Just days after leaving Schering-Plough, its former CEO Fred Hassan is tackling the media circuit. In a sprint across Manhattan, he tells Scrip's US reporter Christopher Spillane about the next pharma revolution and how he's swapping the boardroom for the health advocacy soap box

Moments after delivering a speech to a room teeming with budding CEOs, all students of Columbia University's business school, Fred Hassan is mobbed. He is hemmed in by a crowd of people as he listens to each comment, anecdote and thanks on offer. From a distance you'd be forgiven for thinking a celebrity was walking through this New York hotel.

Minutes later we emerge onto Broadway in Times Square where a waiting car will take Mr Hassan to a recording down town at the iconic Flatiron building. His staff, who are travelling in a separate car, won't tell me who the recording is with or what it is about, which is typical of the secrecy that envelops big pharma and apparently continues to shroud even former executives.

We sit across from each other in the silver Lincoln and begin our journey down town. The chauffeur closes a hatch, which doubles as a cue for Mr Hassan to fire a volley of questions at me.

"Is the industry under stress? Is there an innovation deficit? Is there a commoditisation aspect going on?" he asks. "I don't believe it's a sunset industry. I believe it is a sunrise industry because there are a few things here that don't exist in other places," he adds.

The sun, however, has set on Mr Hassan's dominion over Schering-Plough. After six years during which he guided the once-ailing company through a remarkable turnaround (as recognised in this month's Scrip Awards when it was christened large pharma company of the year), it was acquired by Merck & Co. The $40 billion transaction closed a few days before we met and his advisors warned me that little would be said about the deal.

He is right about there being a few things in pharma that are absent elsewhere. Strip away the optimism and the industry faces a morass of troubles: low earnings beyond 2012 as blockbuster products lose patent protection; rising payer pressures in the West particularly as one of its biggest markets, the US, ponders a government-run insurance option; and R&D becoming less and less productive.

It is an industry in contraction. But Mr Hassan says it is heading towards what he calls "a disruptive opportunity".

"Unlike so many industries where disruption creates a reduction in the top line I believe that here is an opportunity where you can still disrupt but you don't have to drop the top line." In the short term, growth in emerging markets is likely to maintain the top line for companies as the industry addresses the aspirations of a growing middle class.

"People are looking for things to get better and the emerging markets are becoming very important. We might have been working for the top billion people 20 years ago; now we work for a large portion of the 6.5 billion we have today."

The first disruptive opportunity Mr Hassan encountered was in an emerging market – his native Pakistan where he was a regional sales manager in Lahore. He was working in the fertiliser business at the height of the green revolution in the late 1960s and early 1970s, when the country was pioneering short wheat and rice variants and popularising fertilisers. At the time, Pakistan's GDP was growing by 5-10% annually.

Soon after, he joined the pharmaceutical industry and 30-odd years later as he bows out of industry as an executive, he spies the next disruptive opportunity, which is based around the completion of the human genome project, which he believes will be the catalyst for the next wave of pharma.

For the longer term, forget emerging markets: genomics is the next great opportunity.

"We are still in the early stages in terms of getting the full benefit but genomics is going to be a huge disruptive opportunity. Just like antibiotics were a disruptive opportunity – the whole system changes – it's no longer 'I've got breast cancer', it's 'I've got this type of breast cancer'. Now with genomics you can actually go to the real thing as opposed to the way things look to the naked eye."

This is what he describes as "pharma's sunrise opportunity" and some are already making hay while the sun shines.

Around a quarter of women with breast cancer express the protein human epidermal growth factor receptor-2 (HER2-positive), which can be treated with Roche/Genentech's specifically targeted Herceptin (trastuzumab).

This targeted approach allows for more cost-effective, shorter clinical trials and, encouragingly for payers, it will be possible to identify which parts of the population the treatments will work for, unlike many current therapies whose efficacy must be ascertained through trial and error. It is a benchmark that agencies like the UK's National Institute for health and Clinical Excellence are beginning to measure drugs by.

"Some industries are going to be very creative about assessing this opportunity and that starts inside the company with the head of R&D. Other companies might be more conventional and I think if one is conventional then in the very long term it's hard to do well. But one should have the mindset that is, 'Hey! There's an opportunity here and I'm going to take advantage of this disruption and change my company to take advantage.'"

He believes that targeted R&D can categorise and identify subpopulations, which can allow the development of new treatments but will also expose a greater portion of the healthcare market to diagnostic companies.

"There's a lot of money to be made for diagnostic companies too in this revolution and they're the ones that are going to do well. Profit migrates to where the opportunity is and there will be migrations here. For some it won't be that great but for others it'll be a very good opportunity."

After much probing, Mr Hassan unsurprisingly concedes that his next venture is likely to be in the field of genomics. He admits that he's very curious about the domain and is in touch with industry players. "I know people that have a good rolodex when it comes to hiring some people and this is my area of passion."

While he is guarded about his involvement in genomics, after I remind him of comments he made a year ago in Scrip about the prevalence of Alzheimer's disease among the baby-boomers he opens up, losing some of his well-prepared veneer.

Leaning back into his seat, he shakes his head: "It's a very expensive disease and so if we don't start doing something differently now this is going to break the bank.

"20 years from now the present boomers who are 65 will be going past 85 and we're looking at a huge challenge here. The world is looking at a huge challenge because this disease not only causes immense difficulties for families, it has a huge effect on the payers of healthcare," he warns.

He's been in discussions with Dr Charles Sanders, the head of the National Institutes of Health, and his ears prick up when I mention that Sir Terry Pratchett, the author who was recently profiled in Scrip, is raising awareness of the disease in the UK (scripnews.com, July 3rd, 2009). On three occasions he asks for the author's details.

He describes the battle to tackle Alzheimer's as a worldwide effort. "I think this has to be a global fight and we have to access science wherever it might be," he declares, citing a recent treatment in-licensed by Pfizer for which the clinical research is being conducted in Russia as an example.

"In the old days, you looked at R&D in North America, the UK and the Nordic countries; there wasn't much else, but now it's the whole world. There are good clinical trials in Russia and the compound looks very interesting."

But while he will offer to lend his name to certain causes as he considers his personal plans, he's hesitant to bankroll his own non-profit venture. "If during my work I look at some interesting science that might be good, I would then look at it from a private sector point of view, but right now my main mission is to create public and private sector awareness and a sense of urgency around this problem."

There is another pressing concern for the industry and patients alike: US healthcare reform. Like many industry executives, he believes that more needs to be done to put the onus of healthcare responsibility on patients.

He insists that education is the best means of attack, and plays down the remarks he made against the beverage industry when he called for a tax on sugary soda drinks. "I didn't mean to be that out front, but I was pretty clear if that's what's causing an increase in healthcare costs - just like the cigarette tax helped reduce consumption - we should look at it. But I never meant that it should be punitive on families," he says.

"I think tremendous work needs to be done in terms of healthcare literacy in school and getting people to engage in their own personal healthcare for the rest of their lives.

"Behaviour-driven costs are part of the problem and if people are told certain things early in life and encouraged to work with responsible behaviours then I think that can also be very good not only in terms of reducing costs but also health outcomes."

He draws inspiration from his smoking cessation work with Pharmacia & Upjohn and its gum-based treatment for nicotine-addiction, Nicorette. "I was involved in smoking cessation work outside the US when I was at Pharmacia & Upjohn and we did very good work in Japan and China, which was a huge challenge... But I still can't understand how the smoking reduction revolution occurred and whether it was an accident or well-orchestrated," he admits.

The passion and sincerity in his voice make it difficult to doubt his commitment to healthcare advocacy; yet in the days following our meeting, a handful of press releases emerge, plotting a rather different path post-Schering-Plough to that which he outlined to Scrip.

Mr Hassan has agreed to offer his experience to the private equity group Warburg Pincus as a senior advisor to the firm’s healthcare portfolio and he will join the board of directors at the ophthalmic company Bausch & Lomb. And for a bit of variation, he has also joined the board of the media group, Time Warner.

He will be busy indeed if he still plans also to be active in the fields of genomics, Alzheimer's disease and general health advocacy. Merck's acquisition of Schering-Plough was clearly not a sunset moment in Mr Hassan's career.