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00:00EARNINGS. THERE ARE A TON OF COMPANIES WITH NUMBERS OUT TODAY. ONE OF THE KEY NEW DRUGS, A TREATMENT FOR PSORIASIS SAW A SURGE. JOINING US NOW FROM SWITZERLAND IS THE CEO. THANKS SO MUCH FOR JOINING US. LET ME ASK ABOUT THIS PSORIASIS TREATMENT. HOW MUCH DO YOU EXPECT THE GROWTH TO CONTINUE? HOW WELL CAN THE STREET THE PROBLEM? > > WE ARE VERY CONFIDENT ON THE GROWTH STORY. WE BELIEVE WE HAVE A VERY -- GREAT PRODUCT TEAR WITH A STRONG PROFILE. WE BELIEVE WE HAVE BEEN ABLE TO MANAGE THE ACCESS ENVIRONMENT IN THE UNITED STATES TO ENABLE US TO INTERVIEW TO GROW. IT IS A VERY SUCCESSFUL MEDICINE. WE ARE CONFIDENT ABOUT THE GROWTH PROSPECTS AND ALSO WE FEEL CONFIDENT WE CAN MEET THIS CONSENSUS FOR A FULL YEAR AND SEEK CONTINUED GROWTH WELL INTO THE FUTURE. GUY: ON THE CALL THIS MORNING, YOU ' RE TALKING ABOUT THE FACT THAT YOU ARE VOLUNTARILY GOING TO PULL BACK FROM PRICE INCREASES IN THE UNITED STATES THIS YEAR. WHAT WAS THE CATALYST BEHIND THAT DECISION? HOW TEMPORARY PHENOMENON IS THIS? VASSANT : WHEN I LOOK AT THE POLICY ENVIRONMENT WITH OUR TEAM IN THE U.S., AND WE SEE THIS DYNAMIC ENVIRONMENT, WITHOUT THE PRUDENT THING TO DO WAS PULL BACK ON ANY FURTHER PRICE INCREASES IN 2018 AND EVALUATE AS THE ENVIRONMENT EVOLVES. LONGER-TERM, OUR APPROACH IS GOING TO BE TO PRICE OUR MEDICINES BASED ON THE VALUE THEY DELIVER. VALUE-BASED PROCESSING IS SOMETHING I VERY STRONGLY BELIEVE IN. OF COURSE, WE ARE GOING TO WANT TO LOOK AT PRICE INCREASES IN LINE WITH THE WAY MEDICAL INFLATION OVERALL IS HAPPENING ACROSS THE SECTOR. I WOULD NOTE THAT WHEN YOU LOOK AT NET PRICES FOR AS IN THE U.S., AS WE PROBABLY IN OUR TRANSPARENCY REPORT HAVE REALLY BEEN DECLINING. WITH THE REBATES WE HAVE BEEN HAVING TO PAY A PHARMACY BENEFIT MANAGERS, WE HAVE REALLY SEEN THAT PRICES DECLINING. LONGER-TERM, WE FILL CONFIDENT WE CAN GROW BASED ON OUR INNOVATIVE PIPELINE. MATT: THE INTERESTING THING HERE IS THAT HOLDING PRICES DOWN IS ONE OF THE KEY CAMPAIGN PROMISES THE DONALD TRUMP MADE BEFORE COMING INTO OFFICE AND CONTINUES TO TALK ABOUT IT. IS THIS IN ANY WAY AN ATTEMPT TO HAVE THE PRESIDENT ACHIEVE THAT GOAL? VASS ANT: I ' M VERY MUCH FOCUSED ON THE OVERALL POLICY ENVIRONMENT IN THE U.S. IN THE LONG RUN, A COMPANY LIKE OURS THAT PARTICIPATES AROUND THE WORLD AND MEDICINES AND DISTRIBUTING MEDICINES FOR DECADES, WE NEED TO CREATE A SUSTAINABLE ENVIRONMENT. WE ARE VERY POSITIVE ON THE BLUEPRINT DID MENSTRUATION HAS PUT FORWARD, AND THAT WE HAVE COMMENTED ON IN THE RECENT WEEKS. LOOK FORWARD TO SEEING SOME OF THE IMPORTANT POLICY CHANGES START TO COME INTO FORCE AND CREATE A MORE SUSTAINABLE SYSTEM. WE WANT TO BE A CONSTRUCTIVE PARTNER TO HHS IN FINDING REASONABLE SOLUTIONS TO CREATING A MORE SUSTAINABLE ENVIRONMENT FOR PATIENT AFFORDABILITY, BUT ALSO TO ENABLE HIGH-TECH INNOVATION TO HAPPEN. WE KNOW THERE IS A LOT OF UNMET NEED. A LOT OF PEOPLE WHO DIE BEFORE MEETING THEIR FULL LIFE EXPENSIVE C-SUITE -- EXPECTANCY. WE NEED A SUSTAINABLE ENVIRONMENT FOR INNOVATION AND ACCESS. GUY: COMING TALK ABOUT A BIT ABOUT YOUR PERSPECTIVE? HOW MUCH MONEY DO YOU WANT FOR AND WHAT IS THE VALUE DO YOU EXPECT TO GET FOR IT? DO HAVE A CLEAR IDEA IN YOUR MIND? VASSANT: WITH THE ANNOUNCEMENT TO SPIN OUT, TO OUR SHAREHOLDERS, WE ARE QUITE EXCITED. WE LOOK AT HOWAL CON AS A $20 BILLION MARKET THAT CONTINUES TO GROW. IT IS THE MARKET LEADER BOTH IN THE DEVICE SEGMENT AND VISION CARE SEGMENT. IT IS REALLY BEING SPUN INTO ITS OWN COMPANY FROM A POSITION OF STRENGTH. I THINK YOU HEARD FROM US THE RANGE OF 20 BILLION DOLLARS-$30 BILLION WE HAVE ALREADY PUT OUT IN THE PUBLIC DOMAIN. THAT IS GOING TO DEPEND ON THE MARKET AT THAT POINT IN TIME. I THINK THE KEY THING IS WHEN YOU LOOK LONGER-TERM AT THIS BUSINESS. THIS IS A STRONG BUSINESS, A MARKET LEADER WITH A STRONG INNOVATION PORTFOLIO THAT CAN GROW WELL INTO THE FUTURE. NOW WHEN IT HAS ITS FREEDOM TO INCREASE ITS CAPITAL AS IT SEES FIT, I THINK IT WILL BE AN ATTRACTIVE INVESTMENT FOR INVESTORS. MATT: WANT TO ASK A QUESTION ABOUT THE TRADE CONFLICTS WE HAVE BEEN REPORTING SO MUCH ABOUT. PEOPLE ARE GOING TO GET SICK REGARDLESS OF TRADE RESTRICTIONS, HOWEVER, IT IS GOING TO AFFECT THE GLOBAL ECONOMY. IT ' S GOING TO AFFECT HOW MUCH MONEY PEOPLE MAKE AND ARE ABLE TO SPEND. HOW DO YOU SEE THE GLOBAL TRADE CONFLICT, THE DEVELOPING TRADE WAR AFFECTING THE ECONOMY IN THE PHARMACY BUSINESS? VASSANT : I THINK ABOUT IT ON THREE LEVELS. FIRST IS OPERATIONALLY FROM A LOGISTICS STANDPOINT. CAN WE ENSURE OUR SUPPLY CHAINS OPERATE THE WAY THEY NEED TO OPERATE? ON THAT LEVEL, WE FEEL PRETTY GOOD ABOUT WHERE WE ARE. WE FEEL LIKE IT IS NOT WHAT A BE A DISRUPTION TO OUR GLOBAL SUPPLY CHAINS. SECOND LEVEL IS UNDERLYING DEMAND FOR OUR MEDICINES. THERE AGAIN, GIVEN THE UNMET NEEDS AND IMPORTANCE OF HEALTH CARE TO COUNTRIES AROUND THE WORLD, WE BELIEVE INVESTMENT IN HEALTH CARE WILL BE MAINTAINED. WE ALSO OPERATE AND A MACROECONOMIC ENVIRONMENT, WHICH NEEDS TO BE ATTRACTIVE FOR INVESTMENT, NEEDS TO BE ATTRACTIVE FOR THE MOVEMENT OF PEOPLE AND OUR ABILITY TO TRANSACT AROUND THE WORLD. ON THAT LEVEL, I THINK IT IS MORE CONCERNING WHEN YOU LOOK AT THE OVERALL TRADE DISCUSSION. I ' M HOPEFUL THERE WILL BE A PRAGMATIC SOLUTION BETWEEN ALL OF THE PARTIES SO THAT THIS CAN COME TO RESOLUTION AND WE CAN ENABLE GLOBAL GROWTH TO CONTINUE. GUY: THANKS VERY MUCH INDEED FOR YOUR TIME. THE NOVARTIS CEO, THANK YOU VERY MUCH INDEED.

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Novartis CEO Says It's `Prudent' to Pull Back From Further Price Increases

Novartis AG Chief Executive Officer Vas Narasimhan talks about U.S. drug pricing, government health-care policy and plans to spin off the Swiss drugmaker's Alcon eye-care unit. He speaks from Basel, Switzerland, on "Bloomberg Daybreak: Europe" after profit beat estimates in the second quarter, allowing Novartis to reiterate its full-year forecast. (Source: Bloomberg)

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