Novartis: The high cost of recycling

Novartis’ second quarter results may point to a company performing well. Sales were up 12% to E7.8bn, led by strong growth in its patented drugs division where operating income was up 17%. But this leads to a wider mystery. Why does the Swiss group continue to recycle profits from its patented drugs into buying low-margin off-patent drug makers? This curious strategy appears to be generating more splinters than success. Novartis has made three generic acquisitions in the past two years for a ...