A STRIKING point to emerge during the US election campaign was that
Governor Clinton proposed targeting the drugs companies to reduce
healthcare costs.
The immediate worry was that the British pharmaceutical groups
Wellcome and Glaxo would be hard hit; yet on closer examination their
price increases have been the lowest of the significant market-players
despite having the highest revenue growth in 1991 at 27% and 24%
respectively.
The secret has been volume growth and Wellcome chief executive John
Robb is determined for more. His target before retirement in 5[1/2]
years time is to raise Wellcome in the world pharmaceuticals league from
20th to 15th place.
That will come not so much through its anti-Aids drug but through
products such as the Zovirax herpes and shingles anti-viral which is one
of the world's largest golden geese with annual sales of around #600m
and the extensive portfolio of other anti-viral products, including
cancer cures, which will take up the running later this decade.
Edinburgh-born Robb grabbed the headlines when he was fired as chief
executive of Beecham in 1988 after a 22-year career with the company,
mostly on the marketing side. The root cause for the decision was that
Beecham had decided upon splitting the role of chairman and chief
executive and called in Bob Bauman, ''the million-dollar man'', in 1986
-- a very high salary then.
But there was no meeting of minds between the two as to who should do
what, and as it was cheaper to let Robb go, he thought ''it seemed right
to pitch my tent elsewhere''.
After six months of discussions he joined Wellcome in March 1989 at
the invitation of then-chairman Sir Alfred Sheppard.
At first, the new deputy chief executive was treated with some
suspicion as it was pretty obvious he was the heir apparent. Despite
having been appointed to the Beecham board in 1980, it was generally
thought his skills were in marketing and that he knew nothing about
pharmaceuticals.
Again, Wellcome was, and is, the only producer of front-line defence
against Aids with its Retrovir drug, and it was in the centre of a storm
of controversy over pricing, particularly in the US. Robb took exception
to the criticism.
His first major decision at Wellcome was to cancel a major research
programme even although that was in the pre-sales Phase 3 stage. He
considered the product was eight times more expensive than the treatment
Genentec had already put on the market and that it would never be better
than in third place. That Genentec has flat sales over the last four
years of just $200m for its product would seem to validate his action.
The board now bears little relation to that when he arrived, with the
former RTZ and now British Steel chairman, Dalmuir-born Sir Alistair
Frame, having succeeded ''Shep'', although several of the changes have
been through retirement.
Aspirants to the boardroom have no chance unless they have worked
overseas, as Britain is now a relatively insignificant part of the
whole.
Robb has never had any doubts about his own abilities despite his
genial demeanour and reluctance to say too much about himself. At the
end of a tour of duty with any of the Beecham companies, he would ask
himself whether they were in better shape than when he started. ''People
would argue that I was pretty tough -- and so on. But I could always
look in the mirror and say 'Yes'.''
He could never be content as a middle-manager and this has come
through very strongly on the personal side. ''I have always taken the
view that I had to have a successful career to have a successful
family.'' And ''the future of the company is in my hands. I wish I could
do it all -- but it is too complex.''
John Robb left Daniel Stewart's College at 16 and his first job was
with Heinz. The initial years included two years' National Service with
the Middlesex Regiment, split between peaceful Austria, ''which was
pleasant'', and terrorism-torn Cyprus.
Altogether, Heinz employed him for seven years, then he joined the
Associated Fisheries' subsidiary Eskimo Frozen Foods. There he met his
wife-to-be, Janet, who worked for the Inland Revenue in Grimsby. They
have a daughter and two boys, all in their twenties. Gardening, a
quarter-share in a horse-breeding syndicate and golf (handicap 12)
occupy the weekend.
And like so many Scots, it was the lure of London which set him on the
road to success. After a few months with an advertising agency, he
joined Beecham as marketing manager for McLean's Toothpaste. And on the
international side, he had ''a very interesting boss called Ernest
Saunders. He and I got on quite well -- a very capable chap.''
Although Robb moved to the Far East in 1971, he regards that as a
crucial year for the British pharmaceutical industry as Beecham bid,
unsuccessfully, for Glaxo. Sir Ronald Edwards of Beecham had what Robb
says was the right concept of bringing it together with a research-based
group to form a large company able to take on the Americans and the
Swiss.
The growth in the eighties by Glaxo came through focus on research and
development, through building up cash, successful marketing and deciding
that when it did not have enough market share on its own it would form
co-partnerships. ''That is what we are concentrating on here. If someone
has done something efficiently, I will not try to find a new
way.''
The long-term objective is ''to put volume through the Wellcome
factories -- not pound notes''.
That should please Clinton.
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