Novartis (NOTA) Risk Analysis
Risk Overview Q4, 2025
Source: the company's latest filing for the period ended Dec 31, 2025, filed Feb 04, 2026
Risk Change Over Time
- Accounting & Financial Operations - Risk 1Goodwill and intangible assets other than goodwill
Goodwill and intangible assets other than goodwill resulting in significant impairment charges We carry a significant amount of goodwill and intangible assets other than goodwill on our consolidated balance sheet. These include, in particular, substantial goodwill and intangible assets other than goodwill obtained through acquisitions, including most recently through our acquisitions of Anthos Therapeutics, Regulus Therapeutics, and Tourmaline Bio, and through long-term research and development agreements with various third parties. As a result, we have incurred, and may in the future incur further, significant impairment charges if the fair value of the intangible assets other than goodwill and the groupings of cash-generating units containing goodwill would be less than their carrying value on our consolidated balance sheet at any point in time. We regularly review our intangible and tangible assets for impairment, including identifiable intangible assets and goodwill. If one or more events occur that would cause us to revise our estimates and assumptions used in analyzing the value of our goodwill and intangible assets other than goodwill, such revision could result in an impairment charge in the period in which it occurs. Any significant impairment charges could have a material adverse effect on our results of operations and financial condition. In 2025, for example, we recorded impairment charges of USD 557 million on intangible assets other than goodwill. For a detailed discussion about how we determine whether an impairment has occurred, what factors could result in an impairment, and the impact of impairment charges on our results of operations, see "Item 18. Financial Statements-Note 1. Accounting policies" and "Item 18. Financial Statements-Note 11. Goodwill and intangible assets other than goodwill."
Risk Highlights Q4, 2025
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 26
- Regulation - Risk 1ChangedLegal, regulatory and compliance
Risk description Challenges posed by evolving legal and regulatory requirements We are subject to an extensive and complex framework of laws and regulations across the jurisdictions in which we operate. The laws and regulations relevant to the healthcare industry and applicable to us are broad in scope, are subject to change, and have evolving interpretations, which could require us to incur substantial costs associated with compliance or to alter one or more of our business practices. For example, we have been, are currently, and may in the future be, subject to various significant legal proceedings, such as private party litigation, government investigations, and law enforcement actions worldwide. These types of matters may take various forms based on evolving government enforcement and private party litigation priorities, and could include, among other things, matters pertaining to allegations regarding: pricing; bribery and corruption; trade regulation and embargo legislation; product liability; commercial disputes; employment and wrongful discharge; antitrust and competition; securities; government benefit programs; reimbursement; rebates; healthcare fraud; sales and marketing practices; insider trading; occupational health and safety; environmental regulations; tax; cyber and data security; use of technologies, including AI; data privacy; regulatory interactions; disclosure compliance; and intellectual property. Such matters can involve civil or criminal proceedings and can retroactively challenge practices previously considered to be legal. There is also a risk that governance of our medical and patient support activities, and of our interactions with governments, public officials/institutions, healthcare professionals, healthcare organizations, and patient organizations may later be deemed inadequate or fail, or that we may undertake activities based on improper or inadequate scientific justification. New requirements may also be imposed on us due to changing government and societal expectations regarding the healthcare industry, as well as evolving standards of acceptable corporate behavior generally. For example, we are faced with laws and regulations requiring changes in how we do business, including with respect to disclosures concerning our interactions with healthcare professionals, healthcare organizations, and patient organizations. These laws and regulations include requirements that we disclose payments or other transfers of value made to healthcare professionals and organizations, as well as information related to the costs and prices for our products, which represent evolving standards of acceptable corporate behavior. These requirements may cause us to incur significant costs, including substantial time and additional resources, that are necessary to bring our interactions with healthcare professionals and organizations into compliance with these evolving standards. There is also an increased risk of noncompliance with applicable laws and regulations as we pursue new strategies and make organizational changes that may cause responsibilities for compliance matters to become unclear. An actual or alleged failure to comply with the law or with heightened public expectations could lead to substantial liabilities, fines, penalties or other losses that may not be covered by insurance adequately or at all. Legal proceedings and investigations are inherently unpredictable, and significant judgments sometimes occur. Regardless of the outcome of any legal proceedings, such proceedings are costly and time-consuming. They require significant attention from our management, and could therefore have a material adverse effect on our business, financial condition, and results of operations. Consequently, we may in the future incur judgments that could involve large payments, including the potential repayment of amounts allegedly obtained improperly, and other penalties, including treble damages. In addition, such legal proceedings and investigations, even if meritless, may affect our reputation, may create a risk of potential exclusion from government reimbursement programs in the US and other countries, and may lead to civil litigation or criminal exposure. As a result, we have in the past and may again in the future, enter into major settlements of such claims without bringing them to final legal adjudication, despite having potentially significant defenses against them, to limit the risks they pose to our business and reputation. Such settlements may require us to pay significant sums of money and to enter into corporate integrity or similar agreements, which are intended to regulate company behavior for extended periods. From time to time, we may also initiate challenges to laws or regulations that we believe to be illegal or unconstitutional. The result of such litigation that we may pursue is inherently uncertain and may negatively impact our business and reputation. For information on significant legal matters pending against us, see "Item 18. Financial Statements-Note 20. Provisions and other non-current liabilities" and "Item 18. Financial Statements-Note 27. Commitments and contingent liabilities."
- Regulation - Risk 2Pricing, reimbursement and access
Pricing and reimbursement pressure, including pricing transparency and access to healthcare Context and potential impact Our business has continuously experienced significant pressures on the pricing of our products and on our ability to obtain and maintain satisfactory rates of reimbursement for our products from governments, insurers and other payers. These pressures have many sources, including: growth of healthcare costs as a percentage of gross domestic product; funding restrictions and policy changes; and public controversies, political debate, investigations, and legal proceedings regarding pharmaceutical pricing. Pressures on pricing may negatively impact both our product pricing and the availability of our products. In addition, we face numerous cost-containment measures imposed by governments and other payers. These include: government-imposed, industrywide price reductions; mandatory pricing systems; reference pricing systems; payers limiting access to treatments based on cost-benefit analyses; the importation of drugs from lower-cost countries to higher-cost countries; the shifting of the payment burden to patients through higher co-payments and co-pay accumulator programs; the limiting of physicians' ability to choose among competing medicines; the mandatory substitution of generic drugs for the patented equivalent; pressure on physicians to reduce the prescribing of patented prescription medicines; increasing pressure on intellectual property protections; and growing requirements for increased transparency on pricing. For example, in May 2025, the US administration issued an executive order aiming to implement "most-favored-nation" pricing tying US prescription drug prices with prices in selected comparably developed nations. In July 2025, the administration sent letters to several pharmaceutical manufacturers, including Novartis, that, among other things, sought commitments from manufacturers to match US prices to the lowest price offered in certain other developed nations. In December 2025, we announced a voluntary agreement with the US administration that includes, among other things, a commitment to launching future medicines with comparable prices across high-income countries, applying to participate in the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model, and building direct-to-patient platforms for certain of our medicines. These measures and any further developments concerning government imposed pricing pressures could negatively impact access to our products by providers and patients, and depress the price ultimately paid to us for our products, which could have a material adverse impact on our business. For more information on price controls, see "Item 4. Information on the Company-Item 4.B Business overview-Price controls." Macroeconomic and geopolitical trends will continue to have an impact on these pricing and reimbursement pressures. Slow economic growth and the onset and expansion of war in certain parts of the world (which has contributed to challenges such as high energy costs and inflation) have led to increased strain on fiscal budgets in many major economies. In addition, legislative developments such as those in the US (e.g., the Inflation Reduction Act (IRA)) and in Europe (e.g., the EU Joint Health Technology Assessment and 2023 EU Pharmaceutical Legislation Update) have imposed further pressures on pricing and timelines for reimbursement in these countries as legislators seek to reduce growth in healthcare spending. These external factors may materially affect our ability to protect prices to achieve and maintain an acceptable return on our investments in the research and development of our products; and may impact our ability to research and develop new products. For example, in August 2024, we acceded to a "maximum fair price" under the US IRA for our cardiovascular drug Entresto for 2026 to avoid fines or the removal of all our products from both Medicare and Medicaid. Additionally, the Centers for Medicare and Medicaid Services (CMS) selected Cosentyx, Kisqali, and Xolair as part of the Medicare Drug Price Negotiation Program for 2028. Other products of ours may be selected for the Medicare Drug Price Negotiation Program or other price negotiation programs in the US or other jurisdictions in the future.
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