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EF: In your office, there’s the latest edition of Foreign Affairs whose cover asks, “Who Will Run the World?” What’s your answer to that question?
VD: Eventually I think the answer will be China. There's no question about it, USA's influence is losing ground in the International arena with the Trump administration while China, through economic investment across the globe, is gaining influence. Looking at the nearer term, either a new leadership takes over in the United States, whether next year or in 2024, for sure it will change current Trump policies and the United States may regain worldwide influence. This is a paradox: you can’t be a democratic country and stand alone in the world. There’s simply no future in that way. It’s a sin for a CEO not to know what’s going on in the world. Besides, it’s a very interesting world that we’re living in. Many things are changing with big business implications and we need to be aware and take decisions in advance to capitalize on them. These changes cannot be at the expense of clear rules of law to plan where and how to invest.
We are going to see in the future new big players in the worldwide economy. Latin America, which has the same GDP as China, in my opinion, is a region for great growth and must be a place to invest. For this reason, we have seen lately China investing a lot in this region.
EF: How would you assess the Mexican healthcare sector, with a new government and new opportunities?
VD: If you look at the proposed healthcare budget for 2019, this is one of the areas losing ground compared to previous years. You can say that this approach is because the government is taking time to define the healthcare model for the future. Also, to fight potential corruption. In my opinion, the real issue is what kind of model the new administration wants for Mexico. Then, what are the possible models? We have the Nordic model, where healthcare is totally in the hands of the government. Or the Asian model, where you have a more active private participation, or even in Europe where you see an evolving hybrid model moving toward the private sector. So far, I do not have a clear direction for Mexico. What we have seen so far are strategies to invest resources in a more efficient way to reach more people to provide healthcare.
Any time there is a change of model there are risks and opportunities. We hope that eventually more resources will be allocated to healthcare to buy innovative products and services, which imply more business opportunities.
EF: What do you expect to see in an emerging “Mexican” model?
VD: I think we’re going to see a mixed system: a stronger government presence combined with good participation of the private sector. It’s interesting to learn from a new government official that they want to develop and carry out more R&D activity in Mexico. This, in our opinion, is a smart approach. It would be great to see Mexico developing, for example, a new cure for cancer patients. Eventually, within 20-30 years, most cancer will be cured. Perhaps a few will remain, but most will be treatable and become a chronic disease with which you can live for many years. We already see some new IO drugs that substantially extend life.
EF: If cancer becomes the new diabetes, what impact will this have in terms of cost?
VD: Price is a very sensitive issue. Its difficult to access innovative cancer products at the current level of investment. Mexico remains among the OCDE nations with the lowest GNP ratio in healthcare (below 6%). If the government doesn’t invest more in healthcare, we will become a society divided into people who can afford, and people who can’t. In the past, skin colour was an issue. Now, it’s how much money you have in your bank account to afford these new technologically advanced products. As you know, at the beginning of a new technology cycle, they are very expensive for most people. No question about it, we must encourage and invest in new products that offer better quality and longer life expectations.
How do you finance R&D investigations? Biotechnology took around 30 years to see the first products brought into the market. There are no easy and quick solutions. Innovation takes time and money. For example, the first antibiotics were very expensive, the following ones not so much. We need a government policy prone to provide the best treatment while increasing accessibility for everybody.
EF: We are keen to invest in Tesla, but not healthcare; how can we change this orientation?
VD: In the last 15 years, the industry has suffered from a bad reputation. Despite cures for Hepatitis C, oncology, rare diseases, with new technology and products, we continue to be the bad guys mainly judged for the price issue. Investing in Tesla is a pleasurable decision; going to the doctor is not. You go to the doctor scared, concerned. It’s a huge difference. Therefore, the way people value the price of medicine is different from other consumer products. We can change this public perception by raising awareness of the value of a healthy population, having the government invest more in healthcare, have more affordable private insurance and communicate the whole stakeholders on the nature and difficulties of the discovery of innovative products.
EF: Where do these changes and challenges leave you at Alfasigma?
VD: We have an affordable price strategy and innovative products that fit well with the new times and government philosophy. We are also developing a new strategy to become a speciality product company while maintaining our primary care position. We have become more selective and focused on developing this new business vision. Also, we are looking for strategic associations and to build up new business. We continue to be strong in the gastrointestinal field, with new products ready to be launched. We know where we are and where we want to go.
Nothing in life is static, everything can change. Two years ago, we weren’t focused on speciality products, and now we are. Business is a dynamic force. I’ve seen many times a company with a huge product in one category, then the patent expires and they decide to exit completely. What’s important is to assess your strategic direction and correct the action if needed, or take decisions to reinforce the path that you’ve chosen. We have a clear direction defined for the next five years with the current knowledge that we have today. As your new product comes in, you simply adjust it. A good musician knows how to change the tune. It all depends on what kind of song you want to play.
Alfasigma will hold its national sales convention in two weeks. My presentation will be about navigating in uncertain times. It’s important to have the right infrastructure and vision. For example, if you’re piloting a large aircraft, and people tell you there’s a huge storm and that you cannot land if you don’t have the proper instruments, there’s no way of knowing where is right or left, let alone the next airport! The same thing happens in business. You have the infrastructure, knowledge of the market, and a strategic map to make business, so if you have to change direction, it’s very easy. If we have to enter a new therapeutic area, it’s not very complicated to hire a salesforce and train them, because we have a training department, medical marketing, an e-learning infrastructure and a selling model, so we could do it in a short period of time. The knowledge and instruments are there.
EF: In two weeks, when you make that speech, what will be its underlying message about Alfasigma’s direction?
VD: First, that we know what we’re doing. People must trust their leadership. If necessary, we know how to turn the ship to protect the business. We’re aware that this is a changing world and learning the new business is imperative. Second, reinforce where we’re doing well, and do it even better. Third, present a new initiative that challenges the status quo. Most people are afraid that the company will not survive in times of changes, either driven by a technological or government transformation. In Mexico, with a new political leadership, new philosophies, and new consumer expectations, we need to map it to have the whole picture. We are learning what “Mexico First” means in order to adjust our business model. In times of change, it’s very important that leadership assures everyone that they are in good hands, that we’re going to make the right decision for the company and employees.
Lastly, we must remember that change doesn’t always mean problems. Sometimes it means opportunity. And we are looking at every change as an opportunity. Don’t be scared about change—just be prepared.
