How we create value
In a rapidly changing business environment, our strategy and business model help us deliver on our purpose and create value for our company and society.
Our business environment
Accelerating innovation
46
The average yearly number of new drugs approved by the US FDA’s Center for Drug Evaluation and Research from 2016-2020, an increase of 25% compared with 2011-2015
Surging use of digital technology in healthcare
235 bn
The projected value of the global digital health market by 2023 (USD), a 60% increase from 2019, according to the Frost & Sullivan Global Digital Health Outlook 2020
Aging populations feuling a rise in chronic diseases
77.1 years
The projected average global life expectancy in 2050, compared with 72.6 years in 2019, according to the United Nations World Population Prospects
Rising healthcare spending
5%
The expected annual average growth in healthcare spending between 2020 and 2023, according to the Economist Intelligence Unit
Access to healthcare remains a global issue
2 bn
The number of people who lack access to essential medicines, according to the World Health Organization
Our strategic priorities
Our strategy is to build a leading, focused medicines company powered by advanced therapy platforms and data science.
Unleash the power of our people We are transforming our culture to ensure people can fully apply their talent and energy. We’re creating an organization where people are inspired, curious and unbossed.
Deliver transformative innovation In our pursuit of transformative treatments, we challenge medical paradigms and explore possibilities to cure disease, intervene earlier in chronic illnesses, and find ways to dramatically improve quality of life.
Embrace operational excellence We are rethinking how we work, embracing agile teams and building better productivity into our company to free resources that we can invest in innovation and help boost returns.
Go big on data and digital We aim to spark a digital revolution at Novartis, embracing digital technologies, advanced analytics and artificial intelligence to help drive innovation and improve efficiency.
Build trust with society We strive to build trust with society through finding new ways to expand patients’ access to our treatments and operating with integrity.
Our business model
Resources we use
-
Human Capital
We depend on the skills and creativity of our employees to discover, develop and produce new medicines, and deliver them to patients.
110 738
Headcount
45.7
Annual training hours per employee
-
Financial Capital
We use cash, equity and debt to meet our financial commitments, make investments and pay dividends.
214.3 bn
Year-end market capitalization (USD)
1.85 bn
The value of our sustainability-linked bond issued in 2020 (EUR)
-
Intellectual Capital
We use expertise and data to develop and market our products. We hold patents and trademarks that protect the long-term investments required for our business.
9.0 bn
Investment in research and development in 2020 (USD)
160+
Pipeline projects with ongoing clinical trials in Phases I to III
-
Natural Capital
We responsibly consume energy, water and other resources to manufacture our products and operate our business.
11.15
Energy use, on site and purchased (million gigajoules)
8.5
Water consumption (million m3)
-
Manufactured Capital
We own or lease research laboratories, manufacturing sites and offices around the world. We use artificial intelligence, gene editing and other technologies.
60
Novartis manufacturing facilities
72 bn
Treatments produced by our manufacturing facilities in 2020
-
Relationship Capital
We build trusted relationships with stakeholders to bring treatments to patients, advance drug discovery and expand patient access.
24 432
Field force representatives in our Innovative Medicines Division
98%
Employees who completed e-training on new Code of Ethics (to be completed by February 2021)
The value we create
-
Patients
769 m
Patients reached with Novartis medicines
26
Approvals granted to Novartis in 2020 in the US, the EU, Japan and China for new treatments as well as new indications for existing treatments
-
Employment
974 000
Estimated jobs created by Novartis (2019), including own employees, indirect and induced
80
Engagement score (out of 100) in Q4 survey of Novartis associates, an all-time high and 7 points ahead of the industry benchmark
-
Shareholders
8.1 bn
Net income in 2020 (USD)
7.0 bn
Total dividends paid (USD)
-
Environment
19%
Reduction in greenhouse gas emissions vs. 2016 baseline (Scope 1 and Scope 2)
35%
Reduction in water consumption vs. 2016 baseline (million m3)
This infographic is informed by the framework of the International Integrated Reporting Council (IIRC).