Novartis China Restructures County-Level Business Amid Strategic Shift

(Source: Yidu Pharma)

Source: Yidu Pharma

On November 25, 2025, a message stating that "Novartis China's county-level team will be completely disbanded, with the last working day set for December 31" went viral in pharmaceutical circles. On the same day, Novartis China quickly responded to the media, confirming that starting from January 1, 2026, it would adjust its operational model for county-level business. At the same time, it emphasized that "its commitment to county-level patients remains unchanged" and will continue to promote the accessibility of innovative drugs.

The next day (November 26), according to self-media reports,Novartis China's Head of Retail, Emerging Markets and Commerce, Chen Hui, Issues Company-Wide Letter Disclosing Further Adjustment Details：This change involves all employees of the county-level teams and represents a strategic decision by the company to adapt to market changes. The company will assist employees in transitioning smoothly through one-on-one communication, transitional support, and other methods.

According to industry sources, this adjustment is essentially a large-scale layoff, involving all levels of positions including directors and regional managers. It is estimated to affect approximately 500 people, covering promotion teams across multiple disease areas, making it the most closely watched organizational change event in the pharmaceuticals industry recently.According to sources close to Novartis, the severance package for this round of layoffs is "N+3," with some employees in key positions having the opportunity for internal transfers.

Relevant data shows that Novartis China's county-level team layout began in 2021, with the core objective of seizing the growth opportunities in China's county-level healthcare market. At that time, the country was continuously advancing the "Healthy China" strategy, and the enhancement of county-level hospital capabilities and the expansion of grassroots healthcare became industry trends, while the demand of county-level patients for innovative drugs had yet to be fully met.

As a global pharmaceutical giant, Novartis has chosen to break into the county-level market through the field of cardiovascular diseases — a field that is precisely one of the most prevalent conditions among county residents and where the company's star products have already gained widespread clinical recognition. The aim is to expand market share through this下沉布局 while fulfilling corporate social responsibility.

After four years of development, Novartis' county-level business has formed a considerable scale: covering about 1,000 county-level markets across China, with products spanning major disease areas such as dermatology, rheumatology, cardiovascular, and ophthalmology. In terms of channel construction, Novartis innovatively established nearly 1,000 professional pharmacies in over 800 counties, creating a closed-loop service system of "in-hospital diagnosis + off-site medication pickup" to ensure convenient access to innovative drugs for patients in these counties.

In terms of product lines, Novartis' county-level teams primarily focus on the promotion of three major categories of drugs: First, mature products in the cardiovascular field, such as Sacubitril/Valsartan Sodium Tablets (Entresto) and Amlodipine (Norvasc), which are commonly used in medical insurance. Second, popular drugs in the immunology field, such as Secukinumab (Cosentyx) for psoriasis treatment — this drug accelerated its penetration after receiving approval for a new indication in the first quarter of 2025. Third, some basic medications for chronic diseases, forming a complementary pattern with urban teams characterized by "high-end innovation + grassroots popularization."

In the early days of the county team's establishment, Novartis achieved rapid expansion through intensive recruitment and channel development, with the team size peaking around 2023. During the CIIE in 2024, Novartis still set up a special zone for the county market, demonstrating its determination to deepen its presence, but signals of team optimization had already emerged in the industry. In the second half of 2025, adjustment rumors intensified until the operational model change was officially confirmed in November, marking a new phase in its county strategy.

Novartis' Q3 2025 Earnings Report Shows Strong Performance: Net Sales for the First Three Quarters Reach $41.196 Billion, Up 11% Year-on-Year (at Constant Exchange Rates); Core Operating Income at $16.96 Billion, Up 18%; Q3 Net Sales at $13.909 Billion, Net Profit at $3.93 Billion, Up 25% Year-on-Year.

China's performance was particularly impressive, with sales reaching $3.2 billion in the first three quarters of 2025.But the growth momentum is highly concentrated in high-value innovative drugs: Pluvicto, a nuclear medicine, achieved revenue of $1.041 billion in the first three quarters, becoming the world's first nuclear medicine product with sales breaking the $1 billion mark, and is expected to be approved in China by the fourth quarter of 2025; star products such as Kisqali (CDK4/6 inhibitor) and Kesimpta (multiple sclerosis drug) have year-on-year increases exceeding 40%.

In contrast, according to industry estimates,The annual operating cost of the county-level team exceeds 300 million yuan, with related revenue in 2024 estimated at approximately 4.2 billion yuan, and a profit margin of less than 15%, far lower than the group's overall core profit margin of about 32%. This structural imbalance is considered the direct trigger for the recent adjustment in the operating model.

In addition, Novartis announced the restructuring of its Swiss manufacturing operations during the same period, planning to cut 550 jobs, indicating that this adjustment is a key part of the global strategic optimization.

Notably, in recent years, multinational pharmaceutical companies such as Pfizer and AstraZeneca have increasingly focused on the lower-tier markets, while local pharmaceutical companies have quickly seized market share by leveraging their channel advantages.

Novartis' "slimming down" in county-level markets is not an isolated case. In 2024, AstraZeneca further split its respiratory, digestive, and autoimmune business lines to optimize grassroots human resource allocation; Eli Lilly outsourced the commercial operations of its diabetes county-level team and two mature liver cancer drugs to local partners.

A series of actions collectively outline the synchronized shift in multinational pharmaceutical companies' strategies in China: First, "from broad to specialized," concentrating resources on high-barrier innovative drugs and divesting or outsourcing mature products from centralized procurement; second, "from heavy to light," using local channels and internet/commercial companies to replace self-built teams, reducing下沉 costs; third, "from product to value," exchanging access speed through医保 negotiations,多元 payment methods, and ecosystem cooperation to address the dual pressures from domestically produced innovative drugs and generic drugs.