Read the Conversation
Meeting highlights:
- Investments in Italy: J&J committed‚ 580 million euros to Italy for manufacturing and clinical trials, leveraging Italy's demographics, healthcare system, and strategic location.
- Collaboration in Healthcare: Partnerships with academia, hospitals, and government across Italy's 21 regions support innovation, including 114 clinical trials and advanced therapies like CAR-T.
- Healthcare System Challenges: Mario emphasized the unsustainability of Italy's payback mechanism, which deters investments, urging simpler regulations and better healthcare funding.
- R&D Focus Areas: J&J invests heavily in oncology, immunology, and neuroscience to tackle critical needs like neurodegenerative diseases and advanced therapies.
- AI and Technology: J&J integrates AI to optimize clinical trials, streamline processes, and enhance efficiency, cautiously advancing its transformative potential.
EF: What attracted you to Italy? And after three and a half years, how have your priorities evolved?
MS: What initially attracted me to Italy was not only my personal connection through family but also the incredible opportunity to drive business transformation within the organization, particularly in a G5 country in Europe. Over the past three and a half years, we have established a clear mission for the team and successfully completed the transformation of the organization. This involved redesigning the organization, prioritizing initiatives, and implementing innovative go-to-market strategies.
We placed a strong focus on leveraging talent, advancing access to innovation in Italy, and strengthening our presence within the ecosystem of large corporations like Johnson & Johnson. This year, we were proud to announce a significant five-year investment in Italy, marking a historic milestone for us. This investment includes substantial commitments to manufacturing plants and clinical trials, further solidifying Italy's importance within the organization.
Additionally, we unveiled a new headquarters in Milan and were the first country in the EMEA region to adopt the new Johnson & Johnson brand. Our office became a flagship example of the company’s updated identity, showcasing our commitment to leading where medicine is headed.
EF: What makes Italy a strategic location for a global company? Why is investing a euro in Italy more advantageous than in other regions?
MS: These investments are long-term decisions based on trust that Italy, along with its key stakeholders, will address some of the competitive challenges the industry faces in the country. While those challenges exist, there are several key factors that make Italy particularly attractive.
First, the demographics: Italy has a growing elderly population, underscoring the need for increased innovation and enhanced healthcare services. Additionally, the diversity of Italy's population plays a vital role in shaping its healthcare needs and solutions.
Secondly, Italy's manufacturing expertise stands out—not only for multinational companies but also across various sectors in pharmaceuticals and healthcare. This manufacturing capability, coupled with its strategic geopolitical position, makes Italy a reliable partner for numerous nations, reinforcing its global footprint.
Moreover, Italy boasts strong human capital and healthcare capabilities. Its healthcare system, despite certain issues, is supported by centers of excellence, a high level of academic institutions, and talented students. Being a key member of the European Union further enhances its appeal through seamless access to European markets.
Finally, even in the context of geopolitical tensions, Italy has a unique opportunity to attract even more healthcare and pharmaceutical investments. If the country addresses its existing challenges and continues to build on its strengths, the future for investment in Italy looks promising.
EF: Could you share how you are collaborating with industry, academia, and the government to advance the health agenda and drive progress in healthcare in Italy?
MS: In healthcare and pharma, collaboration is at the core of what we do—it is embedded in our DNA. For instance, many of our clinical trials involve extensive partnerships, engaging over 993 hospitals and 5,000 patients across 114 clinical trials. These collaborations span healthcare providers, non-profits, government entities, and the 21 distinct regions of Italy, each with its unique needs and systems.
Italy's regional diversity requires a focused, localized approach, and we have worked to foster these connections. This year, we highlighted these efforts through "Johnson & Johnson Week," an initiative that showcased our collaborations with physicians, academia, patient associations, hospitals, government bodies, and regional authorities across the country.
We have ongoing projects that aim to enhance the understanding of patient pathways and equip centers to adopt cutting-edge pharmaceutical technologies like gene therapy and CAR T-cell therapy. These initiatives demand close collaboration with stakeholders, integrating innovative treatments into healthcare systems effectively.
We operate within Italy’s robust legal and regulatory framework, adhering to strict ethical and transparency standards established by both Italian law and industry codes of conduct. While public-private partnerships hold great potential, regulatory and fiscal barriers often hinder their development. Simplifying these processes without compromising ethics and transparency would be a significant step forward in enabling more effective collaboration between the public and private sectors.
EF: Which emerging treatments and scientific areas is Johnson & Johnson currently investing in that you find most exciting for the future?
MS: We are strategically focusing on a few key areas of science for the future, as it is impossible to invest in every aspect of healthcare. One of our primary areas is onco-hematology, where we are driving significant innovation and demonstrating strong leadership. Immunology is another focus, with substantial advancements underway in this field. Lastly, neuroscience is an emerging area of great importance, especially given the aging population and the growing prevalence of neurodegenerative conditions such as Alzheimer’s and dementia. Additionally, addressing challenges like depression remains a priority.
While we are exploring innovations in other areas, these three—onco-hematology, immunology, and neuroscience—form the core of our efforts.
EF: Do you see a clear pathway in Italy for bringing more complex and costly therapies to market?
MS: I definitely see a pathway to bringing more complex and innovative therapies to market in Italy. As part of my role, I work with the advanced therapies team to help shape and improve the framework for these treatments. This includes collaboration with AIFA, Italy's regulatory agency, to ensure the pathway supports and fully recognizes the value of these innovative therapies.
These advanced therapies represent a new frontier, fundamentally different from traditional small molecules of the past. They often require unique clinical trial designs due to smaller patient pools, ethical considerations, and the nature of the therapies themselves. For example, at the launch phase, robust double-blind, head-to-head clinical trials, common in small molecules for cardiovascular disease or diabetes, may not always be feasible for advanced therapies. Despite these differences, the strong evidence supporting these therapies is a key focus for advancing their adoption.
There is also a need to dispel the misconception that advanced therapies are inherently complex. Complexity often arises from a lack of understanding, but as we gain experience and learn from other markets, these therapies become more accessible. Preparing centers with the right infrastructure and technology is crucial, as the process and products of these therapies are deeply interconnected. This requires significant investments in technology to ensure traceability, compliance, and quality while addressing privacy concerns.
Pricing is another critical aspect. It is essential to shift the conversation from cost to value, helping decision-makers and public payers in Italy understand the long-term benefits of these therapies. Developing innovative payment models that align with the fiscal constraints of the healthcare system will be vital for accommodating their value proposition within existing budgets.
There is growing recognition within Italy’s healthcare system and across Europe that advanced therapies should not be viewed as a mere cost but rather as a long-term investment in patient health and overall system efficiency. Policymakers and stakeholders are working to adjust frameworks to reflect the value of these treatments, particularly given the nature of therapies like CAR-T, which require a significant upfront investment but offer the potential for lasting, transformative results. These therapies often involve one or two interventions, after which patients may remain disease-free for years, thereby reducing the need for long-term treatments that otherwise place continuous strain on the healthcare system.
Such innovations—offering personalized treatments tailored to individual patients—represent the next frontier of healthcare. This evolution is akin to the once-imagined concept of personalized medicine, where each therapy is customized based on the patient's unique genetic and immune profile. For example, in the case of CAR-T therapy, immune cells are trained to target specific tumors, marking a monumental step toward precision medicine. Each treatment is as unique as the patient, requiring a highly personalized approach that reflects the growing sophistication of modern healthcare solutions.
As Italy moves forward, fostering this kind of innovation requires a more efficient healthcare system but also shifts the conversation around the value of these advanced therapies. Demonstrating the long-term benefits, such as reducing the need for ongoing treatment and freeing up resources to address other pressing needs, will be crucial in facilitating broader adoption and access. The future of healthcare, particularly with regard to personalized and advanced therapies, promises remarkable potential if the right investment frameworks and regulatory supports are put in place.
EF: How are you using technology to enhance your operations, both internally and patient-facing?
MS: Being part of a large multinational ecosystem like Johnson & Johnson offers numerous advantages, particularly in adopting cutting-edge technologies. For instance, Johnson & Johnson was one of the first pharma companies to provide its employees with access to new technologies like artificial intelligence (AI). After six months of development, the company allowed employees to start using AI for simple tasks such as summarizing data, which also helped them become more familiar with the technology. We took great care with the type of data we used in the AI due to proprietary concerns. This hands-on approach, rather than just lectures, enabled employees to engage directly with AI, creating a real-world connection to its potential.
In Italy, the launch of this initiative generated strong interest from employees, many of whom volunteered to be ambassadors and test the technology. Beyond the general use of AI, the company is also exploring how AI can streamline clinical development. For example, AI can accelerate the clinical trial process by using data from thousands of past trials to design future ones better, potentially improving efficiency and outcomes. AI is also being used for training purposes and even to create bots that can interact with both internal and external stakeholders.
While the company is still in the early stages of AI integration, the future potential is immense. AI can improve internal communications, making it easier to transcribe meetings and handle simple tasks. Ultimately, the promise of AI lies not only in improving efficiency but also in transforming clinical development, making the future of healthcare look incredibly promising.
Johnson & Johnson has been collaborating with NVIDIA on clinical trials, particularly in phases one and two. One of the most exciting possibilities emerging from this partnership is the potential for using artificial intelligence (AI) to simulate clinical trials before they begin in real-life settings. By leveraging vast amounts of data—thousands of parameters and variables—it may soon be possible to create virtual simulations that predict how treatments will perform, allowing researchers to refine trial designs before human testing. While this technology is not yet fully realized, the prospect of reducing trial failure rates is groundbreaking. It could significantly impact the cost and speed of drug development.
However, as promising as AI is, it's important to proceed cautiously. The technology is still in its early stages, and any errors in the input data can lead to inaccurate predictions. It is critical to ensure that AI models are used correctly and refined continuously to ensure they are reliable. While this new dimension in clinical trials is undeniable and will likely become a standard in the industry, it is essential to maintain careful oversight and check results to avoid fundamental missteps in the development process. The technology holds great promise but must be implemented thoughtfully to ensure success.
EF: How do you effectively foster growth and an innovative mindset within your team to ensure you’re consistently pushing boundaries, bringing more treatments to market, and delivering better patient care?
MS: I believe we are driven by a profound sense of purpose—the need to win this battle for patients. This mission is deeply personal for many of us. For example, If I have a family member in Italy who requires access to breakthrough innovative treatments, we need to ensure that it is available. It is not just about making these treatments available in the system but ensuring they are accessible to the patients who need them, with the proper support in place.
Achieving this requires meticulous planning because, in pharma, developing and launching a new drug takes time. Even after EMA approval, it could take around one year and a half for a treatment to reach patients across all regions in Italy. This delay underscores the urgency of putting the patient at the center of our efforts and working with all stakeholders—whether government or regional authorities—to ensure a patient’s access is not determined by their zip code.
For our company, success comes down to preparation. Over the past three to four years, we have been identifying and certifying centers, tailoring our approach to each therapy. For instance, launching CAR T therapy is entirely different from launching other therapies. The latter, being a controlled substance, requires precise attention to administration protocols, nurse training, and patient support activities.
This level of readiness extends to navigating the regulatory and HTA processes in Italy to secure approvals and reimbursement. Each application must clearly demonstrate how the new therapy differentiates itself from existing options while emphasizing the economic and clinical value it brings. Ultimately, our goal is to introduce innovative treatments in a way that supports Italy’s already pressured healthcare system without adding undue strain.
This is a topic we have discussed with many stakeholders—the observation that the percentage of healthcare resources allocated to innovation has remained relatively stable over the years. This consistency is primarily due to the built-in sustainability mechanisms within pharma.
For example, treatments launched today may initially carry a higher cost, but over the course of almost 10 years, these drugs transition to generics or biosimilars, significantly reducing their price. This cycle ensures the long-term sustainability of the healthcare system.
However, the focus often shifts disproportionately to the cost of groundbreaking, life-saving drugs at the time of their launch without fully appreciating the broader value they bring. These innovations not only save lives but also contribute to the overall efficiency and effectiveness of the system.
What tends to be overlooked is the full spectrum of innovation—the ways these advancements benefit both the healthcare system and individual patients over time. Recognizing this dynamic is key to understanding how innovation drives sustainability in the long run.
EF: What has made Johnson & Johnson such a compelling and valuable company for you to remain with for so many years? What aspects of the company inspire such long-term commitment?
MS: There are countless companies around the world, but for me, Johnson & Johnson stands out for three key reasons. First, its core values genuinely resonate with my own. These values are not just words on a wall but are actively lived and guide the company’s actions, creating a sense of alignment that has been integral to my journey here.
The culture of innovation is another significant factor. Johnson & Johnson consistently evolves and transforms, creating an environment that fosters creativity and growth. For those eager to embrace challenges and explore new opportunities, the possibilities within the company are vast and empowering, offering a global footprint and numerous pathways for personal and professional development.
Lastly, the company's resilience is truly inspiring. With over a century of history, Johnson & Johnson has weathered wars, pandemics, economic downturns, and geopolitical tensions while maintaining its commitment to excellence. This proven ability to adapt and persevere, combined with sound financial management and a long-term vision, underscores the strength and stability of the organization.
Together, these elements create a unique environment that values innovation, human capital, and enduring success, making Johnson & Johnson an exceptional place to build a meaningful career.
EF: What is your final message to our readers?
MS: My final message is that we need to shift our perspective on healthcare. Post-pandemic, it has become evident that health should be viewed more as an investment rather than merely an expense. This shift is vital to recognize the true value of medicines—not just in terms of their price but in the profound impact they have on patients, their families, and society at large.
As our Global Chairman Joaquin Duato has emphasized, the next decade will usher in unprecedented innovation, with more breakthroughs anticipated than we have seen in the past century. This presents a transformative opportunity for the industry to advance, but it also requires an open-minded approach, free from preconceived notions or outdated practices.
The focus should not only be on helping people live longer but also on ensuring they live well, with quality of life as a priority. The pharmaceutical industry plays a pivotal role in this, particularly as the population ages and faces new health challenges.
However, we must also address significant obstacles, such as austerity measures like clawbacks and paybacks, which can stifle innovation and create unsustainable pressure on innovative companies. Long-term investments in health are crucial, but they need to be supported by policies that enable innovation to thrive, ensuring that the industry can continue delivering transformative solutions for the future.
The current system in Italy, particularly the clawback mechanism, poses significant challenges for multinational pharmaceutical companies. While initially designed with a positive mindset to manage healthcare expenditures, its complexity, and unintended consequences are now discouraging further investments in the country. If left unresolved, this system could lead to a gradual halt in investments, which would have long-term repercussions on innovation and access to advanced therapies.
One of the core issues lies in the system’s opacity. The clawback mechanism is not only difficult to understand but also challenging to quantify, making it hard for stakeholders to identify and address the problem. For instance, in the past, the clawback amounted to around 10% of a company’s income; today, it has risen to 16%, with projections suggesting it could soon reach 20%. Essentially, it acts as an "extra tax" on companies operating in an already high-tax environment.
Compounding the issue, the clawback calculation grows exponentially, not linearly, due to the way it factors in sales thresholds and budget gaps in the healthcare system. Success in the market results in disproportionately higher clawback payments, creating a paradox where growth is penalized.
This system not only adds financial strain but also creates confusion among government authorities, who often perceive it as a fixed percentage. The reality is far more complex, and the lack of clarity undermines productive dialogue. To ensure sustainability and foster innovation, stakeholders must collaborate to simplify and reform this system. Placing a cap on the clawback and shifting toward a more predictable and equitable model would be essential steps.
The current system, particularly for private companies in Italy, is becoming increasingly unsustainable. The government’s expectation that private companies shoulder 50% of the cost above a certain threshold while the other 50% is covered by regional or national funds is creating an imbalance. The private sector does not have the same flexibility as the government and is ultimately left to cover unlimited costs, which leads to significant financial strain. It is akin to agreeing to cover a portion of travel costs without any cap, which encourages irresponsible spending and ultimately places the burden on the companies.
This is a particularly damaging message for an innovation-driven ecosystem, as it discourages investment. If this system continues without reform, companies will look elsewhere—whether it is in the Americas, Asia, or other European countries that offer more predictable and favorable environments for investment.
Executives are facing a crisis of unpredictability, unsure of how much they will need to pay or whether they will even receive reimbursement. This uncertainty stifles investment and innovation, which could otherwise help strengthen the local healthcare system.
It is clear that there is a connection between Italy’s aging population and the need for greater investment in healthcare. Italy has one of the oldest populations, and as people age, their healthcare needs increase significantly. Yet, Italy invests one of the lowest percentages of its GDP in healthcare, which creates a gap that will only grow as the population ages. After the age of 65, healthcare needs are at their highest, and this goes beyond just pharmaceutical products—it is a full spectrum of care that is required.
Italy will face serious consequences if this issue is not addressed now. How can people continue to work and contribute to the economy if they are burdened with the care of sick or aging relatives who are not receiving proper treatment? The country needs to prioritize healthcare investments, or everyone will feel the repercussions. It’s about ensuring that people can lead healthy, productive lives as they age, and that requires a healthcare system that is properly funded and equipped to meet the growing demands of the population.
There has been some interesting discussion around the idea of reallocating extra profits from sectors like life insurance and banking to help bridge the funding gap in Italy’s healthcare system. This approach could provide a much-needed boost to the system, especially as the country faces increasing healthcare demands. However, this solution needs to be considered across multiple sectors.
The current system, as it stands, is simply not sustainable—whether for private companies, the pharmaceutical industry, or the healthcare system as a whole. Italy must face this reality and allocate more funding to healthcare, potentially by redistributing money from other sectors. Without addressing this issue, the country may find itself in a precarious position where the sustainability of its healthcare system is at risk. It’s a matter of life or death, and urgent action is needed to secure the future of the healthcare system in Italy.
