Novartis held the line on spend in '09

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Novartis' US sales reorganization seems to have paid off in 2009 as the company held the line on sales and marketing expenses despite a passel of global launches.

The company said in its 2009 results that sales and marketing spend for its pharmaceutical division fell 1.6 percentage points to 29.3% of net sales in 2009 thanks to productivity improvements—even as it launched a host of new products, including Galvus, Exelon Patch, Valturna and the Tekturna/Rasilez franchise.

Novartis announced a realignment of its US commercial model, dubbed its “Customer Centric Initiative,” in October 2008. The reorganization replaced Novartis' managed sales force with five regional units tasked with cross-functional responsibility for primary care. Novartis shed 550 sales spots, most through attrition.

Elsewhere, while noting strong productivity gains in sales and marketing at its Sandoz unit, Novartis said core operating income for its consumer health division fell 1% to $1.1 billion due to heavy outlays for the launch of OTC Prevacid24HR in the US.

Overall, net sales were up 7% in US dollars and 11% in local currencies to $44.2 billion for the full year. Fourth-quarter sales rose a whopping 28% in US dollars (20% in local currencies) compared to the same period in 2008, to $12.9 billion.

Earlier in the year, MM&M named Novartis its Company of the Year.
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