Novartis (C): Reimagining Medicine

Name: Novartis (C): Reimagining Medicine (English version)
SKU: 723445

Casadesus-Masanell, Ramon; Feser, Claudio; Frankenberger, Karolin; Redaschi, David

Product #:723445

Supplier:Harvard Business School

Discipline:Strategy

Setting:Switzerland, 2022

Details:Supplemental Case (PDF) • 5 pages • 2023-05-11 (Rev: 2023-06-20)

Subjects:

Business models Economics Strategy Corporate strategy Strategy

Geography:

Switzerland Europe

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$7.50

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This case unfolds around the first-ever approved personalized cancer treatment, how Novartis wrapped it into a new business model design, and how Novartis scaled it. Novartis - one of the largest pharmaceutical companies in the world - is, among other ventures, discovering, developing, and marketing patent-protected prescription medicines, as well as addressing unmet medical needs and diseases for which no effective treatments or cures exist. In late 2011, Novartis executives became aware of a revolutionary treatment technology developed by researchers at the University of Pennsylvania (UPenn). This technology was designed as a one-time, personalized drug to cure certain types of cancers such as lymphomas and leukemia. Section Chief of Cellular Therapy and Transplant at the Children's Hospital of Philadelphia Stephan A. Grupp, MD, Ph.D. commented on the innovation as follows: "I've been an oncologist for 20 years, and I have never, ever seen anything like this." After approaching UPenn scientists, Novartis decided to develop and commercialize this technology as the company possessed the relevant capabilities. This case series then explores the introduction and scaling of this new treatment over three parts. Case A describes the various challenges Joe Jimenez, the then CEO of Novartis, faced during the launch of the new treatment in 2016. Case B (separate) focuses on the persistent problems with drug manufacturing and scaling this part of the business model design after its launch in 2017. Lastly, case C (separate) examines how Novartis solved the persistent problems and envisioned the future in this new, inspiring area of medicine.

Learning Objectives

This case serves as basis to discuss what business model design Novartis should adopt when launching this revolutionary drug. The case provides a precise description of existing therapies and the new personalized treatment, the business and regulatory framework, the challenges Novartis faced with the new treatment, as well as different stakeholder interests. Based on this information, students experience that new technologies require to be coupled with an innovative business model to make the technology accessible, compliant with the regulatory framework, and commercially viable. Specifically, through this case, students will learn to evaluate business models, design business models, and assess their innovation degree. In addition, students also learn how to price such a technology, how to implement a pricing decision, and what to consider when rolling out a business model. Topics for discussion include whether Novartis should adopt a new business model for the revolutionary technology, what value Novartis creates with the new treatment, how Novartis can sustainably capture value from the innovation, ethical considerations regarding drug access and pricing, how Novartis can leverage revenue models, and what factors determine the roll-out of the business model. Case B serves the purpose of following up on case A and discussing the challenges that came after the launch. The case itself provides a short overview of how the events unfolded after launch and specifically describes the challenges Novartis had with manufacturing and scaling this part of the business model design. In this vein, students discuss the critical question if Novartis should halt the investment into the new treatment and business model. Case C's purpose is to update case B. While Novartis fixed the basic problems highlighted in case B, an important trial failed.