Recent Global Trends and Opportunities in Pharmaceutical Business. Doğan FIDAN, MD, PhD, MBA

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1 Recent Global Trends and Opportunities in Pharmaceutical Business Doğan FIDAN, MD, PhD, MBA Conference Centre Swissotel Krasnye Holmy Moscow, 3 March 2015

2 Outline Review of the global trends that affect pharmaceutical business : Pharma market overview in 2015 Changing regulatory environment Increasing market access hurdles Increased focus on patient centricity

3 Drug development is long, risky and costly process

4 Drug development requires huge R&D investment Source: European Commission (2014) The 2014 EU Industrial R&D Investment Scoreboard

5 R&D productivity has been long on the decline The number of new FDA-approved drugs per billion US dollars of R&D spending has halved approximately every 9 years since 1950, [inflation-adjusted] (Scannel et al 2012) Source: BCG

6 Average cost per molecule over 5 years

7 Current issues pharma industry is facing Decreased productivity / lack of disruptive innovation Longer and costlier drug development Increased data requirements from Regulators Bigger and longer clinical trials Costly post-approval commitments Increasing risk-averse attitude Increased review periods Decrease marginal return of medical care (and research) on areas where unmet need is reduced Hostile pricing and reimbursement environment Patent cliff (and risks around patent protection).. current economic crisis (e.g. in Western Europe)

8 M&A and partnership on the rise

9 Shift towards biologics

10 Shift towards biologics

11 Payors and Patients are now major stakeholders FDA Payor Decision Physician acceptance Patient preference / adherence Successful FDA registration is the first and essential step, but it is not sufficient for drug use in real life FDA/EMA Decision Failure to address any one of the stakeholders may lead to failure of successful drug commercialisation

12 Rise in healthcare expenditure is unstoppable Source: Appleby, J. BMJ 2012;345:e7127

13 Global Market Access Environment Europe Health technology assessment agencies play a strong role in pricing and reimbursement and regulate : access to national health systems : Formal assessment is now a norm (also delaying access in some countries) Pricing in most countries are impacted by others (through reference pricing) US Strong push for cost containment in the US due to further consolidation of payers, as well Obamacare initiatives Others Pricing pressure in all major markets including China and Japan Furthermore, there is a significant push for higher generic / biosimilar use in all major markets

14 Pharmerging countries remain to be a major growth driver Source: IMS World Review Executive 2013

15 Pharmerging countries remain to be a major growth driver Source: Facts and Figures 2014: IFPMA

and influence each other through social media Significant opportunities for pharma to involve patients from product development to

16 Growing power of patients Patients are better informed, better organised, and more demanding Patient groups can influence regulatory and reimbursement decisions Treatment choice is no longer solely based on physician decision Patients talk to each other and influence each other through social media Significant opportunities for pharma to involve patients from product development to real life drug use Source: Peters & Weiss, 2013 Many companies now position themselves as health care solution provider not pill manufacturer

17 Putting patients in the centre

18 Putting patients in the centre

19 Summary of existing trends Change Increasing cost and risks in drug development Increasing payer pressure Saturated mature markets Increased patient power Pharma s response Increased partnerships and risk-sharing amongst big pharma and biotech Further consolidation, M&As Strong focus on value Innovative pricing / risk sharing agreements (e.g pay for performance) Shift into higher growth geographies Patient-focused programmes More holistic approach in development and marketing ( health solution provider ) Increased involvement of patients in product development

20 Thank you!

Clinical Trial Trends Outline Complexity for Supply Chain. Scott Ohanesian, VP Commercial Operations APAC Email: Scott.Ohanesian@marken.

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