The future challenges of Healthcare

Transcription

1 The futue challenges of Healthcae D. Eich Hunzike CFO F. Hoffmann La Roche Ltd. JPMogan Healthcae Confeence San Fancisco, Januay 12, 2005

2 This pesentation contains cetain fowad-looking statements. These fowad-looking statements may be identified by wods such as believes, expects, anticipates, pojects, intends, should, seeks, estimates, futue o simila expessions o by discussion of stategy, goals, plans o intentions. Vaious factos may cause actual esults to diffe mateially in the futue fom those eflected in fowad-looking statements contained in this pesentation among othes: 1. Picing and poduct initiatives of competitos; 2. Legislative and egulatoy developments and economic conditions; 3. Delay o inability in obtaining egulatoy appovals o binging poducts to maket; 4. Fluctuations in cuency exchange ates and geneal financial maket conditions; 5. Uncetainties in the discovey, development o maketing of new poducts o new uses of existing poducts; 6. Inceased govenment picing pessues; 7. Inteuptions in poduction; 8. Loss of o inability to obtain adequate potection fo intellectual popety ights; 9. Litigation; 10. Loss of key executives o othe employees; and Advese publicity o news coveage Fo maketed poducts discussed in this pesentation, please see full pescibing infomation on ou website

3 The key dives of the 21 st centuy (I) 20 th centuy 21 st centuy stability volatility hieachy netwoks value in hadwae value in softwae band is key economic value geneation in Euope, US population centes Euope, US cost leadeship is key economic value geneation in US, Euope, Asia population centes US, Asia, Latin Ameica

4 The key dives of the 21 st centuy (II) 20 th centuy 21 st centuy Innovation ceates sustainable advantages Band powe Povides decide on value spending Infomation is filteed Innovation advantage shot-lived Channel powe Individual decides on value spending Individual has access to oiginal infomation

5 How elevant ae these dives fo the healthcae industy? innovation advantage shot-lived volatility population centes US, Asia, Latin Ameica value in softwae individual decides on value spending Healthcae will definitely change ove the yeas to come, the question is when and how channel powe cost leadeship is key individual has access to oiginal infomation netwoks economic value geneation in US, Euope, Asia

6 No change fom the past: Health emains a basic need of mankind medical theapies consultation with the medical community self testing / self medication diagnostics events pesciptions / eseach activities consumption of dugs "Healthcae events" dominate o at least influence the life of most people

7 No change fom the past: Thee is an big incease in demand fo healthcae no. of healthcae events Reseach activities Population gowth Highe life expectancy Health awaeness Access to healthcae today 2020

8 Will become even toughe: Thee ae not enough funds to pay fo all demands funding of healthcae Social secuity systems unde pessue Slowdown of Economy Co-paymentsystems Payments by individuals today 2020 Cost pessue a eality today and even toughe in the futue

9 The Roche assessment The healthcae maket will split into a low value and a high value segment no. of healthcae events Volume stategy (e.g. geneics) Low value events Value stategy High value events Roche focus today 2020

10 Roche stategic choice: Innovation is key! Only if we ceate elevant poven benefit fo the custome = medically diffeentiated poducts, we will be able to ceate high value etuns Innovation Maketing powe 1. Innovative poducts continue to command high pices and eimbusement, 2. Selling aveage /me-too poducts by shee maketing powe becomes moe and moe difficult

11 Fom taditional Phama to individualized medicine Efficiency gains and value contibutions to healthcae basic eseach and molecula diagnostics ae aleady on the next s-cuve individualized medicine / tageted theapy taditional Phama size mattes 2004? time

12 Whee does size eally matte? Discovey Reseach Development Manufactuing Maketing Selling Intellect intensive Size does not incease poductivity beyond a cetain citical level! Capital intensive Size is citical to optimize investment, speed and coveage! Moe tials Moe patients Investigato netwoks In-licensing powe Moe launches Lage poducts Maket enty speed Sales foce flexibility Economies of scope Economies of scale: Size mattes Souce: Decision esouces Spectum May 03; MacKinsey 01

13 A unique Roche advantage: two high tech businesses joining foces whee it adds value Roche as a key poduce of biologics poducts Roche as one patne of choice fo the scientific community (e.g. decode) and fo top talent Diagnostics + Phama = Value added Joint leaning (e.g. identifying the ight technology at the ight point in time) Diagnostics and Phama to exploit the same technology know-how (e.g. Genomics, Genetics)

14 We ae open to innovation geneated by thid paties "Biotech" companies "Phamaceutical" companies Innovation Reseach Maketing + Distibution Poduction Development Custome benefit

15 Roche is actively shaping its futue by building new futues fo non-coe businesses Phama Stating point CHF 9.7 billion othe 50 % 1 % 14 % 11 % Diagnostics 25 % Vitamins & Fine Chem. Fagances & Flavous Sales and spin-off's Konton Medi-Physics Feeds Gynecological poducts RBL ABX Medi-Lab Rolic DePuy (1998) MFA Actelion Novusphama Fagances & Flavous; Givaudan (2000) Basilea BioXell Vitamins & Fine Chemicals (2003) RCH (2004)

16 Roche is now the most focused global healthcae Goup + Acquisitions Genentech (1990) Nicholas FDO PCR (1991) CompuChem Fisons Syntex (1994) MFA OTC F/I/RP Tastemake Boehinge Mannheim (1997) AVL Chugai (2002) Disetonic (2003) IGEN (2004) Phama Result 2003 CHF 29.0 billion 74 % 26 % Diagnostics

17 The unique Roche innovation cosmos netwoks value in softwae Phamaceuticals volatility Diagnostics Alliances, collaboations and In-Licensing Spin-offs innovation advantage shot-lived

18 A lot is speculated about the fight fo infomation leadeship in healthcae innovation advantage shot-lived volatility Will Micosoft, GE, Siemens, IBM be the key competitos? value in softwae individual decides on value spending Will decision pocesses change damatically? channel powe cost leadeship is key individual has access to oiginal infomation netwoks With Diagnostics we have a foot in the doo to be a playe in actionable health infomation

19 Will Roche be maginalised geogaphically because we focus on high value business? innovation advantage shot-lived volatility population centes US, Asia, Latin Ameica value in softwae individual decides on value spending Roche is stong in the emeging gowth centes of the wold channel powe cost leadeship is key individual has access to oiginal infomation netwoks economic value geneation in US, Euope, Asia

20 Global + many pillas of value ceation = USA (Geate) Euope Japan Asia China Latin Ameica Heceptin Molecula Diagnostics Avastin Taceva Boniva Pegasys Xeloda Diabetes Cae NeoRecomon R744 (CERA) MRA Immuno- Diagnostics CellCept MabThea Insulin sensitize MabThea in in RA RA Futue pillas

21 Roche ambition: to be a unique investment oppotunity in the healthcae industy Phama Biotech Pfize big phama global hightech/biotech Roche a unique investment oppotunity with a foot in the doo to Individualized healthcae biotech Infomation technology