5. These are troubled times.....
€90bn Irish bailout ends in tunnoil.
Now Europe fears crisis will spread
~. theguardian
Warning thatVI< 'may never
recover' ifGreece exits euro -.:
•
•••
•,
..
(l
. ,;I .
•:lA I
~ /1. "'t
. :;o.a,,' -l
Greek austerity plans not ready, say
eurozone ministers Recession causes
doubts over Italy's
deficit cut plans
1
....,
-EurOlone mlnls1.rs tUlve ~st doubt on
Gr••ce'. lIbility to push through
austerity menure. n••ded to relene a
130bn .uro (S170bn: [110bn) bailout.
AI it mtebng 01 finance 11lOlS1ers In BrusselS
Germany's WOlfoang SCnaeuDle saI<I a plan
agree<! Dy Gret<e'S fragile (oa~uon aner
days Of lalkS was -not at a Sl39t wMre It can
De slgned orr
The EU and IMF demaOde<l stoogent cuts In Gemlan FllIance Mlnls'« WoIfgq SChHII~
return IQ( the baIloUt mooey Ntgoc.IIII.ontlllYefll tome'lf tnOUgtI'
6. These are troubled times.....
•
.----- MOOCO
u.<--
•
GERMAJff
FIWKE~" :t
ITAlY ~
CH'"
.-.--w'"
,-_ _ SOOTH
""'"
• SnlllN RECESSION
(two ormenquartenofnegative
~ lnck.u:fng themost rt<leflt quarter)
EMERGEO fROM RECESSION
(two lJIIrteI'S (:If negativewowth
but most recent quarter was pos/tllOe)
• OCDGEO RECESSION (..., "'"....
Of morequarttrSofnegative ~
B1lA2ll
,-J---ARGENTlNA
'Ill-SOUTMAFRlCA
•
8. ·....and pharma ;s not ';mmune~
Fewer New Drugs Gain Approval
Pharmaceutteal companies have spent more on research ana
development over time. but have discovered fewer novel drugs good
enough to gain EO.A. approval.
PHARMAC£unCAL R&O
EXPENOITJRES
$ 70 "'Iben
NEW DRUGS
APPROVED·
60
'95 '00 '10'OS'00
20
o
'95
10
40
30
50
'09'OS
I i ,
PhrMa
...........iiie'fiitJe;fS· .
1""",1
10
o
60
50
40
30
20
• Does not Include biologies, "'Pharrnaceu!tcal Research and Manufacturers
of Amcnca. or PhRMa, Includes most or the maJOr U.$. pharmaccutlcal
research and biotechnology companies.
Souroes: Food .-ld Drug Admlnl51ratlon;
Phal'fNCeUtal R~rch aM t·l.Nlut'ectorp.1"l cA Amenca
9. .....and pharma is not 'immune~
$40
$50
$43.0
$311.11 $39.4
New Drug
Approv.1s (NHE.)
PhRHA Hom....r
RaD Spe.nding
-53
60
50
-~ 39
-z: 40 ,"9.8
c
.2z 3 30 -- -$26.0 .-.. so
- 26 ~8 30,. 30 $2.2.7 ....>
-0 25 $19.0 $21.0
~- 24.. 22 $16.9.. 21 $20 et
c $15.2 18 .." 20 $12.7 $"1:3.4 17 ~,
E~ $11.5 ~
~
..0 ~
~
..,. 10
$JO
z
o $0
1992 1993 1994 1995 J996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
SOUl( :B.,,,II 8[ Con'POny: US ~ood and 0'''9 A""'-lIaUon
10. Drug Development is a Costly Business
The cost of producing a successful marketable product
was approximately €980 million in 2006
• Figure includes both the cost of the successful candidate
and those of the failures.
• Failures represented over 70% of the total cost in 1995.
• Only 34% of new drugs introduced between 1990 and
1994 registered revenues that exceeded the average
research and development cost (blockbusters).
• In 2003 it was estimated that in order to maintain a
healthy revenue growth rate of10%, the ten largest
pharmaceutical companies would need to launch about
three new compounds per year. Less than two launches
per company were actually achieved in 2000.
11. Drug Development is a Costly Business
Number of Compounds to Produce a New Drug
FDA Review
Phase 111
1,000-5,000 Volunteers
PhUt 11
100-500 Volunteers
5-10 Compounds
Phase I
20-100 Vo:unteers
Clinical Trials
250 Compounds
Preclinical
• 3-6 Years
• • 6-7Years
• +- 0.5 - 2 Years --+
Source: PhRMA and FN estimates
12. Drug Development is a Costly Business
Number of Compounds to Produce a New Drug
Phase la
Phase Ib Phase Ha
40-60 healthy
30-50 healthy 50 - 200
subjects patients
subjects
$300,000
$300,000 $750 ,000
6 months
6 months-l 9 months -2
year years
•6·1 Years
•
;p.==~~-----,I' 'l...
•
Clinical Trials
•
Preclinical
3·6Vears•
Source: PhRMA and FN estimates
13. Drug Development is Time-Consuming
Number of Compounds to Produce a New Drug
FDA Review
Phase 111
1,000-5,000 Volunteers
Phase 11
100-500 Volunteers
5-10 Compounds
Phase I
20-100 Vo:unteers
Clinical Trials
250 Compounds
Preclinical
• 3-6 Years
• • 6-7 Years
• +- O.5-2Yean --+
Source: PhRMA and FN estimates
10-'5 years from start to launch
14. Growing Regulatory Conservatism
- - •
"The Committee's decided to ban further research
until it can be proven your 'wheel' poses no
threat to the environment, societ or public health"
18. Technology Stagnation
• 2004: Waters introduces the first of its ultra-high performance
liquid chromatography instruments (Acquity UPLC®), capable of
withstanding the high pressures associated sub-2 flm particle
column technology.
• 2006: Waters launches Acquity UPLC® H-Class for researchers
"who have been attracted by the promise of UPLC but remain
reluctant to change largely because of their comfort levels with
existing HPLC systems and techniques" (Rohit Kanna, Waters
VP ofworldwide marketing).
• 2012: Legacy methods are still running under HPLC quaternary
methodology. Companies try to obtain advantages of sub-2 flm
particle columns on regular HPLC instruments, or change to
core-shell columns, but few, if any, migrate to ultra-high
performance liquid chromatography.
19. Just to put things in perspective...
-_.. _... -
-- -- ----_.. -...-_..- ---_... ------
------ ----
•
- -------- -----~-- _-..-
---
----_._-
20. Consequences of Technology Stagnation
• Production and quality control are not state-of-the
art compared to other industries.
• Products are of good quality, but this comes at
great effort and cost compared to other industries.
• High manufacturing costs are compounded by the
use of technologies that are inefficient by modern
standards.
• Technology stagnation in manufacturing and
analysis acts as a bottleneck in the development of
investigational medicinal products, particularly
biotechnological products.
21. Drug Development is Time-Consuming
Number of Compounds to Produce a New Drug
FDA Review
Phase 111
1,000-5,000 Volunteers
Phase 11
100-500 Volunteers
5-10 Compounds
Phase I
20-100 Vo:unteers
Clinical Trials
250 Compounds
Preclinical
• 3-6 Years
• • 6-7 Years
• +- O.5-2Yean --+
Source: PhRMA and FN estimates
10-'5 years from start to launch
23. o~
'D[]J@
Drug Development: A Race Against Time
Annual Sales Volume in the EU
becoming availablefor competition
2,268
2,115
1,024 1,018
2,059
°
2,000 1,1'74
1,000
€ million 2,On
2004 2005 2006 2007 2008 2009 2010
24. Drug Development: A Race Against Time
Developed Markets Generic Share
11.9% .
~Canada
olulV
24.2%
15.3%
16.2%
5.0% : 8-9%
13-14%
21-22%
21-22%
27-28%
.2010 Generic Share
.2015 Share Increase
'.'~
5 Kore.
.
31.7% I 34-35%
12.8% 15-16%
.:l::.
W
u,
- . '
21.3% : •. 27-28%
13.4% 21-22%
SourcE': IMS Market Prognoiis. Apr 2011
25. Drug Development: A Race Against Time
"
.2010 Gel'!.'rk Sl'are
2015 Sh~re I"crea~e
27-28
8-9%
""=;-J13-14%
,~.
........
lo...
P"",."
SOLUTION.~-
::CoUlpanie's offer a mixed portfolio ofnt;~
.- .
".",," '::),ne:dici'hes"and generio m=-=ec1icines;22
PI.... E_ p~ Ell '''' 21-22%
.........c
RIop«d.1
HOWEVER2,268 34-35%
€. The' gene'rics market is a differenlngl1 game.2,000 1,774 .. ~
•
•
,
..
..
-~ .
~ l~
ID 12-
~
i 10
•~ .-
MiWY originatotOcompanies do not possess the e~perience
and/or know-how to play in the generic space, and must
a,cquire or form joint ventures with existing players.
2004 2005 2006 2007 2008 2009 2010
26. Is Europe prepared to pay?
In Europe, generics make up almost one halfofvolume
sales, but merely a fraction ofvalue sales
100%
90%
79%
70% 70%
g Volume - generic market shareIIValue - generic market share
57% 60%
50% 52% 53% 53%
48%
37% 38% 42% 4
1
3% 4
1
3% 43% 4~% 4~
32% 33% 34% iiI f"
7% 28% i IiI I 28% I 28% 28% 30%
11 I!§ 18% 18% 17%
16% 13% 13% 13% 13% 16%20%
0%
30%
60%
70%
40%
50%
80%
10%
27. Is Europe prepared to pay?
The European Union constantly considers cost-
containment policies in public pharmaceutical
spending.
• External reference pricing as a tool to control
prices and set a parameter of expenditures.
• Rebates, clawback and payback policies.
• Internal reference pricing.
The inclusion of the most recent medicinal
products in reimbursement lists or government
formularies is sometimes inexplicably delayed.
28. Is Europe prepared to pay?
"Europe has unfortunately slipped in terms
ofits willingness to payfor innovation. ...
We're now at a point where we have to take
the view and I thinkface the reality that
really it's about the us. and, excitingly
anew, it's aboutJapan in terms ofwhere
innovation should be driven."
(Sir Andrew Witty, CEO GlaxoSmithKline)
29. Where have we heard this before?
R&D INVESTMENT
Pharmaceutical R&D Expenditure
NME LAUNCHES
New Molecular Entities (NMEs)
by Region of First Launch
0+--.-.--,...,--,-.---.---.-.-..,
9293949596979899000102
- -----
- ••
/-
Europe
U.5.
$30
III
Z 20
o
-......-III
'"
us
CAGR
92-02
11%
8%
100%
80
60
40
20
o
203
1993-1997
170
1998-2002
30. It's not quite deja vu.
Enter the Pharmaemerging Markets
Spending by Geography
$l,175-1,20SBn
2006
Soulte: IMS Hafht Progrosis., H,y 2012
2011
• United States
• EU5
• Japan
• Pharmerglng
• Canada
• Rest of Europe
• South Korea
• Rest of Wond
31. It's not quite deja vu.
Enter the Pharmaemerging Markets
RANk 2006 INDEX RANK 2011 INDEX RANk 2016 INDEX
1 United States 100 1 United States 100 1 United States 100
2 Japan 35 2 Japan 36 2 A China 3'
3 A France 13 3 A China 21 3 V Japan 36
4 V Gennany 13 4 Germany 14 4 A Brazil 15
5 .6. China , 5 V France 12 5 V Germany 13
6 V Italy 8 6 .6. Brazil , 6 V France 11
7 A Spain 6 7 V Italy , 7 Italy 8
8 V UK 6 8 V Spain 7 8 A India 7
, V Canada 6 , Canada 7 , A Russia 7
10 Brazil 5 10 V UK 7 10 V Canada 6
11 Australia 3 11 A Russia 5 11 V UK 6
12 Mexico 3 12 V Australia 4 12 V Spain 5
13 South Korea 3 13 A India 4 13 V Australia 4
14 Russia 3 14 V South Korea 4 14 A Argentina 4
15 V India 2 15 V Mexico 3 15 V South Korea 4
16 A Turkey 2 16 Turkey 3 16 V Mexico 3
17 V Netherlands 2 17 A Poland 2 17 A Venezuela 3
18 V Belgium 2 18 A Venezuela 2 18 V Turkey 3
19 A Greece 2 19 V Netherlands 2 19 A Indonesia 2
20 V Poland 2 20 V Belgium 2 20 V Poland 2
...... Change in ranking over prior 5 years
Appendix notu
R~nking in all years based on spending in constant US! at 04 2011 ellthange riltes.
Source: IMS Market Prognosis. May 2012 Index in each ~ar based on rat;o of country spending to U.S. spending (in constant USl) in the y~ar.
32. Outsourc;ng ;5 not new
CHIHI
Is bKOmllIll • key ptodllCHt'ttlop-
IlItIlI (till"!of Gtntrll £ltclrk, Inttt.
Pllifips,. Nicrosoft. _ ot/wf tlldruniu
qIInts. Strfftqths; .ft IIIrdWIlt dI1lQn
,nd tllIbtddfd soft'Hre. CII cteters
fOf ...__ South r.orN lA! ~
in CNStJI Cities..
PlIUP~K£S
Mort thM a.ooofor.. C 'p'M15
sourtt -" 11_etfflnt nPlrU
WIUI fibt~lic Unb. StttnqUIs ..
dadt Iluqt SlIPPY of Enohh-spH~
col.tducltfd KtoIIIIIMtS, soft·
••t wriltrs,lrtllltKtS. 1,ltmllttl'
m,,1Id QI'.phic artists..
MUICO
8e<om!IlQ. f.YOI'it. rT IIld t.ttflnq
outsourtift9 hmnlor Us. compilits
tf'IIt ...1to keep - ' dM' to Ilomt.
As CM Ind tlKtronlts COlDpiMs 110ft
lIIiICM:twiIQ 0'l'H tbt botdfi. tMy It.
baostln9 dtGlincl for ~
OtAP trIKMI «ISts .1Id tcb:.It"
wortfOfCt IUkt s'n JoH .ltril'IllQ
spot tor ell cHtrn fM1ttillQ SpillisIt-
sptlklaq consumtrs In lilt U.S.•1lII
[lI'opt.
AWORLD
~r OF
OUTSOURCING
SOUTH AfRICA
Wtll-.duc.led spNktn of french, [n-
41bll••nd Gfl'1M1l lrom,lI Mr ,lfrlui
suff QrOWia9 ell cIDllfl c:.ltrinq main-
ly 10 EurOJlHI COt'I'lfIInln. OHf9U!.tlon
.,...", oIltlKom cOlld spHd 6t'tt1oplnHt.
r- otlltf c.aII cfllttrS.rt 091.19"'.
Mawitius.
USTlRH [UROP!
IIdII.nd AIlltIUI rT senb ptoftdtn
.reoprflIn9 otnm Illllunq¥y. PoIud,
IIId t!lf ClKil RfIIlIbIic. to 11Jl.~1t
GtnMn lid ~....... wortfOftt
!or Eil"op4!llI cltllts.1OlUllIi W a..
~riI.rt Ql'owiJl9 IS IT .or~s lot
GtnMl'I multiNtiorwlls.
RUSSII
Some 100 local software servlce u'
pon.rs tflIP»v Ill to 10,000 ttlQiHfl'S
sptCilIlizinq In complex projKts.llotlnq
MOft.1. Motoroli. Illd lnttlllm slIIIII
ItU (utrn. Stil Ms ID tllOflllOU5 ...
I~d pool of -.,sttl"'s IIId dortoRtts
in K»rx:ts. IT. Md UIl.
, INOII
JT stmces. dlIp ~ uII ctnItrs,
IlllIIlI&sint'U ,*,-otfiu W'lIflIlrNdy
9fftfl'1tt $10bibIaflpom Md cNd
Ilit S57...by 2008.1rd1n prtMOtn
lu 1Itl, Iltosys,1Ad'I'trv-Hlt1111
9IobiI1t1llltrs.1lld us.IT StRict f.1IlS
1ft piI:IllQ 1ft.
33. Outsourcing is not new
SOIII. mICA
IHIII
S-1OO 1Dc.II.of~Sf,... et , •.
portm tIIlploy up to 1O,ooo"'Hffl
sllfdllll ~ In COI!1plt. projII(t1. '"1Il9
Jiklrtr Iilolllftlla. Ud ItItrlllnt 1IUtI
RHI cmln. StllllM .. fllOl'bIUS_
1'llPtd IlDOt of ..sttl"s II'ld doctorltft
,n KItN:M. IT. MId IUtII.
EJS1lIII EIIIIIl
'IIfI f'ducItlld ~ 01 FflllCll. Ea-
,au. lad GfnIoIII ".III OWl' AIm
sutl'''....1lIlI c.- cllltftJ utrr 119"
I,to £JIfllOHll to"'P"n. ......l1on
of ttIKClI'll cOllId '"" elf t'tlollmtnl
0tW UQtm II'f OA : , Ill_
......
.....w~nwr "prof."art OClItlb19 ol'!ns IlllbJl9lry. PolIad.
.nd tilt Cltdl..,..SOtilt et.e1Mt
~ _ £tl9lilH(>NklllllJ foru
Iof £sroptM citm. ...
....."",_"IS""kS_rot,....-. Gtmin IIIIlItIMtlcNlt.
t!..1Jut this is differe
AWORLD
OF
OUTSOURCING
!«o1Dlllq' f.yo!1tt IT Ind .ftQiattflllll
ouIiOU1"Ol1CJ 1IIwa!of us. ~
tIlIt ....1to kHf -.on ellst to /lolllf.
As CIf IIld tlf(ll'OQks cocrp.u 110....
NIlU1tclllFWl O'l'tf lhI botdtr. tlWy ...
boost 119 6tNnd tor "9'IlHrs..
COSIIIKI
Cht.p trltcOlll costs.nd tdutllfll
wortfotu IIlIU Sfn)oll • t/lrMItj
spot for ull crntM Itrqdl/lq S~sll
SpUI'II9 alIlSumtrs In tIW U,$. aM
Ewopt.
IT ~ICM, cbill dt5iq11, ull Ctlll,rs.
IIld tMlM$S blck-otric. wrd alrN:Iy
Otllll'litf $10 bIlbIlI ,.portsIfIdau:I
flit $51 biIlDJI by 2008. WdIn (ll'CIYiCItB
'r TN,lnfosys. iftCIWiPfO ....." art
910llaJ lears. and US. IT MMC,!irms
Ir, PIIInq ilL
34. Outsourcing is not new
SOUIH IflICA
S-1OO lDc.II.ofhroan sttYIct , •.
portfn tmploy up to 10,000 fG9I~
sllfdlllllllJ In QNll9lrx ...ojKl:s. blllq
)lGrtf Motllftlla, lid IIlt,1 Un SUI
RiD (film. Stilll.llM 'llOflDClUS"
tCllltd PIliof ..sttl"s II'ld doctorllft
'n KItf'C:n. IT. MId IUtII.
lUll
USlllll [1JIIIl
.....W A.'lItI1c:iD rT wr .,prof.n
.. OIlItlb19 ol'!ns Illlblolry. PoIIad.
"Id tilt Cltdla.p.tllitlo tilt et.e1Mt
~ _ ~ k ..fortt
for lsroptM tints. ............
0Il'I "" , ...1.., itS " WOfblilOO:1 for
Gtmin IIIIlItIMtlcNls.
Wlhducltlld ~ of fflllCll, [a-
flU, lad GfnIoIII ".III OWl' A'/b
sutl'''....1lIlI aI ctIItftJ Yl:.II119"
., 10 brooNn ~ Dtfll~.lJDft
of ftlKCItI COlIllI sptH cif tllop'1'ofnt.
Otatr aGlm ft Oii : , lIP •
.-
t!..1Jut this is differe
AWORLD
OF
OUTSOURCING
CHIM
Men tu. "000 forfl9ll toMNMS
~ -*lIl_lMfIftll n PI'"
IriUI fibtNlpllC 1. SlmllItfI$"
cllldr .... JIIIIlCIIy If ~ fit.
ul .. tdCittd _Cl I_I, 10ft.
.", 'lIIfflm. .I'tbitKll.l ht·
'rl, ... qr.p/lIC Irtists.
S«0IllIq' f.-..o!1tt nMd ,tQiattfUlll
OllIsourtlllCJ ",,"!'of us. (:OlII£IIIIH
UIIt ....1to ""' 1IPOrt dDS' 10 1lorM.
As tit IIld tlf(troQks collp.n 110....
NIlUIICIIIFlIl9 CMf lM bOtdtr. tlWy ...
boost IllJ 6tNnd for tnqIllHrs..
IS bKomrtICI. Uy (IJtldIct *__
IIlU! tM:tl' tor GtwII OKltIt, IIItrl.
PIlitips.. McrosafL _lIttIIfNI;1...cs
.lIb.SU'tftlIIM Il'. ""dwlft ....
.aIId ICllIlirddtd 1On..",_ e-cnltrs
fer ....1Id 50uUI ~ .rt.,.130
III cNStJII atJft.
::m
COSIIIKI
Cht.p trltcOll toSb.nd tdutllH
wortfotet IIlIU Sill Josf • tllrMIItj
spot for nil c,nl«1 IIfqfl'Aq S~sll
spu~ 119 COIlSUlMl1ln tilt U,$.....
Ewopt.
Made inAsia
'1 ~ICM, cbill ~ ull Ctlll,rs.
IIld tMlM$S b1ck-offic. wrd alrN:Iy
Of._$10 lIIlkrIlI,.portsIfIdau:I
llit $51 biIlDJI b~ 2008.lrdIn prtIYidtrs
•• t.tI,lnfosys,IlldWVO .....,.rt910ClaJ "ldtrs. and US. IT MMt", firms
Ir, plIInQ In..
35. Outsourcing is not new
SOUIH IflICA
S-1OO lDc.II.ofhoarl sttYIct , •.
portfn tmploy up to 10,000 fG9I~
sllfdlllllllJ In CM9ltJ ...ojKl:s. blllq
Iklrt' Motllftlla,lIld Iatel Un SUI
RiD cflltn. S MiM 'llOfblUS"
l'llPtd IlDOt of ..sttl"s II'Id doctorllft
'n KltN:n. IT. MId /UtI.
Inll
USlllll [1JIIIl
......and A.'lItI1c:iD rT wr .,prof.n
.. OIlItlb19 ol'!ns Illlblolry. PoIIad.
"Id tilt Cltdla.p.tllitlo tilt et.e1Mt
GHNI_~k ·lfortt
for lsroptM tints. .............
0Il'I "" , ...1" itS " WOfblilOO:1 for
Gtmin IIIIlItIMtlcNls.
Wlhducltlld ~ of fflllCll, [a-
flU, lad GfnIoIII ".III OWl' A'/b
sutl'''....1lIlI aI ctIItftJ Yl:rllll9"
., to brooNn ~ Dtfll~.lJDft
of ftlKCIl'I COlIllI sptH cif tllop'1'ofnt.
Otatr aGlm ft Oii : , lIP •
.-
t!.1Jut this is differe
AWORLD
OF
OUTSOURCING
CHIM
Men tu. "000 tortllJlll toMNMS
~ -*111_ *ffIft1l n PI'"
IriUI fibtNlpllC 1. SlmllItfI$"
cllldr .... JIIIIlCIIy If ~ fit,.
ul .. tdCittd _Cl I_I, 10ft.
••, writ'1', .I'tbitKll.l itt·
ttl, 'lid or"Irtists.
1«OIIllI4. f.-..o!1tt nMd ,tQiatttlllll
owIiOU1'til1C1 ",,"!'of us. (:OlII£IIIIH
UlIt ""'I to kHf 1IPOrt dDS' to Ilomt
As tit IIld tlf(troQks collp.n 110....
NIlUIICIIIFlIl9 CMf lM bOtdtr. tlWy In
boost IllJ 6tNnd for tnqIllHrs..
IS bKomrtICI. Uy (IJtldIct *__
...1cMfl' I. GtwII OKltIt, IIItrl.
PIlllips. M;uosafL _lIttIIfNI;1...cs
0II/IlJ. SU'IftlIIM Il'. ""dwlft ....
.and rlIlDtdr:lrd 1On..",_ e-cnltrs
fer ....1Id 50uUI ~ .rt.,.130
1II c~ crtlft,
::m
COSIIIKI
Cht.p trltcOll toSb.Ad tdutllH
wortfotet IIlIU Sill Josf • tllrMIItj
spot for nil c,nt«'J IIfqfl'Aq S~sll
spu~ 119 COIlSUlMl1ln tilt U,$. aM
Ewopt.
Invented in Asia
IT ~1Cn, cblll lift, ~ uil (MI',I'$,
.lld tMlM$S b«k-offiClI'ITd alrNdy
OtIlll'Itf $10 bilbIWl,.portsIfldaM:!
flit $51 bt"1OI'I b~ 2008.lrdIn proyidtB
hkt lftI,lnfosys. MCIW~ ...MIr.rt
910ClaJ 1I1dtrs. and US. IT MfV'C' firm
Ir, plIlnq In..
36. Are emerging markets the solution?
( Global New Molecular Entities
Country Availability
Global Launches of New Molecular Entities
..... - - -.tlWlovatar• Orphan• fellowet'
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• Add1tIon~1 2006·2010 NME available In 2016
• 2006-2010 NME available In 2011
2005 2006 2007 2008 2009 2010 2011 IAverage
1Per Ye"r
12012 •
l~l~ _
37. Are emerging markets the solution?
rE t e
",oltor
to 2011 I Aver.
I Per Yeilr
12012 •
1
2016
Pharmerglng
• Additional 2006·2010 NME available In 2016
.2006-2010 NME available In 2011
Developed
Global New Molecular Entities
Country AvailabilityG b.
e w
>: SO%~
z<
"'..z
"'"-"" ~ 70%
~ "'.. ..5
"'.. :5 60%
-
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AdehU
• 2006-
SoY'''': IMS IMtltuto for KNItha,. In
Sourm: IMS Instituto for HNlthcalll Inbtn/ltic May 2012
38. Are emerging markets the solution?
GLobaL Launches of New MoLecuLar Entities
no 2011! Average
I Per Yeilr
12012 •
1
2016
rE t e
OVdtor
.- - --looovator• Orphan• Follower
2005 2006 2007 2008 2009 2010 2011 1Average
I Per Year 1
12012 - 1
l2016 _I
15
10
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o
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~ 20
w
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Source: INS Instituto for HoaLthcart lnblNtics. May 2012
39. So let~s access emerging markets
This is not as straightforward as it seems.
• Diverse healthcare systems
• Fragmented markets
• Complex regulatory systems
• Cultural and language barriers
• Increased competition (local and global)
• Varied infrastructure
• Highly dynamic situation
40. India: A case study
In 2005:
• Sector ranked 4th worldwide in volume
terms, 13th in value.
• Market worth €3.6 billion (1% of world
market in value, 8% in volume).
• Growth rate of 5.1%, projected to reach
€18.8 billion by 2010.
• Total exports around €2.25 billion, to over
65 countries.
41. India: A case study
Why this success?
Jugaad: Literally, an
arrangement or a
workaround, which has to
be used because of lack of
resources. Practically, a
creative idea, a quick,
alternate way of solving or
fixing problems.
42. India: A case study
Today:
• Plans to widen scope of price controls to
348 medicines from the current 74. "Most
countries follow some form ofprice control.
We need to ensure that expensive drugs are
available at affordable rates to the poor."
(D.S. Kalba, Secretary, Pharmaceutical Department)
43. India: A case study
Figure 2: The Wealth Pyramid across the emerging markets (adapted from Prahalad and
L1eberthal, 1998').
Purchasing power parity
In U.S. dollars
Population in millions
China India 8razil
hi Greater than $20,000 2 7 9
a lot
Have
$10,000 to $20,000 60 63 15
Have less
$5,000 to $1 0,000 330 125 27
Have not Less than $5,000 800 700 105
44. India: A case study
Today:
• Plans to widen scope of price controls to
348 medicines from the current 74. "Most
countries follow some form ofprice control.
We need to ensure that expensive drugs are
available at affordable rates to the poor."
(D.S. Kalba, Secretary, Pharmaceutical Department)
• Big Pharma is having a hard time
protecting the intellectual property of its
anticancer drugs.
45. India: A case study
"The danger ofpushing the prices
ofprescription drugs down, down,
down is that at some point the
business model of developing
these drugs will lose its
attractiveness. India is
becoming very reluctant to
respect IP for Western companies
and that is becoming a challenge
fi "or us.
(Marijn Dekkers, CEO Bayer)
46. Is the writing on the wall?
Ifit seems too good to be true,
It probably is.
47. Is the writing on the wall?
Romania
100%
Brazil
16Mn
Poland
Mexkoe·
Turke
South Africa •
Russia
Argentina. •
20% 40% 60% 80%
% OF POPULATION WITH 2016 INCOME >55,000
•k1stan
• Indonesia
loda
IOOMn
Vietnam
Volume Growth and Populations
With >$5,000/year Income by Country in 2016
80%
~ 70%~
,
N
'0%~
~
, SO%
~ 40%0
5 30%w,0 20%
"0
> 10%
#
0%
-10%
0%27.$
$9580
Tier 3
Ph"rmel'1lll"O
~
... 1,
4.'
$2780•
• Brand spending
3.3 7.1
$2980
S150 - 16SBn
519480
1.9 2.6
$4780
• Total spending
11.2 7.9
Pharmerging Spending and Growth
516180
2011
Spending
In 2016
Growth to
2016
SoUJal: IMS InstitutQ for HoNlthcare Inknnaticl" IMS M«1'lIIt Proonosi$, IUV 2012 Sourct: lnstitutll fof HoNlthcn lofol1lllltics. I"S ~(bt Prognosis,. May 2<112; ((onollist IrttlliQtOtll Urnt, Jan 2012
48. Is the writing on the wall?
Pharmerging Spending and Growth
Spending
In 2016 S161.n
r
Spending
In 2016 51618" $478" $29B" •$278n
Tier 3
Phannerglng
$9S8n
to
n y n 0 6
Jtn AtnGll •
•
Roman..
JSSIol •
Poland
MexICO••
_-,"'!!!r~
SO,*, 100%
>$5,000
nO
'Mo
$150 - 1658"
Growth to
2016
10.4
Growttl to
2016
10.4 1.. 2." 4." 7.7
$194Bn
2011
11.2 2011
eT""
Sourw: LIIS 11lSt1tI'- fof IiNlthCl'" In"" 11.2 7•• J.J 7.1 27.5
• Total spending • ","od spending
Source: JMS InstitutQ for ttwLthcarv lnformatics,. INS Hafkot Prognosis,. Hay 10lZ
49. Is the writing on the wall?
....,
16'"
South AfnGll •
•
RUSSia •
a. Romanta
ulot on
onyn06
Ol~ fcotlOPlSllnt....9"'IO' lImL Jln 2012
Poland
MexICO••
,----""''''''''--
BO,*, 100%
)ME :>$5,000
•
Romania
100%
BraZil
16Mn
South Africa •
Russia •
Argentina.
• Thailand
India
looMn
• Indonesia
20% 40% 60% 80%
% OF POPULATION WITH 2016 INCOME >55/000
Vietnam
•akist:an
Volume Growth and Populations
With >$5,OOO!year Income by Country in 2016
Poland
Mexico••
-10% +- "!.!u!!:.!!rk
0%
80%
'" 70%
-•N
60%
-:<l
:I: 50%
~ 40%0
"Cl 30%
w
:E
=> 20%....
0
> 10%
I-
0%
Spending
In 2016 $161.n
11.2
2011
10.4
Growth to
2016
•~"~"" , _••, ...'oh•• , I
Source: Institute for tWalthc:.w Infonnatics. IHS Milrblt Proonosis, May 2012; ECOllOlllst Intilij~ Unit,..lan 2012
50. Challenges in Emerging Markets
• Many companies struggle with regulatory standards in
different global regions; companies from certain regions
may work to higher standards than FDA or EU GMP.
• Pricing products is problematic. Different systems exist
and reference pricing lists change regularly. The wrong
decision in one market can backfire in an another region.
NICE-like systems are being established in emerging
markets.
• Products from certain countries are not easily registered in
other countries due to historical and cultural issues.
• Wealth Pyramid is unlikely to change and generates
different attitudes towards intellectual property protection:
counterfeiting activities follow pharma in emerging
markets.
51. Challenges in Emerging Markets
2016 Pharmaceutical Spend Per Capita
2005$ and Population
900
..III 800
::>
0
z 700
~
III
" 600
ii!0 500
~
~ 400
u
'" 300
~
;;J. 200::>
z
z
" 100
0
Developed Ph.-merglng
US. $892 Pop. 326Mn
Japan $644 Pop. 124Mn
Canada $420 Pop. 36Mn
EUS $375 Pop. 320Mn
i -
South Korea $323 Pop. SOHn
Rest of Europe $321 Pop. lOSMn
Brazil $180 Pop. 201Hn
Russia $179 Pop. 14QMn
China $121 Pop. l,349Mn
::---7-=:-::'--.,....,..,-:::-:-"'
Pharmerylng l1er 3 $96 Pop. i,OUMn
India $33 Pop. l,292Mn
POPULATION
50011:.: IKS Mol/ut Progf1OSl, ~...Jy 2012: EconolA;st ht.llig,nc. Unit. Join 2012
52. Falsified Medicinal Products
2008 2009 2010 2011
Number of cases 3,207 3>368 1,812 2,494
Number of articles 8,891,056 11,462,533 3,200,492 27,460,538
India UAE India China
(51.6%) (73-7%) (93.2%) (68.2%)
Provenance Top 3
Syria India China India
(36.4%) (22.6%) (4·7%) (28.2%)
UAE China Hong Kong Hong Kong
(8.7%) (l.4%) (04/0) (1.5%)
European Commission Taxation and Customs Union
53. Quality and safety are non-negotiable
• Manufacturer will remain responsible for ensuring
EU GMP compliance of the API manufacturers he
uses. Applicant for MA must confirm in writing
that manufacturer of finished product has verified
compliance with EU GMP ofAPI manufacturer
through audits.
• Finished product manufacturer must ensure that
APIs it uses have been manufactured in line with
EU GMP & distributed in line with EU GDP by
conducting audits.
• Onus is on Qualified Persons.
54. Quality and safety are non-negotiable
• Medicinal products to bear safety features enabling
whole distributors and persons authorised or
entitled to supply medicinal products to the public
to verify the authenticity of the medicinal product
and identify individual packs, as well as a device
allowing verification ofwhether the outer
packaging has been tampered with.
• Qualified Person has to ensure that the safety
features have been affixed on the packaging.
55. Changes in the industry: globalisation
• Local knowledge is the
key to working locally, but
how is this knowledge
integrated with the rest of
the corporation?
• Change agents whose
focus is emerging markets
are needed throughout
the organisation to
provide the missing link.
SCOTTISII IIIGIII~NI)S
--
NOHTIII;HN V'.;1"N"M
--Never underestimate Ihe importance of local knowledge.
---_..__....._-_._.....--"'...:.......-..._--_....._-_.-......-......._.",_..--_..._.._-...-....--_.._-_ _ 4. -- ... _
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57. Changes in the industry: biologicals
Biosimilar penetration in Europe embryonic;
potential in USA post 2014
For R&D based companies is going to be an established market play
0/0 share of global biosimilars
lSO,GOO
300,000
~ 250,000
..'"W lOO,OOO
~
'"'"1SO,000
100,000
so,ooo
o
Medica
...Stada
5%
2001 '008 '00' 2010
58. The industrial pharmacist of the future
Seven Skill Sets Necessary to Operate in the Pharmaceutical
Industry of the Future
1) Ability to Manage Decentralized Intellectual Capital Resources
2) Ability to Work in Joint Ventures and Across Divisions. Cultures and Countries
3) Ability to Integrate an Understanding of Intellectual Property Laws,
Scientific Expertise and Business Strategy
4) Ability to Spur Creativity While Managing Commercially
5) Knowledge and Insight on the Decision-Making Dynamics of Payers
6) Expertise in the Functioning and Decision-Making of Regulatory Agencies
7) Human Resource Skills to Help Transform Pharmaceutical Companies
59. The industrial pharmacist of the future
• A changing workplace:
• drug discovery in Europe with drug development
conducted in India and registration executed in Europe
or North America
• drug discovery occurring in China, developed in China,
commercialised in China and then registered and
commercialised in Europe
• drug discovery conducted in China, development
conducted in India and commercialised in Europe
• Basic Formulation Development for small
molecules will be outsourced to low cost countries
whereas large molecules will be developed in the
EU and USA.
60. «:European Industrial Pharmacists Group
• The main objective of ElPG is to promote and uphold
the importance and role of the industrial pharmacist
within the pharmaceutical industry.
• Promote the modern pharmaceutical industry to
observers and more importantly to young pharmacists
• Ensure that educational standards meet the needs of the
industrial pharmacist in the industry of 2020
• Provide mentoring and coaching to young pharmacists
who need career advice
61. ::: European Industrial Pharmacists Group
• However, the industrial pharmacist of the future needs
to evolve with the industry in which he/she operates.
• The industrial pharmacist of the future needs to think
differently.
• The industrial pharmacist of the future needs
Jugaad