1. October 7th, 2011 PwC Health Industries Advisory Draft Ohio State – 4th Annual Personalized Health Care National Conference Gerry McDougall Partner, U.S. Personalized Medicine & Health Sciences Leader Private and Confidential

2. PwC and our Personalized Medicine Practice – Established in July 1998 with the merger of Price Waterhouse and Coopers & Lybrand, PwC is the world’s largest professional services firm. Globally, PwC’s revenue is over 30 billion dollars, of which close to 10 billion is consultancy. PwC provides a full range of business services, which include audit, accounting and tax advice; management, health care, information technology and human resource consulting; and financial advisory services including mergers & acquisitions and project finance. PricewaterhouseCoopers (PwC) is a global firm that draws upon the talents of more than 165,000 people in 150 countries. 6/7/2011 2 PricewaterhouseCoopers LLP

3. PwC and our Personalized Medicine Practice – PwC's Healthcare Strategy is predicated on our ability to understand and help clients respond to key trends and to serve all sectors on the healthcare continuum 10/7/2011 3 PricewaterhouseCoopers LLP

4. PwC and our Personalized Medicine Practice – PwC’s Definition: A holistic, individualized model of care that examines each individual’s unique makeup and designs appropriate strategies for maintaining wellness and treating illness. “The application of genomic and molecular data to better target the delivery of healthcare, facilitate the discovery and clinical testing of new products, and help determines a person’s predisposition to a particular disease or condition” (Senate bill sponsored by Senator Obama, 2007) “A form of medicine that uses information about a person’s genes, proteins, and environment to prevent, diagnose, and treat disease” (US National Cancer Institute) Personalized Medicine has many different definitions, and is broader than just molecular genomics PricewaterhouseCoopers LLP “The right treatment for the right person at the right time” 10/7/2011 4

6. Key PwC efforts included:

7. Feasibility study and assessment

8. Affiliation agreements with academic and clinical partners

9. Business and financial planning

10. Strategic, operational, facilities planning

11. Overall operational implementation

12. Board development PwC has been and continues to be involved in many TGen initiatives - TGen: Translational Genomics Research Institute: Development of a Research Institute, creation of a partnership 10/7/2011 5 PricewaterhouseCoopers LLP

14. Luxembourg will complement what has been done in Europe by focusing initially on molecular diagnostics, and becoming a center of excellence around molecular diagnostics, in order to enable the early detection of diseases. Their aim is to not compete in established areas already, but to create a niche where they can take advantage of their geographic location.

15. PwC goal with Luxembourg was to deliver knowledge transfer over the next three to five years, so that Luxembourg has the world-class sophistication to do the research — proteomics and systems biology. PwC helped facilitate the training of Luxembourg scientists in the US and then re-establish themselves back in Luxembourg once the infrastructure is in place.

16. Luxembourg aimed to develop its center of excellence’ for bioscience by establishing a trans-Atlantic series of collaborations with three US-based institutions: The Partnership for Personalized Medicine, the Institute for Systems Biology, and TGen.

17. PwC was the initial facilitator of these partnerships which drove over $250M into these US research organizations, and developed the plans for each of the new ventures. 10/7/2011 6 PricewaterhouseCoopers LLP

19. Conducted over 200 in-depth interviews globally (55 in the US) of top executives in government, hospital systems, insurance companies, physician groups, pharma and life science companies and technology firms in 25+ countries.

20. Surveyed 3,500 consumers (500 per country) in over 20+ countries including the UK, Germany, the Netherlands, Norway, the US, Canada, and Australia.HealthCast report: The Customization of Diagnosis, Care and Cure Through International Project Work and Global Research, we have Developed a Deep Knowledge Base Regarding International InitiativesOne example – the development of our HealthCast 2010 report: PricewaterhouseCoopers LLP 10/7/2011 7

21. The Personalized Medicine Market – 2008 Total Market: $210-215bn 2015 Total Market: $344-452bn Nutrition & Wellness Total: $185bn Complementary & Alternative Medicine:$35bn Health Clubs & Spa:$35bn Nutrition & Wellness Total: $292bn CAGR ’08-’15 Complementary & Alternative Medicine:$41bn Health Clubs & Spa:$61bn Nutrition/ Organic care:$112bn Medical Retail: $3bn Personalized Medical Care Total: $4-9bn RPM/ Telemedicine:$0-5bn EMR: $2bn Nutrition/ Organic care:$181bn Nutrition & Wellness 7% CORE P4 Total: $21bn Medical Retail: $10bn The Market Potential is Huge PricewaterhouseCoopers LLP DM: $2bn 7% Personalized Medical Care Total: $9-118bn Nutrition/Organic Esoteric Lab Services:$5bn Esoteric Test Sales:$4bn 2% Comp & Alt Medic. EMR: $6bn RPM/ Telemedicine:$0-109bn 22% Medical Retail Health Clubs & Spa 10% DM: $3bn CORE P4 Total: $42bn Targeted Therapeutics: $12bn Personalized Medical Care 44% RPM/Telemedicine 23%-92% Esoteric Lab Services:$11bn Esoteric Test Sales:$10bn EMR 15% Molecular Diagnostics: $3bn Disease Mgmt 6% 10% CORE P4 Targeted Therapeutics: $21bn Esoteric Lab Serv. 10% Esoteric Test Sales 13% Targ. Therapeutics 9% Note: Totals may differ due to rounding Molecular Diagnostics: $7bn Figures Not Drawn to Scale 1 Reflects upper range of RPM/Telemedicine “One of the innovation areas with the highest impact will be the whole field of early and correct diagnoses.” - Mars di Bartolomeo, Luxembourg Minister of Health PwC Health Industries Advisory • 10/7/2011 8

22. A New Emerging Paradigm PricewaterhouseCoopers LLP Sick Healthy Vulnerable Affected The Personalized Medicine Market – Expanded view of Health & Wellness Traditional view of Health & Wellness Treatment Delivery Consumer Problem Diagnosis Treatment Plan Treatment Delivery Patient Problem Diagnosis Treatment Plan Resort/Spa Preventative Hospital Surgery Patient Diagnosis Home/Gym Emotional (Social / Spiritual) Preventative & Chronic Group/ Community Physician Diagnosis Chronic Physical Discomfort Physician Physician/nurse Clinic Surgery Mental Physician office/Clinic Nurse Diagnosis Chronic & Clinical Preventative Physical ASC/ Outpatient center Alternative Diagnosis Physician office Exam Clinical Preventative Hospital CDC Definition of Wellness – covers all phases of patient well being 10/7/2011 9

23. The Broad Health and Wellness Perspective of a Large Global Consumer Products Company Demonstrates the Wealth of Potential Strategic Partners 10/7/2011 10 PricewaterhouseCoopers LLP Key players:Molecular Diagnostics The Personalized Medicine Market – Sports Nutrition Programs Digital Coaching Programs Health E-Games Health-Based Social Media Personalized Fitness Wellness Mobile Applications Weight Management Centered Media Exergame Equipment and Fitness Centers Personal Monitoring Sports Entertainment Wellness Market Technology Sports Nutrition Programs Health Data Aggregation Nutrition / Consumer Goods Healthcare Employer Initiatives to Decrease Health Costs Personalized Skincare & Cosmetics Personalized Medicine / Genetic Testing Functional Foods and Drinks Community Based Awareness Initiatives Personalized Health and Lifestyle Coaching Government Initiatives to Decrease Health Costs Activity Management and Wellness Programs Home Health Monitoring

24. – Watch Video The Trends We Are Seeing… 10/7/2011 11 PricewaterhouseCoopers LLP

26. more than 500 Facebook pages, groups or events devoted to the theory

27. tens of thousands of followers

28. A poll shows more than half of Canadians are familiar with the theory

29. Resulted in demands for clinical trials for controversial treatment

30. Reports have sparked a national debate about whether publicly funded trials should be conducted and whether MS patients should have immediate, publicly funded access to the vein-widening treatment known as venoplastyResearch Priorities Can Be Altered By Social Media 10/7/2011 12 PricewaterhouseCoopers LLP

32. 1,800 diagnostic tests available now

33. 5-10 new diagnostics tests per week

34. Diagnostics provide value at every stage of clinical careU.S. Healthcare ≈ $2 T *Over 72% of all medical decisions are made based on the $14B IVD U.S. Lab Billings $55 B <3% of total spend Spending on Diagnostics is the Most Efficient Use of Health Dollars PricewaterhouseCoopers LLP U.S. IVD Revenue $14B <.7% of total spend Source: Noel Doheny 10/7/2011 13

37. Target ID/Validation

38. Rx algorithms

39. PGX

40. Therapeutic monitoringPrognosis Companion Dr Source: Dr. Franklyn G. Prendergast, Mayo Clinic

41. The Importance of HIT – Health intelligence Health management Offerings Quality & efficiency management Decision support Provider Health plan Channels Chronic care management Health plan Health outcomes & economics Provider Health informatics Health informatics Employer Medicationtherapymanagement Electronic Patient Information Network Demand for information-enabled health services Clinical research optimization Life Sciences Public sector Health & wellness management Safety surveillance Clinical, financial & operational data Consumer Public sector Disease/ bio-surveillance Personal health records(Shared decision making) Data network Information Systems will Serve as the Foundation for Personalized Medicine 10/7/2011 15 PricewaterhouseCoopers LLP

42. The Importance of HIT – Personalized medicine Richness and timeliness of information Distinctive Competitive advantage Health management (Systemic management of outcomes) Advanced Marketadvantage Healthcare measurement (Quality, safety, Outcomes and cost) Advanced decision support Opportunities Foundational Building blocks to success Organizations grow their informatics competency, which increases the availability and portability of secure and protected clinical information Health managementalgorithms and tools Analytical competencies and tools Integrated patient records Evolution of evidence-based medicine knowledge base Required capabilities HIT Systems fall on an Evolutionary Continuum that Supports Personalized Medicine 10/7/2011 16 PricewaterhouseCoopers LLP

43. The Multiple Myeloma Example – DIAGNOSTICS TARGETS BIOMARKERS SEGMENTATION TARGET ID Longitudinal Study LS Tissue Bank LS Data Bank Cure for Multiple Myeloma Innovative Clinical Trials Patient Focused Outcomes Bio-Infomatics and Data Analytics Genomics Initiative MMRC Tissue Bank Drug Pool Novel & Existing Drugs Integration of the Personalized Medicine Value Chain – Biology to Cure – will be Critical to Curing Multiple Myeloma PricewaterhouseCoopers LLP 10/7/2011 17

44. The Multiple Myeloma Example – WISER FASTER The MMRF/C must Balance its Focus on Accelerating Drug Development with Identifying the Right Drug(s) for the Right Patient(s) PricewaterhouseCoopers LLP MMRF Resources 10/7/2011 18

45. The Changing Healthcare Landscape – Healthcare Reform Landscape 10/7/2011 19 PricewaterhouseCoopers LLP

47. Services need to be defined as covered versus excluded category.

48. States may require specific test benefits.

50. CPT: uncertain granularity of Tier 1 codes, and lack of granularity of Tier 2 codes

51. Multiple methodology-based or misc. (NOC) CPT codes (incl. molecular diagnostics “stacking” codes

53. CMS’s coverage determination process lacks sufficient predictability in its evidence requirements

55. Payment system anchored in the costs of tests developed and performed decades ago, and applied inconsistently

57. Risk assessment based on genomic and proteomic profiles and information

58. Used for definitive diagnosis and disease typing

59. Better accuracy in diagnosis through tests with improved specificity

60. Focus on prevention and prediction of disease rather than reaction to it

61. Probabilistic health history through DNA sequence

62. Early warning about predisposition could promote healthier lifestyles

63. Recurrence monitoring

64. Monitoring for treatment efficacy

65. Leverage population based therapeutic research

66. More targeted treatment for mgmt. and late stage

67. Used to predict efficacy or safety response for specific treatments

68. Right treatments at right time for right patients

69. Genomic and information based clinical decisions

70. Less variability

71. Assess severity and/or risk of recurrence

72. Informed decisions on clinical decisions and pathway

73. Know what is true stage of disease progression

75. Multiple reimbursements for fragmented (siloed) care versus integrated management of patient needs

76. Medical professionals paid for illness versus wellness

77. Inadequate social and economic incentives for wellness

78. Inadequate medical training/understanding of genetics/genomics/proteomicsAccountability? Clearer risk, accountability, cost Risk Share 10/7/2011 20

79. The Changing Healthcare Landscape – Financial Reimbursement Health Management Care Delivery Fee-for- service Full capitation Episodic Preventive Chronic Wellness Payer Landscape Continuum 10/7/2011 21 PricewaterhouseCoopers LLP

80. The Changing Healthcare Landscape – Payment Volume based Performance based Towards Accountable Care Organizations 10/7/2011 22 PricewaterhouseCoopers LLP Venue Hospital based Integrated, outpatient Records Paper Electronic Treatment One size fits all Personalized Accountable Care Organizations: Patient Centric Model 1990 2000 2010 2020

82. It is designed to provide stakeholders in the health care with an actionable plan

83. Led by Harvard Business School professor Clayton Christensen, creator of the theory of disruptive innovation.

84. The Roadmap will draw from and build upon Christensen’s analysis of how disruptive forces can be put to work to help effect systemic change in diagnosis and patient care. National Initiatives: The Forum on Personalized Health Care Announces Launch of The Roadmap for Personalized Health Care 10/7/2011 23 PricewaterhouseCoopers LLP

85. – Several articles yesterday as follow up to the ASCO Conference in Chicago, applaud the new wave of personalized cancer treatments in development Personalized Medicine has Momentum 10/7/2011 24 PricewaterhouseCoopers LLP

86. – Gerry McDougall Personalized Medicine Leader PricewaterhouseCoopers gerald.mcdougall@us.pwc.com (617) 530-4471 For additional insight, see our publications: 10/7/2011 25 PricewaterhouseCoopers LLP