is that a surprise

to you that that could possibly happen. Well, David, look, I think it demonstrates that we're all vulnerable and we still all need to be very vigilant and diligent and the actions that we're taking to prevent this virus from

spreading any further. So, you, as the CEO of the largest healthcare company in the United States, I think it's the tenth largest company by market CAPP in the entire United States, market value of about almost four billion dollars, you have to be very careful because I think it would look bad, wouldn't it if the CEO of the largest health care company got the virus? So what do

you do to protect yourself? Well, David, look, I think all of us have a huge responsibility to take care of ourselves, and certainly those of us like myself fortunate to be in this kind of a position where we have responsibility for others, have got to make sure that we put the safety of our employees, of our friends, of our families first and everything that we do. And Uh, look,

that starts with the simple things. And I think one of the things that we've learned most through this pan emic is by making sure that we're using social distancing, that we're wearing masks, that we're washing our hands, that we're doing everything we can to prevent the spread of the virus. Are the most important steps that we can take to actually bringing an end of this pandemic and

in dealing with it for the long term. Now, vaccines of what everybody has been focused on, but there's also therapeutics. So for people might have already contracted the disease or already have the virus, is there any progress being made on therapeutics that might help people that already have the disease. Well, David, that's that's a great point. There is no one silver bullet here, And I think what is really important for everyone to understand it's going to take a holistic approach.

Is likely we're gonna be dealing with this not only is a pandemic, but it's going to be endemic for several years going forward. So in all likelihood it's going to take a combination of therapeutics for patients who are actually sick, vaccines to present it, prevent it from happening in the first place, and you know, last, but not least hospital protocols that I think you've done a great job. Still much more work to do in terms of reducing

actual mortality and morbidity. So things that have been talked about our mdzevie hydrodroxy chloroquine and also um convalescent plasma. But generally today you wouldn't say that those things are therapeutics that are going to solve the problem. Is that right? Not each and of themselves. I think there will be various opportunities that use and look, we're going to learn, for example, with commualiss and plasma, when and where are they most effective in what patient population is? In an

older population? Could they be used, for example, in an elder care facility where you're seeing an outbreak in a more aggressive way? Uh? Should antivirals be used earlier in the disease? And I think we're again we're developing a lot of information as we speak, and we're gonna learn a lot more in the coming weeks and months. Hindsight is always, it is said, but looking back, what would you say that the CDC or the f d A, or the White House or HHS should have done differently?

Is there anything that you would recommend that somebody in the future that they do differently if they were overseeing this kind of pandemic response. Well, you know, you're right, when we look backwards, things always seem clear, and uh, you know, I think there's a few lessons. And I would also say that almost all of us have underestimated

the dramatic impact of this outbreak. I mean, if you would have asked most people eight or nine months ago if you would ever see the kind of impact that we're you know, seeing around the world right now, few would have gotten it right. But I think there are lessons to be learned. First and foremost, I think is

the importance David, of global public health. And I think going forward, we're going to understand much better that you know, if we don't have global public health security, we don't have national security, we don't have economic security, and we

will not have security of society. So I think the importance of being prepared, making sure that you know, we've got the kind of protocols in place, that we have certain products preposition and frankly, also move from a maniacal focus on efficiency and effectiveness in certain cases to one

more of resiliency and sustainability. Particularly for these kind of situations where even you surprise how dependent maybe Johnson Johnson and the healthcare industry was on manufacturing things in China and offshore, so that for ppe and other things, we really had to almost beg the Chinese to get us some material. Will that change in the future and we're you're surprised at the extent that we were so dependent

on offshore production? Yes, and I look, I think there's an important lesson for all industries, not only the healthcare industry, but you know, every supply chain. And the good news is, over the last several decades, the globally integrated supply chain has reaped tremendous rewards and again in terms of efficiency and effectiveness for so many different companies. However, I think it's important for us to realize that we've got to make sure that we've got the kind of redundancy and

resiliency when these types of situations arise. And so we're looking hard across our supply chain as we speak, to say, look, what are the things where we Yes, we can still take advantage of so many of the efficiencies from what we were doing before, but what other things do we need to think about reshoring. UH. What other capabilities do we need to think to have more local uh, to ensure that, you know, in future pandemics were all better

positioned and better prepared. Let's talk about how you went from a graduate of the West Point to becoming the CEO of this company. So where did you grow up? Well, Uh, Dad, I couldn't have imagined forty sixty years ago that I'd ever be in this role of position. But I was actually born in Kansas City, Kansas. My grandparents for the most part, we're immigrants, uh, and opened up small stores, worked in meat packing plants UH in Kansas City and

UH I was there through my early years. And then my father was moved with his job when I was about twelve years old, UH, to a little town the lower peninsula of Michigan. What propelled you to say I want to go to West Point? Well, look, I was. I was very fortunate. And you know, both my mother and father worked. My My father, UH started as a salesman in a in a foods company group of baby food, and kind of worked his way a bladder. But he was also a Korean War veteran and UH and he

stayed in the Army reserves. Uh. And my mother taught uh special education students. And so I thought it was natural when you were growing up that your father not only went to work and your mother went to work, but also that you know, one weekend a month, that he would put a uniform on to go service country and um. And I was really inspired by that. And

I was one of six children, uh and uh. And I also knew that going to a place like West Point not only would afford me an opportunity for a great education and a career, but it was also certainly an economical way to do it, and you know, one where I could pay my own ways. True. And and so I put all that together and I found that to be a really you know, attractive path and uh and I was fortunately that's what I was able to follow.

And when you graduated, did you say, now I want to be a healthcare executive or how long did you stay in the military? No? No, I look, I graduated, and like all of my classmates, I I went into the army as a lieutenant. I had a I had an assignment in Europe for my very first role, and then I was stationed back in the United States, actually out of for Doord, California in the seventh Infortory Division, and I spent six years where I ended my service as a as a captain. I was a battery commander

and a rapid deployment force unit. And that's when I made my decision to, uh, you know, exit the Army and join Johnson and Johnson. Now you also got an MBA from Wharton. Yes, when do you have time to do that? Well? You know, I I started when I left the Army. I started as a sales representative at

Johnson and Johnson. It was part of a leadership development program and I but I felt getting the skills understanding the customers, really learning you know what doctors and surgeons and nurses and people who were using our products on a day to day basis, that was an important experience to get uh and uh. And then I went into sales management, later into marketing. But I also realized that look I had I had studied engineering in college uh

and UM. And I realized that if I was going to have the skills and business that I felt were really necessary, UH, that you know, going back and getting exposed and much more depth to accounting, to finance, to strategy and other things I was going to be important and I was. Uh. I was very fortunate that they supported my attendance at the Executive NBA program at Wharton where I went and completed that. Uh. You know, at

an early point in my career. So you started out marketing with a subsidiary of Johnson and Johnson UM at the time, and you did that, Did you say, well, somebody who starts out as a marketing person for this subsidiary surely should rise up to be the CEO someday a UM. Did you ever imagine at that point that you could rise up or you always had that as your goal? No, you know, I did realize, however, that getting exposure and experience with as many different aspects of

our business early on in my career is important. And marketing was one place where you could interface with research and development to really understand our products, where you would interview, where you would engage with your finance counterparts, your supply chain people, and so it was really the kind of position that exposed you to almost all aspects of the organization.

And look, at that time, I aspired to perhaps be able to run one of our our divisions, and uh and and and from there things took on a life of their own. So you've now been the CEO since two thousand twelve, so about eight years or so. And for most CEOs of fortune companies or less, they were the founder of them. Generally five six years is fairly average. So you're eight, um, but you're very young, and you're

obviously in good shape. So as your plan to do this for a long time in the future, Well, look, David, I'm I'm very fortunate to be the seven CEO Johnson and Johnson. You're right, the I think one of the uh, the great characteristics of the company is the long tenure that my predecessors have have in the in the continuity, the consistency, and the kind of long range thinking that it imbued into the organization. And uh and I'm proud

to you know, have been part of that. And uh and and look, I'm I'm as excited today about what I'm seeing in terms of science and technology and the potential of the patients. I mean, look what we're doing with the vaccine. We couldn't have even imagined that, you know, with about ten months ago. And uh, so that it's you know, it's a constant stream of new opportunities challenges that you're facing along the way. But look, you know, like everybody, UM, I would always consider ways of how

could you continue to serve other stakeholders? How can you continue to serve others? But you know what, I think I've got the best job in the world most days. Now. You are a fitness expert or a person who cares a lot about fitness. You're always running or exercising, and so I assumed during this period of time you're doing it even more just to stay in shape. Is that right? Do you run a lot or do you exercise a

lot every day? Yes? I do, David. And look, I learned a long time ago, even during my time in the military, that one of the most important things you can do, uh, to ensure that if my chance, you know, you were you were wounded, was to be healthy in

the first place. And it's interesting because I think one of the things that we're learning about this disease, of course, is that the healthier you are, if you in faction contact the disease, likely the better prepared you're going to be to be able to survive and get through it in a much better manner. And uh, you know, look like many others, I've been doing my best to to deal with the situation, not only working out of the

house but taking care of myself. But yes, I I always put a priority on, you know, trying to take care of ourselves, stay healthy, get the kind of rest that you need, eat the right way, and um, I think doing all these things not only happen or help in your daily life, but certainly are going to affect

in a situation like COVID nineteen as well. So when you're running the biggest healthcare company United States, I guess you're always worried that somebody might see you eating a French fry or a big mac, or you know you're you gained an extra pound or something. Do you feel you've gotta be very careful because everybody's watching you of who you are and the company you're running. No, No, I don't worry about that, look. I think. I think

it's important about life and so many things. Is balanced and uh, And I tend to follow an act some that look During the week, especially given my travel schedule and the demands is I tend to be pretty strict, uh, you know about what I eat and and the kind of rituals I put in place. It just keeps me on pace, whether I'm here in New Brunswick or whether I'm in China or traveling in other places around the world. But hey, on the weekend, of course, I uh, I like to I like to have a burger from time

to time, or or that steak. And that's why I worked so hard, uh in trying to keep fit along the way, and and I find by having that balance, say, I can I can take care of myself, but I can also have fun. So I'm you're in pretty good shape obviously, so, but eventually I guess you have Uh. You go to the doctor for annual physicals or something like that. If the doctor says, uh, you need a band aid. Here, I'll give you a shot and put a band aid on. That's not a band aid, it's

some other company's product. You take it off, or you say you can only use Johnson and Johnson products on me. Well, actually, had that happened One time? I had a bicycling accident where I had to get some stitches in my hand, and of course when I went to the local hospital, I made sure that they were our sutures. Uh. So uh and look I've I've had my hip replaced. I have one of our products in my hip, and uh it feels great, and uh it was. It was a

life changer for me once I had that procedure done. Well. Listen, I appreciate your giving us as much time. I hope the vaccine comes as soon as possible and the health and good way and safe for everybody. You can rest assure that we're going to be working seven doing everything we can to make that possible. Between now and then, you've been listening to Alex Gorski, chairman and chief executive officer at Johnson and Johnson on the David Rubinstein Show

Peer to peer Conversations. And that's it for this hour of Bloomberg Best. I'm at Baxter and I'm Denise Pelly Green. This is Bloomberg