Johnson & Johnson

Disease, Robots and Health Today

Sandi Petersen by Marc-steffen Unger
Sandra Petersen is known for achieving results, turning two units around at Bayer before joining J&J.
  • Why it matters

    Why it matters

    If Johnson & Johnson can become more innovative, it will be able to defend its market share against competitors such as Amgen, Merck and Pfizer.

  • Facts

    Facts

    • Johnson & Johnson, based in the United States, makes medical devices, pharmaceutical and consumer packaged goods.
    • In 2014, J&J reported revenues of $74 billion.
    • J&J created the post of global chairwoman for Sandra Peterson, for which she moved from Bayer. She has also worked at Medco Health Solutions, Nabisco Holdings and Whirlpool.
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  • Audio

    Audio

  • Pdf

Sandra Peterson is pretty busy these days. She traveled to Berlin in advance of the G7 meetings to counsel government leaders about healthcare policy. As the highest-ranking outsider ever hired by J&J, she is charged with making the global healthcare products company faster and more efficient.

 

Ms. Peterson, the health care industry is being taken over by information technology and genetic research. Is medicine about to undergo a paradigm shift?
Sandra Peterson: Yes, we are on the brink of a new era. We now have a chance to radically change the way we think about health and the way we want to take care of patients.

What would that look like?
In developed countries, the emphasis now is mostly on how to manage chronic diseases and much less on the original question of how to cure illnesses. New insights from biology, genome analysis, behavioral research, and information technology are now allowing us to improve the help we can offer people when it comes to avoiding diseases and to taking preventative action.

Johnson & Johnson partners with IBM and Apple, with the aim of working together to offer better care to, among others, people with joint replacements. What is the idea behind this?

Most people suffering from knee problems today will wait years before they actually go to see a doctor. If they then need a knee replacement, they only get basic information on the surgical procedure itself and are generally left to their own devices when it comes to everything else. Through our partnership, we want to create a system which will physically and mentally prepare patients for the surgery months in advance and then will carefully monitor them afterwards.

What are the different roles taken on by the partners?

Johnson & Johnson will be contributing its innovative technical products and expertise as a healthcare company and our partners will be providing the requisite technology. In the U.S., IBM will be providing the analytics system and connectivity to the health care system and attending doctor. That in itself is not that easy. Apple, on the other hand, will take care of the interaction with the patient through a smartphone or tablet app.

So, what is the program’s overall aim?

The aim of the program is to better prepare patients for surgery on a physical, emotional and mental level, which – as our studies show – will significantly increase their chance of success. We want to start doing so six months before surgery by providing advice on matters such as diet and exercise. After surgery, we want to help patients get back on their feet quicker, such as with physical therapy. This is a radically new approach to preparing for surgery.

Are the health insurance companies going to pay for these programs?

As far as we know, yes, although that refers primarily to the U.S. However, patients are also willing to take on part of the cost. I strongly believe that the more we can demonstrate that these kinds of programs contribute to successful treatment outcomes, the more willing health insurance companies are going to be to pay for them.

Is J&J working on similar programs in its pharmaceutical segment?

We would like to make significantly broader use of modern technologies. We are hoping to do so through collaborations between our three sectors that are aimed at producing comprehensive solutions for our customers and patients. Our pharmaceutical company Janssen is already piloting projects in the United States in the area of mental health. Modern technology can, for example, be used to detect when patients with mental illness are not doing well. This means that these patients can then be systematically contacted.

Do these new therapeutic approaches have an impact on the research done by your companies?

Definitely. We spend $8.5 billion on research and development every year. This money used to be primarily spent on traditional science and clinical trials. However, we now need to gain a different kind of insight into our products, because, in the future, they will always be used in conjunction with information technology.

This means that your company now also needs different kinds of experts in addition to medical specialists, chemists, and biologists.

Indeed – we now need more IT specialists. We see ourselves as a company that doesn’t just specialize in science, but has an equally strong focus on technology, through which we hope to strengthen our capacity to innovate. We invest a lot of energy in choosing the right partners. An example of this is our collaboration with Google on creating more robotic surgical systems. Our shared objective is to develop the next generation of surgery.

Does that mean that doctors will be working from control rooms in the future?

Not quite, even though that is a possibility. What we are talking about is robot-assisted surgery. We want to be able to use data to determine what steps are most likely to produce the best results. This includes data on what kind of incisions and movements a surgeon needs to make. Google contributes the know-how and analytic capabilities required to analyze data of operating procedures.

Clearly, the entire health care sector is currently being changed by technology. But who is going to win the race? Large corporations or small specialist companies?

I cannot predict that. The IT sector has already shown that it is perfectly possible for small companies to grow into huge operations because they had innovative ideas. Here at Johnson & Johnson, we do of course have the advantage of being able to take a comprehensive approach to ensuring that people get and stay well. We do so not only by providing medication, but also through surgery and health care programs.

Does that mean that J&J intends to continue to diversify as before? Especially considering that other companies are starting to narrow their focus to become more specialized?

We are going to keep our three main sectors. However, we are also restructuring and changing these segments internally, and are buying and selling divisions.

Which is exactly what all pharmaceutical companies are doing. What is behind all these mergers and takeovers?

I can’t comment for other companies, but in many cases, it is of course consolidation that drives this development.

Is that the key to success?

One of the key requirements for solving people’s health problems is innovation. We only buy when we feel that an innovation is going to help us progress. And we disinvest in areas where we don’t foresee any more key innovations. These days, we tend to mainly look for smaller and medium-sized companies that will complement our portfolio.

For a complete change of subject: The upcoming G7 summit will also focus on health issues such tropical diseases and antibiotic resistance. You were invited to a pre-summit debate of these issues with representatives from the ministry of health. What was the outcome?

One of the most important points to note is the fact that the public health issue was put on the G7 summit agenda by German Chancellor Angela Merkel in the first place. This has never happened before. I believe that the Ebola outbreak last year was the first time that people really started to understand the seriousness of a pandemic. Although we had SARS and bird flu before that, it really took Ebola for this to register with the general public. It also made it clear that it is vital for us as a society to find solutions to these problems.

What kind of a solution could that be?

Ebola has shown us that Western countries took too long to get mobilized. Although helping with local infrastructure issues is vital, speeding up the development of medicines is just as important. I think that these are issues that need to be tackled jointly by governments and healthcare companies. To give you an example, we have just launched the first new tuberculosis drug in 50 years. However, we are now finding that we are unable to get the drug to the people who need it the most, because there simply isn’t the infrastructure. This is why it is important for us to enter into partnerships with the relevant governments. By this I mean that we need a kind of public-private partnership in order to jointly solve these challenges.

So, what you are saying is that the real progress in all of this actually lies in the fact that these matters will be discussed at a G7 summit for the first time.

Yes, that’s right. The same applies to the second issue, which is antibiotic resistance. Researching and developing new antibiotics is a very complicated matter, which is obviously one of the reasons why the pharmaceutical industry has been reticent to invest in this area.

On that point, it is also important to note that developing antibiotics is not very profitable for the industry. They do not command the same prices as medicines in other treatment areas.

Discovering a new antibiotic is one thing. However, the other part of the problem is that people have to limit their use of antibiotics in order to maintain their effectiveness. And in many ways, that is obviously the opposite of what a pharmaceutical company would like to see in terms of financial reward following the successful development of a treatment. So, this is really another area where we need to discuss with governments the possibilities of organizing joint research initiatives and how to limit antibiotic use.

J&J, just like other pharmaceutical companies, is also working on an Ebola vaccine. The pandemic has now been contained to such an extent that there are no longer enough patients to continue the necessary clinical trials. How are you going to overcome this problem?

We are currently in talks with governments and the U.S. Food and Drug Administration, FDA, to explore other ways of completing our research. The vaccine’s safety can, for example, also be tested on healthy subjects. Then there is also animal testing or we might agree to perform a number of studies with just a few patients. What’s important is to make sure that the vaccines will be ready next time there is an outbreak. In that respect, I also have to note that the talks between the industry and authorities have been very constructive so far.

You are the most powerful woman in the global pharmaceutical industry. What would be your advice to women who would like to make it to the top?

My advice to women is this: Don’t underestimate your capacity to be successful. Don’t let a lack of some of the qualifications needed for a given job stop you from applying for it. You will learn the missing capabilities.

You are obviously speaking from experience?

I have often taken on challenges that were difficult to understand for others. But I always learned a lot and, as a result, constantly improved my skills. In my experience, women can be just as successful professionally as men. They need to believe in themselves, be courageous, and decisive.

 

Maike Telgheder covers the pharmaceuticals and health sector for Handelsblatt. To contact the author: telgheder@handelsblatt.com

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