|Born||Daniel Lucius Vasella
August 15, 1953
|Alma mater||University of Bern (MD)
Harvard Business School (PMD)
|Occupation||Chairman Novartis AG|
Daniel Lucius Vasella, M.D. (born 15 August 1953) is a medical doctor, author, and executive who served as CEO and chairman of the Swiss pharmaceutical company Novartis AG, the world's fifth largest drug company.
Vasella is an honorary member of the American Academy of Arts and Sciences. In 2004, Time magazine named him one of the world’s 100 most influential people, and he was chosen as the Most Influential European Business Leader of the Last 25 Years by the readers of the Financial Times.
- 1 Early Life and Education
- 2 Career
- 2.1 Novartis - Controversies and criticism
- 2.1.1 Challenge to India's patent laws
- 2.1.2 "No" to free flu vaccines
- 2.1.3 Sexual discrimination class action from 5,600 current and former employees
- 2.1.4 Off-label marketing and other marketing violations
- 2.1.5 Fighting off-label prescribing of competitor's drug
- 2.1.6 U.S. government's second civil fraud lawsuit against Novartis AG in four days
- 2.1 Novartis - Controversies and criticism
- 3 Writing
- 4 Personal life
- 5 Awards and recognition
- 6 External links
- 7 References
Early Life and Education
Vasella was born in Fribourg, Switzerland in 1953. His father was a history professor at the local university, and his mother was a housewife. His desire to become a doctor began during his childhood, which was marked by several tragedies. At eight years old, he contracted TB and meningitis and spent nearly a year in hospitals. When Vasella was 13 years old, his father died from complications of surgery.
Vasella obtained his M.D. in 1980 from the University of Bern in Switzerland. He completed his residency at the University Hospital in Bern and the city hospital in Zurich, before returning to Bern as chief resident. In 1988, he changed career paths, working in the United States as a pharmaceutical sales representative and in market research. In 1989, he completed the Program for Management Development at Harvard Business School. Vasella was awarded an honorary doctorate for medicine by the University of Basel in 2002.
Vasella held a number of medical positions in Switzerland before being hired in 1988 by Sandoz Pharmaceutical Corporation, the former U.S. subsidiary of Swiss pharmaceutical company, Sandoz. He remained there until 1992, when he was promoted to CEO of parent company, Sandoz Pharma Ltd., and named a member of the Group Executive Committee.
Vasella helped to orchestrate the 1996 merger between Sandoz and Ciba-Geigy, another Swiss pharmaceutical company. The two companies combined to form Novartis AG. Vasella was appointed CEO of the combined entity and a member of the Board of Directors. In 1999, he was named Chairman of the Board of Directors.
In January 2010, Vasella decided to step down as CEO. He was replaced by his hand-picked successor, Joseph Jimenez, the Division Head of Novartis Pharmaceuticals at the time.
In January 2013, Novartis announced that Vasella would be retiring as Chairman of the Board of Directors in February 2013. Vasella was named an honorary chairman, to be succeeded by Jörg Reinhard in August 2013.
Novartis - Controversies and criticism
Challenge to India's patent laws
Novartis fought a seven year, controversial battle to patent Gleevec in India, and took the case all the way to the Indian Supreme Court, where the patent application was finally rejected. The patent application at the center of the case was filed by Novartis in India in 1998, after India had agreed to enter the World Trade Organization and to abide by worldwide intellectual property standards under the TRIPS agreement. As part of this agreement, India made changes to its patent law; the biggest of which was that prior to these changes, patents on products were not allowed, while afterwards they were, albeit with restrictions. These changes came into effect in 2005, so Novartis' patent application waited in a "mailbox" with others until then, under procedures that India instituted to manage the transition. India also passed certain amendments to its patent law in 2005, just before the laws came into effect, which played a key role in the rejection of the patent application.
The patent application claimed the final form of Gleevec (the beta crystalline form of imatinib mesylate).:3 In 1993, during the time India did not allow patents on products, Novartis had patented imatinib, with salts vaguely specified, in many countries but could not patent it in India. The key differences between the two patent applications, were that 1998 patent application specified the counterion (Gleevec is a specific salt - imatinib mesylate) while the 1993 patent application did not claim any specific salts nor did it mention mesylate, and the 1998 patent application specified the solid form of Gleevec - the way the individual molecules are packed together into a solid when the drug itself is manufactured (this is separate from processes by which the drug itself is formulated into pills or capsules) - while the 1993 patent application did not. The solid form of imatinib mesylate in Gleevec is beta crystalline.
As provided under the TRIPS agreement, Novartis applied for Exclusive Marketing Rights (EMR) for Gleevec from the Indian Patent Office and the EMR was granted in November 2003. Novartis made use of the EMR to obtain orders against some generic manufacturers who had already launched Gleevec in India. Novartis set the price of Gleevec at USD 2666 per patient per month; generic companies were selling their versions at USD 177 to 266 per patient per month. Novartis also initiated a program to assist patients who could not afford its version of the drug, concurrent with its product launch.
When examination of Novartis' patent application began in 2005, it came under immediate attack from oppositions initiated by generic companies that were already selling Gleevec in India and by advocacy groups. The application was rejected by the patent office and by an appeal board. The key basis for the rejection was the part of Indian patent law that was created by amendment in 2005, describing the patentability of new uses for known drugs and modifications of known drugs. That section, Paragraph 3d, specified that such inventions are patentable only if "they differ significantly in properties with regard to efficacy." At one point, Novartis went to court to try to invalidate Paragraph 3d; it argued that the provision was unconstitutionally vague and that it violated TRIPS. Novartis lost that case and did not appeal. Novartis did appeal the rejection by the patent office to India's Supreme Court, which took the case.
The Supreme Court case hinged on the interpretation of Paragraph 3d. The Supreme Court decided that the substance that Novartis sought to patent was indeed a modification of a known drug (the raw form of imatinib, which was publicly disclosed in the 1993 patent application and in scientific articles), that Novartis did not present evidence of a difference in therapeutic efficacy between the final form of Gleevec and the raw form of imatinib, and that therefore the patent application was properly rejected by the patent office and lower courts.
Although the court ruled narrowly, and took care to note that the subject application was filed during a time of transition in Indian patent law, the decision generated widespread global news coverage and reignited debates on balancing public good with monopolistic pricing, innovation with affordability etc.
Had Novartis won and gotten its patent issued, it could not have prevented generics companies in India from continuing to sell generic Gleevec, but it could have obligated them to pay a reasonable royalty under a grandfather clause included in India's patent law.
In reaction to the decision, Ranjit Shahani, vice-chairman and managing director of Novartis India Ltd was quoted as saying "This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options." He also said that companies like Novartis would invest less money in research in India as a result of the ruling. Novartis also emphasized that it continues to be committed to access to its drugs; according to Novartis, by 2013, "95% of patients in India—roughly 16,000 people—receive Glivec free of charge... and it has provided more than $1.7 billion worth of Glivec to Indian patients in its support program since it was started...."
"No" to free flu vaccines
In June 2009, Novartis declined to provide free vaccines to the poor in order to counter a current flu epidemic, saying developing nations or donor nations should cover the costs. Daniel Vasella, Novartis chief executive, told the Financial Times that he would consider offering discounted pricing to low-income nations, but unlike GlaxoSmithKline, would not offer vaccines for free.
Sexual discrimination class action from 5,600 current and former employees
On May 17, 2010, a jury in the United States District Court for the Southern District of New York awarded $3,367,250 in compensatory damages against Novartis, finding that the company had committed sexual discrimination against twelve female sales representatives and entry-level managers since 2002, in matters of pay, promotion, and treatment after learning that the employees were pregnant. Two days later (the trial was bifurcated so that the punitive damages verdict was argued and deliberated separately), the jury awarded punitive damages in the amount of $250 million, representing about 2% of Novartis' gross revenues for 2009. Normally punitive damages would be reduced to less than a 10:1 ratio, but the trial was for a group of named plaintiffs in a class action, who were representing a class of 5,600 class members. The jury was instructed to award compensatory damages just to the named plaintiffs, but to award punitive damages to the entire class. Once the court makes findings on compensatory damages for the remaining class members (which are estimated by plaintiffs' counsel at just under $1 billion), the $250 million is expected to satisfy the Supreme Court's single-digit ratio test for proportionality of compensatory to punitive damages.
Off-label marketing and other marketing violations
In September 2008, the U.S. Food and Drug Administration (FDA) sent a notice to Novartis Pharmaceuticals regarding its advertising of Focalin XR, an ADHD drug, in which the company overstated its efficacy while marketing to the public and medical professionals.
In 2005 federal prosecutors opened an investigation into Novartis' marketing of several drugs: Trileptal, an antiseizure drug; three drugs for heart conditions - Diovan (the company’s top-selling product), Exforge, and Tekturna; Sandostatin, a drug to treat a growth hormone disorder; and Zelnorm, a drug for irritable bowel syndrome. In September, 2010, Novartis agreed to pay US$422.5 million in criminal and civil claims and to enter into a Corporate Integrity Agreement with the US Office of the Inspector General. According to the New York Times "Federal prosecutors accused Novartis of paying illegal kickbacks to health care professionals through speaker programs, advisory boards, entertainment, travel and meals. But aside from pleading guilty to one misdemeanor charge of mislabeling in an agreement that Novartis announced in February, the company denied wrongdoing." In the same New York Times article, Frank Lichtenberg, a Columbia professor who receives pharmaceutical financing for research on innovation in the industry, said off-label prescribing was encouraged by the American Medical Association and paid for by insurers, but off-label marketing was clearly illegal. “So it’s not surprising that they would settle because they don’t have a legal leg to stand on."
In April 2013, federal prosecutors filed two lawsuits against Novartis under the False Claims Act for off-label marketing and kickbacks; in both suits, prosecutors are seeking treble damages. The first suit "accused Novartis of inducing pharmacies to switch thousands of kidney transplant patients to its immunosuppressant drug Myfortic in exchange for kickbacks disguised as rebates and discounts". In the second, the justice department joined a qui tam, or whistleblower, lawsuit brought by a former sales rep over off-label marketing of three drugs: Lotrel and Valturna (both hypertension drugs), and the diabetes drug, Starlix. Twenty-seven states, the District of Columbia and Chicago and New York also joined.
Fighting off-label prescribing of competitor's drug
Outside the US, Novartis markets the drug ranibizumab (trade name Lucentis), which is a monoclonal antibody fragment derived from the same parent mouse antibody as bevacizumab (Avastin). Both Avastin and Lucentis were created by Genentech which is owned by Roche; Roche markets Avastin worldwide, and also markets Lucentis in the US. Lucentis has been approved worldwide as a treatment for wet macular degeneration and other retinal disorders; Avastin is used to treat certain cancers. Because the price of Lucentis is much higher than Avastin, many opthalmalogists began having compounding pharmacies formulate Avastin for administration to the eye, and began treating their patients with Avastin. In 2011, four trusts of the National Health Service in the UK issued policies approving use and payment for administering Avastin for macular degeneration, in order to save money, even though Avastin had not been approved for that indication. In April 2012, after failing to persuade the trusts that it was uncertain whether Avastin was as safe and effective as Lucentis, and in order to retain the market for Lucentis, Novartis announced it would sue the trusts. However, in July Novartis offered significant discounts (kept confidential) to the trusts, and the trusts agreed to change their policy, and in November, Novartis dropped the litigation.
Vasella is a member of the Board of Directors of PepsiCo, Inc. and the American Express Company. He is also a member of the International Advisory Board of the Peres Center for Peace in Israel, the International Business Leaders Advisory Council for the Mayor of Shanghai, and a board member of the Carnegie Endowment for International Peace. As of May 2013, Vasella was working with the global management consulting firm McKinsey & Company as a coach for CEOs, and as a private coach and advisor to executives.
U.S. government's second civil fraud lawsuit against Novartis AG in four days
 United States Files Complaint Against Novartis Pharmaceuticals Corp. for Allegedly Paying Kickbacks to Doctors in Exchange for Prescribing Its Drugs. On Friday 26 April 2013, The U.S Government The United States government on Friday announced its second civil fraud lawsuit against the Swiss drug maker Novartis in four days, accusing a unit of the company of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs. The Justice Department announced that the United States has filed a  second civil false claims lawsuit against Novartis Pharmaceuticals Corp. involving alleged kickbacks paid by the company to health care providers. The government’s complaint seeks damages and civil penalties under the False Claims Act and under the common law for paying kickbacks to doctors to induce them to prescribe Novartis pharmaceutical products that were reimbursed by federal health care programs. The lawsuit alleges that the payments violated the Anti-Kickback Statute and, as a result of  Novartis’s unlawful conduct, the government paid false claims for reimbursement for Novartis pharmaceutical products.
Vasella authored Magic Cancer Bullet: How a Tiny Orange Pill May Rewrite Medical History (2003), a book about the discovery and development of the breakthrough cancer drug Gleevec. The book was co-written with Robert Slater.
Vasella met Anne-Laurence Moret, the niece of former Sandoz CFO, CEO, and chairman Marc Moret, in 1973, and they were married in 1978. Vasella and his wife have two grown sons and a daughter. His older brother, Andrea Vasella, was a professor at the ETH Zurich. Vasella is a patron of the arts and enjoys skiing and spending time outdoors.
Awards and recognition
Vasella has received numerous awards for his humanitarian efforts, corporate philanthropy work, and his leadership in the Pharmaceutical industry. They include:
- Harvard Alumnus Award 2003
- Most Influential European Business Leader of the Last 25 Years by the readers of Financial Times 2004
- Time magazine: One of the Top 100 Most Influential Personalities 2004
- The Cancer Research Institute’s Oliver R. Grace Award (for Distinguished Service in Advancing Cancer Research) 2004
- University of Marburg’s Karl Winnacker Preis 2007
- Elected to the American Academy of Arts and Sciences 2008
- GILD Award for Leadership: Warren Bennis Award for Excellence in Leadership 2010
- December 2009 USA Today Q&A with Dan Vasella
- Business Week Cover Story, "Novartis: Radically Remaking Its Drug Business"
- Indian patent laws discriminate against the innovation-focused pharmaceutical industry, Mint of India, 10 May 2007
- Drug Lord, Time Magazine, 13 Nov 2007
- Daniel Vasella biography, Forbes.com
- The Pharmaceutical Horizon Beckons, The New York Times, 13 August 2005
- Madslien, Jorn. "Profile: Novartis chief Daniel Vasella". BBC News. Retrieved 15 May 2013.
- "American Express Company Elects Dr. Daniel Vasella to Board of Directors". American Express. Retrieved 15 May 2013.
- The 2004 Time 100 : Daniel Vasella, Time
- 2003 Alumni Achievement Award for D. Vasella
- "An interview with Daniel Vasella". McKinsey & Company. Retrieved 15 May 2013.
- "Curriculum Vitae: Dr. Daniel Vasella". WebCite. Retrieved 15 May 2013.
- Businessweek: "Vasella Quitting Wins Cheers From Novartis’s Investors"
- Pharmaceutical Market Europe: "Bayer’s Jörg Reinhardt to replace Daniel Vasella as Novartis chair"
- Gardiner Harris and Katie Thomas for the New York Times. April 1, 2013 Top court in India rejects Novartis drug patent
- Note: The Indian patent application No.1602/MAS/1998 does not appear to be publicly available. However according to the decision of the IPAB on 26 June 2009 (page 27) discussed below, "The Appellant’s application under the PCT was substantially on the same invention as had been made in India."
- Published PCT application WO1999003854
- Staff, European Medicines Agency, 2004. EMEA Scientific Discussion of Glivec
- US Patent 5,521,184
- Indian Supreme Court Decision paragraphs 5-6
- Novartis v UoI, para 8-9
- Shamnad Basheer for Spicy IP March 11, 2006 First Mailbox Opposition (Gleevec) Decided in India
- Staff, LawyersCollective. September 6, 2011 Novartis case: background and update – Supreme Court of India to recommence hearing
- R. Jai Krishna and Jeanne Whalen for the Wall Street Journal. April 1, 2013 Novartis Loses Glivec Patent Battle in India
- Intellectual Property Appellate Board decision dated 26 June 2009, p 149
- W.P. No.24759 of 2006
- "Supreme Court rejects bid by Novartis to patent Glivec".
- Novartis v UoI, Para 191
- Novartis v UoI, Para 24-25
- "How the Indian judgment will reverberate across the world".
- "Patented drugs must be priced smartly".
- Patent with a purpose, Prof. Shamnad Basheer, Indian Express, 3 April 2013
- Kevin Grogan for PharmaTimes. February 27, 2012 Novartis explains stance over India patent law challenge
- Berne Declaration. May 8, 2007 Short questions and answers about the court case initiated by Novartis in India
- Shift in Novartis Strategy, The Telegraph
- "Novartis says 'no' to free flu vaccines". Andrew Jack. Financial Times. June 15, 2009.
- Mark Hamblett (New York Law Journal) (2010-05-20). "Novartis Hit With $250 Million in Punitives in Gender Bias Case". law.com. ALM Media. Retrieved 2012-01-16.
- "Focalin XR (dexmethylphenidate hydrochloride) extended-release capsules CII". Warning Letters. U.S. Food and Drug Administration (FDA). 2008-09-25. Retrieved 2009-08-05.
- Wilson, Duff (2010-09-30). "Novartis Settles Off-Label Marketing Case". NYTimes.com. Retrieved 2012-01-16.
- "Novartis Pharmaceuticals Corporation, a US subsidiary of Novartis AG, reaches settlement agreement with US Attorney's Office" (press release). Novartis. 2010-09-30. Media Releases. Retrieved 2012-01-16.
- "U.S. Sues Novartis Again, Accusing It of Kickbacks". New York Times. 2013-04-26. Retrieved 2013-04-27.
- "United States Files Complaint Against Novartis Pharmaceuticals Corp. for Allegedly Paying Kickbacks to Doctors in Exchange for Prescribing Its Drugs". The United States Department of Justice. 2013-04-26. Retrieved 2013-04-26.
- Andrew Pollack for the New York Times. April 28, 2011 Cheaper Drug to Treat Eye Disease Is Effective
- Jeffreys, Branwen (2012-05-06). "Using Avastin for eye condition wet AMD 'could save NHS £84m'". bbc.com. Retrieved 2012-05-06.
- Copley, Caroline; Hirschler, Ben (April 24, 2012), Potter, Mark, ed., Novartis challenges UK Avastin use in eye disease, Reuters, retrieved April 29, 2012
- Ben Adams for Pharmafile. July 26, 2012 Lucentis price cut ends PCT-Novartis dispute
- Ben Adams for Pharma Times. October 3, 2012. Novartis to drop legal case against NHS body
- "Builder of Novartis Is Stepping Down". Wall Street Journal. Retrieved 15 May 2013.
- "U.S. Sues Novartis Again, Accusing It of Kickbacks". New York Times. 2013-04-26. Retrieved 2013-04-27.
- "U.S. sues Novartis over kickbacks". Reuters Edition: U.S. 2013-04-26. Retrieved 2013-04-26.
- Vasella Slater, Daniel Robert. "Magic Cancer Bullet: How a Tiny Orange Pill May Rewrite Medical History". Amazon. Retrieved 15 May 2013.
- "Blick für die Frau". Die Weltwoche. Retrieved 15 May 2013.
- "Daniel Vasella". Bloomberg Businessweek. Retrieved 15 May 2013.
- "Alumni Achievement Awards: Daniel L. Vasella, M.D.". Harvard Business School. Retrieved 15 May 2013.
- "Verleihung des Karl-Winnacker-Preises 2007 an Dr. Daniel Vasella". Philipps-Universität, Marburg. Retrieved 15 May 2013.