1. Augusto Villanueva 21 July 2010 The Medical City, Pasig, Philippines Business and Healthcare

2. Snapshot CV Worked for Hoffmann-La Roche from 1997-2010. Variety of roles in affiliates and headquarters, mostly marketing or strategy related. Most recent assignment was General Manager, Philippines until March 2010. First career in consumer products with Procter and Gamble. Education: Economics (University of Western Ontario, 1988) and MBA (INSEAD, 1996).

3. Disclaimers The content of this presentation does not reflect the policies of Hoffmann-La Roche or any other pharmaceutical manufacturer. Any opinions, insights, and inaccuracies are the responsibility of the presenter.

4. Objectives “…Emphasize on the marketing strategies that you have employed to promote Roche…” Summarize the most important considerations to bring a research-based medicine to market and keep it there Discuss how practices differ across regions and countries and why Discuss some issues and controversies, especially those most relevant to clinicians

5. What does marketing of pharmaceuticals encompass? New product introductions Customer-directed activities about products and diseases: Deployment of sales representatives Promotional materials and programs (paper and electronic) Continuing Medical Education sponsorship Ensuring and broadening access Public health systems Private insurance-based systems Less important in cash-based systems (e.g. Philippines) Clinical trials (pre- and post-registration) Pharmacovigilence and safety monitoring

6. New product introductions Innovation is lifeblood of all research-based companies Only one chance to launch Sales in Q3 Year 1 are predictive of sales in Year 5 Issues: What is label? Where is unmet need? Where is competition vulnerable? What is current level of disease awareness and education? What resources is company prepared to commit? What is the optimal marketing mix? What is the global pricing strategy and approach with payers?

7. Many controversies surrounding the promotion of medicines today What is the value to public health of promotion and does it affect prices? Are reps helpful and credible? Do companies have the right to engage in scientific promotion and education? Minimal impact on price, but high marginal profit leads to higher spending Good reps: yes and yes; but very inefficient channel Will public health systems assume cost of education in place of industry? Current approach is to have transparency and disclosure

8. Marketing depends on disease area, lifecycle stage, and competition (1)

9. Marketing depends on disease area, lifecycle stage, and competition (2)

10. Most people cannot afford treatment for serious illness Percentile PHP 000 Source: 2006 Family Income and Expenditure Survey

11. Impact of poverty on healthcare Less than half the population can afford occasional treatment Only the top 10% can “afford” to be sick Most people cannot afford to see a doctor Many people in rural areas have no access to a local clinic Incentives for too many specialists and hospitals, not enough GPs and community facilities Many live without proper shelter, hygiene, water, etc. Many families are trapped in a cycle of poverty that flows from one generation to the next No single institution – government, industry, private enterprise, NGO – can remedy this situation on its own

12. Improved access to treatment makes social and commercial sense Creation of access systems would permit more people to participate in the healthcare economy Combination of public and private seems most likely Increased demand from these patients would have probable consequences for industry: Create negotiation opportunities for public and private payers (higher volume for lower prices) Widen market space between positions of multinationals and local firms Greatest growth potential exists in emerging economies

13. China and India alone are double the size of current developed economies Source: World Bank , United Nations 2009 data

14. Summary Successful new product launches are most important activity for research-based pharmaceutical companies Most crucial factor(s) for determining launch success or failure can very tremendously from one product to another Traditional promotion channels are inefficient and/or under scrutiny for accuracy, completeness, and objectivity Pharma industry's geographic focus is shifting due to aging populations in West and growing developing economies Innovation in the commercial model is needed to exploit near-term growth in developing world