By Matt Dolbey
For WisBusiness.com
An executive for Johnson and Johnson, the third largest pharmaceutical company in the world, is watching for coming health care reform efforts to focus on prevention and wellness, building a medical information infrastructure and improving access to health insurance for all Americans.
David Norton, the chairman of New Jersey-based Johnson and Johnson’s pharmaceutical group, sees value in the current push for health care reform, but prefers a solution that centers on the private sector.
“I think there needs to essentially be a private-driven health care system,” Norton said. “But, we also need to have a public plan to support those less privileged or those less advantaged. … But I think the drive of having a competition within a private system has actually proved to be quite beneficial.”
Norton, in Madison Tuesday to take part in America’s Agenda for Health Care summit conversation sponsored by the University of Wisconsin Law School, predicted some solutions will be on the way fairly soon, with Congress and the Obama administration starting on health care reform this year or the beginning of next year.
He said that all Americans “need” access to affordable health care, and says the solution should be a combination of private and public sector plans.
“It’s how we get there that will be the challenging part of today’s discussion,” Norton said.
As far as prescription drugs go, Norton said drugs represent 10 cents of every health care dollar. Even eliminating that cost wouldn’t solve the problem, Norton said, and he sees cost controls as counter-productive. Norton said some European pharmaceutical companies moved their research and development assets to the United States because of cost control measures taken there.
“I think [cost control] is probably an anathema to driving innovation, because cost controls will stifle innovation and stifle growth.”
But Norton said pharmaceutical companies could rally around strengthening of the industry-regulating Food and Drug Administration. The FDA has had to deal with problems like the lack of substantial funding — which he said is being addressed in the upcoming federal budget — and having only acting commissioners governing the body, not fully appointed ones.
“I do think they’re moving in the right direction, but they have a long way to come back,” Norton said. “I think that under the new administration, and we have an appointee, not confirmed yet, that will lead the FDA. I’m optimistic.”
Norton said Johnson and Johnson is a big supporter of public-private ventures involving biotechnology. His company is involved with an organization similar to the new Wisconsin Institutes of Discovery, where Johnson and Johnson has entered an agreement with Duke University to study the central nervous system.
“Basic science is absolutely critical to the industry, because we then turn that into viable products,” Norton said. “We think that’s a pretty symbiotic relationship having partnerships with academic institutions that do groundbreaking, quote-unquote Nobel Prize type-winning activity and industry needs to translate that into viable products.”
Norton also addressed the issue of stem cells. He said it’s too early to say if stem cells have had an impact, but said “it will be a reality.” Norton said he thinks advances will be seen in the next decade to 15 years.
“I think it will be a next wave of scientific revolution,” Norton said, adding Johnson and Johnson is active in its own stem cell research.
Norton declined to answer any questions about potential Johnson and Johnson acquisitions in Wisconsin.
“I would be shot by my CFO if I answered that question,” he said. “We are in the quiet period, because we have finished our quarter so I can’t answer anything about acquisition.”
Johnson and Johnson does have sales and marketing representatives working in Wisconsin, as well as scientists who work are affiliated with the University of Wisconsin or those who are working on drug trials, but no “bricks and mortar” part of the business, according to Norton.
