Novartis AG

Pharmaceuticals*
Switzerland
Novartis

[email protected]

According to its Annual report filed with the SEC for fiscal year 2019: "As of October 18, 2010, a non-US affiliate within our Innovative Medicines Division entered into a non-binding Memorandum of Understanding (MoU) with the Ministry of Health and Medical Education of the Islamic Republic of Iran. Pursuant to the MoU, the Iranian Ministry of Health acknowledges certain benefits that may apply to sales of certain Innovative Medicines Division medicines by third-party distributors in Iran. These include fast-track registration, market exclusivity, end-user subsidies, and exemptions from customs tariffs. Novartis receives no payments from the Iranian Ministry of Health under the MoU, and the MoU creates no obligations on the part of either Novartis or the Iranian Ministry of Health.
From time to time, including in 2019, non-US affiliates in our Innovative Medicines and Sandoz Divisions made payments to government entities in Iran related to patents, trademarks, exit fees and other transactions ordinarily incident to travel by doctors and other medical professionals resident in Iran to attend conferences or other events outside Iran.
From time to time, including in 2019, non-US affiliates in our Innovative Medicines and Sandoz Divisions enter into agreements with hospitals, research institutes, medical associations and universities in Iran to provide grants and sponsor congresses, seminars and symposia, and with doctors and other healthcare professionals for consulting services, including participation in advisory boards and investigator services for observational (non-interventional) studies. Some hospitals and research institutes are owned or controlled by the government of Iran, and some doctors and healthcare professionals are employed by hospitals that may be public or government-owned.
Because our Innovative Medicines and Sandoz Divisions have operations in Iran, including employees, they obtain services and have other dealings incidental to their activities in that country, including paying taxes and salaries either directly or indirectly through a service provider, and obtaining office rentals, insurance, electricity, water and telecommunications services, office and similar supplies, and customs-related services from Iranian companies that may be owned or controlled by the government of Iran. In addition, from time to time, representatives of our non-US affiliates participate in meetings with Iranian officials to discuss issues relevant to our business and the pharmaceutical industry.
Non-US affiliates in our Innovative Medicines and Sandoz Divisions maintain local accounts at banks that are, as of November 5, 2018, on the Specially Designated Nationals and Blocked Persons List (SDN List). These non-US affiliates make local transactions for employee payroll and local vendor payment purposes only with SDN-listed Iranian banks that are not subject to secondary sanctions. Payments to employees and vendors are only made to accounts in Iranian banks that are not subject to secondary sanctions."

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As stated in its 2017 20-F SEC disclosure: "To help us fulfill this mission, we have representative offices located in Iran. In the second quarter of 2016, a non-US affiliate within our Innovative Medicines Division submitted a non-binding written proposal for potential collaboration related to local manufacturing, scientific and medical activities between the Iranian Ministry of Health and certain non-US affiliates within our Innovative Medicines and Sandoz Divisions. In the third quarter of 2016, a non-US affiliate within our Innovative Medicines Division submitted a draft of a proposed binding Memorandum of Understanding (MoU), based on the proposal submitted during the second quarter of 2016, to the Embassy of the Islamic Republic of Iran in Bern, Switzerland, to seek support for a meeting with representatives of the Iranian Ministry of Health to negotiate and finalize the MoU. A draft of the proposed binding MoU was submitted to the Iranian Ministry of Health and the Ministry of Foreign Affairs of Iran in the fourth quarter of 2016.
In 2017, non-US affiliates relating to our Innovative Medicines and Sandoz Divisions made payments to government entities in Iran related to exit fees and other transactions ordinarily incident to travel by doctors and other medical professionals resident in Iran to attend conferences or other events outside Iran.
From time to time, including in 2017, non-US affiliates relating to our Innovative Medicines and Sandoz Divisions enter into agreements with hospitals, research institutes, medical associations and universities in Iran to provide grants, sponsor congresses, seminars and symposia, and with doctors and other healthcare professionals for consulting services, including participation in advisory boards and investigator services for observational (non-interventional) studies. Some of these hospitals and research institutes are owned or controlled by the government of Iran, and some of these doctors and healthcare professionals are employed by hospitals that may be public or government-owned.
Because our Innovative Medicines and Sandoz Divisions have operations in Iran, including employees, they obtain services and have other dealings incidental to their activities in that country, including paying taxes and salaries either directly or indirectly through a service provider, and obtaining office rentals, insurance, electricity, water and telecommunications services, office and similar supplies and customs-related services from Iranian companies that may be owned or controlled by the government of Iran." 

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According to its Annual Report filed with the SEC for fiscal year 2014: "

At Novartis, it is our mission to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life of all people, regardless of where they live. As part of that mission, and in connection with the sale of medicines and other healthcare products in Iran, we have representative offices located in Iran. As of October 18, 2010, a non-US affiliate within our Pharmaceuticals Division entered into a non-binding Memorandum of Understanding (MoU) with the Ministry of Health and Medical Education of the Islamic Republic of Iran. Pursuant to the MoU, the Iranian Ministry of Health acknowledges certain benefits that may apply to sales of certain Novartis Pharmaceuticals medicines by third-party distributors in Iran. These include fast-track registration, market exclusivity, end-user subsidies and exemptions from customs tariffs. Novartis receives no payments from the Iranian Ministry of Health under the MoU and the MoU creates no obligations on the part of either Novartis or the Iranian Ministry of Health.

In 2014, Novartis made payments to government entities in Iran for exit fees and other transactions ordinarily incident to travel by doctors and other medical professionals resident in Iran to attend conferences or other events outside Iran.

From time to time, including in 2014, our non-US affiliates enter into agreements with hospitals and research institutes in Iran to provide grants, sponsor congresses and seminars, and with doctors and other healthcare professionals for consulting services, including participation in advisory boards. Some of these hospitals and research institutes are owned or controlled by the government of Iran, and some of these doctors and healthcare professionals are employed by hospitals that may be public or government-owned.

Because we have operations in Iran, including employees, Novartis obtains services and has other dealings incidental to its activities in that country, including paying taxes and salaries, and obtaining rentals, electricity, water and telecommunications services, office and similar supplies and customs-related services from Iranian companies who may be owned or controlled by the government of Iran."

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According to its Annual Report filed with the SEC for fiscal year 2013: "At Novartis, it is our mission to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life of all people, regardless of where they live. As part of that mission, and in connection with the sale of medicines and other healthcare products in Iran, a non-US affiliate within our Pharmaceuticals Division has entered into a non-binding Memorandum of Understanding (MoU) with the Ministry of Health and Medical Education of the Islamic Republic of Iran, dated October 18, 2010. Pursuant to the MoU, the Iranian Ministry of Health acknowledges certain benefits that may apply to sales of certain Novartis Pharmaceuticals medicines by third-party distributors in Iran. These include fast-track registration, market exclusivity, end-user subsidies and exemptions from customs tariffs. Novartis receives no payments from the Iranian Ministry of Health under the MoU and the MoU creates no obligations on the part of either Novartis or the Iranian Ministry of Health.

In 2013, Novartis made payments to government entities in Iran for exit fees and other transactions ordinarily incident to travel by doctors and other medical professionals resident in Iran to attend conferences or other events outside Iran.

From time to time, including in 2013, our non-US affiliates enter into agreements with hospitals and research institutes in Iran to provide grants, sponsor congresses and seminars, and with doctors and other healthcare professionals for consulting services, including participation in advisory boards. Some of these hospitals and research institutes are owned or controlled by the government of Iran, and some of these doctors and healthcare professionals are employed by hospitals that may be public or government-owned.

 Because we have operations in Iran, including employees, Novartis obtains services and has other dealings incidental to its activities in that country, including paying taxes and salaries, and obtaining rentals, electricity, water and telecommunications services, office and similar supplies and customs-related services from Iranian companies who may be owned or controlled by the government of Iran.

Some beneficiaries of payments made by our non-US affiliates in the course of the operations described above maintain accounts at banks that are included on the list of Specially Designated Nationals (SDNs).

        To our knowledge, none of our sales of products in Iran during 2013 are required to be disclosed pursuant to ITRA Section 219, with the following possible exception: In 2013, a non-US affiliate of our Vaccines and Diagnostics Division received a payment of EUR 1,294,335 (net of bank fees), and a payment of EUR 185,000, from Medical Equipment and Pharmaceutical Holding Co. of Iran, which we understand is an affiliate of the Iranian Ministry of Health, for a 2012 sale of rabies vaccine, and a 2012 sale of influenza vaccine, respectively, both of which were disclosed in our 2012 Form 20-F."

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According to its Annual report filed with the SEC for fiscal year 2012: "At Novartis, it is our mission to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life of all people, regardless of where they live. As part of that mission, and in connection with the sale of medicines and other healthcare products in Iran, a non-US affiliate within our Pharmaceuticals Division has entered into a non-binding Memorandum of Understanding (MoU) with the Ministry of Health and Medical Education of the Islamic Republic of Iran, dated October 18, 2010. Pursuant to the MoU, the Iranian Ministry of Health acknowledges certain benefits that may apply to sales of certain Novartis Pharmaceuticals medicines by third-party distributors in Iran. These include fast-track registration, market exclusivity, end-user subsidies and exemptions from customs tariffs. Novartis receives no payments from the Iranian Ministry of Health under the MoU and the MoU creates no obligations on the part of either Novartis or the Iranian Ministry of Health.

        To our knowledge, none of our sales of products in Iran during 2012 are required to be disclosed pursuant to ITRA Section 219, with the following possible exception: During 2012, non-US affiliates within our Vaccines and Diagnostics Division sold influenza vaccines and rabies vaccines to Medical Equipment and Pharmaceutical Holding Co. of Iran, which we understand is an affiliate of the Iranian Ministry of Health. Our gross sales of these influenza and rabies vaccines during 2012 were EUR 185,000 and EUR 1,362,500 respectively, and our net profits (gross sales minus cost of goods sold and commissions) from such sales were EUR 43,300 and EUR 397,501, respectively. We expect to continue to make sales of vaccines to this customer during 2013."

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"Novartis AG, Europe's biggest drugmaker by sales, said its Alcon eye-care unit is under U.S. government investigation related to the export of products to Iran and other countries subject to trade sanctions. Alcon was notified last year that the U.S. Attorney's office for the Northern District of Texas is conducting an investigation into its sales, Novartis said in a regulatory filing today. The unit, run from Fort Worth, Texas, received a grand jury subpoena for documents dating back to 2005. Alcon is cooperating with the investigation, according to the filing. The U.S. government has programs that prohibit or limit products made or held in the U.S. from being sold to certain countries, including Iran, Syria and North Korea. Novartis, based in Basel, Switzerland, took full control of Alcon in 2010 after an 11 month dispute with minority shareholders. Alcon was based in Huenenberg, Switzerland, with U.S. headquarters in Texas. It generated $2.6 billion in sales during the fourth quarter, Novartis said today." (Bloomberg, "Novartis Draws U.S. Investigation Into Sales to Iran," 1/23/12)