Garnier, Jean-Pierre 1947–
Chief executive officer, GlaxoSmithKline
Family: Married; children: three.
Career: Schering-Plough, 1975–1983, various management positions, including general manager of several overseas subsidiaries; U.S. Pharmaceutical Products Division, 1983–?, vice president of marketing, president; SmithKline Beecham, 1990–1994, president of North American pharmaceutical department; 1994–1995, chairman of pharmaceuticals; 1995–2000, chief operating officer; 2000, CEO; GlaxoSmithKline, 2000–, chief executive officer.
Awards: Chevalier de la Légion d'Honneur, French government, 1997; Oliver R. Grace Award for Distinguished Service in Advancing Cancer Research, Cancer Research Institute, 1997; named one of the 50 Stars of Europe, Business Week, 2001; Marco Polo Award, US-China Foundation for International Exchange, 2001; Humanitarian Award, Sabin Vaccine Institute, 2002; Legend Lifetime Achievement Award, Eastern Technology Council, 2002; Lifetime Achievement Medal, Fulbright Association, 2002.
Address: GlaxoSmithKline plc, 980 Great West Road, Brentford, Middlesex TW8 9GS, United Kingdom; http://www.gsk.com.
■ Jean-Pierre Garnier assumed the role of chief executive officer of GlaxoSmithKline in December 2000, with the merger of SmithKline Beecham and Glaxo Wellcome. Garnier had joined SmithKline Beecham in 1990 as president of its pharmaceutical business in North America and served as chairman of the pharmaceuticals division from 1994 until his appointment as chief operating officer in 1995. He was elected to the company's board of directors in 1992. He became chief executive officer-elect in December 1999 and chief executive officer in April 2000.
Before joining SmithKline Beecham, Garnier had served as president of Schering-Plough's U.S. business. During his 15 years at Schering, he held various management positions, including general manager of several overseas subsidiaries. In 1983 he joined the U.S. Pharmaceutical Products Division, serving as vice president of marketing. He was then named senior vice president and general manager of the over-the-counter business and assumed responsibility for sales and marketing for the U.S. prescription business before taking on the job of president.
A TALENTED FRENCH DOCTOR
As soon as Garnier became the head of GlaxoSmithKline (GSK), a giant health-care group, the French CEO had to face a tricky situation: the access of poor countries to medicines. Indeed, at that time, 39 laboratories were suing the South African government for using cheap generic medicines to treat AIDS. GSK, the main manufacturer and worldwide leader in this area, was one of the initiators of the lawsuit, which was thought to have been lost in the arena of public opinion. In the end, GSK gave up the lawsuit before the action could damage the image of the company. The other companies involved in the suit soon withdrew their cases as well. Garnier had made a calculated strategic choice. David Earnshaw, director of the Belgian office for Oxfam International, stated that among all the CEOs in the pharmaceutical business, Garnier was the most likely to lead the industry in such a move.
Garnier's strategic acquiescence to public opinion was an important choice. The public, in general, does not countenance the notion that companies consider health care, especially for the poor, to be a source of profit for themselves. As Garnier put it, "A western business model cannot be applied to medicine," adding that GSK had a noble goal: to improve health care in the world (Bauchard, 2001). His moral sense, his charisma, and his solid business acumen made this strong, tall, and dynamic man one of the most respected French CEOs in the United States and put him at the top among worldwide pharmaceutical leaders.
DEVELOPING ENTREPRENEURIAL SKILLS
Garnier was a brilliant student. "He has always had the genes of a boss … ambitious, determined and upright," asserted Jean-Louis Muller, one of his former university classmates from l'Université Louis Pasteur in Strasbourg (Bauchard). By age 25, Garnier had completed an MS in pharmaceutical science and a PhD in pharmacology. As a Fulbright Scholar, he then earned an MBA at Stanford University, in California, in 1974. There, the young Frenchman discovered the importance of the human factor in an organization, a lesson that was invaluable in seeing him through many company mergers.
Garnier always kept in mind what he had learned while studying for his MBA at Stanford. At that time, most students were embracing finance and marketing. Everyone wanted to know more about linear programming and accounting, but for Garnier these subjects were too black and white. He preferred to study organizational behavior. This topic covered the intersection of personal needs and company needs, the concept of teamwork, the ways in which to lead a team to realize its objectives, and how to organize people in a company to move forward toward a single goal and to succeed. Such courses were not the most popular in the 1970s. They were considered "too soft," but for Garnier they were crucial, the most useful ones he took. He had many opportunities to apply them in the course of his career.
FROM SCHERING-PLOUGH TO GLAXOSMITHKLINE
Garnier began his career at Schering-Plough in the marketing department and held a dozen different positions in seven countries over 15 years. He then became one of the only nonnatives, which happens very rarely, to manage the national subsidiary of a British laboratory. Garnier explained: "I had to create 'internationalism' where I was, because few examples preceded me." In his collaboration with the Dane Jan Leschly at SmithKline Beecham, he learned the value of being surrounded with different personalities. "Opposite points of view allow for better decision making" (Bauchard).
He soon gained fame for his knowledge of science, his marketing skills, his facility for simplifying issues, and his focus on the essentials. Garnier could plan and execute three or four objectives a year, and his high expectations in all areas of business, along with a personality that was viewed as cold, at least on the surface, could intimidate. A former colleague said of Garnier that he could "discourage dissent—even though he appreciates it—unless it happens in small group" (Bauchard).
In December 2000 the $195 billion merger between rival British drug companies Glaxo Wellcome and SmithKline Beecham was finalized, and Jean-Pierre Garnier moved rapidly to ensure that GlaxoSmithKline maintained its leading 6.9% share of the $317 billion global drug business. In this way Garnier demonstrated that drug mergers could be a success and a fast success. He reshaped the company's huge research and development effort into competing teams to enhance productivity. The payoff should be interesting since the company is determined to launch 15 new drugs by 2005, and according to Jean-Pierre Garnier, it is just a start.
CONCERNS FOR PATENT ISSUES
In developing drugs, a scientist first looks at a disease or a pathological condition to find the root cause. Perhaps it is an enzyme. With trial and error, a chemical might be found to block the enzyme. The chemical would then be tested for toxic effects, in animal studies and then in Phase I human trials, in which a very small amount of the chemical is administered to volunteers. If the product proves safe for human consumption, the company provides it to patients with the disease, to see whether it has the desired effect. If a drug is successful on this small scale, called a Phase II trial, the study group is enlarged to perhaps four thousand or five thousand patients. When this trial is complete, a drug company sends the complete information to the FDA for approval of the drug. With FDA approval, the drug can be marketed. The average cost of developing a pharmaceutical can range from $300 to $500 million. Scientists need to examine thousands of possible drugs to find one that shows efficacy and meets with approval. Even at the stage of a clinical trial, perhaps 80 of 100 products will not make it to the end.
In Garnier's view, and in the context of the lengthy drug research and approval process, the issue of patents was vital. Devising and implementing a patent policy were the keys to the success of a company. Indeed, the cost of producing pharmaceuticals is very low; the most money is not spent on manufacturing but on development. If an effective drug is launched on the market without a patent, it can be instantly copied. Garnier firmly believed in patents as a way to push forward research into new drugs. As he put it, "There would be no economic incentive, no payoff. Patents are the means to reward people who do research…. Virtually 99 percent of all pharmaceuticals on the market today were discovered and developed by the industry, not by universities".
Still, patents have a limited life, just seventeen years in the United States. This was a concern to Garnier, who thought that patent law should be reviewed and reconsidered. A patent for a drug has to be taken out when research begins, not when the product goes to market. By the time a drug reaches the consumer, a company might have put seven years into research. Garnier complained, "We then only have only seven or eight years left on the market, after which it is legal to make 'generics.' The price crashes, and we don't make any more money. We are given just seven or eight years to recoup our investment, get a return, and pay back the shareholders".
With revenues of EUR 29 billion, GSK was born from the merger of Glaxo Wellcome and SmithKline Beecham. The company is evenly matched with Pfizer, the other leader in the pharmaceutical field. In research and development, the nerve of a pharmaceutical company, Garnier and his team applied a model already tested by the antibiotic division of Smith-Kline: researchers were given the independence of a startup in taking the creative steps necessary to find a promising new drug, and they also benefited from a financial interest in the results. "It is not about playing a better game than our competitors; it is all about creating an ongoing climate of innovation and an exploratory state of mind," asserted Garnier (Bauchard). This strategy also focused on anticipating and concentrating on new products. Garnier was aware that being a pioneer is risky, especially if the market is not ready: "Many products have failed because they arrived on the market too early. On the other hand, people who think the world cannot change are not successful in business".
Garnier liked challenges and faced one with the merger of Glaxo, a very British company, and SmithKline, with its more American focus. With his dual citizenship (French-American), Garnier had a clear sense of American business culture; at the same time, he did not deny his European origins, which enabled him to be a bridge between cultures. His French touch and his solid family spirit spoke to Americans' traditional values. Charles Pizzi, president of the Chamber of Commerce of Philadelphia, declared that Garnier had transformed GSK into a "citizen company," granting funds to charity and cultural activities (Bauchard).
It was Garnier's view that an understanding of human nature played a major part in his company's success. If the majority of a company's employees have a common objective, they take pleasure in their work. Likewise, if workers are not happy, they will not perform well. A business is successful when employees work in a positive atmosphere and when they feel as if they are making a positive contribution. Business practices have less of an effect on the bottom line than the employees' state of mind. Creating such a business climate can be challenging. Garnier believed that his generation focused more on understanding marketing techniques and only much later discovered that the human factor was most important.
In the business strategy of GSK, certain decisions are made at the lowest levels of the company. "People like to have a sense of control. Here we don't want managers to have exclusive power; we want them to coach. By recruiting good players, we will have a better team". Garnier stressed the value of working together, having a common goal, believing in the company, striving for success, and having a sense of personal responsibility. These were not mere ideals; Garnier put them into practice as a result of his belief that every employee had the power to influence the future of the company. Without this mindset, he thought, a company becomes merely a bureaucracy and loses its soul. The company's positive mission of providing health care was also an advantage.
In the early 2000s GSK launched a humanitarian program to eradicate the disease elephantiasis, which affects 110 million people in the third world. Drug treatment can cure this disease, but the countries where it is prevalent cannot afford to purchase the medicine. Through GSK, Garnier decided to offer it. With proper treatment—just one pill per person—it was thought that elephantiasis could be eliminated in the space of twenty years. Thus, there was strong motivation to make the effort, but Garnier was aware that it would take a great deal of work to sustain such a commitment. In 2004 Garnier was still at work, trying to "convert" the elders of Glaxo to his vision and building a new corporate culture, before the next acquisition of this "serial mergerer."
See also entries on GlaxoSmithKline plc, Schering-Plough Corporation, and SmithKline Beecham plc in International Directory of Company Histories.
sources for further information
Albanese, Virginie, "Jean Pierre Garnier, CEO de GSK," Pharmaceutiques, no. 87 (May 2001): 18–19, www.pharmaceutiques.com/phq/mag/pdf/phq87_jpgarnier.pdf.
Bauchard, Florence, "Jean-Pierre Garnier, les médications du french doctor," Enjeux, Les Echos, no. 170, June 2001, pp. 48-52.
"Dr. Jean-Pierre Garnier," GlaxoSmithKline, http://www.gsk.com/bios/bio_garnier.htm.
Fombrun, Charles J., and Cees B. M. Van Riel, Fame and Fortune: How Successful Companies Build Winning Reputations, Upper Saddle River, NJ: Financial Times Prentice Hall, 2003.
"Garnier, Jean-Pierre," World Economic Forum, http://www.weforum.org/site/knowledgenavigator.nsf/Content/Garnier%20Jean-Pierre.
"Jean Pierre Garnier," BIO 2003 Newsroom, http://www.bio.org/events/2003/media/brunchjpg.asp.
"Jean-Pierre Garnier," BusinessWeek Online, June 11, 2001, http://www.businessweek.com/magazine/content/01_24/b3736656.htm.