Novartis CEO had a rocky start to his tenure. Last year, the newly appointed boss was in a car when he learned that his predecessor had signed a $1.2 million contract with then Trump attorney and fixer, Michael Cohen, for him to provide access to the Trump administration. As he told STAT’s Matt Herper: “I was not mentally prepared, nor prepared from a crisis-management standpoint. It’s not a phone call you expect to get from your mother, which was one of the first people I heard from.” One would assume that this was a learning moment for the young Novartis CEO.
Narasimhan, however, is not afraid of controversy. Last November, during Novartis’ Annual R&D investor day, he took special pains to highlight AVXS-101, its gene therapy cure for Spinal Muscular Atrophy (SMA). SMA is a progressive disease that gradually erodes muscular function and, in its severest cases, leads to death before age 2. After extoling the virtues of AVXS-101, Narasimhan speculated that this breakthrough, which Novartis acquired with its purchase of AveXis, could be priced as high as $4 million for a one-time treatment. Well, perhaps he was just trying to roil the waters. In fact, on May 24th when the FDA approved AVXS-101, now known as Zolgensma, Narasimhan set the price at a “mere” $2.1 million. While this price raised the hackles of industry critics, who are justifiably concerned about the upward spiral of drug prices, Novartis was off and running with Zolgensma.
A few months later, the New York Times published a very complimentary interview with Narasimhan in its highly visible “Corner Office” column. Among other things, Narasimhan talked about how he left the World Health Organization after a brief stint because he was disillusioned by the “dearth of real leaders”. He discussed his relentless quest of self-improvement which involves meditation, daily exercise and intermittent fasting. But one of the most important thing he touched on was his top priority for Novartis.
“One of the five priorities I’ve set for our company is building trust with society, which I see as a long game. This is not going to be fast. It’s about consistency, whether it’s access and pricing, tackling public health problems like malaria and leprosy, or being a responsible actor on social problems, human rights, gender equality. I believe I have an opportunity to do something unique in this because of my background in developing vaccines and working with public health.”
Well, it seems that the ”long game” in building trust just got even longer. Five days after this puff piece appeared, the New York Times led with the following headline: “Novartis Hid Manipulated Data While Seeking Approval for $2.1 Million Treatment” . Apparently, AveXis, the company that discovered and developed Zolgensma, manipulated testing data in mice used in the early phases of the research. The manipulated data were then included in the reports that were eventually submitted to the FDA to support the Zolgensma approval. It appears that this occurred before Novartis bought AveXis and that Novartis was initially unaware of this. (Although Novartis should be all over the due diligence team responsible for reviewing these data for missing this.) Furthermore, it doesn’t appear that the manipulated data compromise the human efficacy results used to convince the FDA that Zolgensma should be made available to SMA patients.
But, here’s the rub. Novartis was made aware of this despicable act well before the FDA approved Zolgensma on May 24th. When internal colleagues told him of their concerns, Narasimhan decided NOT to inform the FDA. Rather, as he subsequently explained, he said:
“We made the decision to progress our quality investigation prior to informing FDA and other regulatory authorities so that we could provide the best information and technical analysis – which we did promptly on completion on June 28th.”
At best, this is a rookie mistake made by a new CEO who hasn’t had a lot of experience working with the FDA. At worst, this is an intentional act made to rush through the approval – and sales – of what has been deemed the most expensive therapy approved to date. In either case, the Novartis Board of Directors can’t be happy. Neither should be shareholders.
Had Novartis immediately contacted the FDA saying that they had uncovered irregularities in the early Zolgensma research, here’s what would likely have happened. The FDA would have placed the review of Zolgensma on hold. They would then have worked with Novartis to sort through the issues and try to resolve them as quickly as possible. In all likelihood, this would have caused a 3 – 6 months delay in FDA approval. But, the FDA would have been appreciative of Novartis’ transparency and would not have been embarrassed by having its drug approval processes called into question. Plus, Novartis would have been able to live up to Narasimhan’s first priority of building trust with society. Instead, Novartis comes off as a company only interested in profits and is now facing a Senate panel investigation launched by Senator Chuck Grassley to investigate the company’s “reprehensible” behavior.
But there’s a bigger problem. Narasimhan’s actions have tarred not just Novartis but the entire biopharmaceutical industry. A Sunday New York Times editorial called into question the process that was used to get Zolgensma approved.
“Zolgensma benefitted from several F.D.A programs intended to get urgently needed medications onto the market as quickly as possible, including a program that reduces the amount of data needed for agency approval.
Rapid drug reviews, which used to be the exception, are becoming the rule. At least 60 percent of all new drugs were approved through such pathways over the past five years, according to a recent Wall Street Journal investigation. The agency says that the growing use of these programs reflects a change in the type of drugs coming through the pipeline – namely, more treatments for rare diseases and more targeted therapies designed to work on a tiny portion of patients.
Another effect of the expedited pathways is that, on balance, more drugs are being approved with less scrutiny than in the past. The benefit to drug makers is clear: Fewer, shorter clinical trials mean a faster, cheaper regulatory process with a much higher probability of success. The value to patients can be more difficult to evaluate.”
How do you think that the FDA will react to this and the other criticisms that have arisen since the Zolgensma fiasco? It is unlikely that the agency will bend over backwards to increase the number of drugs being granted expedited reviews. In fact, it wouldn’t be surprising to see the agency become much more conservative and approve fewer such programs. Such a reaction will hurt patients who are desperate for truly life-saving treatments and anxiously await their approval.
Narasimhan’s poor decision making has had negative consequences not just for Novartis but also for the industry and patients. Let’s hope it’s not repeated.
