Distribution in Region – Pharma

Which primary distributors are used in your top countries in the AP region?

Country Distributor 1 Distributor 2 Comments

e.g. Diethelm (Agreements/ exclusivity?)

1 Australia/New Zealand Exel PH Standard

2 Bangladesh Sandoz (in-house)
3 China SNT Zuellig PH Standard
4 Hong Kong Diethelm PH Standard
5 Indonesia APL (Zuellig owned) 3 year contract (expiring 2008)
6 India NIL Multiple local C&Fs 2 year term contracts (45 C&Fs)
7 Korea Zuellig Review in progress
8 Malaysia Diethelm PH Standard
9 Pakistan Pharma (in-house) Shifting to 3rd party (Zuellig)

10 Philippines Diethelm GB (Dispensing MDs) PH Standard

11 Singapore Zuellig PH Standard
12 Taiwan MayWuFa (Diethelm) Expiring end-2007
13 Thailand Zuellig Expiring mid-2007
BU Distributor Review 2006 1
 Distribution in Region – Pharma

• What are the key synergies/ opportunities with your distributors your BU could realise by
collaborating with Novartis BU/ Divisions?
– Bigger clout / One voice with higher volumes (Novartis as key customer)
– Better overall rates, considering synergies from similar systems/processes (e.g. SAP systems,
planning processes) within the CPOs / Region

• Are you already collaborating with other BU’s in specific countries and if so how is this
set up and what has been achieved?
– Yes, where required/possible (e.g. PH, AU); but more on an ad-hoc basis.
– One contract established for all BU’s involved; BU peculiar items are detailed/covered in the
schedules to keep the main body of the contract standard.
– Standard non-negotiable terms: Non-exclusivity, ABC, open-ended, fixed termination clauses.
– Global Volume Discount Agreement established in coordination with Global Purchasing –
Warehousing & Transport. Covering W&D services for all Novartis BU’s

BU Distributor Review 2006 2

Status of shift to ABC (end 2005)

At end 2005 By end 2006

% of Sales
Indonesia Indonesia
Korea Thailand Taiwan
Thailand Taiwan

Fee per unit

vol/kg

AU & NZ

ABCosting Korea AU & NZ

CN-SNTHK PH MY SG CN-SNTHK PH MY SG

Novartis Pharma managed : Pakistan India NIL Pakistan India NIL

Other Division Ops Bangladesh India NEPL Bangladesh India NEPL

AP CPO SCM Operations / Alan Dy / Jan 2006