Business Strategy Novartis Restructures Organization to Accelerate Growth and Increase Productivity

Source: Press release

Under the new organizational structure, Novartis will aim to establish itself as a focused medicines company. The company’s pharmaceuticals and oncology business units will be merged into an Innovative Medicines business with separate US and International commercial organizations. Other divisions such as corporate strategy, R&D portfolio and business development will also be combined to further strengthen the pipeline with high-value medicines. Changes to its Executive Committee have also been announced.

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The Novartis Campus in Basel, Switzerland.
The Novartis Campus in Basel, Switzerland.
(Source: Novartis)

Basel/Switzerland – Novartis has recently announced the introduction of a new organizational structure and operating model designed to support the company’s innovation, growth, and productivity ambitions as a focused medicines company in the coming decade.

“The simpler organizational model we are unveiling today is central to our growth strategy as it will make us more agile and competitive, enhance patient and customer orientation, unlock significant potential in our R&D pipeline and drive value-creation through operational efficiencies,” said Vas Narasimhan, CEO Novartis. “With our portfolio of in-market medicines and up to 20 major pipeline assets that could be approved by 2026, Novartis is in a strong position to deliver above-peer-median sales and margin growth in the mid- and long-term.”

Integrating Pharmaceuticals and Oncology business units

Novartis will integrate the Pharmaceuticals and Oncology business units and create two separate commercial organizations with a stronger geographic focus—Innovative Medicines US and Innovative Medicines International. The two units will have full P&L responsibility across all therapeutic areas and ownership of customer experience, marketing and sales, and market access for their respective markets. The elevation and establishment of an independent US commercial organization strengthens Novartis’s ability to achieve its goal of becoming a top-five company in the US in terms of sales while maintaining and growing its leadership position internationally. The new model will also help Novartis bring increased focus and commitment to its core therapeutic areas of Cardiovascular, Hematology, Solid Tumors, Immunology and Neuroscience.

Marie-France Tschudin, currently President, Novartis Pharmaceuticals, will become President, Innovative Medicines International and Chief Commercial Officer. In her capacity as Chief Commercial Officer, Marie-France Tschudin will oversee global marketing, medical affairs and value and access across all therapeutic areas. Victor Bulto, currently Head of US Pharmaceuticals, will become President, Innovative Medicines US. They will both report to Vas Narasimhan effective immediately.

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New Strategy & Growth Function

Novartis will create a new Strategy & Growth function combining corporate strategy, R&D portfolio strategy and business development. This function will help drive the company’s growth strategy end-to-end and will look across internal and external opportunities to strengthen Novartis’s pipeline with medicines that are both transformational and can make significant contributions to growth. This new function will be led by a Chief Strategy & Growth Officer who will become a member of the ECN and report to the CEO. The search is currently underway for this new leader, and in the interim the function will be led by Lutz Hegemann, M.D., Ph.D., President, Global Health.

Integrated Operations and Global Functions

Novartis will also combine its Technical Operations and Customer & Technology Solutions units to create a new Operations unit. This new unit will provide a stronger and simpler operational backbone that can accelerate multiple technology transformation initiatives more efficiently, create novel digital solutions at scale and increase productivity, while maintaining industry-leading quality and service levels. Effective immediately, Steffen Lang, currently Global Head of Novartis Technical Operations, will become President, Operations reporting to Vas Narasimhan. In addition, all G&A functions—Finance, People & Organization, Ethics, Risk & Compliance, Legal, and Communications & Engagement—will be integrated on global and country levels.

Change in Global Drug Development (GDD) Leadership

Novartis has appointed Shreeram Aradhye, M.D., as President, Global Drug Development and Chief Medical Officer effective May 16, 2022. Dr. Aradhye, who is returning to Novartis, was most recently Executive Vice President and Chief Medical Officer at Dicerna Therapeutics where he led the development of multiple clinical stage RNAi assets. Previously, he was Chief Development Officer at Axcella Health. Dr. Aradhye has dedicated his entire professional career to improving patient lives, first as an academic clinician and then as a drug developer and business leader. He brings significant experience in global clinical development of innovative medicines across several therapeutic areas and has played a key leadership role in the development of multiple innovative therapeutics.

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During his 20-year tenure at Novartis, he held several global leadership roles including as development head for the company’s Neuroscience franchise and Global Head of Medical Affairs for the Pharmaceuticals business unit. Dr. Aradhye will report to Vas Narasimhan and join the ECN. With the changes in organizational structure and operating model, John Tsai, M.D., has decided to pursue opportunities outside Novartis effective May 15, 2022.

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