Novartis Business Model Canvas

Novartis actively collaborates with healthcare systems, hospitals, and clinics. These partnerships are crucial for advancing medical research through clinical trials and collecting real-world evidence to understand how their therapies perform in everyday settings. In 2024, Novartis continued to invest heavily in clinical research, with a significant portion of its R&D budget allocated to studies conducted within these provider networks.

These collaborations are vital for ensuring patients can access and effectively use Novartis's medicines. Beyond initial treatment, these partnerships also support post-market surveillance, allowing for ongoing monitoring of drug safety and efficacy, and the implementation of patient support programs designed to improve adherence and outcomes.

• Clinical Trial Recruitment: Hospitals serve as key sites for recruiting patients into Novartis's extensive clinical trial programs, a cornerstone of their drug development process.
• Real-World Data (RWD) Generation: Partnerships facilitate the collection of RWD, providing insights into treatment effectiveness and patient journeys outside of controlled trial environments.
• Market Access and Utilization: Collaborations with healthcare providers are essential for establishing pathways for appropriate patient access and ensuring the correct utilization of innovative therapies.
• Post-Market Surveillance: Hospitals and clinics play a critical role in monitoring the long-term safety and effectiveness of Novartis's products after they have been approved and are in wider use.

Novartis collaborates closely with patient advocacy groups and foundations. These partnerships are crucial for understanding the real-world challenges faced by patients and identifying unmet medical needs. In 2024, Novartis partnered with the Australian breast cancer charity So Brave as part of its APPIS Innovator Program, highlighting a commitment to patient-centric initiatives.

These collaborations extend beyond understanding needs to actively raising awareness about specific diseases and advocating for improved patient access to novel treatments. Such alliances are vital for Novartis to align its research and development efforts with the most pressing patient requirements.

• Understanding Unmet Needs: Partnering with patient groups provides direct insights into the challenges and gaps in current medical care.
• Disease Awareness Campaigns: Joint efforts help educate the public and healthcare professionals, fostering earlier diagnosis and better management.
• Facilitating Access: Collaborations can streamline pathways for patients to access innovative and life-changing therapies.
• Real-World Example: The 2024 collaboration with So Brave in Australia exemplifies Novartis's commitment to supporting breast cancer patient communities.

Novartis relies on a sophisticated network of manufacturing plants and a global supply chain to deliver its medicines. This infrastructure is fundamental to ensuring consistent production and timely distribution across diverse markets.

In 2024, Novartis committed to substantial investments aimed at bolstering its US-based manufacturing capabilities. This strategic move is designed to enhance supply chain resilience and reduce dependencies on single geographic regions.

• Global Reach: Novartis operates manufacturing sites strategically located worldwide to serve its international patient base.
• Supply Chain Resilience: Investments are being directed towards expanding US manufacturing to mitigate risks and ensure continuity of supply.
• Quality and Compliance: These facilities adhere to stringent global regulatory standards for pharmaceutical production.
• Distribution Network: A robust logistics network supports the efficient movement of finished products to healthcare providers and patients.

Financial capital is a cornerstone of Novartis's business model, enabling significant investments in research and development. This is crucial for discovering and bringing new therapies to market.

The company's ability to fund extensive clinical trials, advanced manufacturing facilities, and a global distribution network relies heavily on its financial strength. These operations are vital for maintaining its competitive edge in the pharmaceutical industry.

Novartis's robust financial health is underscored by its performance. For instance, in 2024, the company reported a free cash flow of $16.3 billion. This substantial figure highlights its capacity to self-fund strategic growth initiatives, including potential acquisitions and the expansion of its product pipeline.

Key aspects of Novartis's financial capital utilization include:

• Research and Development: Funding the discovery and development of innovative medicines.
• Acquisitions: Pursuing strategic mergers and acquisitions to enhance its portfolio.
• Manufacturing: Investing in state-of-the-art facilities for drug production.
• Global Operations: Supporting worldwide sales, marketing, and distribution efforts.

Novartis actively leverages digital channels to disseminate crucial medical information and foster engagement with healthcare professionals (HCPs). This includes a robust presence on online portals, offering educational webinars, and hosting virtual conferences. For instance, in 2024, Novartis reported a significant increase in participation across its digital educational platforms, with over 500,000 HCPs engaging with their content, a 20% year-over-year growth.

These digital initiatives are designed to provide accessible patient resources, enhancing Novartis's customer relationships beyond traditional interactions. The company's commitment to digital engagement aims to reach a wider audience, offering support and information tailored to various needs. In 2024, patient portal registrations saw a 15% uptick, indicating a growing reliance on these digital touchpoints for health management support.

• Digital Information Dissemination: Novartis utilizes its online platforms to share the latest research, clinical trial data, and treatment guidelines with HCPs, ensuring they have up-to-date information.
• HCP Engagement: Virtual events, including webinars and online symposia, facilitate direct interaction and knowledge exchange between Novartis medical experts and healthcare professionals.
• Patient Resources: The company provides digital tools and information hubs to empower patients with knowledge about their conditions and treatment options, fostering a supportive ecosystem.
• Reach and Accessibility: By prioritizing digital channels, Novartis expands its reach, making valuable medical and patient support resources accessible globally, irrespective of geographical limitations.

Novartis prioritizes building trust through open communication about clinical trial results, drug safety information, and pricing strategies. This commitment to transparency is fundamental to their customer relationships.

The company actively reinforces its ethical standards, which is reflected in its strong Environmental, Social, and Governance (ESG) performance. For instance, in 2023, Novartis was recognized with a CDP A- score for its climate change disclosure, highlighting its dedication to responsible business practices.

• Ethical Data Sharing: Novartis aims for clear and honest dissemination of clinical data, fostering confidence among healthcare providers and patients.
• Drug Safety Vigilance: Proactive and transparent reporting of drug safety information is a cornerstone of their patient-centric approach.
• Fair Pricing Practices: Openness about drug pricing and value propositions helps build understanding and trust with payers and the public.
• High ESG Ratings: Maintaining high ESG ratings, such as their inclusion in the Dow Jones Sustainability Index for multiple consecutive years, underscores their commitment to ethical operations.

Governmental health agencies and payers, including national health systems and private insurance companies, are crucial for Novartis as they are the primary funders and reimbursers of pharmaceutical expenditures. These entities wield significant influence over market access and drug pricing, directly affecting sales volumes and profitability. For instance, in 2024, many European countries continued to negotiate drug prices through centralized health technology assessment (HTA) bodies, impacting the commercial viability of new therapies.

The policies enacted by these governmental bodies and payers shape the landscape for pharmaceutical companies. Their decisions on formulary placement, reimbursement levels, and evidence requirements for new drugs can either facilitate or hinder market penetration. In 2024, we observed increased scrutiny on the value proposition of innovative medicines, with payers demanding robust real-world evidence to justify pricing.

• Market Access: These entities determine which drugs are covered and under what conditions, directly influencing patient access to Novartis's treatments.
• Pricing Power: Governmental payers often possess significant leverage in price negotiations, impacting Novartis's revenue streams for its products.
• Regulatory Influence: Health agencies set standards for drug approval and post-market surveillance, affecting product lifecycles and market dynamics.
• Reimbursement Policies: The structure of reimbursement, including co-pays and deductibles, influences out-of-pocket costs for patients and overall demand.

Universities and research facilities are key partners for Novartis, utilizing its products for vital scientific investigations and collaborating on crucial clinical trials. These institutions are instrumental in pushing the boundaries of medical science, directly contributing to the discovery and development of future groundbreaking therapies. In 2024, Novartis continued to foster these relationships, with a significant portion of its research and development budget allocated to academic collaborations and sponsored research programs aimed at accelerating innovation.

These collaborations are essential for validating new drug candidates and understanding complex biological mechanisms. The insights gained from academic research often pave the way for novel treatment approaches and expand the therapeutic potential of Novartis' existing portfolio. For instance, in early 2024, several leading universities were actively involved in preclinical studies of novel gene therapies developed by Novartis, demonstrating the ongoing commitment to shared scientific advancement.

• Academic Partnerships: Universities and research institutions are critical consumers of Novartis' advanced pharmaceutical and biological products for their research endeavors.
• Clinical Study Collaboration: These centers serve as essential sites for conducting clinical trials, providing access to diverse patient populations and expert medical professionals.
• Advancing Medical Science: Collaboration with academic centers fuels the foundational research that underpins Novartis' future drug pipeline and innovation strategy.
• Knowledge Exchange: These relationships facilitate the exchange of scientific knowledge and expertise, benefiting both Novartis and the broader scientific community.

Novartis generates revenue from a broad range of innovative medicines, spanning various therapeutic areas. This diversification helps mitigate risks associated with any single drug's performance, leading to a more consistent revenue stream. For instance, in 2023, Novartis reported net sales of $45.4 billion, with key growth drivers like Entresto and Cosentyx contributing significantly.

The company's strategic focus on high-value medicines means that its revenue is increasingly derived from products with strong clinical profiles and significant market potential. This approach aims to maximize profitability and ensure long-term sustainability. In the first quarter of 2024, Novartis saw continued momentum, with net sales reaching $11.3 billion, up 10% in constant currencies, driven by its innovative medicines portfolio.

• Diversified Revenue Base: Income from multiple therapeutic areas reduces reliance on single products.
• Focus on High-Value Medicines: Strategic emphasis on innovative drugs with strong market potential.
• 2023 Net Sales: $45.4 billion, showcasing the scale of operations.
• Q1 2024 Growth: 10% increase in net sales (constant currency) driven by innovative portfolio.

Novartis’s geographic sales are heavily weighted towards established markets, with the United States serving as its largest single market. In 2024, the US alone accounted for a substantial $21.1 billion in sales for the company.

Beyond the US, Europe also represents a significant revenue driver, contributing a large portion of Novartis’s global income. These developed regions are crucial for the company’s financial performance.

Emerging markets are increasingly important, with notable growth in sales contributions from countries like China and Japan. This geographic diversification helps to balance revenue streams and capitalize on global healthcare demand.

• United States: $21.1 billion in sales in 2024.
• Europe: Significant revenue contributor, underscoring its importance.
• China and Japan: Markets showing growing sales contributions.