Creating value through responsible businessphilipkotlercenter.net/old/pdf-files/Novartis-CMO-Club-JohnKetchum.pdfCreating value through responsible business Corporate Citizenship at

Creating value through responsible businessCorporate Citizenship at Novartis

John B. KetchumRegion Head, Novartis Oncology Asia PacificJakarta, October 13, 2008

2 Novartis Corporate Citizenship

Novartis aspires to become the world’s most respected healthcare company

Our purposeCaring and curing is our purpose

Our aspirationOur aspiration is to be the world’s most respected healthcare company

Our strategyWe have the best portfolio to meet the healthcare needs of patients and society


Novartis best positioned to meet changing healthcare needs

Our medicine-based portfolio provides:• Innovative pharmaceuticals• High-quality, low-cost generics• Preventive vaccines• Self-medication (OTC) brands

Only company with leadership positions in both patented and generic pharmaceuticalsServing patients, physicians and payors


Medicines: Socially Sensitive Products

Medicine development is risky, long, and expensive: • Only 10% of medicines that start development get to market – after

an average of 15 years and > USD 800 million invested

Therefore successful medicines can be costly during the first years on the market – the period of brand exclusivity

But can deliver extremely high value in patient well being

This creates a powerful dynamic that stimulates spirited debate and close scrutiny of pharma companies

As a medicines based company, Novartis accepts a responsibility to behave as a good corporate citizen


What does good corporate citizenship mean?

Corporate citizenship is about creating value through responsible businessCorporate citizenship principles guide responsible behavior:• Activities in which we engage and how we conduct them

Citizenship is integral to how we develop, manufacture, market and distribute our productsProvides benefits to society beyond economic success


Corporate citizenship is the right thing to do and makes good business sense

Corporate citizenship is integral to how we operate

Drivebusiness success

STRENGTHENREPUTATION

Being a trustworthy and strong partner Maintaining “license to innovate, operate and grow”

IMPROVE ACCESS TO MEDICINE

BUILD AN ETHICAL CULTURE

Building a value-based corporate cultureAttracting and growing talent

SHAPE NEW MARKETS

Attracting investorsMitigating risks and capitalizing on new opportunities

Gaining recognition asa company committed to improving access to medicine


The four pillars of corporate citizenship at Novartis

People and communities

Diversity & inclusionLiving wageHealth & safety Community involvementEmergency aid

Environment

Risk prevention & managementResource management

Patients

AccessResearchClinical trialsDialogue

We want to discover, develop and successfully market innovative products to cure and prevent diseases, to ease suffering and to enhance the quality of life. We also want to provide a shareholder return that reflects outstanding performance and to adequately reward those who invest ideas and

work in our company.

Businessconduct

Integrity & ComplianceMarketing practicesThird-party managementIntegrity Line


“We believe that each sphere of society – from government and charitable organizations, to medical

professionals and business – has a role to play in support of the right to health.”

Commitment to patients

Position on the Right to HealthExecutive Committee of Novartis (2004)


Discovering new vaccines and drugs against neglected diseases

Novartis Institute for Tropical Diseases (NITD) established in 2003 in SingaporePartnership between Novartis and the Singapore Economic Development BoardResearch into dengue fever, malaria and tuberculosisTreatments to be made available without profit to patients in developing countriesNovartis Vaccines Institute for Global Health (NVGH) launched in 2008


NFSD improving access to healthcare for the poor and eradicating diseases

More than 25 years of commitment from Novartis Foundation for Sustainable Development (NFSD) to eradicating poverty and neglected diseases Three main areas of focus:• Think-tank • Stakeholder dialogue and networking• Grassroots projects


Novartis working to eliminate tuberculosis

Novartis DOTS1 combination of medicines including Rimactane (rifampicin)DOTS is the recommended therapy of WHO500,000 free treatments provided from 2003-2008Collaboration between NITD and Global TB Alliance to simplify treatment

1 Directly Observed Treatment, Short-course

Tuberculosis (TB) is an airborne infectious disease TB kills 8 000 people each day, two million each year, making it the world’s top killer diseaseSomeone in the world infected with TB every second (6 to 8 million new cases annually)

About TB


Novartis fighting to eliminate leprosy

Free treatment provided to patients through WHO Novartis developed two of the three products used in multi-drug therapy to treat leprosyMore than 14 million patients cured since 1985• 4.3 million patients helped

in Novartis-WHO collaborationDrug donations of USD 40 millionLeprosy now eliminated on country level in all but four countries• Special efforts needed to eliminate

on sub-national levels

Leprosy is an infectious disease caused by bacteriaMore than one million people still live with permanent disabilities caused by leprosyMulti-drug therapy recommended by WHO developed in 1980s

About leprosy


Rolling back malaria with Coartem

Coartem the treatment of choice against malaria with cure rates of up to 96%Coartem cost in 2006 cut to USD 1.00 per treatment thanks to Novartis subsidyNovartis has annual capacity to make 100 million treatments66 million treatments delivered in 2007New pediatric formulation under development (2008)

Malaria ranks No. 3 among infectious-disease killers A child under age 5 dies every 30 seconds from malaria in Africa1 million people die every year from malaria, with 300-500 million new cases annually

About malaria


Ensuring access to all through the Glivec International Patient Assistance Program

Started in 2001, GIPAP provides Glivec at no cost for eligible patients with CML and GIST

Global network of more than 1,000 GIPAP physicians and 429 qualified treatment centers

Novartis works with governments, NGOs, physicians as well as local and global healthcare organizations to expand GIPAP

More than 33,000 patients reached in more than 80 countries since 2001

Total donation of USD 534 million in 2007

Glivec inhibits the principal causes of two forms of cancer – chronic myeloid leukemia (CML) and Kit (CD117) positive gastrointestinal stromal tumor (GIST)

CML and GIST affect 1 to 2 people per 100,000 annually

Facts

Patients


Exploring innovative partnerships

As emerging countries evolve, Novartis explores new ways to provide access to a broader group of patients through innovative public-private partnerships

Glivec Global Access Programs today include a range of flexible models in which Novartis partners with governments, charities and other payors

Novartis also works with NGOs, physicians and other healthcare providers to customize patient access models to achieve our common goal…

…the best cancer care possible for the most patients

Patients


GIPAP in Indonesia: A local example of good citizenship

Has helped more than 300 patients since being established in 2003

Dispenses IDR 1.7 Billion worth of Glivec free to patients each month

Commercial (paid) sales of Glivec in Indonesia are <IDR 0.5 Billion per month

Patients


GIPAP Indonesia is a partnership for the benefit of patients

Stakeholders include:• Hematologists and Oncologists

• Indonesian Cancer Foundation DKI Jakarta Province

• TMF

• Novartis Oncology

Centers provide access in several geographies• Jakarta – Cipto Mangunkusumo Hospital

• Bandung – Hasan Sadikin Hospital

• Semarang – Kariadi Hospital

• Surabaya – Sutomo Hospital

• Jogja – Sarjito Hospital

Patients


1 World Health Organization

Novartis is a leader in drug access programs….

Leprosy (free to WHO1):Over 4 million patients treated since 2000

Malaria / Coartem: 66 million treatments delivered in 2007

Tuberculosis (with WHO): 500,000 free treatments provided over 5 years

Glivec Patient Assistance Program: Free therapy to 33,000 people in 80 countries

Novartis Institute for Tropical Diseases:Singapore-based research initiative

Access programs worth USD 937 million reached 66 million patients in 2007

Patients


“Corporate citizenship implies many things that add up to responsible behavior of a

company within society. In the end, doing the right thing also

makes business sense.”

…Because we believe that doing the right thing makes business sense

Daniel Vasella, MDChairman and Chief Executive Officer

Novartis

Documents

Creating value through responsible businessphilipkotlercenter.net/old/pdf-files/Novartis-CMO-Club-JohnKetchum.pdfCreating value through responsible business Corporate Citizenship at