Novartis to prioritize US market unfazed by drug pricing pushback

Swiss drugmaker Novartis’ logo is seen at the company’s plant in the northern Swiss town of Stein, Switzerland October 23, 2017. REUTERS/Arnd Wiegmann/File Photo

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ZURICH, Sept 22 (Reuters) – Swiss pharma giant Novartis (NOVN.S) said it would make growth in the United States its top geographic priority, even after laws were passed to rein in drug prices in the world’s largest pharmaceutical market.

The company said it would adopt a “US-first mindset”, increase the share of US patients in clinical, build capacity there and give US staff and executives more say and career opportunities within the organization.

Novartis’ aspiration is “to improve competitive positioning and organically build its US business to become a top-five player in the US by 2027,” it said in a statement.

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It ranked 10th in the US market last year, the company added.

Still, Novartis said it aimed to be a top-three player in China, up from fifth place last year among multinational pharma companies, while maintaining leading positions in Germany and Japan.

US President Joe Biden last month signed the $430 billion Inflation Reduction Act, authorizing the federal government to negotiate prices on some prescription drugs and cap costs for the government’s Medicare health program. read more

Novartis announced a strategy on Thursday based on eight big drug brands as the pharmaceutical maker reshapes itself following the decision to spin off Sandoz, its underperforming generics business.

As part of an investor event, the Swiss company said the currently in-market brands – Cosentyx, Entresto, Zolgensma, Kisqali, Kesimpta, Leqvio, Pluvicto and Scemblix – each held multibillion-dollar peak sales potential.

Novartis also said it would focus in the future on five areas for investment: cardiovascular, immunology, neuroscience, solid tumors and hematology medicine.

The company last month said it planned to spin off Sandoz to sharpen its focus on its patented prescription medicines. read more

The spin-off is expected to be completed in the second half of 2023, Novartis said, with Sandoz listed on the SIX Swiss Exchange.

Novartis has also been pruning other businesses, spinning off its Alcon eye care business in 2019 and last November agreeing to sell a nearly one-third voting stake in Roche (ROG.S).

Narasimhan on Thursday also confirmed Novartis’ previously stated financial targets.

“We will continue to deliver improved financials with +4% sales CAGR through 2027 and a core operating income margin ~40%+ in the mid-long term,” he said.

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Editing by Mark Potter and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

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