Why Novartis Eyed The Eye Business
1 CommentBy Ed Silverman // April 8th, 2008 // 9:04 am
As you may recall, Novartis yesterday agreed to pay $39 billion, in two stages, for Alcon, which markets various eye-care products. In a chat with The Wall Street Journal, ceo Dan Vasella explains the decision. This is an excerpt of an excerpt…
WSJ: How does Alcon fit into your strategy?
Vasella: It fits perfectly well. From the point of view of portfolio management, we have said we want to strengthen the businesses which give us growth opportunities and balance risks. (Eye care) is a specialty area with high growth and diversification from the point of view of risk.
WSJ: What is attractive about eye care?
Vasella: Cataract surgery (and) lens implants (are) heavily age-related. Another factor is you have millions of people in countries like China, Russia, who need surgery and don’t have it yet. You have emerging markets as a growth factor. And continued innovation. If you look at glaucoma, that’s another age-related disease.
WSJ: Why are Alcon’s products less likely to come under price pressure from health-care systems and insurers than prescription drugs?
Vasella: You have a different reimbursement system for surgical products. And in the consumer-health area, the consumer is paying. We see less price sensitivity. You can pass on price increases easier. As soon as you get into regulated markets such as pharma, it’s more difficult. We see prices for pharma world-wide declining.
WSJ: For how much longer?
Vasella: It will continue up to a certain degree, and then people will see if companies continue to invest in R&D at the level they do, and then society will have to make a decision: Do we want innovation or not? We are in an aging society, and unless we find new solutions for treating diabetes, cardiovascular disease and cancer, there will be a much bigger problem at the end of the road.
Cancer Patient
Novartis is essentially a management company. Dan has no right to speak about innovation - Novartis hasn’t innovated anything. They “buy” their way into markets, dominate them with pricing management schemes, over market the potential of their drugs and enslave patients by buying KOL’s opinions and affections.
In short they are the spoilers for any company that would/could be the true innovators.
Personally, they would do all cancer patients a favor if they would just leave this market.
Hope eye care grows nicely for them and I wish them well.
Leukemia patients and GIST patients have been left hanging - they can’t find a follow up to Gleevec and now I hear the molecule they thought they had for T315I mutations is tanking big time.
The problem is that they continue to try to block entry to other drugs that are far superior. All the while sucking money out of the sytem that can be better used elsewhere.
Well, at least we can see, it never was about the patients - it never is…