Pharma Giant Novartis Explores Agency Options

Novartis is talking to agency search consultants about global media duties on its ad account, according to sources.

Sources familiar with the client’s deliberations say that the pharmaceuticals giant is exploring its options but has yet to sign off on a review.

A Novartis rep at the company’s headquarters in Basel, Switzerland, said “We won’t comment on rumors,” via e-mail.

The incumbent on the account is WPP’s MEC. Officials there didn’t return calls.

The client is said to be spending approximately $600 million a year on ads worldwide, down about a third from just a few years ago, when it reportedly spent around $950 million globally. In the U.S., the company spent $265 million on the ads in 2009 and $165 million in 2010, according to Nielsen (although those figures exclude digital expenditures).

Novartis consolidated the account with MEC in 2008, when it shifted the U.S. portion of the assignment to the shop from sister agency Mindshare without a review. At the time, MEC already handled media duties on the account in some 60 countries.

If Novartis proceeds, it would be the third major pharmaceutical company to launch a recent review. In December, both Pfizer and GlaxoSmithKline completed reviews. Pfizer retained Aegis Group’s Carat for its U.S. account, and GSK shifted from WPP’s MediaCom to Omnicom’s PHD.

It’s not unusual for multiple clients in the same category to commence reviews shortly after a first review is kicked off. “One does it, and then others feel that they’ll miss out on something if they don’t do it too,” said a source familiar with the process.

It’s been nearly a decade since the client has conducted a review for the U.S. portion of the business—the last one being a 2002 consolidation review won by Mindshare.

Novartis manufactures over-the-counter remedies such as Excedrin headache tablets and cold-and-flu remedy Theraflu, as well as prescription drugs such as Diovan HCT for high blood pressure.

The company reported net sales of more than $44 billion in its 2009 annual report.