Episode 33: COVID-19
Goal: One Billion Doses by the End of 2021
Alex Gorsky, Chairman and CEO, Johnson & Johnson
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In this episode of Fireside Chat, we sit down with Alex Gorsky, Chairman and CEO, Johnson & Johnson to talk about the company’s pursuit of a vaccine for COVID-19 and the ways Johnson & Johnson have supported the healthcare system during the crisis.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Alex Gorsky is Chairman of the Board and Chief Executive Officer of Johnson & Johnson, one of just seven leaders who have served in the dual role since the company was listed on the New York Stock Exchange in 1944. Alex began his Johnson & Johnson career as a sales representative with Janssen Pharmaceutica in 1988. Read more…

Transcription

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Alex Gorsky 0:03
As we announced in late March, our goal is to be able to do this in a safe and effective way and have more than a billion vaccines by the end of 2021. We’re working with regulators in the United States and around the world. We’re partnering with other companies, particularly manufacturing facilities to be able to scale up so that we can produce here in the United States, but also around the globe. And that we would be doing all of this on a not-for-profit basis.

Gary Bisbee 0:29
That was Alex Gorsky, Chairman and CEO, Johnson and Johnson, on J&J’s goal to produce 1 billion doses of coronavirus vaccine by the end of 2021. And to do so on a not for profit basis. I’m Gary Bisbee, and this is Fireside Chat. The most important next step in the battle against coronavirus is the availability of a vaccine. Alex discusses the prospects in progress as of May 20, 2020, the day this conversation was recorded.

Alex Gorsky 0:57
For making good progress there’s still a lot of work that needs to be done. Much more testing needs to be concluded. But every piece of data and new insights that we gather, I think, are giving us greater confidence that this is certainly something that is possible, and that we’re going to do everything we can to make it happen.

Gary Bisbee 1:14
The vaccine update is all-important. And in addition, we went deep with Alex on a wide range of topics, including the development of medicines to treat COVID, lessons learned from J&J’s global and resilient supply chain, the most important characteristics of a leader in a crisis, key questions the board should ask in a crisis like COVID-19, the resources and support J&J have devoted to frontline workers and the value of J&J’s diversified business model. I’m delighted to welcome Alex Gorsky to the microphone.

Good afternoon, Alex, and welcome.

Alex Gorsky 1:53
Hey, Gary, thank you very much for having me.

Gary Bisbee 1:54
Well, we’re pleased to have you at this microphone. Let’s lead off with the discussion of the all-important vaccine and everybody’s talking about that. It was just recently front page on the Wall Street Journal and so on. Can you provide us with an update on the status of J&J’s pursuit of the coronavirus vaccine, Alex?

Alex Gorsky 2:14
Sure, Gary. First of all, let me say it’s a pleasure being here with you to have this discussion. Thank you and all the Academy is doing to continue to educate and inform stakeholders about these important issues. And I guess the way that I would start off there is, first of all, who would have thought, even two-three months ago, let alone two or three years ago or several decades ago, that we would be facing into likely one of the most challenging times in our country’s history. Perhaps other than World War II and a few others as we face and deal with the coronavirus. And I think by almost any measure, certainly in terms of human life, in terms of health, healthcare systems, our economy, and many other issues. It’s challenging us in ways that we really haven’t been challenged before. And what I would say is, many companies we were watching closely when some of the first news started to come out of Asia, very late in 2019 and early 2020. And when we first started getting the reports, our priority was to ensure the safety of our employees in the region, as well as to secure our ability to continue to serve customers, hospital systems, physicians, and consumers in their respective countries. And at the same time, it was about mid-January, when the scientists that worked in our vaccine group who have long been researching significantly in areas such as HIV, such as an ebola, and the Zika vaccines identified coming out of the healthcare system in China, the DNA sequencing of the coronavirus. And they quickly did some work and developed hypothesis that if we utilized our vaccine platform, combined with information regarding the virus itself, obtained from the gene sequencing, that we could, in fact, have the potential to develop a vaccine that would develop neutralizing antibodies and would eventually work. And in a process that would usually take five to seven years, literally in five to seven weeks, they put together a plan that included the work that I just mentioned, and some early animal studies that indicated we had a strong likelihood of producing a safe and effective vaccine. But also one that could be produced at large scale. And so really, since then, the entire focus of our organization has been on doing just that. And as we announced in late March, our goal is to be able to do this in a safe and effective way and have more than a billion vaccines by the end of 2021. We’re working with regulators in the United States and around the world. We’re partnering with other companies, particularly manufacturing facilities to be able to scale up so that we can produce here in the United States, but also for around the globe. And that we would be doing all of this on a not for profit basis, given the significant challenge that the virus represents to the world, and we’re making good progress. There’s still a lot of work that needs to be done, much more testing needs to be concluded from every piece of data and new insights that we gather. But I think they’re giving us greater confidence that this is certainly something that is possible, and that we’re going to do everything we can to make happen.

Gary Bisbee 5:50
Well, that’s our great news and congratulations on your efforts in this space. Could we dig into the timeframe a little bit more? You mentioned 2 billion doses by the end of ’21. What does that suggest in terms of the approach to the FDA and clearance and so on? In other words, would it be cleared by the end of this year or by mid next year? What would the timeframe be?

Alex Gorsky 6:17
Well, there’s still much more than we need to learn through the preclinical work, the clinical work as well as the scale-up in the manufacturing process work that we’re doing. And what I can tell you is I’ve never seen in my more than 30-year career in the industry, the level of partnering not only between different companies but also between regulators, the FDA, organizations such as ARDA are responsible for vaccine oversight and the United States. The same agencies in Europe all understand the severity and the importance of this moment of trying to do everything possible to accelerate that process. However, to do it in a way that ensures safety, and that ensures a high level of quality in everything that we do. Now what that means for us technically is that we are working hand in hand with regulators trying to parallel pass certain processes, where we would ordinarily, for example, do certain testing procedures prior to starting our larger scale-up of capacity and manufacturing an actual product. We’re going at risk and doing some of those things simultaneously. We’re looking at what are the absolutely critical steps in the process, and what can be done by utilizing new types of data analytics, at times even utilizing data and information from other similar compounds to see what we can do to move the timelines up. Because all of us understand that if we let it run its full process this could take five or seven years. Which frankly would be unacceptable. At the same time, if something is going to be used, with literally billions of patients or around the world, we need to ensure that the risk-benefit equation is very strong and agreed upon by regulators and other interested parties around the world. We’re working hard to be in humans by late August or early September. Again, we will be producing at risk by that time to be able to have sufficient quantities. And it’s our expectation that as we work our way through the early part of 2021, that we could be at that time producing at a rate of hundreds of millions of vaccines. Our goal is to be at a position by the end of 2021. To be doing at the rate of a billion doses, we do want to ensure that there’s broad Global Access that’s affordable that it’s accessible for everyone. And again, on a not for profit basis.

Gary Bisbee 8:46
Well, good luck. We’re obviously all very enthusiastic about the work that you’re doing. Why don’t we turned to medicines or treatment options?

Alex Gorsky 8:57
The very good news here, Gary, is that while this is a difficult virus, and certainly one is presented a major challenge in terms of what should be the right approaches to treatment, and how can they rapidly help address the underlying pathophysiology and biology with the patient and the disease. Once someone is diagnosed, we have literally dozens and dozens of companies working on therapeutics, medicines, and vaccines. And I believe that literally 10s of billions of dollars, hundreds of billions of dollars have been invested in the biopharmaceutical industry over the past several decades, that have put us into a position where we are today to be able to make significant strides in relatively short order. While again, there are dozens of approaches being studied. I would say the two main are one – can we develop an antiviral? Or how do we better perhaps regulate the body’s immune system either up-regulating it or downregulating it in certain cases, it needs to be expanded in other areas, it can actually overreact and result in challenges something called the cytokine cascade syndrome. And so by either taking these independent approaches or combined approaches, I believe most scientists would agree that in the coming months, we should be in a position where we have not only one but potentially several therapeutics available to treat patients who’ve been infected. As we all know vaccines take longer, but here too, I think we’re going to have multiple approaches. We’re going to have RNA, DNA, mRNA approaches, vector approaches as we have. And what I can tell you from the collaboration that I’ve seen, between the various pharmaceutical companies involved is that we don’t see this as competing against each other. We see this as competition against COVID-19. And something that’s so important for the world for humanity, that we’ve got to do everything possible to bring these kinds of solutions to patients.

Gary Bisbee 11:26
Well, we appreciate the leadership that you and J&J have shown, along with the other pharma companies. So again, our good wishes are with you. Why don’t we turn Alex to the caregivers who have operated under a very stressful environment. And I know J&J has spent considerable resources developing expertise and workers and the stress that workers are under. Can you describe the programs where J&J is committed $50 million to supply frontline workers with PPE?

Alex Gorsky 11:59
Sure, we’re very proud of the long tradition in history we have at J&J investing in our frontline health care workers. In fact, Johnson and Johnson is one of the first companies to support nurses in a significant way. And on a personal level, to me, that’s very important. My wife and sister are both nurses. I have a niece who’s literally a nurse manager at ground zero in one of the local areas that are significantly impacted by COVID-19. And there’s always been a strong ethos at J&J. We certainly put a priority on bringing new technology to patients and healthcare systems, but nothing replaces the important care provided by those frontline workers, the nurses, the aides, the physicians, the EMTs, who are literally on those front lines every day and imagine those who were there today, often putting themselves at risk often having to improvise in a significant way due to the patient load they were facing at any one particular time. And it’s been nothing less than a rollercoaster. What we’ve seen particularly in places like New York City, Northern New Jersey, Detroit, Michigan, New Orleans, where there have been really significant outbreaks, we’ve made a commitment actually to do over 250 million dollars of investment over a 10-year time frame. But then we’ve also got another 50 million, half of which has already been committed directly to the pandemic issue and we think that that’s important that we’re there showing our support of putting tangible programs and other investments in place, all in the spirit of trying to help them do their job that’s ultimately going to help patients.

Gary Bisbee 13:43
You’ve also supported the Chan Public Health School at Harvard and Thrive Global for stress management resiliency program. Can you describe that for us, Alex?

Alex Gorsky 13:53
We’re fortunate at Johnson and Johnson. That was actually one of my predecessors, Jim Burke. Dating back to the 1970s, really put a challenge on the company to say we not only want to have the best workforce, but we want to have a very healthy workforce as well. And recognizing the important role that healthcare for each of us and for our families plays, ultimately in helping to ensure that we can be our best every day that we can show up to not only do our job but to be our best and make a contribution to be able to take care of our families. It’s essential that we take care of ourselves. And through the last several decades, we’ve been able to make a lot of progress in wellness prevention live for life energy programs, that all have the focus on saying, “How can we help people be at their very best physically, and ultimately, that manifests itself in things like productivity, but also levels of engagement, how they feel about the company, and frankly, how they’re also able to engage with their broader community. Where they live and work and raise their families, whether they’re online training programs, whether they’re in person, classes that focus on things like diet, exercise, like sleep. And again, all with an emphasis on prevention and wellness is perhaps being some of the most important steps that we can take to maintaining our overall health. And that certainly applies to COVID-19. And through the years, we’ve taken these very same ideas and programs, and in many cases, we’ve worked with customers and other partners and help do a like a train the trainer of sorts where we have produced these programs in their institutions. And I must tell you, the feedback is great. I think if you look at some surveys among nurses and physicians and other health care providers, their own health and in making sure that they are getting the amount of rest that they need on a daily basis is a significant challenge and I think the feedback that we’ve gotten from many of our partners has been overwhelmingly positive. And it’s another way that we can take what we do at Johnson and Johnson, partner with others, and hopefully have a positive impact on the entire healthcare system.

Gary Bisbee 16:14
Well, the Academy has worked with J&J on several of those programs. And we’re definite fans. Alex, I know there’s a number of other activities and programs that J&J has worked with the health systems. Many of our audience are health system executives. Can you just share with us a bit about other programs that J&J is working on during the crisis in particular?

Alex Gorsky 16:42
Sure, you know, what I think is exciting about the crisis and every crisis that brings forth an opportunity to work in new ways together, and very early on in the crisis. Partners came to us asking if we could help in areas such as for example, acquiring PPE. Our hospital group rallied very quickly worked with our internal teams that were where we use PPE extensively in many of our manufacturing and production facilities and worked with some of their suppliers to try to assess hospitals to get an adequate supply of mass gowns, gloves and other types of equipment. We did that to a significant degree. When it looked as though we’re on the cusp of exceeding capacity for ventilators in this country, our engineers and one of our groups quickly went to work and came up with a way to almost double the output from ventilators by creating a splitter, a 3d printed splitter, that could be applied in the right circumstances to help maintain additional patients on those systems. So again, in a very hands-on patient facing away, but in other cases, who actually helped some of the large accounts with terms we tried to revise our contracts that were very customer friendly. Recognizing the challenges that they were facing. So those are just a few of the ways that we been trying to partner and we continue to do so today as many hospitals start to open up again for elective surgeries. They’re having to consider what kind of changes do they need to make in their supply chain to ensure that they can ramp back up that during a period where they’re likely to accelerate their number of elective surgeries that the supply chain stays robust, stays constant? How do they ensure that they can get their workers and technicians back into the operating room with the right kind of protection and equipment in place? So these are all areas that we think offer a significant opportunity to partner likely in new and unprecedented ways with inpatient and outpatient health care systems around the country and in fact around the globe?

Gary Bisbee 18:45
Well, it’s much appreciated by the health systems. You bring up supply chain if we could turn to that for a moment. The supply chain for PPE has been, I think we would agree, unreliable. We’ve looked across the country and I know J&J has substantial experience in building a reliable global supply chain. What are the key success factors that health systems could learn from J&J in terms of a reliable supply chain?

Alex Gorsky 19:13
Well, look, I think we’re all going to learn a lot of lessons in this process that will hopefully put us in a better position and prepare us for the future or in a significant way because chances are, this won’t be the last pandemic that we face. There will be things in the future, that through better preparation, better planning, and better early execution, we can make an impact sooner in the course of the disease. A few things that we’ve always tried to focus on at Johnson and Johnson is ensuring that you’ve got the kind of resiliency and redundancy systems in place that enable you to handle certain surges. We’ve seen this to a significant degree. There are parts or products that were quickly taxes as hospitals and others. Systems ramped up, being able to quickly engage not only your own internal supply system but other external partners to help fill some of the gaps that can be created when you see that kind of surge is critically important. Having the kind of business continuity plans in place so that you know what the checklist is where you need to go, how can you quickly adapt things as simple as your purchasing order requirements and protocols to be able to rapidly seek and complete ordering in a very different kind of environment that many of us face. So those are things that we have done that we continue to do and that I think all of us are going to have to improve our systems going forward like that. The other big opportunity here, Gary is I think, technology innovation. I think we’re finding that in many ways. Many of our systems are rather antiquated, and how can we apply some of the new technology and the new ways of looking at and using datasets to gather insights and to rapidly develop options for us in a much more integrated, digital and connected way.

Gary Bisbee 21:13
Well, there’s a balance between the federal, state, and private sectors regarding PPE supply chain stockpiles and so on. How do you think about that, Alex?

Alex Gorsky 21:22
Well, look, I don’t think anybody has the ability to do it alone. I think it’s going to take a lot of public-private partnerships, there will be certain components of the supply chain healthcare system that should be more centralized or standardized or done at the federal level, just as you would expect us in a company like Johnson and Johnson to do. On the other hand, you want the right amount of agility, flexibility, accountability, and responsibility at the local level. so that people can respond based upon the unique needs of that particular unit or customer at any given time. So I think again, knowing what should be done for example, In the preparation stage around stockpiling, or clearly, the federal government could play an important role versus what are those unique hospital opportunities? Do we want to continue to support at the local level to ensure that we are matching real-time need, which real-time supply and not encumbering it with ultimately could be a kind of paralyzing bureaucracy or other impediments that would prevent a particular system from getting exactly what they need at a certain time?

Gary Bisbee 22:36
Let’s turn to J&J’s diversified business model. Can you describe the Johnson and Johnson business diversification for us, Alex? Particularly, what’s the value how you see that contributing to Johnson & Johnson as a whole,

Alex Gorsky 22:50
Our diversified model is one that we believe is an essential component of our success. For well over 100 years and it’s a choice on how we run our business for the long term. If you look over most measures of performance, over 50, over 25, or 15, over 10, 5 years, Johnson and Johnson has exceeded the performance of its peer group. And we think because we have a diversified bottle of a consumer group, pharmaceutical group, medical device group, that at various times in their life cycles have either outperformed or underperformed. It gives us the optionality to continue to perform even in a market like today where the medical device market is down significantly. And yet our pharmaceutical business and consumer businesses continue to do very well, even in this type of environment. We think that having that kind of breadth and depth across our different businesses, frankly also gives us a very unique insight into healthcare. We try to go where the best technology the best capabilities are, we are not relegated by only is this type of pharmaceutical product or this kind of device or this kind of consumer product. And I think it gives us the ability to leverage the spaces in between. In fact, right now we’re working on a comprehensive program in our cancer group to say, “How can we prevent and cure and treat cancer much, much earlier in the process?” All too often we find cancer very late. And if we can find it, if we can diagnose it, identify it, and treat it much earlier in the process, the probability of success and have a better outcome goes up significantly. And it’s only because we have such a diverse portfolio that we are positioned to do something like that. Again, we think that there’s a number of advantages, but we also expect each one of our business units to compete within their particular vertical to be competitive in terms of their performance of their pipeline. Their cost structure. So it’s something that we pay a lot of attention to. And again, we think it’s a core strength of Johnson Johnson.

Gary Bisbee 25:08
As a CEO of a diversified company, what do you pay particular attention to, Alex?

Alex Gorsky 25:15
I think it’s all about appropriately managing your portfolio. And we set consistent and strong goals in place that each one of our sectors and each business within each sector should strive to be number one or number two in their category. Because we know that when you’ve got that kind of critical mass, it gives you the ability to find better science, find better people, and frankly, reach more customers. We require those respective units to have strong pipelines for the future, are they investing with the long term in mind so that they can be competitive today, but also competitive and five months, five years, 10 years away? That’s critical. Next, we look for ways for these businesses to be complimentary. With other businesses, is it something that would be a good match to either help them better serve a particular customer? Or is it something that can help us be more effective or efficient within a particular business? And of course, we require all of our businesses to be competitive to also have a strong business over time that they have a competitive p&l relative to benchmarks in their particular area. And it’s one of our businesses that doesn’t meet those criteria over time. Then, of course, we ask a question, is it the right fit for J&J, even though it could be a healthy and good business, perhaps it would be a better fit someplace else. So that we could continue to invest in other areas of perhaps greater unmet medical need, or that presents a greater growth opportunity. So it’s an ongoing process, literally something that we do with our leaders monthly, that we do with our Executive Committee on an ongoing basis and all the way up to our board of directors, to make sure we’re investing areas where number one, we think we can make the biggest difference with patients and consumers. And number two, where we can ultimately generate the best long term returns for our company to be able to continue to invest in for shareholders to realize an appropriate gain.

Gary Bisbee 27:16
So if I could follow up on the leadership question for a moment, what are the most important characteristics of a leader during a crisis, like this crisis?

Alex Gorsky 27:25
I think that there are so many characteristics of a leader that really have a light shine upon them during times like this. One is an ability to react quickly to a situation frequently, we can become so bogged down with bureaucracy, or having both the systems that are there often to protect this kind of takeover versus understanding that decisions need to be made in a very timely in a very agile and a very flexible way. The way that I frequently describe it is: the best leaders are those who know that when things slow down, they speed up. When things speed up too much, they slow things down. And I think having your hand on the rudder of the organization, so to speak, at all times, to know when to ramp up and ramp down to make the best decisions is critically important. The next thing for me, it’s, it’s about engagement and communication, people expect to be communicated with particularly in today’s environment, and if you leave a vacuum void, unfortunately, negativity tends to fill in versus speaking in a very authentic adult way providing your team’s your colleagues with the facts of the situation that as best you understand them and know them at the time and then providing them a clear path or roadwork ahead that acknowledges the challenges but also gives them a reason to believe in the future. So I think those elements I found to be important always in leadership, but particularly so during times of crisis.

Gary Bisbee 29:04
Turning from leadership to governance, you sit on several large company boards in addition to J&J. What are the key questions of board members should be asking in a crisis situation like this Alex?

Alex Gorsky 29:17
As both the Chairman of our board and also as a board member on IBM, I think the kinds of questions you need to be asking in times like this are, what are the risks that the company faces? What are they in by risk, in terms of business, financial, operational, execution, an employee at all levels, so that, again, plans can be not only put into place but reinforced were necessary to ultimately protect your stakeholders. The second thing that I think the boards should be asking is, look, what are the immediate, near term and long term challenges and opportunities that will evolve as a result of this particular situation. We all have to work simultaneously on the issue. But also be looking around the corner over the hill so that we have the right and appropriate balance between today, tomorrow, the next month, next year. The actions we’re taking not only allow us to address today’s issue but better position us for the future, as well. I think the other question that the board should be asking is, what are we doing to ensure the safety, the success, the resiliency, of our people in our teams. Times like this can be very, very trying. There’s always going to be an issue or a situation that you’re dealing with, but making sure that you’re providing your employees the kind of support they need to work from home, to help manage their family issues as well as their work issues, how to take care of themselves, how to continue their own career development, even during times like this. More important than ever, because without the engagement, the support of your employees, you just can’t be successful.

Gary Bisbee 31:05
Alex, this has been just a terrific interview. I have one additional question if I could, and that is that we’re all talking about a new normal that we imagine will be coming. How do you think about a new normal? in particular? What would you like to see, change, or evolve in the future?

Alex Gorsky 31:24
I think out of every crisis, there comes an opportunity to rethink the way that we do everything. And I think coming out of this, a few changes that will actually be good for us as a society and as a country would be a reprioritization, of public health policy. And I think we clearly are gaining an understanding that without a strong public health policy and outcomes, we can’t have a strong economy, we can’t have strong security, we can’t have a strong society. So making those appropriate investments and keeping them consistent going forward, I think is going to be more important than ever. The second thing is I think that we’re going to only accelerate the uptake in technology across almost every aspect of healthcare and of our business, whether it’s telemedicine, telehealth, whether it’s the way that we think about doing medical education, and training and support, whether it’s the way that we merge files and data sets to do better patient and virus tracking and understanding technology, data, AI, machine learning, connectivity, sensing will all be inherent in what we do. And I think the pace of that uptake will only increase in the coming months and years. And last but not least, I think we’re going to perhaps rethink the working contract that employees have with large institutions and organizations. I think we’re realizing here that there are some jobs and roles that need us to be there every day. There are others that can be done remotely. They frankly facilitate us to be more productive and more engaged. And so rethinking the standard roles and responsibilities that many of us have had in place for decades, in light of the way that we live, the way that we work today, I think will present a significant opportunity going forward as well. I consider myself a realistic optimist. And I think I am in this case, there’s no doubt we still have a significant road ahead. There will be challenges along the way. But I do remain confident that on the other side of COVID-19, that we can be a stronger healthcare system. We can be stronger leaders, we can be a stronger country if we address these things in the right way.

Gary Bisbee 33:45
Alex, thanks again, just a terrific interview. We very much appreciate your time today.

Alex Gorsky 33:51
Thank you very much, Gary. Stay safe, stay healthy, and I look forward to talking again soon.

Gary Bisbee 33:57
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee’s Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.