Novartis Case Solution

Company Background:

Novartis was created in 1996 after one of the largest merger in history between two Swiss firms Sandoz and Cibap-Geigy. Both Sandoz and Cibap-Geigy are known for developing chemicals and performing research in life science and their history dates back to the 1760s. Novartis businesses are categorized in pharmaceuticals and consumer health. The main business units consist of pharmaceuticals, generics, animal health, medical nutrition, infant and baby. Novartis product for pharmaceuticals and consumer health are known throughout the world.

At a glance:

Location Basel, Switzerland

Business Category Pharmaceuticals

Year Founded 1996

Development Status Market (drug)

Website http://www.novartis.com

Evolution of Internet in Pharmaceutical Industry

Internet is very important for pharmaceutical industry because it alters the balance of power between pharmaceutical companies and their suppliers, physicians and end users. It helps consumers to develop self-care capabilities through internet-based health assessment tools, online disease therapy information, and online support/advocacy groups. It also helps the companies to open up new ways to interact with consumers, to tailor information to consumer's individual need.

But in European countries pharmaceutical company's development to e-commerce capabilities were slow because of the following reason:

1. Pharmaceutical industry did not provide enough information and services over the Internet.

2. The industry also spent less on IT than any other major industry. Healthcare companies on an average spent 3.9% of their revenue on IT systems whereas financial service firms spent 10%.

3. Disparate regulations regarding the manufacture and sales of pharmaceuticals, significant differences in the costs of pharmaceuticals and different ways in which cultures treated ailments also created problems.

4. European Union did not allow pharmaceutical advertising to consumers while direct-to-consumer advertising could be the principal source of income. European companies could only provide information for diseases their medicines helped treat.

5. Mail-order distribution of drugs were forbidden where online sales was far more profitable.

6. Ethics was also an issue. But in February 2000, the Internet Healthcare Coalition, an international nonprofit dedicated to quality healthcare information on the Internet, to

devise an e-Health Code of Ethics.

The demand for online health related information