Chairman’s letter

The COVID-19 pandemic in 2020 created massive societal, economic and healthcare challenges. Novartis took careful steps to protect our associates, maintain supplies of medicines to patients and ensure business continuity, helping us also meet the needs and interests of our healthcare partners, stakeholders and shareholders.

Joerg Reinhardt – Chairman of the Board of Directors (Photo)

These actions enabled Novartis to navigate the pandemic and paved the way for future growth. We increased sales and operating profit in 2020, generated good cash flows and continued to innovate. We absorbed the economic shock without resorting to government support or dividend cuts, and we committed to no COVID-19-related job losses during the year. Our performance demonstrates our strong operational resilience and ability to cater to diverse patient needs in challenging situations.

Even as the healthcare landscape changed, we launched new products and strengthened our foothold in the biosimilars arena. Our new launches included the multiple sclerosis medicine Kesimpta and the lung cancer treatment Tabrecta. We supported these market entries through digital platforms. Biosimilars, meanwhile, benefited from increased demand amid a continued focus on healthcare costs.

Our performance demonstrates our strong operational resilience and ability to cater to diverse patient needs in challenging situations

Our research and development activities remained robust. We leveraged remote monitoring technology to ensure patient safety while keeping the majority of our clinical trials on track. We also enhanced internal and external collaboration to bolster our medical pipeline. Going forward, we will continue to pursue our science-based innovation strategy, focusing on fast-growing areas of healthcare, including oncology, cardiology and lung diseases.

We also participated in cross-industry collaborations to fight the pandemic and took steps to support patients in low-income and lower-middle-income countries through a dedicated generic medicines portfolio as well as the creation of a relief fund for affected communities. These efforts are designed to help mitigate the effects of the pandemic in the months and years to come, especially in the most vulnerable regions of the world, where healthcare-related challenges can have undue long-term societal and economic consequences.

Demonstrating the Board of Directors’ and management’s attention to the growing importance of our environmental, social and governance (ESG) agenda, we further reduced our environmental footprint, expanded our global health efforts and strengthened our governance framework. We consider these steps essential to contribute to efforts led by the United Nations to fight poverty and climate change, and work toward the creation of more equitable societies.

With the goal of strengthening our reputation and protecting the interests of patients, stakeholders and shareholders, we also overhauled our third-party risk management to establish stricter controls of our supplier network. Our new Code of Ethics, crowdsourced by associates and rolled out in 2020, is aimed at integrating ethics more closely into business decision-making. These steps are helping Novartis make progress toward its ambition to be one of the world’s most trusted healthcare partners.

I thank you for the confidence you have placed in our company and am pleased to be able to propose a dividend increase of 2% to CHF 3.00 at the next Annual General Meeting.

Sincerely,
Joerg Reinhardt
Chairman of the Board of Directors