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Seminar: Integrating Global Marketing and R&D Management at Novartis

On 29th Dec. 2010, Dr. Subhanu Saxena, the Global Head of Marketing and Sales, General Medicine of Novartis visited the department and provided insights into pharmaceutical industry. During his long career at Novartis, he has handled many challenging roles, dealt with diverse business conditions and travelled to various parts of the globe. His commitment to the field of healthcare is supplemented by his passion towards ancient Indian literature and philosophy.

The seminar was aimed at sharing the speaker's insights in the healthcare industry and share with the audience the various challenges, innovations, technological initiatives and management practices prevalent at Novartis.

Dr. Saxena began by sharing with the audience some information on the healthcare industry in general, and Novartis in particular. The high financial margins of Novartis are indicative of the robustness of business along with diversification of interests to strengthen revenue flows of the company. The amount invested in R&D is very substantial and points out the high priority given to innovation and new drug development over generics. To foster this spirit and ensure high success rates in research, the focus has been on the value proposition of a drug to justify its business case as well as the health economic cost modelling to justify further investments.

Dr. Saxena then proceeded to breif the audience the internal workings of Novartis in the drug testing and clinical trials stage of drug development, called Integrated Product Strategies (IPS). The various stages of drug testing were thoroughly explained emphasising the various checks and procedures prior to human trials. This point was in response to a students query regarding the clinical trials and their thoroughness in detecting side effects during human trials.

Dr. Saxena also shared with the audience the inherent costs associated with new drug development. Since statistically, the discovery of a drug without side effects and having potency is very small, hence the drug discovered needs to be having sufficient revenue generating capability to offset the losses incurred during R&D. This is done by Novartis through the Pathway based R&D approach. By this method, diseases are researched to determine the common pathway of the disease as well as the drug used to treat it. By this, a drug discovered for a rare strain of disease can be used to treat a more widespread ailment, thus expanding the target segment and improving the business case for drug development.

The structure of the company was also explained in depth to show the working of a geographically spread, technology focussed and globally integrated organization. The structure illustrated numerous key aspects of the organization such as preference for in-bred talent pools, diversity in higher management, re-shuffling of verticals to increase exposure and integration of functions for improved synergies.

The audience also were engaged in interactive discussions with the speaker as they looked to gain first hand information about the healthcare sector from his extensive experience. In response to a faculty's query, Dr. Saxena elaborated on how interpreting and acting on consumer behaviour analysis was a vital cog of the product marketing and sales functions to increase their acceptance and boost market shares. In response to a student's query on the cannabalization of sales by generic drug companies limiting the revenue stream from developed drugs, Dr. Saxena shared with him that Novartis has a generic company which is 2nd largest in the world. In this way, the revenue lost is still benefitting Novartis's generic arm.

In conclusion, all the present faculty and students from various students were treated to a highly interactive and informative session by an industry stalwart. The interaction helped all the students understand operations of large firms in competitive environments and got a glimpse into the thought processes of higher management dealing with diverse challenging scenarios while balancing social responsibilities.

Comments

  1. This was truly a very illuminating lecture. The topics covered were of great relevance to us as future managers and the speaker really infused great passion with his oratory skills.
    Definitely a great start to the new semester for MBA@IITK!
    - Nabarun

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