Novartis Announces Major Sales Team Restructuring in China with Focus on CRM and Transplant & Respiratory Business Units

Major Adjustments

Recently, Novartis issued a company-wide email announcing that, effective today (December 1, 2020), the Cardiovascular Business Unit and the General Medicines Business Unit have merged to form the new Cardiovascular, Renal & Metabolism Business Unit (CRM BU).

Meanwhile, the teams from the two major disease areas of transplantation and respiratory were integrated to establish the Transplantation and Respiratory Business Unit (Transplant & Respiratory BU).

In an email, Novartis stated that the merger to form the new Cardiovascular, Renal and Metabolism (CRM) Business Unit is one of the strategic initiatives undertaken by the company to integrate resources, foster innovation, strengthen primary care capabilities, and support the sustainable development of Novartis Pharmaceuticals in China. The newly established business unit will also report directly to the global CRM Business Unit, one of Novartis Pharmaceuticals’ five major global divisions.

Yan Qiong will serve as the Head of the Cardiovascular, Renal and Metabolism Business Unit. Executive Director Lu Zhong, Senior Regional Directors Su Ji, Regional Directors Xue Tianwen, Zhao Bo, Zhang Jinchao, Dai Chang, County Regional Director Guo Jiangfeng, Core Market Director Wang Ziwen, and Broad Market and Innovation Senior Marketing Director Zhang Wei will report directly to Yan Qiong.

The establishment of the Transplantation and Respiratory Business Unit will enhance cross-therapeutic area synergy, facilitating faster market access for Novartis’ innovative medicines in transplantation and respiratory diseases in China, thereby benefiting patients. Jia Wang will serve as the Head of the Transplantation and Respiratory Business Unit. Qi Cao, Head of Transplantation Diseases, and Li Liu, Head of Respiratory Diseases, will report directly to Jia Wang. Dorine Leung, Head of Novartis Hong Kong, will also report directly to Jia Wang.

CaiBolan has confirmed the authenticity of this information from authoritative sources.

Department with the Largest Growth Undergoes Adjustment

In fact, Novartis’ current organizational restructuring stems from the establishment of its Primary Care Business Unit in March this year.

On March 25, Zhang Ying, President of Novartis China, announced an organizational restructuring to employees, establishing a new Primary Care Business Unit. This new unit was formed by integrating the metabolic team from the Metabolism and Transplantation Business Unit with the Hypertension and Hyperlipidemia Business Unit.

Subsequently, the transplant team within the Metabolism and Transplant Division was established as an independent Transplant Division, focusing on business expansion in the transplant field and the subsequent launch of new products. The county-level teams from the Hypertension and Hyperlipidemia Division were transferred to the Cardiovascular Division, while the community teams were moved to the Commercial and Emerging Markets Business Unit.

In other words, the newly merged Cardiovascular Business Unit and Primary Care Business Unit, officially established today, encompass the former Metabolism team, the Hypertension and Hyperlipidemia Business Unit, and its county-level teams.

The newly established Transplantation and Respiratory Business Unit today comprises the original transplantation team and respiratory team.

According to Novartis’s previously released 2020 semi-annual report, the total revenue for the first half of the year was $23.631 billion (+3%), of which the Innovative Medicines segment generated $18.94 billion (+5%), accounting for 80%; Sandoz (the generics segment) generated $4.69 billion, accounting for 20%.

Despite the impact and disruption caused by the pandemic, the innovative medicines business delivered strong overall performance. With the exception of the Ophthalmology franchise (-9%), the other five major therapeutic areas all achieved positive growth. Specifically, Cardiovascular, Renal and Metabolism; Neuroscience; Immunology, Hepatology and Dermatology; Oncology; and Respiratory diseases increased by 46%, 22%, 16%, 4%, and 1% year-over-year, respectively. The Cardiovascular, Renal and Metabolism franchise saw the most significant growth, primarily driven by the strong performance of the heart failure medication Entresto (+48%).

According to available data, Entresto (known in Chinese as Nuoxintuo; generic name: sacubitril/valsartan sodium tablets) was approved in the Chinese market on July 26, 2017, for use in adult patients with chronic heart failure with reduced ejection fraction, to reduce the risk of cardiovascular death and hospitalization for heart failure. In 2018, global sales of this product reached USD 1.028 billion, representing a year-on-year increase of 103% compared with 2017, thereby entering the ranks of blockbuster drugs.

Novartis’ semi-annual report data shows a significant 46% growth in its cardiovascular, renal, and metabolism business, driven by Entresto. This business adjustment may further refine and optimize the future promotion strategy for this drug.

It is reported that in the first half of 2020, Novartis China region grew by 19%, with revenue reaching USD 1.25 billion, accounting for 5% of total revenue. The performance growth was mainly driven by the new drugs Entresto and Cosentyx.

A research report from Southwest Securities shows that the heart failure drug Entresto achieved year-on-year growth of 172% and 38% in the first and second quarters, respectively. It has now become the new standard therapy for patients with chronic heart failure, with first-half revenue rising to $1.15 billion.

Does Novartis’ consolidation of its cardiovascular division imply that the sales team for this blockbuster drug will also be adjusted? This warrants further attention.

A Batch of Sales Positions to Be Adjusted

For pharmaceutical sales representatives, the restructuring and consolidation of the company’s business divisions inevitably bring about changes. Such changes lead to team realignments, resulting in promotions for some while others are unfortunately forced out.

According to Yao Sila, the current severance package is quite favorable—the standard policy following the departmental merger is N+3. However, this particular severance package differs in that it includes many unrealized benefits, such as year-end bonuses, compensation for unused annual leave, and MVP awards.

For instance, AstraZeneca previously merged and restructured its cardiovascular and diabetes/metabolism businesses to form the industry’s largest cardiovascular and diabetes business units. This slogan underscores the company’s ambitions in these therapeutic areas and signals its plans to increase headcount and expand its sales force.

On the other hand, any organizational changes will lead to the release of a number of management positions, enabling employees in existing roles to advance their careers. In the future, more medical representatives will have opportunities for promotion or to join Novartis.