Emma Walmsley

Denise Pelligriny. On this weekend edition of Bloomberg Best. We can be increasingly optimistic that science will win. Efforts to develop a COVID nineteen vaccine gained momentum. The world will pay a very big price, not just for COVID, but beyond that. If we break trust. Risks are high for the drug makers. It is really hard to discover new drugs and vaccines. G SK CEO says cooperation is key to success. All this and more coming up in the

next hour of Bloomberg Best. All right, and you know, we had a lot of good news on the COVID nineteen front, with so many companies reporting progress son of vaccine. Yeah, Denis and one of those involved is g SK and we had a chance to hear from the company's CEO, Emma Walmsley. She spoke on the David Rubinstein Show a peer to peer conversations and if it begins here by asking Walmsley how many times a day people ask her

when the company's vaccine will be available? Yes, well, that's definitely a very regular question, whether it's from employees, customers, government's media or my mother, so very frequently, and obviously we've all been delighted to see the very recent news of some of the first results that's coming through on

vaccines yesterday. I was just on a call last night with with ten of the global pharma CEOs who are all very heavily involved in bringing solutions to COVID, and we're really excited and optimistic to see some of the first data coming through and looking forward to seeing a lot more in the next six months or so. We have three vaccines in the clinic and two therapeutic treatments.

Um everyone is understandably very impatient because I think the I m F said it's every month we wipe off the pandemic is five billion of value for the world. But I think right now we can be increasingly optimistic that science will win and our industry that's mobilized so fast will start to bring some scale solutions, and we're going to need more than one, that's for sure. Now. Normally to have a vaccine it takes four to seven years. The polio vaccine was seven years. I think Mom Seni

Bowler was four years. So this has been done in basically a year or so. So is it because you have so many people working on it that you'll be able to do it so quickly or is it less complicated than people originally thought? Well, it certainly remains a very complicated effort. But when you're facing into a global crisis of this scale and this impact, there are many reasons that we have been able as an industry to

mobilize behind getting to some faster solutions. But the real the ways you get to go faster are an incredible mobilization and partnership with regulators and governments. The fact that we have all been parallel pathing work that you might normally do sequentially, and that has been through putting capital

at risk. But we've always and that's why many of us signed a commitment around the quality of the work, the scale of the trials, and the commitment to safety, and wherever the pressure might have understandably come from to go faster, we're all very committed to make sure that trust in vaccination is maintained, because the world will pay a very big price, not just for COVID but beyond that,

if we break trust in the quality of vaccination. And it has frankly been the biggest contribution to human health since clean water, and we need to make sure that that that's maintained for the future. So some people are not willing to take a vaccination. Some people have said in surveys the United States, only or less people say they want to take this vaccine because they think it's either been politicized and not sure it's safe, or some

people just don't like vaccines anyway. Are you worried that people won't take the vaccine, Well, yes, of course I do think um and we remain concerned about vaccine hesitancy. But we also have to be incredibly respectful about why people have these questions. You know, have we been able to move fast, have the companies put in the right kind of processes and scales of trials, what transparency are we going to bring to these processes and why do

you hear about things being stopped and started? And what does all of this mean? So I think we our job is to make the commitments we have and we have very publicly about that alongside other manufacturers, but but also make sure we share data transparently and partner with governments who alter ly are those that guide in different countries around policies and distributions to to reassure people. And again, because you know vaccine, we don't worry about our children

dying of measles anymore, you can. You know there are smallpox is not has been eradicated, Polio nearly so and this is because of this incredible contribution to protecting people and protecting life is always better than intervening at a later stage. Now you have teamed up with the for the coronavirus vaccine with Sonophi, which is another large pharmaceutical company. I'm just curious why did you team up with someone else? You you're the biggest manufacturer of vaccines. Could you not

have done this yourself? Well, um, I think it's one of the great things that we've all seen in many industries through this pandemic. Is this incredible collaboration against a

common competitor or enemy. And when we announced our approaches to vaccines development in the beginning of February, we said our best chance of the contributing g SK science technology and know how was to offer our adjuvant technology it's called which helps make other vaccines more effective, and an adjuvant technology that has been proven in pandemics to any

credible partners. So we have three vaccines partnered in the clinic with others including Sonophie, because that adjuvant technology is proven in pandemic to work on older people and means and is a more effective way to get to scale manufacturing,

which is the other real challenge here. We need to probably provide up to fourteen billion doses if we're in two dose vaccines to really protect the world, and so as well as getting to a safe and effective vaccine, we need to get to scale as fast as possible, and our route to that was partnership. Okay, there are two questions that people often to ask as well about whether vaccines are not only going to be available, but

to whom are they going to be available. First, let's suppose you come up with one who gets them first? Private equity professionals do they get the first or not in the first in line? And secondly, what's it going

to cost? Well, firstly, these are two fundamental questions. And again right from the beginning we said at GSK that our principles were around global access, which is why scale of manufacturing, getting to billions of doses and having multiple vaccine solutions not just the first one off the block matters. Some of the new technologies that are being distributed have to be distributed at minus seventy degrees I think, which is not suitable for going into some of the developing world.

So we need access and we need responsible pricing, which is why we declared that we would not expect to profit from any COVID vaccine during the pandemic phase. We would reinvest any short term profits in pandemic preparedness donations to the developming world. We in terms of who gets it, we are contracted to governments in the U, the US, Europe,

the UK, Canada and others. But we also just recently with Sonofi, committed to two hundred million, two hundred million doses for Kovacs as a starting point, which is particularly about supplying to the developing world where you have many vulnerable populations. The first principle should be the people who get it first are the people who need it most. Now, you are the largest vaccine manufacturer in the world, as

I understand it. Um some people say that vaccines are not the most profitable part of the pharmaceutical industry because, as I understand it, with a regular drug that one might manufacture, people might take it once a week, once a month, or so forth. With vaccines, you take it once or twice and you're done. So some people say that the pharmaceutical initially doesn't really care about vaccines as much as maybe they should. Is that fair and is

it that profitable business to be in the vaccine business? Well, first of all, I think everyone in the world, every family, community, company, and country, cares a lot more about vaccines and is looking at a lot more now than perhaps we did two years ago or a year ago. And we are the largest manufacturer. We have more than thirty vaccines. We shipped two million vaccines a day. I think we vaccinate about of the world's children, and it is a profitable business.

But it's a business that comes with responsibility around access to so why do you think it is that pharmaceutical companies, and you're one of the largest pharmaceutical companies in the world, generally the public says, maybe they're making too much money and maybe your image is not as good as you know you would like it to be. Why do you think that's happened? And do you think there's anything the industry can do to improve its image with the public.

I think this is a really fundamental question for our industry because I mean, you just need to look this year at how uh mobilized we've been, what a difference we can make, and how much for heal healthcare resilience globally our contribution is required. And I am really proud of my company, but our industry for the way we've tried to collaborate for that. But the fact remains that we're still turning up in movies as the industry that

people have criticisms of. And fundamentally, you can understand why there is this when people not just in developing countries but in the most powerful countries in the world, they're still fighting for access to healthcare for themselves of the people they love, and there is this tension, as you say, between the human right to access to healthcare, and profits in big corporates that perceived tension, and frankly, I think the industry hasn't always historically helped itself, either because of

a small number of egregious acts on pricing or not enough transparency about why we do what we how we do what we do, and why it matters. And I think that what we can do about that is to do a better job of fulfilling our purpose two protect health find new solutions to fight new diseases responsibly, so partnering with governments to help address out of pocket challenges.

To bring more transparency and stability to how people can engage with healthcare, to champion access across the world, to be responsible always in our pricing, to bring transparency to the way we work, but also do a better job of showing why it matters to everybody that we do

that profitably. Because one in two of us gets cancer, one in three of us, maybe it's one and two two, It doesn't matter how successful all the people are that you interview with that we don't have treatments for dementia and Alzheimer's, and we need to keep fighting and investing to be able to solve these problems for the future. So is it cheaper and easier for a company like GSK to go buy somebody that has already made a product and put it into your system rather than try

to develop it yourself. Because I realized that it takes ten years or more to develop a products. So is it easier sometimes and better to go buy something? And how do you see the trade offs between the two? What we're all working hard to do and it is get to a better quality pipeline. And it would be incredibly arrogant to think, you know, all the world's best scientists sit inside your company, which is why business development and m and A is so common in our industry.

The other thing to remember is that because of the patent cliff model in Farmer, you are having to read and it's another reason why as well as delivering on our purpose responsibly, we have to do it profitably. You are having to reinvent your portfolio on a rolling decade basis. Because we invest in the innovation, we build that drug and then rightly it comes off patent can be genericized and the sales are lost, you know, very aggressively and quickly.

Now you're a member of the Microsoft board. So I assume you have a fair degree of background now in technology and I T and other things like that. How have you been able to apply that to what you're doing at GSK. Well, I would never describe myself as having a background in technology and I TUM and I'm I'm absolutely sure that was not why I always brought

onto the Microsoft board. But it's an extraordinary company doing extraordinary things in an incredibly responsible way at a time when technology is changing the world and an industries, and I believe can be an incredible force for good. Um, you know, I it'll be interesting to see what we look back on the twenties as as standing for and

meaning and what evolved. No doubt loads of people will be writing books about how to lead through a COVID crisis, But I think most of us believe that there will be other, you know, huge global issues that will have to address, like climate change and inclusive economic recovery, etcetera. But I also believe health resilience will be on the agenda.

And the advances that the world has seen in biology, all of the genetics and genomics data that's coming through at the same time as the advances the world are seen in AI and machine learning combined together have a real real shot over the next decade to improve the productivity of R and D and science in my industry incredibly. You know, it is really hard to discover new drugs

and vaccines of them fail. It takes a long time. Obviously, the world is mobilized right now to get to faster solutions, and I hope we learned lessons in a way we partner with regulators and use new technologies to to to

permanently accelerate some of these processes. But the opportunity to use technology to do it, to identify and the enormous amounts of data to identify better quality targets, so we have a biological targets, so we have a higher probability of success of developing better medicines faster for these enormous unmet needs in the world. I think we'll be defining for the next decade. When you grew up, UM, you went to Oxford and you majored in UM modern languages

and classics. And as a general rule of most people running pharmaceutical companies are not majors in classic or Romance languages. So when you were in Oxford. Did you say you wanted to do what you're now doing or do you what was your career ambition? Yeah, I think it would be fair to say that I spent most of my time and my master's looking at Latin poetry, which was not an obvious path towards this destiny so far. And honestly, I am probably the person you've interviewed who had the

least strategic career plan ever. I am. My entire work experience up until I left all studies was waitressing. I never had, you know, any kind of internship or anything

like that. I went into consultancy for a few years because I needed to pay off my debts, and and then because I spoke French, I was shot in charge of benchmarking Laurel and I just got super curious about that industry, and then took a pake up to go and be the assistant assistant product manager on a home hair color, and then spent seventeen years going all around the world, just tremendous opportunities, living and working in Paris, in New York for five years, and then in China

um and never thought I'd leave, And then had one of those kind of accidental meetings at the time in Shanghai, Ah with the then CEO of GSK who explained, explained and convinced me that I should move into the consumer business at GSK UM and I couldn't resist the chance to pursue. I thought of a business with an incredibly important and impactful purpose, UM, which is health and and also have the chance to run a global division. I had no idea that that would then lead to this,

but it's been exciting so far. So what did your family say when you said I'm going to be in the pharmaceutical or healthcare business? Um? Well, my family, because I had four children, we were living in in in Shanghai and China, and I said, guess what, I've got a new idea. We're not completely thrilled at the prospects of the time, but they, uh, And then you know, obviously, Um, I mean, I grew up my father was in the

Navy his whole career. I grew up in a in a military family where there was a tremendous sense of work ethic and duty and responsibility. And and I think, um, you know, they were incredibly proud when we eventually came back to the UK after being out for ten years and excited to see the work that we've been doing since. So you're a consumer healthcare specialists in addition to a being a classics person in a modern language person. But then you in effect sold off or you've joint ventured

your consumer healthcare business. Did you ever expect when you came to GSK that you would actually not be doing

consumer healthcare and you'd be doing the traditional pharmaceutical healthcare. Well, the short answer that is no, But I'm incredible excited to see, frankly, the creation of two world leading businesses and UM in consumer health We built the joint venture with Visor and declared at the time of doing that deal that we would buy around mid twenty two separate that company out to be an independent company because it's the only UH stand alone dedicated to consumer healthcare consumer

products company in the world. It's got leading positions in leading markets and leading UH categories, and frankly having it inside as a slightly invisible division a much bigger company whose number one priority is to