Start of Main Content

By Alexandria Jacobson

From navigating the COVID-19 pandemic to addressing economic uncertainty, the pharmaceutical industry has been swept up in a whirlwind of demands over the past few years. Rob Davis ’93 MBA, ’98 JD, chairman and CEO of Merck, recently sat down with Francesca Cornelli, dean and the Donald P. Jacobs Chair of Finance at Kellogg, to share how he is leading one of the largest pharmaceutical companies in the world through massive technological change and constant demand for advancement in new drug treatments.

Francesca Cornelli: How do you view the business landscape for the pharmaceutical industry?

Rob Davis: The landscape right now for biopharmaceuticals is growing increasingly complex. Some of that is due to what’s happening in the global environment. Obviously, the pandemic created unprecedented global health challenges, and there are some lingering effects we’re facing as a global community.

In all of that complexity, as governments are trying to both manage public health and manage budgets, there is increased pressure on us as a sector because everyone is feeling that pain and pressure at the same time. We’re also seeing increased competition in our industry and the need for speed and agility in how we respond to public health threats has never been greater.

With that said, I’m optimistic about where we’re headed. Our industry is built on innovation and has driven scientific successes that have saved or improved millions of lives. We’re also starting to understand biology differently as data and new digital approaches like AI and machine learning are being applied in research, and I believe we could be at an inflection point in the advancement of global health.

Cornelli: When did Merck start to use artificial intelligence and machine-learning tools? 

Davis: We’ve been using different forms of machine learning and artificial intelligence going back all the way to the early 2000s, primarily in our discovery space. At that time, the computing power, the lack of structured data and the inability to augment your internal data through time with external data limited the benefits we saw. We used these tools, but I would say we didn’t see a huge benefit from them. 

It’s probably been only in the past few years, as computing power has changed markedly with the advent of the cloud and the ability to amass large amounts of data, that we’ve started to really reap the benefits of it. It’s now one of the core strategic priorities for our company.

Cornelli: Are there any challenges associated with using these tools given that they require large databases?

Davis: We’re in the early days of having data that is validated enough, structured enough, that you can truly rely upon it. It’s not just the quantity of the data; frankly, right now you tend to find that data is still too unstructured or not validated, and that makes mining that data hard. Some of that is the data itself. Some of it is the governance you put around it. So we’re spending a lot of time defining data governance to be able to do this. 

Cornelli: Will new technology boost the research on diseases that are difficult to treat?

Davis: It definitely will, and it has. 

Historically, a small molecule can be chemically synthesized. Most of early medicine was that, so a chemist could actually produce it in a lab. We tend to think of those as oral drugs. Most of the generic drugs that have benefited society long after their intellectual property restrictions have expired are those drugs. 

As we started to move into other disease areas that are more difficult to treat — what scientists found is we could identify drug targets. But the molecule you would need to go after the target was so large and so complex that it was impossible using rudimentary chemistry to reproduce it. 

The world of biologics came about because people realized we could organically grow some of these large and complex molecules, but they’re generally not taken orally. Most of these are injected drugs, and they bring a whole area of complexity in how they work within the body. With computational design and our ability to model molecular structure, or guidance aided through these computational tools, we now are able to actually synthesize orally available molecules when historically we couldn’t. 

Cornelli: What is the Rob Davis leadership philosophy? 

Davis: It’s people and purpose with a focus on a one-team mindset.

What we do to help society matters. Purpose is who we are. It’s who we’ve always been. It is our best weapon for recruiting and retaining talent, by making sure people understand that’s the core of who we are. 

We are in the business of intellectual property. We’re not a brick-and-mortar business. If we don’t have the most diverse talent, where we really are inclusive in how we embrace that talent to get the best of everyone’s thinking, we won’t win. 

That’s what “one team” is about. A team will always beat the individual — a diverse team, where everyone is bringing their best ideas, their full selves. We need a one-team mindset, and we need to think enterprise first. 

It’s about focusing on what matters, which is the patient at the center. Moving with urgency and understanding that there’s someone waiting for either that existing treatment or the next one to be discovered, and doing it as one team. If we do that, we win. We win for the patient. We win for society, and in turn, we win for the shareholder. 

Cornelli: What drew you to pharma?

Davis: I grew up in a small town in Indiana in the shadow of Eli Lilly, which is another very important biopharmaceutical company. I saw what Lilly did. I understood the mission of the company. I saw the impact they had on the community. They were so philanthropic in how they gave back. 

Then I got into the industry and realized the impact we could have. I’ve stayed for 30 years. At the end of the day, it’s nice to wake up and know what you’re doing is going to make a difference in someone’s life. Frankly, it will make a difference in your own life. 

Our leading drug, Keytruda, is now a foundational therapy in cancer care. It has fundamentally changed the way that cancer is treated. I have family members who have had cancer. We all have friends who’ve had cancer. It gets very personal very quickly, and if you believe that you can have an impact to help them, what better reason to get out of bed and do something? That’s really what brought me here. It’s what has kept me in the industry all this time.

Cornelli: What is it like to lead a company that employs more than 17,000 scientists?

Davis: First and foremost, I would say it’s a privilege. It’s humbling when you meet with these people. Many are MD/PhDs. You have to be comfortable enough with yourself to frankly recognize that you’re probably not the smartest person in the room. In fact, I’m pretty confident I’m not. 

I recall the great advice I got from my predecessor, Ken Frazier: If you’re a great CEO, it’s because you’ve cleared the way for everyone else to thrive. If I can be comfortable that my people across the functions — the scientists, the teams in manufacturing, my commercial colleagues — are all thriving, we’ll win. And we’ll do it as one team.


More in this issue

Profits with purpose: Meet alumni launching sustainability-focused startups

Delivering critical medical care with the NEST360 Program

Nike’s Angela Dong is hitting her stride

Faculty in focus: Cynthia Wang PhD ’07, MS ’04

Browse the Kellogg magazine archive