When it comes to drug pricing, Johnson & Johnson’s CEO says he’s open to change. But he is also quick to defend the importance of how breakthrough drugs are improving patient’s lives. That, he says, justifies high prices.
CEO Alex Gorsky tells Fortune, “Obviously you’ve got to work with payers, providers. You’ve got to work with the government to make sure that’s done in a responsible way.” But he warns, “I think we need to be thoughtful about is making wholesale changes to the system that could have untoward consequences that ultimately restricts patients access to those kinds of products or actually is a disincentive to continue research that’s going to produce that next breakthrough.”
Nearly half of Johnson & Johnson’s (JNJ) total revenues come from pharmaceutical sales—everything from Tylenol to cancer-fighting drugs like Zytiga and Darzalex. The New Brunswick, New Jersey based company is ranked at number 37 on the Fortune 500 list of the largest companies in America. It had 2017 revenues of $76 billion from those pharma sales, as well as medical devices, and consumer products like Band-Aids and baby lotion.
And what about President Trump’s proposal to require drug prices in television ads? Gorsky is okay about that too.
“We think the education of consumers is a good thing,” he says. “I think they should be as informed and educated about their healthcare pricing and decisions. And they’ve got to be part of that conversation, just as insurers, distributors, pharmacists and other people in the system.”
Watch the video above for more from my interview with Gorsky.