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00:00This is my kitchen table and also my filing system over much of the past three decades. I've been an investor the highest quality of mankind. I've often thought as private equity. And then I started interviewing on my watch here interviews those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said to 250. I said fine I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest man to rise out right . Everyone is no doubt used bandaids or Tylenol. Those products are well-known products produced by Johnson and Johnson Johnson and Johnson is also a giant in many other areas. It's now taking a leading role in preparing a vaccine for Kobe 19 . Its CEO is Alex Gorski a West Point trained former military man who has done incredible job over the last eight years making this company the most valuable health care company in the world . Now some people say the most commonly spoken words in the English language today are. Can you hear me. Because of the Zoom phenomenon. But I assume in your case the most commonly asked question of you is when is the vaccine coming. So you must be get asked this about every hour on the hour. So why don't I just do this as well. When is your vaccine coming . Well like it's usually about every 15 minutes actually that I get asked that. And let me start by saying I could not be more proud of the incredible work that our scientists and our engineers have been doing over the past nine months to to put us into the position that we are today with a vaccine. I mean to think that would ordinarily take five or seven years we've been able to do in a matter of months is quite remarkable. And you know without the heart their hard work and dedication. You know probably 40000 of our hundred and fifty thousand employees mostly in our factories and facilities and our laboratories have still been working. And and they've been going literally around the clock to make that possible. And look we still have a lot of work to do but we made a lot of progress. And and we'll be finding out a lot more in the coming weeks and months. But you know consistent with what we talked about just recently when we announced the start of our Phase 3 trial we would expect by late this year early next year we should be in a position to begin reviews with regulatory authorities to see if our vaccine is in fact safe effective and something that could be considered for an emergency use use authorization here in the United States and more likely around the world. So even if you have emergency use authorization to be realistic about it it's not going to be ready until next year. Right. I think I think that's a good timeframe to be planning on. You know in and again a lot of it's going to depend on what we find in Phase 3. And David as you know that can depend on the incidence of the virus of course . And because that has an impact on the statistical analysis that you'll be using in your study. It's going to depend on how well our vaccine is actually doing in the study and what kind of efficacy rates we hit. But I think for planning purposes if you think about late 2020 and early 2021 I think those are the kinds of timelines that are likely most realistic. OK. Now there you and a number of other CEOs of vaccine manufacturers have issued a letter saying basically you don't want to be politically pressured to have a certain date and so forth. And can you articulate why you felt the need for that letter. Well look we think this is an incredibly important time for the pharmaceutical industry let alone each of our companies. And it's absolutely critical during a time when unfortunately everything becomes politicized that we rely on data that we rely on science that we rely on well established regulatory guidelines to guide all of our decisions regarding the development and the actual utilization of these vaccines. And we thought that collectively making a very explicit statement about our commitment our pledge to following those established guidelines was very important to to maintain the trust to maintain the confidence of people around the world regarding the safety and efficacy and in actual accessibility of these vaccines. In a recent survey I read that that was done of Americans that only 19 percent are yet prepared today to take a vaccine if it's available. Is that a surprise to you that somebody people are not yet ready to take this up because of the perceived politicization of it. Well David unfortunately no it's not a surprise. And it's it's actually fairly consistent in fact with what you see with the annual flu vaccine that can range from anywhere from about 20 percent and perhaps in some of the best states as high as 40 40 or 50 percent. And now look I understand some of the skepticism and cynicism. There's a lot of misinformation and there's a lot of concern about that . People genuinely have you know based upon some of the readings that you can find out there. But I think that demonstrates just how important it is for us to number one to work closely with health care authorities whether it's the CDC BARDA the NIH the FDA agencies outside the United States to follow those appropriate protocols. I think secondly it's going to take a lot of education . And that's by the way not only the responsibility I believe of the pharmaceutical industry but it's going to require the government. It's going to require perhaps even businesses other stakeholders to make sure that we are sharing the facts. Look I'm cautiously optimistic that as we provide more data more information that as people see the the potential impact positive impact that this could have in terms of returning back to a more normal state. Some way that people will find the comfort and confidence to have a vaccine because ultimately that it's going to be very important as we think about you know returning to a new kind of normal. Now the federal government has poured billions of dollars into getting a vaccine developed and provided you and other companies with that money to help you facilitate the production of this. Do you think that the taxpayers should get a benefit by either getting very low cost vaccines or free vaccines. We asked David look I think it's in the public's best interest that we're seeing this kind of public private partnership. I mean there it would be very difficult for us to make the kind of advancements and accelerate the timelines that we're doing right now. Were it not for the partnership that we're seeing not only in terms of funds being provided but in terms of literally the day to day interactions that are taking place between regulators and scientists across many of these platforms. You know in our case from the very beginning we made a pledge that we would do this on a not for profit basis. And yes we are working with the government . We've accept the government funds. But we also recognize that is Johnson and Johnson the world's largest health care company . That's important for us at this very unique time to do it on a not for profit basis so that we can give as many people access around the world as possible. So that's the approach that we're taking. Now there's a fear in some circles that wealthy people will get the vaccine quicker than people that are not wealthy . And you have with other CEOs and other health care officials . And the Bill Melinda Gates Foundation signed a letter essentially saying you're committed to making certain that it doesn't go only to wealthy people and only the people in the United States. Can you explain why you wanted to have that letter and how you're going to make sure that happens. Well look we're the only way we're going to beat this virus is if we have global distribution and no one is safe. Frankly if the entire world is not provided access. And so we are absolutely committed to doing this in a very ethical and a very just way . And we worked very hard to make agreements clearly with governments like the United States and Europe Japan the developed countries. But we're also working hand in hand with other pharmaceutical companies the Bill Melinda Gates Foundation to ensure that developing countries also have got access . Looking back what would you say that the CDC or the FDA or the White House or HHS should have done differently. Almost all of us have underestimated the dramatic impact of this outbreak . So as we talk today the big news is that President Trump and the first lady have contracted the Corona virus. Is that a surprise to you that that could possibly happen. Well David look I think it demonstrates that we're all vulnerable and we still all need to be very vigilant and diligent in the actions that we're taking to prevent this virus from spreading any further. So you as the CEO of the largest health care company in the United States I think it's the 10th largest company by market cap in the entire United States market value of about almost 400 billion dollars. You have to be very careful because I think it would look bad wouldn't it if the CEO of the largest health care company got the virus. So what do you do to protect yourself . Well David look I think all of us have a huge responsibility to take care of ourselves. And certainly those of us like myself fortunate to be in this kind of a position where we have responsibility for others have got to make sure that we put the safety of our employees our friends and our families first and everything that we do. And look that starts with the simple things. And I think one of the things that we've learned most through this pandemic is by making sure that we're using social distancing that we're wearing masks that we're washing our hands that we're doing everything we can to prevent the spread of the virus are the most important steps that we can take to actually bringing an end of this pandemic and in dealing with it for the long term. Now vaccines are what everybody has been focused on . But there's also therapeutics. So for people might have already contracted the disease or already have the virus. Is there any progress being made on therapeutics that might help people that already have the disease. Well David that's that's a great point. There is no one silver bullet here. And I think what is really important for everyone to understand it's going to take a holistic approach is likely. We're going to be dealing with this not only as a pandemic but it's going to be endemic for several years going forward. So in all likelihood it's going to take a combination of therapeutics for patients who are actually sick vaccines to present to prevent it from happening in the first place. And last but not least the hospital protocols that I think have done a great job. Still much more work to do in terms of reducing actual mortality and morbidity. So things that have been talked about her remedies revere hydrogen toxic chloroquine and also convalescent plasma . But generally today you wouldn't say that those things are therapeutics that are going to solve the problem. Is that right . Not at each end of themselves. I think there will be various opportunities use. And then we look we're going to learn for example what convalescent plasma when and where are they most effective in what patient population is at an older population . Could they be used for example in an elder care facility where you're seeing an outbreak in a more aggressive way. Should antivirals be used earlier in the disease. And I think we're again we're developing a lot of information as we speak and we're going to learn a lot more in the coming weeks and months . Hindsight is always 20 20 it is said. But looking back what would you say that the CDC or the FDA or the White House or HHS should have done differently. Is there anything that you would recommend that somebody in the future that they do differently if they were overseeing this kind of pandemic response. Well you know you're right. When we look backwards things always seem clear. And you know I think there's a few lessons. And I would also say that almost all of us have underestimated the dramatic impact of this outbreak. I mean if you would have asked most people eight or nine months ago if you would ever see the kind of impact that we're seeing around the world right now few would have gotten it right. But I think there are lessons to be learned first and foremost I think is the importance David of global public health. And I think going forward we're going to understand much better that you know if we don't have global public health security we don't have national security we don't have economic security and we will not have security in societies. So I think the importance of being prepared making sure that you know we've got the kind of protocols in place that we have certain products preposition and frankly also move from a maniacal focus on efficiency and effectiveness in certain cases to one more of resiliency and sustainability particularly for these kind of situations where even you surprise how dependent maybe Johnson Johnson and the health care industry was on manufacturing things in China and offshore. So that for PPE and other things we really had to almost beg the Chinese to get us some material. Now will that change in the future. And were you surprised at the extent that we were so dependent on offshore production. We asked and I looked. I think there's an important lesson for all industries not only the health care industry but every supply chain. The good news is over the last several decades the globally integrated supply chain has reaped tremendous. Rewards and again in terms of efficiency and effectiveness for so many different companies. However I think it's important for us to realize that we've got to make sure that we've got the kind of redundancy and resiliency when these types of situations arise. And so we're we're looking hard across our supply chain as we speak to say look what are the things where we. Yes we can still take advantage of so many of the efficiencies from what we were doing before. But what other things do we need to think about reassuring weather capabilities . Do we need to think to have more local to ensure that you know in future pandemics we're all better positioned and better prepared. If a doctor says you need a Band-Aid here I'll give you a shot and put a Band-Aid on. That's not a Band-Aid. It's some other companies product. You take it off. Well actually had that happened one time I had a bicycle accident where I had to get some stitches in my hand. And of course when I went to the local hospital I made sure that they were our sutures . Let's talk about how you went from a graduate of the West Point to becoming the CEO of this company. So where did you grow up . Well I couldn't have imagined to you know 20 40 60 years ago that I'd ever be in this role a position that I was actually born in Kansas City Kansas. My grandparents for the most part were immigrants and opened up small stores worked in meatpacking plants in Kansas City. And I was there through my early years. And then my father was moved with his job when I was about 12 years old to a little town the lower peninsula of Michigan. What propelled you to say I want to go to West Point. Well look I was I was very fortunate. And you know both my mother and father worked. My my father started as a salesman in a foods company Gerber Baby Food. And it kind of worked his way up the ladder. But he was also a Korean War veteran and he stayed in the Army Reserves. And my mother taught special education students. And so I thought it was natural when you were growing up that your father not only went to work and your mother went to work but also that one weekend a month that he would put a uniform on to go serve his country. And I was really inspired by that. And that was one of six children . And I also knew that going to a place like West Point not only would afford me an opportunity for a great education and a career but it was also certainly an economical way to do it . And in a one where I could pay my own way through and and so I put all that together and I found that to be a really attractive path. And I was fortunate that that's what I was able to follow . But when you graduated did you say now I want to be a health care executive or how long did you stay in the military. Now I look I graduated and like all of my classmates I went into the army as a lieutenant. I had a I had an assignment in Europe for my very first role. And then I was stationed back in the United States actually out of Fort Ord California in the 7th Infantry Division. And I spent six years where I ended my service as a as a captain. I was a battery commander and a rapid deployment force unit. And that's when I made my decision to exit the army and join Johnson and Johnson. Now you also got an MBA from Wharton. Yes. When you have time to do that. Well you know I I started when I left the army I started as a sales representative at Johnson and Johnson. It was part of a leadership development program. And I I felt getting the skills understanding the customers really learning you know what doctors and surgeons and nurses and people who were using our products on a day to day basis. That was an important experience to get. And and then I went into sales management later in marketing. But I also realized that look I had studied engineering in college and I realized that if I was going to have the skills and business that I felt were really necessary that you know going back and getting exposed to much more depth to accounting to finance to strategy and other things was going to be important. And I was I was very fortunate that they supported my attendance at the executive MBA program at Wharton where I went and completed that you know at an early point my career. So you started out marketing with a subsidiary of Johnson and Johnson at the time and you did that and you say well somebody who starts out as a marketing person for this subsidiary surely should rise up to be the CEO someday. Did you ever imagine at that point that you could rise up or you always had that is your goal. No I didn't realize however that getting exposure and experience with as many different aspects of our business early on in my crew is important. And in marketing was one place where you could interface with research and development to really understand our products where you would enter and where you would engage with your finance counterparts your supply chain people. And so was really the kind of position that expose you to almost all aspects of the organization. And look at that time. I aspired to perhaps be able to run one of our our divisions. And and from there things took on a life of their own. So we've now been a CEO since 2012 . So about eight years or so. And for most CEOs of Fortune 500 companies unless they were the founder of them generally five six years is fairly average. So you're eight but you're very young and you're obviously in good shape. So is your plan to do this for a long time in the future. Well look David I'm very fortunate to be the seventh CEO Johnson and Johnson. You're right. I think one of the great characteristics of the company is the long tenure that my predecessors have and they in the continuity the consistency and the kind of long range thinking that it imbued into the organization. And I'm. To have been part of that. And look I'm as excited today about what I'm seeing in terms of science and technology and the potential of the patients I mean look what we're doing with the vaccine. We couldn't have even imagined that you know with about 10 months ago. And so that it's you know it's a constant stream of new opportunities challenges that you're facing along the way. But look you like everybody. I would always consider ways of how could you continue to serve other stakeholders. How could you continue to serve others. But you know what. I think I've got the best job in the world. Most days now you are a fitness expert or a person who cares a lot about fitness. You're always running or exercising. And so I assume during this period of time you're doing even more just to stay in shape. Is that right. You run a lot or do you exercise a lot every day. Yes I do David. And look I learned a long time ago even during my time in the military that one of the most important things you can do to ensure that if by chance you know you what you were wounded was to be healthy in the first place. And it's interesting because I think one of the things that we're learning about this disease of course is that the healthier you are if you in fact should contract the disease likely the better prepared you're going to be to be able to survive and get through it in a much better manner. And you know look like many others. I've been doing my best to to deal with this situation. I like working at the house but taking care of myself. But yes I always put a priority on trying to take care of ourselves stay healthy get the kind of rest that you need eat the right way. And I think doing all these things not only happen or help in your daily life but certainly are going into effect in a situation like Kobe 19 as well. So when you're running the biggest health care company United States I guess you're always worried that somebody might see you eating a French fry or a Big Mac or you know you're you've gained an extra pound or something. You feel you've got to be very careful because everybody's watching you who you are in the company you're running now. No I don't worry about that. Look I think I think what's important about life and so many things is balance. And I tend to follow an axiom . Look during the week especially given my travel schedule and the demands is I tend to be pretty strict about what I eat and in the kind of rituals I put in place it just keeps me on pace whether I'm here in New Brunswick or whether I'm in China or traveling in other places around the world. But hey on the weekend of course a I like to I like to have a burger from time to time or that steak. And that's why I work so hard in trying to keep fit along the way. And I find by having that balance say I can I can take care of myself but I can also have fun. So I'm you're in pretty good shape obviously. So but eventually I guess you have you go to the doctor for annual physicals or something like that. If a doctor says you need a Band-Aid here I'll give you a shot and put a Band-Aid on. That's not a Band-Aid. It's some other companies product. You take it off or do you say you can only use Johnson and Johnson products on me. Well actually had that happen one time I had a bicycling accident where I had to get some stitches in my hand. And of course when I went to the local hospital I made sure that they were our sutures . So. And look I've I've had my hip replaced. I have one of our products in my hip and it feels great. And it was it was a life changer for me once I had that procedure done. Well listen I appreciate you giving us this much time. I hope the vaccine comes as soon as possible and healthy and good way and safe for everybody. You can rest assured that we're going to be working 24/7 doing everything we can to make that possible between now and .

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The David Rubenstein Show: Johnson & Johnson CEO Alex Gorsky

Alex Gorsky, Johnson & Johnson chairman and chief executive officer, talks about developing a Covid-19 vaccine that is affordable for all, lessons learned from the pandemic, and how he went from West Point to being a salesman. He appears on the latest episode of "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded Oct. 2, 2020. (Source: Bloomberg)

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