Novartis Announces Strategic Global Restructuring to Drive Innovation and Growth

On April 4, Novartis announced that it would adopt a new organizational structure and operating model to support the company's innovation, growth, and productivity goals over the next decade as a pharmaceutical-focused company.

"The simpler organizational model we are introducing today is at the core of our growth strategy, as it will make us more agile and competitive, enhance our patient and customer focus, unlock the significant potential of our R&D pipeline, and drive value creation by improving operational efficiency," said Vas Narasimhan, CEO of Novartis. "With our marketed portfolio and up to 20 major pipeline assets that could be approved by 2026, Novartis is well-positioned to achieve above-peer-median sales and profit margin growth over the mid to long term."

Novartis' New Organizational Structure

Integrate pharmaceuticals and oncology business units

Novartis to Integrate Pharmaceuticals and Oncology Business Units, Create Two Independent Commercial Organizations with Stronger Geographic Focus – US Innovative Medicines Unit and International Innovative Medicines Unit. These two units will assume full P&L responsibility across all therapy areas and own customer experience, marketing and sales, as well as market access in their respective markets.

The establishment of an independent U.S. commercial organization enhances Novartis' ability to achieve its goal of becoming one of the top five companies in U.S. sales, while maintaining and developing its international leading position. The new model will also help Novartis focus more on and commit to the company’s core therapeutic areas such as cardiovascular, hematology, solid tumors, immunology, and neuroscience.

Marie-France Tschudin, the current president of Novartis' pharmaceuticals division, will become the president of the international innovative drugs division and chief commercial officer. As chief commercial officer, Marie-France Tschudin will oversee global marketing, medical affairs, and value and access across all therapeutic areas. Victor Bulto, the current head of the pharmaceuticals division in the United States, will become the president of the U.S. innovative drugs division. Both will report to Vas Narasimhan.

Establish a New Strategic & Growth Function Department

Novartis will also merge three departments: Corporate Strategy, R&D Portfolio Strategy, and Business Development, into a single department responsible for Strategy and Growth. This function will help drive the company's end-to-end growth strategy and facilitate the identification of both internal and external opportunities to strengthen Novartis' pipeline with transformative medicines that can make significant contributions to growth. This new function will be led by the Chief Strategy and Growth Officer, who will become a member of the ECN and report directly to the CEO. A search is underway for this new leader, and in the interim, the function will be led by Dr. Lutz Hegemann, President of Global Health.

Integrate Operations and Global Functions

Novartis will also merge 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 more effectively accelerate multiple technology transformation initiatives, create innovative digital solutions at scale, and enhance productivity while maintaining industry-leading quality and service levels.

Effective immediately, Steffen Lang, the current Global Head of Novartis Technical Operations, will become the Chief Operating Officer, reporting to Vas Narasimhan. In addition, all G&A functions—Finance, People & Organization, Ethics, Risk & Compliance, Legal, and Communications & Engagement—will be integrated at both the global and country levels.

Global Drug Development (GDD) Leadership Changes

Novartis Appoints Shreeram Aradhye, M.D., as President of Global Drug Development and Chief Medical Officer, Effective May 16, 2022. Aradhye has served at Novartis for 20 years in various global leadership roles, including Head of Development for the Neuroscience franchise and Global Head of Medical Affairs for the Pharmaceuticals division. Dr. Aradhye will report to Vas Narasimhan and join the ECN.

Dr. Aradhye currently serves as Executive Vice President and Chief Medical Officer of Dicerna Pharmaceuticals, overseeing the development of multiple clinical-stage RNAi products. Previously, he served as Chief Development Officer of Axcella Health.

Dr. Aradhye has dedicated his entire career to improving patients' lives, first as an academic clinician, then as a drug developer and business leader. He has extensive experience in the global clinical development of innovative drugs across multiple therapeutic areas and has played a key leadership role in the development of various innovative therapies.

As organizational structures and operating models evolve, current Chief Medical Officer Dr. John Tsai has decided to pursue opportunities outside of Novartis, effective May 15, 2022.

In addition, Dr. Susanne Schaffert, Head of Oncology, and Robert Weltevreden, responsible for customer and technical solutions, will also leave the company.