Novartis Restructures

Novartis AG is restructuring the management of three of four business units, with plans to cut 550 marketing jobs in an effort to save $80 million annually starting in 2010, according to Joerg Reinhardt, head of the vaccines unit and chief operating officer. The restructuring is part of chief executive officer Daniel Vasella‘s plan to thwart losses of its best-selling drug Diovan due to generic competition.

Thomas Ebeling, head of the consumer health unit, is leaving the company and will be replaced by George Gunn, currently head of the animal health division. Mr. Reinhardt’s position will be filled by Andrin Oswald, chief executive of Speedel AG, which was acquired by Novartis earlier this year. Andreas Rummelt, head of the Sandoz generic drugs division, will be replaced by Jeff George, who leads emerging markets. Mr. Rummelt will head quality assurance. David Epstein, head of the oncology division, will also oversee a new unit focusing on molecular diagnostics. Mr. Vasella has reached an agreement with the board to extend his contract, according to a Novartis statement.

The company also plans to cut its sales force and concentrate on marketing drugs to managed care organizations instead of selling to general practitioners.