New Novartis chief talks productivity

Novartis has released more information about its U.S. drug reorganization: Andre Wyss is set to take the reins of that business, which is restructuring and cutting about 20 percent of its headquarters staff. That's 383 jobs, though they're not all layoffs; some of the shrinkage is coming via attrition.

The overhaul also includes a reorg into four new business units: Primary care, multiple sclerosis, respiratory disease and neuroscience. CEO Joe Jiminez tells the Wall Street Journal that the idea is to boost sales by focusing on doctors and patients in each treatment area. The changes are modeled on Novartis' cancer unit, which operates separately. Each of the new units will be in charge of sales and marketing for that disease area, and will also have some input into R&D.

The job cuts are designed to increase productivity, in a drive that in the first quarter shrank sales and marketing expenses to 28 percent of net pharma sales, down from 33 percent. Novartis achieved those cost savings by cutting spending in areas where marketing doesn't affect sales much, Jiminez tells the Journal.

Think the U.K., where a government agency determines which drugs the National Health Service will pay for; the company has very few sales reps left there, he says. "We continue to take resources out of less productive markets and move them to more productive markets," Jiminez tells the Journal.

- read the WSJ story

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