WEBVTT - Joaquin Duato 0:00:02.920 --> 0:00:05.540 By revenue, the biggest healthcare company in the world is 0:00:05.600 --> 0:00:09.610 Johnson & Johnson. But Johnson & Johnson no longer sells Band-Aids. 0:00:10.090 --> 0:00:13.770 It sold off its consumer product division. Now it focuses 0:00:13.870 --> 0:00:17.950 on pharmaceuticals and medical devices. The man responsible for that 0:00:18.050 --> 0:00:21.730 transformation of Johnson & Johnson is Joaquin de Watteau. I 0:00:21.750 --> 0:00:23.790 had a chance recently to sit down with him to 0:00:23.870 --> 0:00:25.760 ask him why he made this transformation. 0:00:26.480 --> 0:00:29.760 When I was preparing for this, I did some research 0:00:29.820 --> 0:00:33.150 and I was disappointed to learn that the Band-Aids I've 0:00:33.170 --> 0:00:35.310 been using all these years are no longer owned by 0:00:35.370 --> 0:00:38.680 Johnson & Johnson. What happened to the Band-Aids? I mean, 0:00:38.720 --> 0:00:40.500 I thought Band-Aids were Johnson & Johnson. 0:00:41.580 --> 0:00:42.760 So it's not only you. 0:00:42.880 --> 0:00:45.190 I think many red IDs of the company are sending 0:00:45.229 --> 0:00:49.350 me mail regarding that same feeling. And many of them 0:00:49.409 --> 0:00:54.950 work in our consumer sector. Even today, when I tell 0:00:54.990 --> 0:00:57.160 people I'm the CEO of Johnson & Johnson, they tell 0:00:57.180 --> 0:00:59.280 me the baby shampoo company. 0:00:59.820 --> 0:01:01.080 All the time, all the time. 0:01:01.380 --> 0:01:03.540 You became the CEO, and then within a year or 0:01:03.580 --> 0:01:06.720 two of that, you spun out your entire consumer division, 0:01:06.740 --> 0:01:08.679 all the kind of products that I'm the one that 0:01:08.800 --> 0:01:10.860 I buy those things at the drugstore. And all those 0:01:10.900 --> 0:01:12.580 things you got rid of. Why did you do that? 0:01:13.280 --> 0:01:16.520 We wanted to be more focused on medical innovation. 0:01:17.340 --> 0:01:21.770 And the consumer business has departed from medical innovation. We 0:01:21.780 --> 0:01:26.590 were more on areas more connected with cosmetics or over-the-counter medication, 0:01:27.130 --> 0:01:30.190 and it didn't fit in the overall umbrella on trying 0:01:30.310 --> 0:01:37.370 to bring medical innovation to treat tough, difficult conditions like oncology, cardiovascular, 0:01:37.670 --> 0:01:38.330 or dementia. 0:01:38.470 --> 0:01:42.660 You're in pharmaceuticals, and you're in medical devices. Let's talk 0:01:42.680 --> 0:01:45.480 about pharmaceuticals. What is your biggest pharmaceutical product? 0:01:46.290 --> 0:01:49.250 Our biggest pharmaceutical product is a drug for multiple myeloma 0:01:49.470 --> 0:01:54.150 called Darzalex. Multiple myeloma is a blood cancer that has 0:01:54.410 --> 0:01:55.970 improved significantly in. 0:01:56.010 --> 0:01:56.690 The last decade. 0:01:57.280 --> 0:02:00.000 The life expectancy of a multiple myeloma patient was about 0:02:01.000 --> 0:02:04.720 single years. Now a multiple myeloma patient can expect to 0:02:04.780 --> 0:02:07.400 live more than 10 years. And in some ways, we're 0:02:07.440 --> 0:02:09.820 turning multiple myeloma into a chronic disease. 0:02:10.270 --> 0:02:14.090 Medical devices is another thing. Pharmaceutical is one thing, medical devices. 0:02:14.150 --> 0:02:17.090 What is your most important medical device that you have? 0:02:18.330 --> 0:02:20.130 Look, let me tell you why we have medical devices 0:02:20.150 --> 0:02:22.740 and pharmaceuticals. It's because I think it gives us a 0:02:22.880 --> 0:02:27.400 long-term competitive advantage because we can span the entire patient journey. 0:02:27.760 --> 0:02:29.560 Let's say cancer. Let's take lung cancer. 0:02:29.600 --> 0:02:33.930 We have systems to do bronchoscopy and do diagnosis there, 0:02:33.990 --> 0:02:35.490 robotic-assisted bronchoscopy. 0:02:35.750 --> 0:02:37.609 We have medicines to treat lung cancer. 0:02:38.310 --> 0:02:41.510 We also have the instruments that are used for the 0:02:41.570 --> 0:02:42.910 surgery in lung cancer. 0:02:43.310 --> 0:02:44.550 And we are working on. 0:02:44.550 --> 0:02:49.080 A radiotherapy enhancer, and radiotherapy is an important therapeutic modality 0:02:49.139 --> 0:02:51.220 for local control in lung cancer. So we can expand 0:02:51.600 --> 0:02:54.080 the entire patient journey. What I'm more excited about medical 0:02:54.120 --> 0:02:57.260 devices right now is that we can use technology to 0:02:57.320 --> 0:03:00.920 make our medical devices smarter. And the most important product 0:03:00.960 --> 0:03:03.360 that we are about to get approval from. 0:03:03.260 --> 0:03:05.790 The FDA is a robotic surgical system. 0:03:06.310 --> 0:03:08.589 So most of the surgery is going to have a 0:03:08.650 --> 0:03:11.800 robotic component that's going to help improve the level of 0:03:11.880 --> 0:03:13.680 surgery and have better outcomes. 0:03:13.700 --> 0:03:16.500 How many different products do you have in the pharmaceutical 0:03:16.520 --> 0:03:18.399 and how many do you have in the devices? 0:03:18.520 --> 0:03:20.310 We have dozens of products on both sides. 0:03:20.530 --> 0:03:22.070 So how do you keep up with all of them? 0:03:22.110 --> 0:03:24.090 And when somebody comes along and says we have a 0:03:24.090 --> 0:03:26.870 new product, do you actually... test the product yourself? Or 0:03:27.150 --> 0:03:28.460 how do you decide whether you're going to go ahead 0:03:28.470 --> 0:03:30.060 and use this product or not? 0:03:30.160 --> 0:03:32.980 We have a large, we have a $ 15 billion regional 0:03:33.000 --> 0:03:36.400 development budget and thousands of scientists working at Johnson & Johnson. 0:03:36.930 --> 0:03:40.030 I don't make those decisions. I trust the scientists working 0:03:40.070 --> 0:03:43.330 at Johnson & Johnson to help me in identifying and 0:03:43.350 --> 0:03:45.830 making the decision of what's gonna have a bigger impact 0:03:45.850 --> 0:03:49.120 on patients. And our standard is, what is going to 0:03:49.160 --> 0:03:51.280 have a bigger impact on patients? What is going to 0:03:51.360 --> 0:03:54.160 clearly improve the standard of care of that particular disease? 0:03:54.200 --> 0:03:55.940 That's what we try to do every day. 0:03:56.080 --> 0:03:58.620 Now you have the highest revenue of any healthcare company 0:03:58.660 --> 0:04:01.400 in the world, but there's one healthcare company that has 0:04:01.420 --> 0:04:04.930 a higher market capitalization than you, which is Eli Lilly, 0:04:05.430 --> 0:04:07.730 and that's about roughly a trillion dollars because they have 0:04:07.750 --> 0:04:11.030 a GLP-1 drug. How come you don't have a GLP-1 drug? 0:04:12.060 --> 0:04:13.500 We were focused on a different area. 0:04:13.520 --> 0:04:15.940 We were not focused on obesity or on diabetes like 0:04:16.300 --> 0:04:18.380 Eli Lilly was. And great for them that they were 0:04:18.520 --> 0:04:22.250 able to identify these transformational medicine GLP-1s. There's going to 0:04:22.270 --> 0:04:25.750 be more GLP-1s coming through the pipe. Multiple companies have GLP-1s. 0:04:26.640 --> 0:04:29.500 We have other things to pay attention to, like trying 0:04:29.540 --> 0:04:32.600 to cure cancer or address dementia, which are real social 0:04:32.640 --> 0:04:34.739 problems and real issues that we want to pursue. 0:04:34.779 --> 0:04:37.000 But no, we are not going to be in the 0:04:37.050 --> 0:04:37.950 GLP-1 area. 0:04:38.029 --> 0:04:41.029 How many employees does Johnson & Johnson have? 0:04:41.050 --> 0:04:42.970 We have 140,000 employees globally. 0:04:42.990 --> 0:04:43.969 How many in the United States? 0:04:44.330 --> 0:04:47.590 We have about 60,000 in the U.S., 80,000 globally. 0:04:48.350 --> 0:04:51.010 And what are the revenues of Johnson & Johnson now? 0:04:51.290 --> 0:04:54.610 Our guidance this year is going to be somewhere north 0:04:54.650 --> 0:04:55.010 of $ 100 billion. 0:04:56.460 --> 0:04:58.730 Now, some people say that the United States is very 0:04:58.760 --> 0:05:01.550 good at health care when you have a problem. We 0:05:01.589 --> 0:05:03.670 have all kinds of drugs for things when you have 0:05:03.710 --> 0:05:06.450 a problem. But what about prevention? We're not thought to 0:05:06.490 --> 0:05:10.190 be as good in preventing health care problems as solving 0:05:10.230 --> 0:05:11.710 them once you have them. What do you think about 0:05:11.740 --> 0:05:12.900 that argument or criticism? 0:05:13.520 --> 0:05:15.320 I think that we could do better as a country 0:05:15.360 --> 0:05:18.219 in prevention. And I think that everything we can do 0:05:18.279 --> 0:05:21.420 to improve our diet, our exercise, our lifestyle is going. 0:05:21.260 --> 0:05:21.700 To be good. 0:05:21.800 --> 0:05:24.910 And everything we can do to improve the primary care 0:05:25.010 --> 0:05:26.370 side of healthcare in the U.S. 0:05:26.410 --> 0:05:27.789 Will help in the prevention side. 0:05:27.870 --> 0:05:31.810 Primary care is the first defense in healthcare and improving 0:05:31.850 --> 0:05:35.970 primary care, it's an important element. 0:05:36.029 --> 0:05:38.740 Now, I tell you, when it comes to specialized care, 0:05:38.839 --> 0:05:40.940 clearly the U.S. is the lead in the world. 0:05:41.100 --> 0:05:44.420 Everywhere I go, when somebody has a serious disease, they 0:05:44.460 --> 0:05:45.599 think about coming to the U.S. 0:05:45.640 --> 0:05:47.380 Because we have the best medicine in the world. 0:05:47.580 --> 0:05:49.740 A number of years ago, the Affordable Care Act was 0:05:49.800 --> 0:05:53.260 passed by Congress. and it was heavily criticized by some, 0:05:53.290 --> 0:05:55.850 but supported by others. Do you think the Affordable Care 0:05:55.910 --> 0:05:59.229 Act has been helpful to our US healthcare system? How 0:05:59.270 --> 0:06:01.100 does it help you? And how would you change it 0:06:01.140 --> 0:06:01.839 if you could change it? 0:06:02.420 --> 0:06:05.080 My principle, our principle as a company is the more 0:06:05.100 --> 0:06:08.250 people that has health coverage, the better for this country. 0:06:08.790 --> 0:06:11.870 So anything that improves health coverage and more people covered, 0:06:12.290 --> 0:06:15.409 the better for this country. It's important for a country 0:06:15.589 --> 0:06:19.169 as rich as the US that we have health care 0:06:19.510 --> 0:06:20.330 extended to as. 0:06:20.310 --> 0:06:22.310 Many people as possible. So in that regard, I think 0:06:22.350 --> 0:06:22.710 that's good. 0:06:22.830 --> 0:06:25.450 And that's going to help in the areas of prevention 0:06:25.500 --> 0:06:26.360 that you were mentioning. 0:06:26.690 --> 0:06:29.360 That's going to help in life expectancy. That's good for 0:06:29.400 --> 0:06:29.839 the country. 0:06:29.900 --> 0:06:33.200 People say that sometimes the drugs in Canada or England 0:06:33.240 --> 0:06:35.229 are cheaper. than they are in the United States for 0:06:35.250 --> 0:06:36.470 the same drug. Have you ever heard of that? 0:06:36.810 --> 0:06:37.150 It's true. 0:06:37.410 --> 0:06:40.610 We are working in order to have the right recognition there. 0:06:40.670 --> 0:06:43.810 But keep in mind that we are working with countries 0:06:43.830 --> 0:06:45.630 that have a national health care system that has a 0:06:45.670 --> 0:06:50.790 monopoly on that. And we have to obey for some 0:06:50.830 --> 0:06:53.560 of these regulations unless we don't want these patients to 0:06:53.570 --> 0:06:54.300 have that medicine. 0:06:54.600 --> 0:06:56.120 It may not be a surprise to you, but a 0:06:56.180 --> 0:06:59.260 lot of people in this country don't think that pharmaceutical 0:06:59.300 --> 0:07:02.380 companies are very good. They charge high prices and things 0:07:02.420 --> 0:07:04.359 like that. You're aware of this concern? 0:07:04.480 --> 0:07:05.620 I'm aware, yeah. 0:07:05.760 --> 0:07:08.170 So what are you trying to do in the pharmaceutical 0:07:08.230 --> 0:07:10.090 industry to make people like you more? 0:07:10.670 --> 0:07:14.110 Every time I talk to a patient that is using 0:07:14.190 --> 0:07:17.130 one of our medicines and has a serious condition, they 0:07:17.170 --> 0:07:20.330 like Johnson & Johnson. And they like the pharmaceutical industry. 0:07:20.510 --> 0:07:22.470 And they are grateful. And we do that a lot. 0:07:22.970 --> 0:07:25.210 I mean, we bring a lot of patients to our offices. 0:07:25.290 --> 0:07:28.570 We bring patients to our manufacturing sites. So our people 0:07:28.630 --> 0:07:31.060 working in the company can connect what they do every 0:07:31.080 --> 0:07:33.900 day with the impact those medicines have on patients or 0:07:33.940 --> 0:07:37.940 those medical devices. So yes, we have a reputation depending, 0:07:38.440 --> 0:07:41.200 but where we have a good reputation is in the 0:07:41.260 --> 0:07:43.720 patients that use our medicines and medical technology. 0:07:43.800 --> 0:07:48.720 Now, when you had a litigation issue years ago where 0:07:48.760 --> 0:07:51.690 I think some kind of baby talc was said to 0:07:51.710 --> 0:07:55.750 be carcinogenic. Maybe it was, I don't know. But then 0:07:55.770 --> 0:07:58.270 when you spun it off, your consumer division, you still 0:07:58.330 --> 0:08:01.540 kept the talc litigation. What's the status of that litigation? 0:08:01.980 --> 0:08:06.600 So let me say first, you know, studies, regulatory agencies 0:08:06.620 --> 0:08:10.680 have never found a causal relationship between talc and cancer. 0:08:11.120 --> 0:08:14.180 So we stand behind that, and that's why we defend 0:08:14.240 --> 0:08:18.310 our position there, and we litigate every single case that 0:08:18.490 --> 0:08:22.590 comes with talk. There's a combination of third-party litigation funders 0:08:22.690 --> 0:08:25.280 that invest in litigation, like if you were working in 0:08:25.460 --> 0:08:29.260 infrastructure or if you were investing in technology, and they 0:08:29.380 --> 0:08:34.760 fund these litigations, building pseudo-scientific arguments and try to play 0:08:34.880 --> 0:08:37.990 in companies like us. That's the business model that exists here. 0:08:38.330 --> 0:08:41.870 So we are litigating every single case. We are winning, 0:08:42.429 --> 0:08:44.730 and at the same time, we are also trying to 0:08:44.870 --> 0:08:48.930 introduce modifications in civil justice in order to make the 0:08:48.960 --> 0:08:49.920 system more fair. 0:08:50.100 --> 0:08:52.860 You must do consumer surveys. What is the most popular 0:08:53.240 --> 0:08:55.000 thing that people tell you about what they like about 0:08:55.040 --> 0:08:56.220 your company, what they don't like? 0:08:56.820 --> 0:08:59.720 What they like about our company is normally the trust 0:08:59.780 --> 0:09:03.579 that our medicines and medical technologies have on them. So 0:09:03.640 --> 0:09:05.569 when they think Johnson & Johnson, they think it's a 0:09:05.590 --> 0:09:08.350 trust market. What they don't like about our company are the. 0:09:08.309 --> 0:09:09.350 Prices, as usual. 0:09:09.450 --> 0:09:11.580 What are you going to do about the prices? 0:09:11.980 --> 0:09:14.559 Look, there's always going to be a tension between innovation 0:09:14.600 --> 0:09:19.160 and affordability. Because innovation is expensive, it's high risk, and 0:09:19.260 --> 0:09:22.559 we want to make that innovation gets to everybody in 0:09:22.600 --> 0:09:26.329 this country. So we are always trying to price our 0:09:26.390 --> 0:09:28.550 medicines in a way that is consistent with the benefit 0:09:28.570 --> 0:09:31.430 they bring. In this country, we can work in different 0:09:31.590 --> 0:09:36.060 areas in order to improve affordability. One area is trying 0:09:36.100 --> 0:09:39.950 to take some of the percentage that the middlemen get 0:09:39.970 --> 0:09:45.090 in pharmaceuticals, try to get back to the patient. We 0:09:45.110 --> 0:09:47.750 can also, we should be doing that, we can also 0:09:47.809 --> 0:09:50.270 have other countries that are developed countries paying the fair 0:09:50.330 --> 0:09:53.350 share for recent development. All these things will help in 0:09:53.390 --> 0:09:55.150 making medicines for Americans more affordable. 0:09:55.290 --> 0:09:57.880 Let's talk about your story. You're born in Spain, What city? 0:09:58.280 --> 0:10:00.920 I was born in Spain, in Valencia. I'm the son 0:10:00.980 --> 0:10:04.739 of an engineer and a nurse. So I had the 0:10:04.860 --> 0:10:07.610 medical side in my family and also the entrepreneurial side. 0:10:08.630 --> 0:10:10.950 And I grew up in a large family. In my family, 0:10:10.990 --> 0:10:13.770 my dad had nine brothers and sisters. 0:10:14.190 --> 0:10:16.729 So I have like 40 cousins. And I was in 0:10:16.770 --> 0:10:17.209 the middle. 0:10:17.770 --> 0:10:20.400 So I realized at the beginning that I needed to 0:10:20.420 --> 0:10:22.680 have a strong voice in order to be heard. Otherwise, 0:10:22.720 --> 0:10:25.020 nobody was paying attention to me in my family. 0:10:25.059 --> 0:10:27.860 Now, as I understand it, you went to college in 0:10:27.940 --> 0:10:28.660 Spain initially. 0:10:28.679 --> 0:10:28.859 Yeah. 0:10:29.500 --> 0:10:32.800 And then after you graduated from college, you applied for 0:10:32.820 --> 0:10:35.330 a job at Johnson & Johnson and got turned down. 0:10:35.730 --> 0:10:36.850 Yeah. 0:10:37.030 --> 0:10:39.310 I got an interview and I didn't make it to 0:10:39.350 --> 0:10:40.370 the second interview. 0:10:40.429 --> 0:10:42.790 So what happened to the person who turned you down? 0:10:42.870 --> 0:10:43.530 Is he still there? 0:10:43.929 --> 0:10:47.770 He worked in the consumer business and look what happened 0:10:47.790 --> 0:10:48.970 with consumer. 0:10:50.870 --> 0:10:51.210 Okay. 0:10:51.350 --> 0:10:55.540 All right. So now you worked your way up. Over 0:10:55.580 --> 0:10:57.580 how many years have you been at Johnson & Johnson? 0:10:57.600 --> 0:11:00.320 I've been at Johnson & Johnson. It goes fast. 37 years. 0:11:01.630 --> 0:11:03.300 Did you ever think you could rise up to be 0:11:03.320 --> 0:11:03.840 the CEO? 0:11:04.460 --> 0:11:06.660 Never. I never thought I was going to be the CEO. 0:11:07.000 --> 0:11:09.720 I tell you how I realized I could be the CEO, 0:11:09.740 --> 0:11:12.059 because I was getting different jobs, and every time I 0:11:12.080 --> 0:11:13.560 got that job, I thought, you know what, I can 0:11:13.600 --> 0:11:16.760 do the next one. And then next job, I could 0:11:16.780 --> 0:11:18.420 do the next one, I could do the next one, 0:11:18.600 --> 0:11:20.900 until I became Vacher, and I said, I think I 0:11:20.920 --> 0:11:21.580 can be CEO. 0:11:21.780 --> 0:11:24.080 When did they tell you, like three years in advance? 0:11:24.280 --> 0:11:26.760 They told me maybe a year and a half in advance. 0:11:26.980 --> 0:11:28.800 They told me, you are going to be a candidate 0:11:28.820 --> 0:11:30.719 to be CEO, and I have to go through a 0:11:30.780 --> 0:11:32.380 process in order to become the CEO. 0:11:32.820 --> 0:11:34.330 And did you tell them what was wrong with all 0:11:34.350 --> 0:11:35.949 the other candidates, or you didn't tell them that? 0:11:36.150 --> 0:11:38.170 They didn't tell me anything. They just told me, you're 0:11:38.190 --> 0:11:39.050 going to be the next one. 0:11:39.170 --> 0:11:40.890 Do you have children who want to be in the 0:11:40.929 --> 0:11:41.550 healthcare world? 0:11:42.230 --> 0:11:45.260 I have a daughter who is in medical school, and 0:11:45.280 --> 0:11:48.380 I have a son who is a mechanical engineer. But yeah, 0:11:49.080 --> 0:11:50.730 I have a tradition in my family, as I told you, 0:11:50.750 --> 0:11:54.500 my My mom was a nurse. My grandmother was a pharmacist. 0:11:54.559 --> 0:11:57.459 My grandfather, a pediatrician. And I spent a lot of 0:11:57.500 --> 0:12:01.420 my childhood in Valencia, my hometown, in my grandmother's pharmacy. 0:12:01.450 --> 0:12:03.890 She had a retail pharmacy. And when my mom was 0:12:03.950 --> 0:12:07.010 doing errands in town, she would let me in the 0:12:07.050 --> 0:12:09.610 pharmacy waiting with my grandmother because she was manning the 0:12:09.630 --> 0:12:12.450 pharmacy herself. And she was talking to patients coming to 0:12:12.490 --> 0:12:15.480 refill prescriptions all the time. And I would always complain, grandma, 0:12:15.520 --> 0:12:17.880 why do you talk to people so much? where you 0:12:17.900 --> 0:12:20.620 spend so much time with the people. And she told me, 0:12:20.640 --> 0:12:23.679 I remember that, Joaquin, the important thing is not the medicine, 0:12:23.860 --> 0:12:27.140 it's the person. So I always retain that to myself. 0:12:27.220 --> 0:12:30.990 It's not the medicine, it's the person. 0:12:32.370 --> 0:12:34.770 So if you're the healthcare CEO of the biggest healthcare 0:12:34.830 --> 0:12:37.220 company in the world, you should be really fit. And 0:12:37.240 --> 0:12:39.860 you seem like you're fit, but what do you do 0:12:39.900 --> 0:12:41.599 to save? I mean, do you exercise every day? Do 0:12:41.620 --> 0:12:43.750 you have an instructor to teach you how to make 0:12:43.760 --> 0:12:45.170 sure you look fit and are fit? 0:12:45.510 --> 0:12:48.589 So I exercise a couple of days a week, and 0:12:48.610 --> 0:12:50.809 then I play tennis over the weekend. They say tennis 0:12:50.850 --> 0:12:52.740 is the best sport in order to be fit. 0:12:53.550 --> 0:12:55.920 Because you have to exercise your mind and your body. 0:12:56.260 --> 0:12:58.140 And there are many studies that show that tennis is 0:12:58.160 --> 0:12:59.800 the one that creates more longevity. 0:12:59.980 --> 0:13:01.400 So that's why I'm testing it. So do you play 0:13:01.420 --> 0:13:03.200 with Rafael Nadal? I wish. 0:13:03.220 --> 0:13:03.760 I wish. 0:13:04.240 --> 0:13:07.290 I play with a coach. And I plan that. I 0:13:07.309 --> 0:13:09.190 play twice a week. And I really love it. 0:13:09.710 --> 0:13:11.450 How much of your time do you spend on the road? 0:13:12.110 --> 0:13:13.570 I would say 75%. 75%? Yeah. 0:13:13.830 --> 0:13:16.770 So who's watching the store back in? 0:13:17.220 --> 0:13:21.140 Look, I mean, I have a lot of people back 0:13:21.160 --> 0:13:23.000 in the store, so that is watching for me. 0:13:23.640 --> 0:13:25.520 And it's important for me to be connected. 0:13:25.920 --> 0:13:28.520 I have to be connected to the physicians that use 0:13:28.580 --> 0:13:31.970 our medicines and medical technologies. I have to be connected 0:13:32.030 --> 0:13:33.750 with our employees here in the. 0:13:33.750 --> 0:13:36.210 US and elsewhere. I have to have a pulse of 0:13:36.250 --> 0:13:38.510 the company. I cannot have a pulse of the company 0:13:38.910 --> 0:13:40.390 if I am at New Brunswick. 0:13:40.630 --> 0:13:44.809 What is the hardest part about being CEO of Johnson & Johnson? 0:13:44.850 --> 0:13:46.290 What's the biggest challenge you face? 0:13:47.340 --> 0:13:49.460 The biggest challenge is to be able to continue to 0:13:49.480 --> 0:13:52.580 improve this company every day. I mean, these companies as 0:13:52.640 --> 0:13:54.900 big as Johnson & Johnson, we need to have attention 0:13:54.980 --> 0:13:59.560 to improvement, to reinvent ourselves. So the biggest challenge for 0:13:59.620 --> 0:14:02.859 a CEO is to break the inertia and to make 0:14:02.900 --> 0:14:04.770 the company every day more competitive. 0:14:05.330 --> 0:14:06.830 And that's what I'm trying every day. 0:14:07.620 --> 0:14:09.979 If you were to educate somebody to this audience and 0:14:10.020 --> 0:14:12.300 you say, here's something you should know about healthcare that 0:14:12.320 --> 0:14:14.120 you really don't know or you should know more about, 0:14:14.160 --> 0:14:14.750 what would that be? 0:14:15.370 --> 0:14:17.190 Yeah, so I would say first, in becoming CEO of 0:14:17.230 --> 0:14:19.770 Johnson & Johnson, I think this is a sign of 0:14:19.810 --> 0:14:22.960 the opportunities that exist in this country. I think the U.S. 0:14:22.990 --> 0:14:26.260 is a great country. It's a land of opportunity and Look, 0:14:26.320 --> 0:14:28.280 I was born in Spain, but I am more an 0:14:28.300 --> 0:14:31.480 American from a professional perspective. I love the sense of 0:14:31.520 --> 0:14:34.900 opportunity of this country. I love the opportunity to progress 0:14:34.970 --> 0:14:37.489 and make your dreams come true, like me becoming CEO 0:14:37.530 --> 0:14:38.330 of Johnson & Johnson. 0:14:38.370 --> 0:14:40.330 So as a U.S. 0:14:40.390 --> 0:14:42.430 Citizen that was not born in the U.S., I have 0:14:42.470 --> 0:14:44.990 to say this is a wonderful country. And sometimes you 0:14:45.030 --> 0:14:47.770 have to be from outside to appreciate what a great 0:14:47.820 --> 0:14:50.220 country this is. So I'm very grateful for this country 0:14:50.300 --> 0:14:53.070 and the opportunities they gave me. So as far as 0:14:53.550 --> 0:14:55.810 what I would say in healthcare, I would say trust 0:14:55.830 --> 0:14:59.620 your doctor. I think doctors and nurses and healthcare workers 0:14:59.740 --> 0:15:02.200 are really the frontline of our health, and I think 0:15:02.240 --> 0:15:05.480 that trusting your doctor, your nurse, is a very important 0:15:05.520 --> 0:15:08.480 thing for us. That's why, as Johnson & Johnson, our 0:15:08.580 --> 0:15:11.760 focus in terms of our philanthropic activities is in frontline 0:15:11.800 --> 0:15:15.100 healthcare workers, is in nurses. We think that's the frontline 0:15:15.160 --> 0:15:17.280 of healthcare, and my advice is trust them. 0:15:18.440 --> 0:15:21.790 Now, in the United States, there are only two companies 0:15:22.670 --> 0:15:25.470 that have a triple A credit rating. Does anybody else 0:15:25.750 --> 0:15:27.770 know what, one is Johnson & Johnson, anybody else know 0:15:27.790 --> 0:15:29.570 what the other one is? That is the only other 0:15:29.610 --> 0:15:31.710 company in the United States, publicly traded company, that has 0:15:31.750 --> 0:15:37.960 a triple A credit rating. Anybody? What? Microsoft is the company. 0:15:38.060 --> 0:15:41.710 Microsoft, yeah, Microsoft and Johnson & Johnson. We're proud. to 0:15:41.750 --> 0:15:43.210 have a AAA credit rating. 0:15:43.230 --> 0:15:50.540 I think it's a better credit rating than the US government. 0:15:50.860 --> 0:15:54.180 It's a sign of our financial discipline and our trajectory 0:15:54.200 --> 0:15:57.860 over a long period of time. And many investors ask me, 0:15:58.120 --> 0:16:01.280 why having a AAA credit rating? You could be more leveraged. 0:16:02.260 --> 0:16:04.500 I say, look, it's a sign of our financial discipline. 0:16:04.620 --> 0:16:07.770 We are not married to the AAA credit rating. If 0:16:08.010 --> 0:16:09.930 a good opportunity would come along, we would be happy 0:16:09.970 --> 0:16:12.070 not to have a... a triple-A credit rating, but it's 0:16:12.110 --> 0:16:14.860 a sign of our financial discipline, and our investors like it. 0:16:15.410 --> 0:16:18.910 For 15 years in a row, you've had an annual 0:16:19.550 --> 0:16:21.550 dividend that has increased, is that right? 0:16:21.970 --> 0:16:22.990 More than 50 years. 0:16:23.150 --> 0:16:23.730 More than 50 years. 0:16:23.750 --> 0:16:25.750 More than 50 years we have increased our dividend, yeah, yeah. 0:16:26.130 --> 0:16:28.210 So that's pretty good. Do you try very hard to 0:16:28.230 --> 0:16:29.390 make sure you do that every year? 0:16:29.670 --> 0:16:32.670 That's sacrosanct. You know, when investors ask me, what about 0:16:32.700 --> 0:16:34.840 the dividend? I say, that's always going to be there, 0:16:34.880 --> 0:16:37.680 that you can bet that you will have a dividend 0:16:37.720 --> 0:16:39.820 growth if you are investing in Johnson & Johnson. 0:16:40.180 --> 0:16:42.880 The most commonly asked question of CEOs today is how 0:16:42.940 --> 0:16:45.800 is your company being affected by AI and what are 0:16:45.820 --> 0:16:48.060 you doing to take advantage of AI? So how are 0:16:48.080 --> 0:16:50.040 you being affected by AI and how are you taking 0:16:50.120 --> 0:16:50.780 advantage of AI? 0:16:51.040 --> 0:16:53.380 On the positive, you know, AI for us is a 0:16:53.420 --> 0:16:56.800 force multiplier because AI, it's going to help life science 0:16:56.860 --> 0:16:59.080 companies like Johnson & Johnson to be able to develop 0:16:59.100 --> 0:17:02.250 better medicines and medical technology. So we have to embrace AI. 0:17:03.090 --> 0:17:06.390 AI is going to accelerate discovery of new medicines. AI 0:17:06.410 --> 0:17:09.649 is going to make medical devices smarter, be able to 0:17:09.710 --> 0:17:12.859 navigate the body better. So I think AI is something 0:17:12.880 --> 0:17:15.160 that a company like Johnson & Johnson has to embrace. Now, 0:17:15.220 --> 0:17:19.060 we have to help all our employees to amplify what 0:17:19.100 --> 0:17:21.820 they do with AI. And we are training all our 0:17:21.859 --> 0:17:24.699 employees in AI because we want to bring everybody in 0:17:24.740 --> 0:17:27.330 the journey. AI is not going to take your job, 0:17:27.369 --> 0:17:29.770 but somebody with AI skills may take your job. 0:17:30.070 --> 0:17:31.810 Are you spending a lot of money now on AI? 0:17:32.450 --> 0:17:34.649 We are investing in AI, too, in programs that are 0:17:34.690 --> 0:17:38.400 going to improve the operations of the company in areas 0:17:38.480 --> 0:17:41.500 like drug discovery, where I think AI is going to 0:17:41.520 --> 0:17:45.300 have a big impact, in areas like making our medical 0:17:45.340 --> 0:17:47.320 devices smarter, our robotic systems. 0:17:47.340 --> 0:17:49.370 So we are investing in AI. 0:17:49.570 --> 0:17:52.490 Like in my age, I'm focused on drugs that are 0:17:53.070 --> 0:17:55.469 Alzheimer's related. Is that something you're focused on? 0:17:55.930 --> 0:17:56.170 Yeah. 0:17:56.710 --> 0:17:57.760 Because that's going to be a big.... 0:17:59.070 --> 0:18:02.730 I think the biggest challenge for the healthcare industry and 0:18:02.810 --> 0:18:05.919 for the pharmaceutical and medical device industry is to address 0:18:05.960 --> 0:18:09.300 the issue of neurodegeneration and dementia. 0:18:09.320 --> 0:18:10.520 I mean, it's a real. 0:18:10.340 --> 0:18:14.179 Social problem that your chances of having some type of 0:18:14.240 --> 0:18:15.620 cognitive impairment. 0:18:15.619 --> 0:18:16.700