Frequently asked questions

Top 10 questions from shareholders and our responses

Last updated: July 2024

Access and social impact

Can you summarize your access efforts in LMICs and US?

• One quarter of the world’s population (2bn people) has no access to basic medicines.
• Our approach to access has evolved over the last two decades from donations towards more sustainable access solutions. We have implemented the Novartis Access Principles, which look at three success factors to drive positive social impact in LMICs
  1. R&D: Considering access earlier in the drug development cycle.
  2. Affordability: Utilizing emerging market brands and tiered pricing.
  3. Healthcare systems: Partnering to establish the basic foundations of disease management and build up healthcare capabilities.
• We measure our success in implementing the Access Principles against three key targets:
  • +200% ‘patients reached’ with our innovative therapies in LMICs by 2025.
  • +50% ‘patients reached’ with global health flagship programs (including malaria, leprosy, sickle cell disease, Chagas disease) in LMICs by 2025 (vs. 2019).
  • 100% new medicines launched have a global access strategy.
• In the US, our efforts focus on addressing social determinants of health, and increasing diversity, trust and inclusion across the R&D ecosystem. For example, we established clinical trial Centers of Excellence at four Historically Black Medical Schools to increase diversity among clinical trial investigators and participants (more details on Beacon of Hope initiative).

How do you price advanced therapies such as Zolgensma in LMICs?

• We aim to create sustainable access to Zolgensma® for all patients in need around the world. We believe innovative treatments like Zolgensma® require innovative access approaches, and we seek sustainable solutions that recognize the value of Zolgensma® and achieve appropriate/shared contributions from governments, society and Novartis.
• A value-based approach to healthcare incentivizes the healthcare sector to focus on the interventions that deliver the most effective, efficient and sustainable outcomes. Novartis was among the first pharmaceutical companies to enter into value-based contracting for medicines, linking pricing and reimbursement rates to specific outcomes. Value-based pricing principles consider three elements when proposing the price of innovative medicines:
  1. Patient value, e.g. improvement in motor milestones in the case of Zolgensma®.
  2. Healthcare system value, e.g. one-time therapies with long-term benefit vs. life-long chronic therapies.
  3. Societal value, e.g. increased workforce participation for the patient and caregivers.
• We also offer access options that include deferred payments and pay-over-time options as well as outcomes-based agreements.
• Zolgensma® has reached patients in LMICs including Chile, Mexico, Tunisia, Belarus, India, Malaysia and Vietnam. We have ongoing discussions in several other markets demonstrating our commitment to delivering impact for patients all over the world.

What activities are you undertaking to advocate for healthcare access improvements with governmental bodies and industry associations?

• We work with policymakers, governments and industry associations to raise awareness about unmet needs in global health, advocate for coordinated solutions between public & private sectors, and build effective partnerships to improve access to innovative medicines. Examples include:
  • Novartis was the first company to sign up for the Access to Oncology Medicines Coalition (ATOM), and the first to offer an innovative, on-patent medicine. In 2022, we granted a “freedom to operate license” for one of our blood cancer medicines, nilotinib, to the Medicines Patent Pool (MPP) as part of the coalition.
  • In response to a call for a renewed commitment to tackling the rising toll of sickle cell disease (SCD) from African health ministers and the WHO Africa Regional Office, Novartis joined forces with leaders in SCD to launch the World Coalition on SCD. Through the coalition, we aim to decrease childhood mortality and improve the quality of life associated with SCD in LMICs.

How do you measure the impact of your medicines in LMICs?

• To date we have been using ‘patients reached’ as a proxy for impact in LMICs.
• However, we recognize that new measurement methods are needed in order to better report on our efforts and plan for future activities. For a number of years, we have been piloting methodologies that correlate health benefits (such as QALYs and DALYs) with socio-economic metrics (such as GDP contribution).
• We are actively working with cross-industry consortia, such as the Value Balancing Alliance, to help standardize impact measurement across the industry.

What are your expectations with respect to Novartis ranking for the 2024 Access to Medicines Index (ATMI)? Can you remind us why your ATMI ranking declined in 2022 vs. 2021?

• We are pleased to have had a leading ranking in ATMI over the last decade. We believe that this is a by-product of our consistent efforts towards improving access to medicines in LMICs.
• Our 2022 ATMI rating declined from second to fourth due to the impact of a legacy Alcon issue that occurred between 2011 and 2016 (Alcon was spun off in 2019).
• We recently submitted our responses for the 2024 ATMI cycle, with results expected in Q4 2024.
• Novartis remains dedicated to providing access to patients in every corner of the world, as evidenced by our reaching 284m patients globally with our medicines in 2023, including 33.2m through access approaches in LMICs.¹

Human capital

Can you provide an update on your Transformation for Growth initiative?

• In recent years, we have evolved from being a diversified healthcare conglomerate to a pure-play innovative medicines company. In 2022, we introduced a new operating model to make our organization more agile and efficient in support of our strategy.
• The re-organization involved difficult decisions, including workforce reductions, and caused uncertainty for many of our employees. We navigated these changes to implement the new structure as quickly as possible, ensuring that we took the appropriate steps to support our people compassionately. We established six basic principles to manage the transition, including fairness in decision-making, compliance with local legal requirements and equal opportunities in connection with applying for other available roles. Those affected had access to various support programs to help them transition to new roles, both internally and externally.
• The Transformation for Growth initiative is on track for completion in 2024. While we initially saw a decrease in employee engagement scores in 2022, current scores have increased (as of Q2 2024) and now exceed external benchmarks.

Nature and environment

Could you provide more details about your nature and biodiversity strategy?

• We are progressing on our existing commitments on:
  • Climate: Near-term and long-term science-based greenhouse gas emissions reduction targets, including net-zero by 2040 view more.
  • Water: 50% reduction in water use by 2025 (2016 baseline) and water neutral by 2030²; no water quality impacts from manufacturing effluents by 2025 and enhanced water quality wherever we operate by 2030.
  • Waste: 50% in waste disposal by 2025 (2016 baseline) and plastic neutrality by 2030.
• To help us better understand our impacts and dependencies on nature, we conducted a technical assessment, following the TNFD LEAP³ approach. The scope includes direct operations and upstream supply chains.
• Based on this analysis, we plan to develop our approach to biodiversity by the end of 2024.

What are the specific steps that you are taking to reduce environmental impact of active pharmaceutical ingredients (API) at contract manufacturing sites?

• We have increased engagement with our manufacturing suppliers in managing their impact on aquatic environments, including:
  • Training and capability building: We conduct training for our API supplier sites on wastewater management.
  • Technical support: We assist in performing wastewater effluent risk assessments in alignment with industry best practices, e.g. PSCI water quality maturity assessment.
  • Monitoring: We regularly monitor and promptly address any incidents.
• 88% of our high-risk suppliers met our water quality standards in 2023 vs. 26% in 2022.

Product quality and animal welfare

We appreciate your transparency in reporting the number of recalls in your integrated report. Can you share your approach towards product safety and quality? What was the driver of the class 1 product recall in 2023?

• Maintaining the quality and safety of our medicines is fundamental to our core business. We apply strict quality and safety standards and contractually oblige third parties to follow our standards on quality with robust quality processes. Audits and inspections are conducted to verify compliance with regulatory requirements and guidelines.
• We obtained ISO 9001:2015 certification in 2023, an internationally recognized benchmark for quality management systems.
• In 2023, the class 1 recall concerned Sandimmune  Oral Solution which was distributed in US. The recall was caused by crystallization of active substance in the product. The specific formulation has been discontinued and is no longer on the market. Sandimmune  Capsules and Neoral  Oral Solution are the available alternatives to ensure continued treatment for patients.

Following the 2022 Modernization Act 2.0 in preclinical trials, can you share your efforts in animal welfare?

• Our R&D sites and suppliers adhere to our Animal Welfare policy, which includes a 3Rs program aiming to 1) replace animal use with alternative non-animal methods, 2) reduce the use of animals in clinical trials through improved study methods, and 3) refine study methods to enhance the animal experience.
• Our 3Rs Granting Program provides funding to scientists for the advancement of reduction and replacement technologies. Some examples of advancements in non-animal methods for screening new therapeutic compounds include: Brain cells cultured in the lab, evaluation of liver-on-a-chip technology, and employment of 3D gastrointestinal organoids.
• We reduced the number of animals utilized in our clinical trials by 30% from 2018 to 2022.
• All of our animal in-vivo research sites have obtained independent, voluntary and internationally recognized gold-standard accreditation from the Association for Assessment and Accreditation of Laboratory Animal Care.

1. Includes patients reached with medicines through Novartis Global Health, as well as patients reached through support programs, emerging market brands and donations.
2. All Novartis sites to reduce water consumption in all areas and to be water neutral in water-stressed regions by not depleting local water reserves. Water-stressed regions are determined using the WWF Water Risk Filter.
3. Task Force on Nature-related Financial Disclosures: Locate, Evaluate, Assess, Prepare.

What is the new cost basis of my Novartis and Sandoz shares following the spin-off of Sandoz from Novartis?

Information about allocation of tax basis for U.S. holders may be found in the Form 8937: Basis of Securities (PDF 0.1 MB). With regard to non-U.S. holders, please note that the allocation of tax basis for Novartis and Sandoz shares following the spin-off depend on the applicable local tax provisions and each shareholder’s individual circumstances. Accordingly, all shareholders and ADR holders are asked to consult their own tax advisor regarding the tax basis allocation calculations.

Where are Novartis shares traded?

Novartis shares are listed and traded on the SIX Swiss Exchange (Valor No. 001200526, ISIN CH0012005267, symbol: NOVN) as well as on the NYSE in the form of American Depositary Receipts (ADR) (Valor No. 567514, ISIN US66987V1098, symbol: NVS).

What are the ticker symbols for Novartis?

What is an ADR/ADS?

ADR stands for American Depositary Receipt. ADS stands for American Depositary Share. An ADR is a receipt for a number of shares of a foreign-based corporation held by a US depositary bank, entitling the ADR holder to all dividends and capital gains.

What is the number of outstanding shares in Novartis?

Key Novartis share data

1. Approximately 94 million treasury shares (2022: 99 million 2021: 102 million) are held in Novartis entities that restrict their availbility for use.

What is the number of outstanding ADRs in Novartis?

Key data on ADRs issued in the US

1. The depositary, JPMorgan Chase Bank, N.A., holds one Novartis AG share for every ADR issued.

When is your dividend going to be paid?

The dividend payment date has been set for March 11, 2024.

What is the dividend history for Novartis shares?

Shareholders approved the 27th consecutive dividend increase per share since the creation of Novartis in 1996, with an increase of 3.1% to CHF 3.30 per share for 2023.

Learn more about dividend information

What is the new cost basis of my Novartis and Alcon shares following the spin-off of Alcon from Novartis?

Information about allocation of tax basis for U.S. holders may be found in the Form 8937: Basis of Securities (PDF 0.1 MB). With regard to non-U.S. holders, please note that the allocation of tax basis for Novartis and Alcon shares following the spin-off depend on the applicable local tax provisions and each shareholder’s individual circumstances. Accordingly, all shareholders and ADR holders are asked to consult their own tax advisor regarding the tax basis allocation calculations.

What are the income tax implications to Canadian shareholders due to the Alcon spin-off?

The following documents include the Finance Canada and Canada Revenue Agency comfort letter, Canada income tax guidelines and tax election letters related to the Alcon Spin-off for Canadian resident shareholders:

Canada Income Tax Alcon Spin-off FAQ - English (PDF 0.1 MB)

Canada Income Tax Alcon Spin-off FAQ- French (PDF 0.1 MB)

Department of Finance Canada Comfort Letter (PDF 0.1 MB)

Download the Canada and Quebec Tax Election Example Letters (ZIP 0.1 MB)

What is the amount and timing of the next dividend payment?

The Novartis Board of Directors proposed a dividend of CHF 3.30 per share to the shareholders for approval at the Annual General Meeting held on March 05, 2024. This proposal was approved. The dividend will be paid as from March 11, 2024. The last trading day with entitlement to receive the dividend is March 06, 2024. As from March 07, 2024, the shares will be traded ex-dividend.

Is the dividend on the Novartis ordinary share and the Novartis ADR the same?

Yes, however, since ADR holders will receive their dividend in US dollars, the amount received will be impacted by currency exchange rates, as well as by a handling fee (historically, $0.01 per share) associated with the ADR dividend. An estimate of the amount of the US dollar dividend for the ADR will be calculated on the day of the dividend announcement based on that day’s exchange rates. The actual exchange rate will be determined once all funds are received and exchanged by J.P. Morgan, the depositary bank.

Will the rate recently announced for the ADRs change between now and the ADR payment date?

Yes, the preliminary announcement only provides an estimated rate based on a current FX rate. The actual rate will be determined when the Swiss francs are converted to US dollars once all the funds are received by J.P. Morgan.

Will the dividend on the Novartis ADR be paid out on the Swiss payment date of March 11, 2024?

No, the dividend on the Novartis ADR will be paid out only after a tax reclaim has been completed and once any such reclaimed funds have been received by J.P. Morgan from the Swiss Tax Authorities. Once the funds are received and converted into US dollars a payment will be made shortly thereafter to any ADR holders entitled thereto. The ADR Payment date is estimated to be on or around April 25, 2024.

Will the entire dividend amount be converted into US dollars after the Swiss tax reclaim has been completed?

No. On the Swiss payment date 65% of the dividend is received by JP Morgan. This amount will be converted into US dollars at or after such time.

Why can’t J.P. Morgan receive all of the funds on the Swiss payment date?

The Swiss Tax Authorities require that a tax reclaim be completed prior to each payment for any amounts due above and beyond the non-treaty amount. Investors must certify and elect their entitlement and provide necessary disclosure documentation as required by the treaty between the US and Switzerland based upon their tax status.

Why does it take so long to get the reclaim funds back from the Swiss Tax Authorities?

Holders of ADRs entitled to receive the dividend are not able to elect until after the ADR record date which is just one (1) day prior to the Swiss payment date. Eligible holders of ADRs are given 10 days to complete and submit their election. Once any reclaims are submitted to the Swiss Tax Authorities it takes approximately 15 days for such authorities to process the reclaim.

When will the final/definitive rate and ADR Payment Date be determined?  

The final/definitive rate and ADR Payment Date will be determined once all of the funds that comprise the dividend are received by J.P Morgan and converted into US dollars.  

Will another announcement be made once the tax reclaim funds are received?

Yes, once all the funds have been received and converted, and the final/definitive rate is determined, a new announcement will be made by J.P Morgan.

How does the tax reclaim process work?

There is a process for banks and brokers within Depositary Trust Company to elect their clients’ correct tax status electronically and to provide documentation on behalf of their clients. J.P. Morgan elects on behalf of registered holders based upon their tax status. Please contact J.P. Morgan / Goal Group Recoveries, Inc., New York at phone: +1 212 248 9120 or email: [email protected] for further questions.