Diana Marszalek 22 Feb 2018 // 5:09PM GMT
NEW YORK — Healthcare giant Novartis will be consolidating the bulk of its lucrative agency activity under three holding groups — Interpublic Group, Omnicom and WPP — a sweeping change to its global communications approach, the Holmes Report has learned.
The decision follows a global review that covers Novartis' marketing communications for both healthcare professionals (HCPs) and patients, including public relations. Novartis head of global media relations Eric Althoff confirmed that Novartis will consolidate its business with the trio of partners, and will transition the business over the course of 2018.
"Novartis is constantly reviewing its strategic supplier partnerships and has decided to embrace a new approach to our agencies," said Althoff. "We believe that this will draw out the best talent and services of our agencies allowing us to create the most effective programming to reach our patients and healthcare professionals."
Novartis has worked with numerous agencies across its global footprint, often on a product-led basis. The decision to consolidate its communications is expected to impact relationships with HCP ad agencies, digital shops and PR agencies, although media buying — handled by Starcom — appears unaffected.
"Our priority is to transition work in a timely manner and to minimize business disruption," added Althoff. "Novartis will continue to adhere to our contractual commitments in a respectful manner."
On the PR side, Novartis counts a long-term relationship with Ruder Finn, although sources noted that the firm's business is not the stronghold it once was.
The Novartis consolidation comes after similar agency moves at many of its healthcare rivals, including GSK, Sanofi and Pfizer — all of which have whittled their business down to a handful of holding groups.
Despite a tough 2017, Novartis expects sales to start rising again in 2018, thanks in part to a pioneering cancer drug and an upgraded forecast for eyecare division Alcon. The company recently announced the departure of eight-year CEO Joseph Jimenez, who has been replaced by Vasant Narasimhan, chief medical officer and global head of drug development.
Narasimhan takes charge at a critical period for Novartis, which continues to face commercial challenges after a series of transactions in 2015. These include the expiration of patents for top-selling drugs such as hypertension treatment Diovan and Gleevec along with the potential divestment of Alcon and the company's stake in Roche.
Additional reporting by Arun Sudhaman.