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  Novartis AG

  Lichtstrasse 35

  4056 Basel

  Switzerland

June 2, 2006

BY FACSIMILE AND COURIER

Mr. Jim B. Rosenberg

Senior Assistant Chief Accountant

US Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC  20548

Re:          Novartis AG

Form 20-F for Fiscal Year Ended December 31, 2005

Filed January 30, 2006

File No. 001-15024

Dear Mr. Rosenberg:

This is in response to your letter to me dated May 11, 2006 setting
forth comments regarding our filing, and seeking certain information. For ease
of reference, we set forth your comments below, followed by our responses.

General

SEC Comment 1:

We note from your corporate website that your eye-care unit, CIBA
Vision, provides marketing, distribution, and eye care professional support in
Iran and Syria. We note also that a September 7, 2005 press release issued by
the office of the New York City Comptroller indicates that you have business
ties to Sudan. Finally, we note a November 17, 2005, published report
indicating that you are helping North Korea rebuild its medical factories.

Iran, Sudan, Syria and North Korea are identified as state sponsors of
terrorism by the State Department and are subject to economic sanctions
administered by the Treasury Department’s Office of Foreign Assets Control
(OFAC) and export controls administered by the Commerce Department’s Bureau of
Industry and Security (BIS). Your Form 20-F does not contain any information
regarding your operations in or contacts with these countries. Please describe
to us in reasonable detail your current, historical and anticipated operations
in and contacts with each named country, whether through subsidiaries,
affiliates, or other direct or indirect arrangements. Discuss specifically the
extent to which you sell or distribute into these countries products other than
medicines, such as medical equipment or machinery, technology or services. Describe
the nature of the marketing, distribution, and professional support you provide
in Iran and Syria, and the nature of the facilities you intend to develop in
North Korea. Describe the extent to which your dealings have been with the
governments of

Iran, Sudan, Syria and North
Korea, or entities owned or controlled by their governments. Advise us whether,
to the best of your knowledge, understanding, and belief, any of the products
and services you provide, have provided or will provide to the governments of these
countries have military applications; whether any of those governments has
employed or will employ the products or services in any military application;
and if so, the nature of the military application(s) in which the products or
services have been or will be employed.

Novartis Response:

At Novartis, it is our mission to discover, develop and market
innovative medicines to cure diseases, to ease suffering, and to enhance the
quality of life of patients. This is not a mission that is motivated by or
sensitive to politics. In some instances the suffering may be located in
countries that may not espouse the same political ideals as are taken for
granted in the United States and other Western nations. We do not support
repressive regimes – it would be a violation of our Policies on Corporate
Citizenship and Compliance with Law to do so – but we do support access to
health care for all persons. We believe that this is a concept that is
generally accepted in the United States, and, indeed, most trade embargoes that
are motivated by politics or social consciousness generally contain exceptions
for goods intended to alleviate human suffering.

With this premise, we respond to your questions as follows. As the
questions relate to our Form 20-F filed on January 30, 2006, we respond with
respect to the three-year period covered by that filing, and make use of the
defined terms and accounting policies used in that filing. Our response here is
based on the information we have been able to derive to date.

In the three-year period to which our filing relates, we have not sold
any products to North Korea, directly or indirectly. We have, however, directly
or indirectly sold products to customers in Sudan, Iran and Syria, with the
following Divisions and Business Units having directly or indirectly sold
products to customers in the following countries:

  Sudan

  Iran

  Syria

  Pharmaceuticals

  Yes

  Yes

  Yes

  Sandoz

  Yes

  Yes

  Yes

  Consumer Health

  OTC

  Yes

  Yes

  Yes

  Animal Health

  No

  Yes

  Yes

  Medical Nutrition

  No

  No

  No

  Gerber

  No

  No

  No

  CIBA Vision

  No

  Yes

  Yes

We expect such sales to continue in 2006. We sell only healthcare
products in those countries, including medicines and medical devices of the
same types that we sell in other countries. See Form 20-F Item 4. Information
on the Company – 4.B Business Overview,

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for a description of our products. We do not sell medical or other
equipment, or machinery, technology or services in those countries.

Iran. Our
Pharmaceuticals Division maintains a small number of employees in Iran
responsible for sales. In addition, all of our Divisions and Business Units
which sell products to customers in Iran do so through local agents and/or
distributors. It is our understanding that some of those local agents and/or
distributors are owned by the Iranian government. With the exception of a small
amount of Pharmaceutical Division products purchased directly from us by the
Iranian Embassy in Bern, Switzerland, to the best of our knowledge, we do not
otherwise sell products to the Iranian government. Neither, to the best of our
knowledge, do we have any dealings with the Iranian military. To the best of
our knowledge, our products are not being put to military use.

In response to your specific question regarding CIBA Vision’s
activities with respect to Iran, CIBA Vision sells its products to customers in
Iran through a local distributor. CIBA Vision has no employees in Iran, and
conducts no marketing, distribution or eye care professional support activities
in that country. Any such activities which might be undertaken in that country
would be done by the local distributor.

Sudan. Our
Pharmaceuticals Division maintains a small number of employees in Sudan
responsible for sales. In addition, all of our Divisions and Business Units
which sell products to customers in Sudan do so through local agents and/or
distributors. It is our understanding that one of those local agents and/or
distributors is owned by the Sudanese government. To the best of our knowledge,
we do not sell products directly to the Sudanese government. Neither, to the
best of our knowledge, do we have any dealings with the Sudanese military. To
the best of our knowledge, our products are not being put to military use.

Syria. Our
Pharmaceuticals Division maintains a small number of employees in Syria
responsible for sales. In addition, all of our Divisions and Business Units
which sell products to customers in Syria do so through local agents and/or
distributors. To the best of our knowledge, none of those local agents and/or
distributors are owned by the Syrian government. To the best of our knowledge,
we do not sell products directly to the Syrian government. Neither, to the best
of our knowledge, do we have any dealings with the Syrian military. To the best
of our knowledge, our products are not being put to military use.

In response to your specific question regarding CIBA Vision’s
activities with respect to Syria, CIBA Vision sells its products to customers
in Syria through a local distributor. CIBA Vision has no employees in Syria,
and conducts no marketing, distribution or eye care professional support
activities that country. Any such activities which might be undertaken in that
country would be done by the local distributor.

North Korea. We have
not sold any products to North Korea. We do not expect to sell any products to North
Korea during 2006. However, during 2005 and to date in 2006, as

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humanitarian support under our
Corporate Citizenship program, we have donated approximately $1.25 million
worth of products to North Korea. The donated products included antibiotics,
OTC cold medicines and baby food.

In addition, as further humanitarian aid, Novartis technicians have
inspected North Korean pharmaceutical production facilities, and have provided
training to North Korean pharmaceutical production technicians with respect to
the manufacturing of medicines. The purpose of these inspections and training
is to assist North Korea in their efforts to rebuild their pharmaceutical
production facilities.

In order to organize this humanitarian aid, we have had contact with
representatives of North Korea’s government. To the best of our knowledge, we
have not had any dealings with the North Korean military. Neither, to the best
of our knowledge, are our products being put to military use.

SEC Comment 2:

Please discuss the materiality of the operations or other contacts
described in response to the foregoing comment, and whether those operations or
contacts, individually or in the aggregate, constitute a material investment
risk for your security holders. You should address materiality in quantitative
terms for each country, including the dollar amounts of any associated assets
and liabilities, and the dollar amount of revenues derived from business
activities in or contacts with each country. Please also address materiality in
terms of qualitative factors that a reasonable investor would deem important in
making an investment decision, including the potential impact of your corporate
activities upon your reputation and share value. In this regard, we note, for
example, that Arizona and Louisiana have adopted legislation requiring their
state retirement systems to prepare reports regarding state pension fund assets
invested in, and/or permitting divestment of state pension fund assets from,
companies that conduct business with countries identified as state sponsors of
terrorism. Illinois, New Jersey, and Oregon have adopted, and other states are
considering, legislation prohibiting the investment of certain state assets in,
and/or requiring the divestment of certain state assets from, companies that
conduct business with Sudan. Brown University, Harvard University, Stanford
University, the University of California and other educational institutions
have adopted policies prohibiting investment in, and/or requiring divestment
from, companies that conduct business with Sudan. Your materiality analysis
should address the potential impact of the investor sentiment evidenced by
these actions directed toward companies operating in Iran, Sudan, Syria and
North Korea.

Novartis Response:

In our view, our activities in these countries are not material by any
standard.

From a quantitative point of view, we do not believe that our dealings
with these countries are material because our revenues derived from these
countries are quite small. In

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2005, our combined revenues
from the three countries (there were no sales to North Korea) amounted to less
than 0.4% of our total Net Sales for that year.

The following are our unaudited total sales in the three countries (in
thousands of dollars):

  Sudan

  Iran

  Syria

  Total

  2003

  $

  2,274

  $

  79,898

  $

  14,070

  $

  96,242

  2004

  $

  4,471

  $

  74,208

  $

  15,094

  $

  93,773

  2005

  $

  4,155

  $

  81,119

  $

  19,257

  $

  104,531

For comparison purposes, our Net Sales were $32.2 billion in 2005;
$28.2 billion in 2004 and $24.8 billion in 2003. We do not have any significant
assets or liabilities in Sudan, Iran, Syria or North Korea.

From a qualitative point of view, we do not believe that our dealings
with these countries are material because the various divestment statutes and
policies referred to in your comments generally provide exceptions for
companies, such as ours, which sell “humanitarian” goods, such as our medicines
and other healthcare products, or otherwise expressly or impliedly permit
decision makers discretion to take such factors into account when making
investment decisions. As a result, we believe that few, if any, of these
statutes or policies would require a pension or other fund to divest itself of
Novartis shares. To the extent that we have received inquiries in this regard
from any state or other entity we have responded to them, and explained to them
the humanitarian nature of the goods that we sell. Currently, we are in
communication with one state on this subject.

In addition, we believe that the same exception for humanitarian goods
generally fits with investor sentiment. As a provider of lifesaving medicines,
it would be unconscionable of us to deny our medicines to patients because we
dislike the governments they live under, and we believe that reasonable
investors would not expect us to do so.

For these reasons, we believe that reasonable investors would fully
expect that we would sell our products to countries such as Sudan, Iran and
Syria, and that we would donate products and provide limited training to
countries such as North Korea, which could not otherwise afford to purchase our
products. We further believe that, for these same reasons, our dealings with
these countries are not material to investors in Novartis AG shares.

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Item 18. Financial Statements

Notes to the Novartis Group Consolidated Financial Statements

2. Business combinations and other significant transactions

Acquisitions 2005, page F-17

SEC Comment 3:

Paragraph 70 requires you to disclose the profit or loss for the period
as though the acquisition date for all acquisitions had been as of the
beginning of the period unless it is impracticable to do so. It is not clear to
us why differences in accounting policies for the businesses acquired cannot be
quantified to determine the information required by paragraph 70. Please tell
us why it is impracticable, as opposed to “impractical” as stated in your
disclosure, to provide this information for the 2005 acquisitions of the Sandoz
and Consumer Health Divisions.

Novartis Response:

Based on the post-acquisition operating results discussed below, we
believe that had we determined a pro forma 2005 profit measure it would not
have been material for the Novartis Group. This conclusion is based on the
additional information in Note 2 to our Consolidated Financial Statements which
discloses that our post-acquisition operating results of all our 2005
acquisitions was an operating loss of $16 million. Our 20-F at Item 5.
Operating and Financial Review and Prospects, on page 101 provides further
details of this amount split into the impact on the operating results of our
Sandoz and Consumer Health Divisional results.

In further response, we used the term “impractical” as a synonym to “impracticable”
but we shall use the IFRS 3 term “impracticable” in this context in the future.

The impracticability related to financial information for Hexal, which was
our largest acquisition in 2005. Hexal represented 60% of the $8.8 billion of
total purchase consideration we paid for acquisitions in 2005, and about 75% of
our disclosed 2005 pro forma sales of $2.7 billion relating to our
acquisitions. Hexal’s major activities are in Germany; however, it also
includes activities in 40 other countries including a number of non-western
European countries, such as Turkey, Poland, Brazil, China and Indonesia.

Although Novartis disclosed pro forma 2005 sales of the acquired
businesses, rounded to the nearest $0.1 billion, achieving an acceptable pro
forma 2005 profit measure was considered to be impracticable without
unreasonable cost compared to the benefits of the incremental additional
information given the means employed or at our command due to the fact that
Hexal was a family-owned non-quoted organization with the following
characteristics:

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1.     Hexal
was headquartered in Ger