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In May 2016, Joseph Papa ’83 was a well-known and highly successful business leader in the pharmaceutical industry. Harvard Business Review ranked him 47th on its “2014 Best Performing CEOs in the World” list; Barron’s magazine hailed him as one of the world’s best CEOs in 2012, noting that his company, Perrigo, “generated one of the best shareholder returns in the S&P 500 in the past five years.”
Papa had also launched several important pharmaceutical products, including Lotrel, Diovan and Celebrex, and even held the patent for a cardiovascular drug that approached $1 billion in sales.
It was with such achievements under his belt that Papa then opted to take the helm of the embattled Valeant Pharmaceuticals, which was tangled in a string of controversies involving hiked drug prices that culminated in an SEC investigation and more than $30 billion of debt.
“There's an old saying about be careful of catching a falling knife because you can get hurt and it is really true,” laughs Papa. “There were some real challenges here and I can’t make excuses for the legacy issues at Valeant, but we've now stabilized the company and put together a multi-year plan to ultimately transform the business.”
In the two years since he took the reins, Papa has distanced the company from its previous turmoil by changing the name to Bausch Health Companies Inc., cutting its debt by $7 billion and returning the business to growth again.
“I consider it the turnaround opportunity of a lifetime,” says Papa. “We’re still in the midst of a significant turnaround, but we’re now gaining momentum for the future.”
Papa ascribes much of his strategy for transforming Bausch Health and for his past successes to what he learned at Kellogg. “Whether it was in our strategy or marketing courses, we were always taught to look at what is our competitive advantage versus others in the marketplace, and to continue to focus on that competitive advantage while minimizing some of the weaknesses,” he explains. “So at Bausch we can’t simply pay down our debt — though that’s of course part of it — but we have to think about our competitive advantage and grow from there.”
Papa believes there is a vast number of advantages inherent in pharmaceuticals simply because pharmaceuticals improve and often save lives. For example, after running the numbers, his team discovered that every day, somewhere in the world, over 150 million people use one of Bausch Health’s products. That number will only grow as the population ages and the need for medical care rises. Papa also believes pharmaceuticals can help address the healthcare industry’s overall need for efficiency as the ratio of people working versus those over the age of 65 continues to shrink.
“I will absolutely admit my bias up front, but the pharmaceutical industry is the best industry in the world,” he says. “It has a great growth trajectory, but most importantly, it makes a difference in patients’ lives. As long as you always think about the patient and what you're doing to help that patient, you will be successful.”