Novartis is adapting its business model to the dramatic changes happening in biotechnology and healthcare. The Swiss pharmaceutical company is getting ahead of its competitors by developing products that use digital technology to help solving medical problems. CEO Joseph Jimenez is leading the technological change and also applying controversial measures such as bold asset swaps or cost cuts.
Among other things, Novartis is funding startups that enable smartphones to monitor a patient’s health remotely. Jimenez also signed a deal with Proteus Digital Health to design pills that warn the patients when they skip a dose. Teaming up with Google, Novartis is also developing contact lenses for diabetics that measure blood sugar levels from the patient’s tears. Microsoft is bringing its Kinect motion-detection technology to develop tests for multiple sclerosis sufferers.
In the next year, Novartis will face the loss of several patents on medicines that account for a fifth of its sales. Joe Jimenez executed a $30 billion asset swap meant to save the company, in what he interpreted as a matter of growing or disappearing. Novartis strengthened his prevailing areas -like cancer drugs- and dropped the weakest ones.
Pharmaceuticals foresee a troubled future. First, spending in public health will be enormous and administrations will ask companies to demonstrate their expensive drugs’ efficacy. Second, patients demand more information about their own health. Third, many lucrative patents are about to expire. Digital medicine can be their solution: it will enable drugmakers to demonstrate their treatments work, and definitely can provide more data to patients. Novartis is paving the way; other companies are following suit and investing already in the field.