Novartis boss Vas Narasimhan during his appearance at the WEF in Davos. (archive)Image: keystone
Novartis boss Vas Narasimhan believes he can avoid a historic patent cliff. And strikes a surprisingly calm tone.
02/05/2026, 05:5902/05/2026, 05:59
Pascal Michel / ch media
Novartis boss Vas Narasimhan appeared in good spirits in the Swiss press yesterday. He joked about the annual criticism of his princely salary, currently 24.9 million francs (“If it goes down, hardly anyone reports about it”). And he praised Switzerland for its stability (“in complete contrast to my home country”). The 49-year-old manager has been running Novartis for 9 years and comes from the USA.
The excited mood was no coincidence. Finally, Narasimhan was able to present brilliant annual results. Sales rose 8 percent to $54.5 billion. Net profit was $13.9 billion (+17 percent). It even reached its margin target, which the group had only set for 2027, two years earlier. The core profit margin was 40 percent.
His reward is “mathematics”
These results are directly reflected in the boss’s salary, which is largely linked to the company’s success: it rose from 19.2 million francs in the previous year to 24.9 million francs.
Narasimhan justified the hefty jump in wages by saying that the last three years had gone exceptionally well for Novartis compared to the industry. There are sophisticated formulas to measure its performance in comparison to other pharmaceutical companies. “What comes out is mathematics,” says Narasimhan.
The losses that Novartis will suffer from expiring drugs can also be predicted with mathematical precision. This so-called patent cliff is particularly high for the company: last year, the blockbusters Entresto (heart failure), Promacta (hepatitis C) and Tasigna (leukemia) lost patent protection. At Entresto, Novartis expects losses of $4 billion for the current year that need to be replaced.
The group already felt the first effects of this in the last quarter. Sales fell by 1 percent. CFO Harry Kirsch spoke of the most drastic losses from generics in the company’s history. Nevertheless, the bosses remain optimistic. Sales and profits are expected to increase again from the second half of 2026 after a brief setback. This should happen through more sales of other medicines and the launch of new medicines. In addition, the group will probably have digested the billion-dollar acquisition of the US company Avidity. Novartis expects annual sales growth of 5 to 6 percent over the next five years.
What does the new pricing landscape look like?
This already takes into account US President Donald Trump’s plans to reduce drug prices in the USA and link them to those in similarly economically strong countries. Vas Narasimhan also emphasized that the effect would be “very small” in the coming years. The bigger challenge, according to the message, is the expiring patents – although Novartis sees itself as prepared here too.
When asked, Vas Narasimhan emphasized that there could definitely be an effect with new launches. “Without this price situation, we would grow even faster than forecast,” said Narasimhan. These price adjustments, it seems, are manageable. Narasimhan said they are just now creating model calculations for future price calculations. “Some new launches could experience delays, while others have exceptions.”
While the company itself can apparently deal with the effects, Narasimhan sees a problem for Switzerland in particular. Because the new price system is based on the purchasing power of the G7 countries plus Switzerland and Denmark. For Switzerland, this means that it will one day have to pay higher prices than the USA. Switzerland has a higher economic power per capita than the USA. The redistribution of costs initiated by Trump would affect Germany and Japan much less severely. Here the calculated price differences are deeper and “bridgeable,” said Narasimhan.
With regard to Switzerland, Narasimhan made it clear that the primary goal was to find a solution with the authorities. As an interim solution, Narasimhan envisages that new medications could first be brought onto the market for self-payers or those with additional insurance until the price negotiations with the state have been completed. “Switzerland has a very developed private insurance market,” emphasized Narasimhan.
During his appearance, the company leader made it clear that Novartis valued the conditions in Switzerland: stability, skilled workers, taxes. It sounded strikingly different from the competition last week. Roche boss Thomas Schinecker chose a different perspective and created a real threat. He focused on how much is currently at stake for Switzerland. He also referred to the increased tax burden due to the OECD minimum tax. Novartis was much more relaxed here, as was the case with its US pricing policy. Vas Narasimhan slipped once again. (aargauerzeitung.ch)