IMS Consulting Group's presentation on the South East Asia’s Pharmerging Landscape for the IBC Asia South East Asia Pharmaceutical Forum Sep 2012.

1. South East Asia’s Pharmerging Landscape
IBC Asia South East Asia Pharmaceutical Forum
Sep 2012
Singapore

2. Over the next 30 minutes we will touch briefly upon…
• The “Asian” Pharmerging Markets and growth opportunities therein
• Dynamics & trends that make South East Asia a unique and
challenging environment
• Key success factors in South East Asia
2
• Q&A

3. Pharmerging Markets will drive c.65% of global pharma growth
over the coming 5 year horizon.
The “Asian” Pharmerging Markets
Global pharmaceutical market by region in USD Billions, 2011-2016
United States
Size: US$322Bn
CAGR 2011-16: 2.4 %
Japan
Size: US$115Bn
CAGR 2011-16: 2.6%
Top-5 Europe
Size: US$154Bn
CAGR 2011-16: 0.6%
Rest of World
Mature markets
expected to see
minimal growth
Aging population and
price reforms
benefitting patent
brands to drive growth
3
Note: *China, Brazil, Russia, India, Venezuela, P oland, Argentina, Turkey, Mexico, Ukraine, Vietnam,
S.Africa, Thailand, Indonesia, Romania, Egypt, Pakistan
Source: IMS Health Market Prognosis, May 2012; IMSCG analysis
“Pharmerging” Markets*
Size: US$186Bn
CAGR 2011-16: 14.3%
Rest of World
Size: US$165Bn
CAGR 2011-16: 3.5% “Pharmerging”
markets redefined
in 2010 from 7 to
17 countries*Positive growth expected, as
economies recover from the
Global Economic Crisis
Global Market
2011 Size: US$942Bn
2016 Size: c.US$1211Bn
CAGR 2011-16: c.5.2%
● Pharmerging Markets , US and RoW Emerging
Markets are expected to drive growth
● Historical growth (2006-2011) was c.6% but
distributed across all regions

4. c.55% of this Pharmerging Market growth will be driven by Asia
Growth prospects in Tier 2 markets, while dwarfed by China, are not insignificant
The “Asian” Pharmerging Markets
Pharmerging Markets in Asia, 2016 (FCAGR %)
• Asian Pharmerging Markets will add
c.US$97Bn in annualized market value by
2016, c.75% of which is in China alone
• Tier 2 Pharmerging Markets will add an
annualized c.US$8.5Bn by 2016
• The expanded SEA region (ASEAN + South
Asia ex-India) will grow by c.US$11Bn in
143Bn (16%)
4.1Bn (15%)
4.4Bn (19%)
4
Tier 1 Pharmerging
Markets
Source: IMS MIDAS data; IMSCG
Asia ex-India) will grow by c.US$11Bn in
annualized market value by 2016
• This represents over c.US$30Bn in
cumulative value over the next 5 years!
Tier 2 Pharmerging
Markets
26Bn (15%)
3.9Bn (3%)
7.6Bn (12%)
4.4Bn (19%)
TH: Retail Pharmacy, UPC | PH: BGx/UGx | MY: Public Hospitals BGx/UGx, Private Sector Ox
So, where will the
growth opportunities in
this region be?

5. Growth opportunities in SEA region are numerous, but diverse
Consequently, the “cost” of achieving success is high
Opportunities and Prospects for Growth
…with numerous ways to tap into this growthSplit of forward growth across
the expanded SEA region…
• NHI expansion
• Expansion of value-conscious
middle class + strong retail
pharmacy influence
• FDI in healthcare
Growth driver Portfolio beneficiary
• HC reform targeting primary
care in cities and provinces
Expansion of specialty care
• Gx, Spec Ox
• Gx, Affordable Ox,
OTC
• Pri + Spec Ox, BGx
Vietnam $2.6
Indonesia $3.2
• Local Gx
• Gx, Pri + Spec Ox
5
• Expansion of specialty care
infrastructure & delivery + FDI
• Expansion of value-conscious
middle class
• Broad-based expansion
in access & affordability
• Pockets of growth in private
and retail pharmacy sectors
• Ongoing healthcare reform
• SEA’s new growth frontier?
$1.9
TH $0.6
Malaysia,
Thailand &
Philippines
PK $2.1
Bangladesh
& Pakistan
Myanmar
MY $0.6
$0.1 – Could be higher?
$2.8
PH $0.8
BD $0.7
Incremental annualized
growth by 2016, US$Bn
Source: IMS Analysis, IMS MIDAS Data
• Gx, Pri + Spec Ox
• BGx, Affordable Ox,
OTC
• BGx, Affordable Ox,
OTC
• Broad Ox + Gx, but
limited in uptake,
OTC
MY: 1C1M Priority TAs such as CVM, Onco, COPD/Asthma, MH; Vaccines + Preventative Care; Medical
Tourism; Gx in public sector | TH: Retail pharmacy driven Affordable Ox, OTC
• Gx, Affordable Ox?

6. To leave an imprint…
Pharmerging’s next frontier?
Asia-Pacific market potential assessment*
Countries >10M population Nascent markets
Emerging markets
Developed markets
Healthcareexpenditurepercapita
(US$2009)
10,000
1,000
100 Mongolia ThailandMalaysia China
Taiwan
South Korea
JapanAustralia
Opportunities and Prospects for Growth
6
Note: Asia-Pacific region as defined by UNESCO
Source: IMSCG
Healthcareexpenditurepercapita
(US$2009)
100
10
1
Market size (US$bn in 2011)
1,000.00100.0010.001.000.100.01
Nepal
Mongolia
Laos
Sri Lanka
Pakistan
Myanmar
Cambodia
Bangladesh
Viet Nam
Thailand
Philippines
Malaysia
Indonesia
India
China

7. The dominant trend impacting the region today is healthcare
reform and cost containment
Healthcare is firmly on the agenda in SEA – While this drives overall growth, it
also entails cost containment to balance budgets
Dynamics and Trends in SEA
Thailand
+ Move towards universal coverage
– NLED de-listings in 2008
– CSMBS budget cuts & restrictions on
prescribing & reimbursement, ’09
– Hospital audits (CSMBS), ’10
Vietnam
+ Expansion of social health insurance
– Emphasis on local generics via
tendering system
– Reductions in hospital budget for
originator products
– DAV control on price increases
7
Malaysia
+ 10MP plan to expand primary
care sector
+ “1 Care for 1 Malaysia” aiming
for universal coverage
– Generic emphasis for public
sector
Indonesia
+ Plan to implement universal coverage
by 2014 and beyond (likely run by
ASKES)
– Compulsory prescribing of Gx in 2010
Singapore
+ Upgrading primary care sector
(polyclinics & financial support for
GPs) with focus on aging popl.
– Fast-tracking of Indian Gx, ‘10
Philippines
+ KP reform aiming for UC by 2016
+ Expanded medicines access via
Philippines Medicines policy in 2011
– Cheaper medicines act & price cuts in
2009 & 2010
– Maximum drug retail price, 2010
Source: IMS Analysis, IMS Market Prognosis

8. Cost containment tools FR DE IT ES UK AUS CH IN JP KR TW ID MY PH TH VN
VBP / Risk sharing
agreements
-
HTA/ cost effectiveness
assessments
- -
Quality/ innovation/
therapeutic value rating
Generics promotion - - - -
EU APAC ASEAN
oftool
ASEAN countries are increasingly adopting more sophisticated
methods of cost containment
Dynamics and Trends in SEA
8
Generics promotion - - - -
International price
referencing
- - -
Spending caps
Patient contributions
Prescribing controls - -
Mandatory price cuts /
controls
-
Only recently implemented/ limited application
Complexityoftool
FR: France, DE: Germany, IT: Italy,, ES: Spain, UK: United Kingdom, AUS: Australia, CH: China, IN: India, JP: Japan, KR:
Korea, TW: Taiwan, ID: Indonesia, MY: Malaysia, PH: Philippines,, TH: Thailand, VN: Vietnam
Source: IMSCG
Most cost containment tools used are at the
relatively low complexity end of the scale
-

9. Reform and containment, coupled with strong local generics
plays, is making SEA an increasingly difficult turf for MNCs
MNCs have lost market share to generics firms recently, as patent expiries,
pricing pressure and increasingly aggressive generics competitors come into play
Dynamics and Trends in SEA
60
57
4442
60
56
43
41
45
65
60
55
50
-4%
-2%
-3%
-4%
-2%
+1%
Expanded SEA Top 10 MNC* Market Share by Country (2010 vs 2011)
Share and Share change (%)
Branded Generics players
have stolen a march over
MNC innovators, supported by
• Cost-containment
• Government emphasis on
9
39
20
18
8
34
41
37
19
17
8
32
25
20
15
10
40
35
PKVNIDTotal BD SG
30
0
-4%
-5%
5
+1%
MYTHPH
-4%
20112010
Source: IMS Analysis, IMS MIDAS Data; *Top-10 MNCs for 2011 comprise Pfizer, Novartis, Merck, Sanofi, AZ,
Roche, GSK, J&J, Abbott and Lilly
LoE LoE Pri
• Government emphasis on
and support for generics
• Public tendering in many
SEA countries
• Increasing reputation of
branded generic
manufacturers
• LoE for blockbuster
products
• Prescribing according to
national formulary listing

10. Generic penetration varies across SEA and has increased overall
across countries
52%
85%
64%
62%Pakistan 1.729% 9%
Indonesia 4.216% 20%
Bangladesh 1.06% 9%
100%90%80%70%60%50%40%30%20%10%0%
ASEAN* 16.433% 15%
Expanded SEA Overall Market – Originator vs Generic Penetration (2011)
Ox BGx Gx
9% 13% 13%
14% 18% 10%
12% 13% 13%
12% 18% 14%
2006- 2011 CAGR
Dynamics and Trends in SEA
10
62%
54%
51%
37%
27%
28%
2.837% 13%
Vietnam 1.731% 15%
Pakistan 1.729% 9%
Malaysia 1.354% 19%
Thailand 3.049% 14%
Philippines
0.760%Singapore 12%
Originators Branded Generics Generics
USD Billions
Source: IMS Analysis, IMS MIDAS Data
12% 18% 14%
30% 36% 33%
3% 9% 10%
7% 8% 8%
21% 20% 29%
8% 12% 11%

11. MNCs can still win in the SEA region
However, winning will entail a tailoring strategies to the region’s unique challenges
Key Success Factors
…and how MNCs could overcome themChallenges faced by MNCs in
the SEA region…
Diverse & heterogeneous
market landscape
• Tailored portfolio strategies, with an openness to adopt
alternative commercial models for low priority brands
• Active support of ASEAN harmonization, possibly more so
than today
Access & affordability
• Willingness to partner with payers to improve access to high-
quality primary care medicines
• Supporting patient access and innovative pricing schemes to
drive access and compliance for specialty medicines
11
Competitive, low compliance
business environment
• Partnering with local competitors possessing complementary
capabilities (ex., local manufacturing, knowledge of local
regulatory and tendering complexities, sales & distribution
footprint outside top cities)
• Selectively leveraging strong MNC brand identity in
alternative business models (ex., OTC, BGx)
• Working with local industry leaders to develop and adhere to
basic ethical compliance norms
Talent & capability
• Openness to acquire talent from regional and leading local
generic firms, with commitment to training and “moulding”
to meet global MNC norms and expectations

12. About IMS Consulting Group
IMS Consulting Group is present across 70 countries with over 500 consultants across the globe. As it
focuses only on healthcare and life-sciences sector, our team of consultants bring a wide- and in-depthfocuses only on healthcare and life-sciences sector, our team of consultants bring a wide- and in-depth
skill set that is unmatched by any other firm.
IMS Consulting Group works with clients to facilitate a wide range of mission critical business decisions.
Some typical work includes strategies to enter to specific geographic/ business/ therapy/ product
markets and operational excellence initiatives to cover sales force as well as internal operations.
If you would like to know more about what we can do for your business, contact us at:
Dr. Srikanth Rajagopal: srajagopal1@imscg.com / +65 6412 7381