Making moves in China
Lars Rebien Sørensen
President and CEO
Novo Nordisk AS
Lars Rebien Sørensen, president and CEO of Novo Nordisk ($NVO) since 2000, joined the company in 1982 in marketing, and so genuinely knows the company from bottom to top. He is at the helm of a company that is weathering the financial storms rather well, and with its focus on metabolic disorders in a world where diabetes is increasing, both in the developed and the developing worlds, Novo Nordisk looks set to continue comfortably under his leadership, and be a role model for the industry.
China is exciting for the biopharma industry--long seen just as a place for low-cost manufacturing, it is increasingly emerging as a biopharma market. This is driven by the improving incomes and quality of life increasing access to (and desire for) healthcare. However, this rising income is a double-edged sword--as people embrace a more Western-style lifestyle they also take on the Western-style diseases of obesity, diabetes, lipid disorders and cancer. China also has a huge aging population, with all the associated diseases of old age.
Sørensen is grasping this opportunity, not by the established route of buying up domestic Chinese generics companies but by creating a brand-new R&D center in China to develop innovative drugs for the local and international market and so contributing to the local community. Something else that Novo Nordisk is doing that should be an example to the industry is educating local physicians directly and through the Chinese government and Chinese academic institutions. Diabetes is also climbing in Qatar and Novo Nordisk is part of an educational partnership there.
Under Sørensen, Novo Nordisk has changed its approach to people with diabetes (and their physicians)--rather than encouraging people to switch, it's aiming to catch people as soon as they are diagnosed. It might only seem like a small change, but it could drive the company toward a much larger bite of the market, because once people get established on a form of insulin, they tend to be loyal. Also in diabetes, Novo Nordisk is using a "me-slightly-better" rather than a "me-too" approach to insulin development in an already crowded market. These are approaches that could work across the industry, and not just in diabetes--why develop a "me-too" when you could make something that's actually better?
Since Sørensen joined Novo Nordisk, he has been a distinctive voice in the access to medicines debate. Under him, the company has maintained its ethical stance while still making a profit, and this is a strand that runs through many of its projects, including the investment of $100 million to create the World Diabetes Foundation, and the commitment to provide insulin at 20% of its standard price to people in the developing world.
Health for Sorensen isn't just a market, it's a personal commitment--he is a keen cyclist and was one of a group of CEOs at Davos who introduced the Workplace Wellness Alliance to promote health and fitness to employees. Workplace health programs, as well as being socially responsible, also have an ROI of $4 per $1 spent-a pragmatic move that deserves to move out across the industry, both for the sake of the employees and for the bottom line.