Novartis

John Gapper

We have been presented this week with two visions for the future of innovation in the pharmaceuticals industry. One is encouraging, the other is not.

John Gapper

Novartis has done the right thing by scrapping its proposed payment of up to $78m to Daniel Vasella, its outgoing chairman, not to compete against the Swiss pharmaceuticals company. It raises questions not only about Swiss corporate governance but the entire principle of non-compete deals.

Mr Vasella was a dynamic and effective chief executive of Novartis but there is no obvious reason why he needs an extended non-compete agreement any more than another retiring chairman or corporate executive.