david: this is, uh, my kitchen table and also my filing system.

over much of the past three decades, i have been an investor. the highest calling of mankind, i've often thought, was private equity. [laughter] and then i started interviewing. while i watch your interview, i know how to do some interviews. i've learned from doing my interviews how leaders make it to the top. jeff: i asked him how much he wanted. he said 250. i said, fine. i didn't negotiate with him. i did no due diligence. david: i have something i would like to sell. and how they stay there. you don't feel inadequate now because being only the second wealthiest man in the world, is that right? [laughter] vasant narashimhan is the ceo of novartis, a major swiss-based pharmaceutical company. he was educated at harvard medical school but chose not to practice medicine. he chose to go into the pharmaceutical industry and is leading the transformation of novartis to one of the most important pharmaceutical companies in the world. i had a chance to sit down with him in new york to talk about the transformation. many people know the names of

the drugs they use but they don't know the names of the drug companies or pharmaceutical companies that produce them. for people who might not know much about novartis, tell us what drugs or products people would have heard of. dr. narashimhan: there are a couple of drugs we have right now, we have one for heart failure, breast cancer. these names are not always tied into what the drugs do. we have a broad portfolio of medicines, over 15 medicines and over $40 million in sales. david: who comes up with these brand names, they are names i can't pronounce. dr. narashimhan: it's a whole industry, maybe private equity would be interested to getting into it. there's a whole industry of people who try to find word permutations that might tied to the drug did then you have to send it to the regulators and they have to be sure the word

will not be confused in any number of different languages for some other medicine or something else. david: people who don't follow the industry carefully might not recognize it but the way the industry works as i understand it is large pharmaceutical companies other developed internally or through an acquisition a drug, pharmaceutical product, they can sell, it is patented, and the patents last for 17 years and after that it becomes known as a generic, which means you can presumably get a for a lower price. is that a good way to make a business? you build products and and 17 years they are gone? dr. narashimhan: it's a tough way to make a business, you are on a constant treadmill and you have to have the innovation capacity to have what we call replacement power. you have to replace your sales with the next medicines and innovations. the only winners in the long run are companies that have the r&d firepower and capacity to keep inventing medicines, to rejuvenate almost an entire

portfolio. a company like us, $45 billion in sales, every year we could have 2 to 8 billion dollars plus going off patent and we have to generate sales to replace that and grow on top. we have a limited number of very large pharmaceutical companies. david: if someone develops a drug or pharmaceutical company -- is the lab in switzerland? dr. narashimhan: we invest about $9.5 billion a year in r&d, the research departments are in massachusetts and switzerland. david: you test on animals and then a small subset of humans and then a large subset of humans? dr. narashimhan: roughly that's how it works. first we have to find what we call a target in the human body we want to drug. we think this target has some ability to impact human health

and the disease we are interested in. the we have to design the drug to inhibit or promote that target. that takes time. ai might help us to do that faster, we will see. when we have the target drug optimized, we take it to animals, make sure it doesn't cause preclinical safety signals, and then we moved to humans. from the time we move into humans to when we get it the people is usually around nine years. david: 2023 we saw an enormous increase in drugs that reduce your weight. you going to get into that business and why not? it seems very profitable. dr. narashimhan: we are interested. we are interested in the next wave of medicines. the once you're talking about are very well serviced by the current companies. it took us almost nine years to realize the potent effect these drugs would have on obesity. we think there's opportunity to improve on them. it's very early stages in

novartis, but can we come up with jobs that help muscle and can be more frequently taken? one area where we are a leader is what is called small interfering rna therapies. it sounds fancy but allows you to take drugs you normally would take everyday and make them drugs you only have to take twice a year. cholesterol-lowering, we have a draghi only have to take twice a year to lower cholesterol 60%. we are working on medicines for hypertension, low blood pressure. most people don't stay on their drugs. david: the drug i'm most interested in deals with alzheimer's and dementia. i'm always wondering if i'm going to to get this disease.

what are you doing in that area? dr. narashimhan: we are active. we are interested in the next wave of what might be effective therapies for alzheimer's disease. there are currently two drugs targeting the plaques in the brain. we think the next generation opportunities will be other elements that accumulate in the brain. i would also say alzheimer's is a tough space. one thing that is hard as you need to intervene very early because it's a slowly progressing disease. identifying which patients to intervene on and figuring out what to treat them with is very difficult. david: cancer related drugs, there are some, and i guess you have some as well, they tend to deal with cancer once you have cancer, they try to ameliorate the side effects or the effects of it. what about something that prevents cancer, is that realistic in my lifetime? dr. narashimhan: that's a heavy interest in the field and at our cup and we just got great data about a breast cancer drug that can be given to women to prevent it recurring.

there's a lot of interest right now, can you identify things in the blood that would show the cancer is starting to happen in the body but will before it would be detectable in any scan? if we can get those tests to an adequate level, that would be the opportunity that that's a long time away. david: you produce drugs that help people with their lives, so why aren't you a more popular industry? private equity has its detractors no doubt, but the pharmaceutical industry is not far behind us. why do people not love you? dr. narashimhan: it's a long story in terms of the history of this industry. even in the 1970's or 1980's we were much more popular as a sector. as we brought more and more medicines forward and patients got on more and more therapies, the one thing we were watching carefully enough as an industry was what was happening at the pharmacy counter.

there's a lot of focus and congressional hearings on list prices but they mean very little in the sector because you have pharmacy benefit managers, retail pharmacies, wholesalers. what really matters is at the end of the day when someone comes to the pharmacy counter, can they afford their medicines? we are starting to address that, some recent legislation addresses it and we are thinking a lot about it. that's what we have to think about how to solve. ♪

david: your parents came from where? dr. narashimhan: southern india. david: when did they come to the united states? dr. narashimhan: the late 1960's and early 1970's. david: were they educated? dr. narashimhan: they were, my father alongside his brothers were some of the first people in our family to go to college in india. my father did his phd in india. i was one of the first people to

come to the united states. my mother came to carnegie mellon, became a nuclear engineer. it was pretty extraordinary story that they were able to come from relatively modest beginnings, beginning with my grandparents, relatively small places in india, and find a way to the united states. david: you grew up in the pittsburgh area? dr. narashimhan: a steelers fan indeed. david: you did well in high school? dr. narashimhan: i did well. david: you went to the university of chicago. why did you go there? dr. narashimhan: it's interesting, i applied to all of the ivies and didn't get in anywhere and one place that admitted me was the university of chicago. it was such a gift. i would still credit it with how to think, synthesize and be limbless a curious. david: harvard recognizing its mistake admitted you to medical school.

dr. narashimhan: they did. david: i assume your immigrant parents were saying great, my son is going to be a doctor. when you told him you were knocking to be a practicing doctor, what did they say? dr. narashimhan: there were very confused. i had this idea in my mind -- i did work in public health and had great mentors at harvard and i wanted to see how could i have a bigger impact beyond individual patient care? i first went to the world health organization and then mckinsey. all this time, i think the parents were assuming i would do a residency and become a cardiologist and finish the journey. david: for a while you were a protege of paul farmer, the famous doctor at harvard for a while and other places. you then went back to india and worked with street children. did your parents say you have a harvard medical school degree and you are making no money in india?

india is the right country, why don't you practice medicine? dr. narashimhan: my father would ask, i worked so hard to get out of these places, why are you working so hard to go back to them? it was confusion in his mind. but overall my parents were supportive of the public health goal. david: you ultimately came to mickinsey, why did you not stay? dr. narashimhan: was a great training ground for a physician who did not know anything about a balance sheet, nothing about m&a or valuation. i learned a lot quickly. but i felt a little detached from the real action. i had an opportunity presented to me to join novartis pharmaceuticals, to look at the r&d strategy at novartis at the time. it was a little bit of a whim, a gamble to see how it worked out. i would never have imagined it unfolded the way you did but it was great. david: you work your way up and at the age of 40, summary at novartis says we have a

four-year-old who didn't go to business school, is not from switzerland, and is a medical doctor who has never practiced medicine, let's make him the ceo. dr. narashimhan: that's right. david: were you surprised? dr. narashimhan: i was shocked when they first even asked me to be part of it. i was the head of drug development and i have the opportunity to be in summary different roles, i worked in so many different roles, i worked in the vaccine development and drug development for many years. i think part of the reason they were interested is i had a background in r&d. i think it was also not only my age but the fact that i think no other major pharmaceutical company had an r&d or development head as their ceo. david: your strategy has been different than what you inherited. novartis had a generic drug business and you sold that. why did you get out of that business, it seemed reasonably

profitable. dr. narashimhan: as you know, when you have these conglomerates, you have to ask, is there value building all of these businesses together? the question is, what are we really great at? when i came into the role of ceo, we were in consumer health, devices, generics, we had a broad portfolio. i think what our company is great at is discover novel breakthroughs and getting access to over 280 million patients, which is our reach today, the largest we believe of any pharma company. in order to do that well, i didn't think we could allocate capital successfully across these different businesses. we spun out, one of the largest in recent memory, we sold our consumer health business, about $130 billion of transactions later we come out as a pure play medicines company. david: you go to the board and say we've been in the generics is nest, consumer drug business,

we will get out of all of them except the business we are in now. did they say you are not qualified to make that judgment? dr. narashimhan: i think they went along and generally were aligned. first we did consumer health and we saw how that wind. a year later we did alcon, and the pandemic came. the fear comes back from what we discussed earlier. when you have these patent cliffs, if you have these other more stable businesses, there's a feeling you can offset risk. you have stable businesses in this one business where you face these cliffs every 15 to 17 years. i take the view that the only way you will generate enough medicines to keep growing is to focus your capital on innovation. david: last week you made another acquisition i think for roughly $5 billion. you bought a company dealing with blood cancer. why was had a good acquisition and how long does it take you to make an assessment whether that

is good or not, and do you come up with the ideas yourself or does investment banker come along and tell you? dr. narashimhan: we limit our time with investment bankers overall. we have been in blood cancers over 20 years. some of the most pioneering drugs and blood cancers have come from our lab. we have deep understanding, therefore this makes sense to add another medicine to that portfolio. we made that assessment and it was a good strategic fit. a good financial fit. one of the things we tried to be much more disciplined on is to try to go at the lower end of the range, over $5 billion for acquisitions, and ensure they are in areas where we have deep understanding. generally when we've gone too far away from our core, the value creation hasn't been there. david: 2022, ai burst on the scene. how will it affect your company? dr. narashimhan: i think you will have an impact.

in productivity we can use it for document generation, not sexy areas. in our sector uniquely, the big question is can you speed up or increase the efficiency of drug r&d? we are doing some things to work on clinical trials, but the big bets we've made her with palantir, microsoft research labs, google and some other partners to say can we discover some novel drugs that were not discoverable without ai and optimize drugs more quickly? it's part of the pioneering work that google deep mind did. we also have to acknowledge we only understand about 5% to 10% of what's going on in the human body. to expect ai to use that 5% to 10% to come up with big discoveries will take time.

david: other than ai, what other medical technologies will come up in the next one to three years that will change the medical world? dr. narashimhan: rna therapeutics as i mentioned earlier. these are really coming to life now. it allows you to treat diseases that were not treatable or treat them infrequently. can you imagine if we could take on blood pressure or cholesterol. another is therapy for blood diseases. if you can reset someone's immune system, the autoimmune disease goes away. we will see if it sustains. these are some of the most impressive results we seen in early stage clinical studies. we are also big in an area of cancer, an idea that can you bring nuclear particles right next to a cancer in the body and deliver the radiation very locally? it has the opportunity to treat a whole range of solid tumors in ways we could not before. david: why should someone want to be in the pharmaceutical industry?

why not go into something sexy like private equity? dr. narashimhan: we create miracles that fit in the palm of your hand, these little medicines that can transform a human beings live. ♪ david: what do you do to lower your global footprint? dr. narashimhan: we have a big effort on global access to medicines, trying to make sure our innovations are accessible. the area -- the work we do in malaria, leprosy, sickle cell disease, to ensure that populations around the world can get access to those medicines. david: how do you pay for that? dr. narashimhan: it's part of sustainability efforts, and it's one of our goal to deliver these around the globe.

we have a huge effort in global health r&d, trying to discover the next wave of medicines to treat these. we have a 48% women in management, the median pay is higher for women than for men. we have our work to do at the upper levels of the company but overall doing well. david: what skill set should somebody develop in order to rise up to be a ceo? dr. narashimhan: the biggest thing i think is curiosity. relentless curiosity. whatever position i was in i had to teach myself and be curious. having expense in a range of different parts of the business world will be a huge success. ♪

david: how may employees does novartis have now? dr. narashimhan: 76,000. david: that's a lot. you get a chance to meet them? dr. narashimhan: i think the most valuable thing i find in my job is to go around the world and meet our people, have townhomes and interactions. before we spun off all of these businesses, used to be 135,000

people. but there is nothing that can replace showing up face-to-face and describing why we do what we do. david: as the ceo, do you tell your subordinates, these are the areas i think we should work on and see if you can come up with a pharmaceutical product? or do they come to you and say we have a prospect? how does that work? dr. narashimhan: i have a philosophy we call in our culture unbossed. we want our people to bring the ideas up and we challenge them. i believe in our sector, some of our scientists, many of our scientists are world-class. they should bring up the ideas and we cure them. but i'm not sitting on a mountain knowing the right thing to do. david: if someone is saying i'm graduating from college or graduate school in the next year or so and i want a nice career, why should somebody want to be in the pharmaceutical industry? why not something sexy like private equity or investment banking or some thing like that? dr. narashimhan: despite some of the things people, concepts

people have about our industry, in the end what we do is create miracles that fit in the palm of your hand, these little medicines that can transform human beings live. if you look at the arc of history, in the last 130 years, we've been able to move through the power of medicine life expectancy from 30 years to 80 years. we are able to cure diseases, we can give people with debilitating diseases their life back. you can get up every day back knowing you're are moving the needle for society, for mankind. i think we imagine medicine with the medicines we create. that's an inspiring way to spend your time. david: suppose a president came to you and said you would be great to be the secretary of health and human services, head of the fda or something, what would you say? dr. narashimhan: i would think hard about it. at the moment he would feel like a very daunting task given the politics, but on the flipside i think public service has so much power. if it's in the right context, you can do a lot of good for the world.

but i think it's very context dependent. as you know, it can be a very short time and some of these roles with some of the recent cabinet members. david: suppose i said i'm a stock market picker and i want to buy good stocks in companies that will grow. why should i want to invest in the pharmaceutical industry? will it continue to grow as last year? and your own company, good growth prospects the next couple of years? dr. narashimhan: we do, we signed up for a 5%-plus growth and 40% both in markets over time. i think the biggest investment is a science. most of the last century we were only giving people pills and small molecule drugs. then we discovered we had this whole world of biologics and we could treat diseases with biologics. we've recently discovered we can reprogram ourselves, completely transform areas of medicine. those technologies are at the nascent stage.

they will open up whole new areas of growth from our business standpoint and the human health impact standpoint. to get in now as that is happening. you've seen the obesity companies clearing the $500 million market cap. we hope that as we work on rna therapeutics we can climb to that market cap overtime. david: you are still early in the career relative to many other people i talked to. any regrets going this route or not becoming a medical doctor? dr. narashimhan: no, i have to say. when i look at the reach of our medicines and the impact they have -- i will go back to my time with paul farmer to say -- he unfortunately passed away but was an incredible mentor -- i always told him i wanted to have a big impact on public health. he did it with working with patients around the world. novartis has a malaria drug that's almost 99% effective when given on time to treat a malaria patient.

over 400 million children treated with our malaria medicines, the biggest malaria pipeline. even from a public health standpoint, the opportunity to have an impact at scale has been fulfilled with this role. ♪

hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. and i was so surprised.

you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're extremely heavy they're not so simple. golo is real and when you take release and follow the plan, it works. i think he's having a midlife crisis i'm not. you got us t-mobile home internet lite. after a week of streaming they knocked us down... ...to dial up speeds. like from the 90s. great times. all i can do say is that my life is pre-- i like watching the puddles gather rain. -hey, your mom and i procreated to that song. oh, ew! i think you've said enough. why don't we just switch to xfinity like everyone else? then you would know what year it was. i know what year it is.

>> the world's fastest growing economy is this tiny nation tucked in between venezuela and brazil. guiana. this nation of 800 people -- 800,000 people is going through

massive tranf