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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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April 15, 2010

A Re-Org at Novartis

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Posted by Derek

Here's the letter sent out to Novartis employees about the new structure for their US pharma business. Stripped of the biz-speak (aligning priorities, high-growth this, competitive advantage that, you all can fill in the rest), what it says is that (first) the current US pharma head is leaving (replacment to be named soon).

Second, there will be four Business Units: primary care, multiple sclerosis, CNS, and one that looks like a catch-all, respiratory/transplant/infectious disease. The latter ones used to be under the broad heading of "Specialty Medicine" (as opposed to primary care), but now get their own billing.

The biz-speak gets especially thick in this detail-light paragraph, which I suppose will become clear with time:

To maximize investment in high-impact growth areas, we are implementing a brand prioritization approach that will allocate resources based on the brand's growth potential and lifecycle stage. This means we will elevate support for some brands and reduce support for others. We will ensure that critical patient needs are met but we can no longer sustain the old approach to resourcing. You will be hearing more about this from your functional leaders.

The one thing that is made clear in that section is that about 250 people will lose their jobs - "mostly in headquarters", it says. There's also a line about how this is all about "a shift in mindset from doing more with less to prioritizing our focus and resources". If you have some spare time, you can try to work out what the difference might be between those, how you prioritize a focus, and other such questions, but most readers will probably have something more productive to do. . .

Comments (24) + TrackBacks (0) | Category: Business and Markets


1. Ken on April 15, 2010 12:49 PM writes...

the difference is that "prioritizing our focus and resources" leaves open the possibility of some people getting to "do more with more". as a general strategy, "do more with less" makes it hard for the most promising projects to get more resources.

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2. RB Woodweird on April 15, 2010 1:23 PM writes...

"To maximize investment in high-impact growth areas, we are implementing a brand prioritization approach that will allocate resources based on the brand's growth potential and lifecycle stage. This means we will elevate support for some brands and reduce support for others."

That's exactly what they said when they rolled out New Coke.

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3. smurf on April 15, 2010 1:26 PM writes...

Sounds like R+D at Pfizer post 2008. Same consultant?

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4. lynn on April 15, 2010 1:47 PM writes...

Reading the letter, I'd say this sounds directed toward Marketing, Sales, etc. I'd like to know the effect on R&D, particularly 'R". Guess I'll go ask some Novartis folks...

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5. You're Pfizered on April 15, 2010 1:54 PM writes...

Based on what I'm hearing, folks on the "R" side of things haven't heard much about this at all, and didn't even get that EMAIL that was sent out.

I'd agree with lynn, it sounds like the sales and marketing folks who are impacted for now.

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6. weirdo on April 15, 2010 2:22 PM writes...

Does anybody else find it odd that the company of Gleevec doesn't have an, um, Oncology business unit? Certainly cancer is not "Primary Care"?

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7. dearieme on April 15, 2010 2:39 PM writes...

"your functional leaders": these buggers really have cloth ears, don't they?

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8. milkshake on April 15, 2010 3:24 PM writes...

#7: there is no need for such hurtful comments. Even the invertebrates have feelings, too. They filter the muck, devour the carcasses and facilitate the paradigm shift for the rest of us.

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9. Jose on April 15, 2010 4:05 PM writes...

Ah, BCG rears it's head, yet again! Time to run some (self)-plagiarism software on that press release.

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10. lynn on April 15, 2010 5:30 PM writes...

#6 - I do find lack of mention of oncology to be very odd. There's not only Gleevec, but Novartis' radio marketing campaign for anti-cancer agents [unnamed] in general.

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11. PorkPieHat on April 15, 2010 6:27 PM writes... their oncology business centre in Basel? This announcement pertains to the US operations, no?
Milkshake, have you started at your new position yet?

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12. Ty on April 15, 2010 9:29 PM writes...

NIBR is kinda insulated from what's going on at Novartis Pharma AG. Gotta keep it up to stay like that, I guess.

I just "learned" today that (not that I did now "know") striving to cure (modify? stabilize?) diseases is not a strategy. It's a commitment. I liked that.

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13. quintus on April 15, 2010 10:15 PM writes...

Well in Basel R&D they (in the D part) are removing at least 70-80 jobs, mine being one of them. Some are going to China, the rest are going to the big dustbin in the sky

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14. milkshake on April 15, 2010 10:56 PM writes...

#11: Oppie, I have nothing official in hand - I only got their assurances. I heard the job start is still couple weeks away because of the admin delays. Perhaps do you wish to make a last-ditch counter-offer?

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15. SRC on April 16, 2010 12:04 AM writes...

My favorite comment from a biz-type: "We need to focus on everything."


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16. out of pharma on April 16, 2010 7:25 AM writes...

quintus sorry to hear that the 'American' mentality has hit Basel. So much for Schweizer Qualitat. I thought that the Swiss had a much better long term view- guess with the 'imported' execs, that is gone.

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17. HappyDog on April 16, 2010 7:54 AM writes...

My guess is that R&D won't be affected at all. This email was sent out to Novartis Pharmaceuticals Corporation, which is the U.S. based arm of the business. R&D in the U.S. is based in Cambridge and has its own company - Novartis Institutes for Biomedical Research, Incorporated (NIBRI). This is not to be confused with the non-business designation for all of Novartis research worldwide - Novartis Institutes for Biomedical Research (NIBR).

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18. HappyDog on April 16, 2010 7:57 AM writes...

Clarification on my previous post - I meant to say "non-legal" rather than "non-business" designation for worldwide research.

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19. Anonymous on April 16, 2010 8:32 AM writes...

Oncology is its own businuss unit within Novartis (with thier own chemistry, biology and development teams). So thats why there is no oncology unit mentioned in this press release.

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20. Lu on April 16, 2010 9:21 AM writes...

"brand prioritization"?

Does it mean that they will focus on already successful projects (existing brands!) as opposite to developing new drugs?
Such a lousy excuse to fire a bunch of people...

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21. Quintus on April 16, 2010 7:15 PM writes...

Happydog, R&D is being affected in Basel, at least the D part. I appreciate the original post was referring to the US side of the business, but Basel is being affected as well in other more subtle ways.

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22. MIMD on April 18, 2010 1:30 PM writes...

Dear Mr, Novartis CEO,

May I make a three word comment about this letter?

It is bullshit.

Thank you for your attention.

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23. You're Pfizered on April 18, 2010 6:12 PM writes...

#17--There are quite a few people in the Bay Area doing oncology for Novartis at the old Chiron site...

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24. Quintus on April 19, 2010 9:32 AM writes...

Dear MIMD,
hear hear, Novartis has a secondary pipeline full of it

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