INNOVATION

THAT CARES

36 YEARS CARING FOR PUERTO RICO#PIAPR

PIA Insider 2014-20155th Edition 2014

PRESIDENTRobert Maroney, VP & GM Amgen

VICE PRESIDENTYvonne McBurney, VP & GM GSK Commercial Operations

SECRETARYLourdes Colón, VP & GM Lilly Manufacturing Operations

TREASURERCamilo Gómez, VP & GM Abbvie Commercial Operations

DIRECTORS Manufacturing:

• Robert Maroney, VP & GM Amgen • Lourdes Colón, VP & GM Lilly Manufacturing Operations • Barry Regan, VP & GM Abbvie Manufacturing • John O’Hara, VP & GM J&J Manufacturing • Ileana Quiñonez, President & General Manager PR (AstraZeneca)

Commercial:

• Camilo Gómez, VP & GM Abbvie Commercial Operations • Elsa Saavedra, Commercial Business Director AstraZeneca • Yvonne McBurney, VP & GM GSK Commercial Operations • César Simich, VP & GM Merck Commercial Operations • Mario Sturion, General Manager Janssen (J&J)

EX-OFFICIO MEMBERS • Eduardo Negrón, Legal Counsel, FGR • Iván Román, Advisor to the Board • Rafael Castro, Operations VP PIA

PIA BOARD OF DIRECTORS

Happy New Year to all and thank you again for

your trust in leading the organization that

represents us all. I have had the opportunity to be

a part of PIA’s Board of Directors during the past

two years and it is the commitment of each

Robert Maroney

individual that enables the organization to advance its strategic priorities,

therefore I thank you in advance for your commitment during 2015.

Although we continue to face challenges it is critical that we remain focused

on our strategic objectives to Improve Patient Outcomes & P.R.’s

Competitiveness, this will allow us to continue supporting the local economy,

while working together in the development of our industry on the island.

I wish you a very successful year and look forward to working together during

my term.

MESSAGEfrom the President

A new year begins and PIA has a new president, Bob Maroney, vice president of Amgen

Manufacturing Limited operations in Juncos, Puerto Rico.

Bob will take the leadership of our association, and I am confident that he will receive the same

extraordinary support that I received from all of you during these last two years. Please join me

in giving Bob a warm welcome as PIA President!

As you all know, 2014 was a period of enormous challenges as a country and industry-- but the

biopharmaceutical industry continuous to be the backbone of Puerto Rico’s socio-economic

development. This put a huge responsibility over our roles and requires that we all continue to

focus in collaborating with stakeholders and contributors and advance our two main strategic

priorities: Improve Patient Outcomes and Puerto Rico’s Competitiveness.

As I move to other tasks, I want to thank you all and specially PIA’s Board of Directors

and Committee Leaders for your outstanding and unconditional support during my

2013-2014 leadership. Even though it took a significant amount of my time and

energy, the learnings and experiences exceeded by far my e�orts and contributions

to PIA.

Best Regards,

Camilo Gómez

MESSAGEfrom past President

With the desire to expand visibility and spark discussion among the public, this year’s Annual Meeting was the first ever to use live-tweeting.

You can now find PIA, @PIA_PuertoRico, on Twitter.

Over 70 tweets were made during the Annual Meeting which included important messages from the various speakers, healthcare initiatives, and patient care and drug market numerical data.

PIA o�cially created its twitter account in October of 2014 as a way to be more accessible through social media to the pharmaceutical and biotechnology community, patients, and the general public.

PIA Live Tweets!

We need to be partners in discovering health solutions, and we also need to create the opportunity for collaboration for the good of everyone,” concluded Hudson.

Paul Hudson, president of AstraZeneca in the United States and executive vice president of AstraZeneca in North America, urged the pharmaceutical community to broaden its collaborative ties and search for opportunities of improvement to help better the lives of patients. While speaking in front of 300 people at PIA’s 25th Annual Meeting, Hudson indicated that nearly 20,000 healthcare professionals in Afghanistan, who are involved in medical e�orts for the United States Army, have not been able to integrate themselves into the healthcare industry.

He continued by discussing the necessity to integrate these people into di�erent healthcare areas. For example, Hudson mentioned the initiative of visiting patients in their homes as a crucial way to learn more about them in a personal environment.

Later, Hudson stated that many of the “super utilizers” within the healthcare system, those individuals that

AstraZeneca’s Paul Hudsonshares his thoughts during PIA’s Annual Meeting

• More than 8.2 million lives are lost to cancer each year around the world.

• The North American Health IT market is forecasted to grow at a compound annual growth rate

of 7.4 percent and reach $31.3 billion by 2017.

• In 2013, AstraZeneca reported $9.7 billion in annual sales in the United States and treated more

than 24 million patients with AZ medicines.

• In Puerto Rico, AstraZeneca produces Crestor, which is one of the top branded products in the

United States.

The Numbers

continuously return to the hospital, are people that live alone, do not eat well, or live in a nonsuiting environment. He proposed that more healthcare professionals visit the homes of these individuals to help them improve their lifestyle.

We need to be partners in discovering health solutions, and we also need to create the opportunity for collaboration for the good of everyone,” concluded Hudson.

Prior to concluding his conference, Hudson announced that AstraZeneca is focused on the oncology franchise where the average life expectancy has increased exponentially. He stated that the genotype of certain cancer patients should be taken to specific medical o�ces where they are conducting studies and investigations for the benefit of those patients.

Paul Hudson, president of AstraZeneca in the United States and executive vice president of AstraZeneca in North America, Camilo Gómez, president of PIA, Rafael Castro, executive director of PIA, and Elsa Saavedra, leader of the Patient Outcomes Committee.

is back in the pharma industry

Abilify®** Otsuka America ($7.2 billion)

Humira®** Abbvie ($6.3 billion)

Nexium®** AstraZeneca ($6.3 billion)

Crestor®** AstraZeneca ($5.6 billion)

Enbrel®** Amgen ($5 billion)

Advair Diskus® GSK ($5 billion)

Sovaldi® Gilead ($4.4 billion)

Remicade®** Janssen ($4.3 billion)

Lantus Solostar® Sanofi Aventis ($3.8 billion)

Neulasta®** Amgen ($3.6 billion)

Source: IMS Health, NationalSalesPerspectives, June 2014

Presented by Doug Long, VP Industry Relations IMS Health PIA’sAnnual Meeting Oct. 30, 2014

Sales for June 2013 -June 2014 period

** Manufactured in Puerto Rico

Did you Know? Top 10 products in the US

said Long.

Sales of pharmaceuticals in Puerto Rico grew by 9.3% to $3.1 million last year with 2/3 of sales coming from branded drugs ($2.006 million) and positioning the island in 34th place in sales volume in comparison with the 50 states of the U.S.

Doug Long, vice president of industry relations at IMS Health – the world’s largest pharmaceutical information company, discussed the latest figures and trends during his “Pharmaceutical Year in Review” presentation at PIA’s 25th Annual Meeting.

“If Puerto Rico were to be a state, it would be ranked 34th in terms of sales between Arkansas and Nevada. We see strong sales for HIV, cancer, thyroid, mental health and diabetes products in Puerto Rico. In terms of the distribution channels, we still see a strong inclination for independent pharmacies which experienced sales growth of 11.3% last year,” said Long.

The top branded products sold in Puerto Rico are Humira, Lantus, Truvada, Enbrel and Humulin 70/30, according to Long. “For the pharmaceutical industry in general in the U.S. and Puerto Rico, we see that double-digit dollar sales growth is back.”

Sales of pharmaceuticals in nursing homes also grew dramatically by 36.7% to $433 million, he added.

Looking ahead, the industry will see specialty drugs in areas where innovation continues to flow and will provide the highest growth rates among therapy areas. And while the market for biologics will be robust, driven by innovation, it will also benefit from a limited impact regarding biosimilar introduction.

Pharmaceutical sales in the United States had rebounded sharply in 2013 and 2014 following an all-time low in 2012, when “the market declined for the first time in its history,” said Long, while looking at historical trends over the past 10 years.

Sales in the U.S. topped $329 billion in 2013, with retail representing more than 71% of the market on sales of $236 billion (up 3.2%), and chain pharmacy leading the way with sales of $115 billion up 4.1%.

In Puerto Rico, the drug market grew 9.3% with reported sales of $3.170 million (August 2013 to August 2014). According to Long, $2.006 million accounted to branded products (10.4% growth), $928 million to generics (10.1% growth), $162 million for branded generics and the other $75.4 million for non specified products.

For the pharmaceutical industry in general in the U.S. and Puerto Rico, we see that double-digit dollar sales growth is back.

Energy and proposed taxreform take center stage

Continueson next page

The Puerto Rico Electric Power Authority

(Prepa) is working with the pharmaceutical

sector to ensure the reliability of its service,

after concerns were expressed by the

industrial sector about the current state of the

electrical infrastructure on the island.

“The reliability of our electrical system is an

issue as important, if not more important, than

the electricity cost issue. Both issues have to

go hand in hand, and I have a close eye on our

reliability metrics since I took the ‘reigns’ of

Prepa,” said Juan Alicea, executive director of

Prepa, during PIA’s Annual Meeting in the

session “Decentralized Approach to Puerto

Rico’s Energy Cost Challenge.”

“We measure the amount of interruptions and

their frequency and we recently discussed this

issue with your industry’s leaders and assured

them that we understand the importance of

our consistent service for your local

operations,” said Alicea.

The transition to natural gas usage in Prepa’s

plants will be crucial in helping reduce energy

costs in Puerto Rico. Prepa is betting on its

Aguirre O�shore natural gas project to make

this happen, which should be ready in 18

months “because the permit process is much

more advanced than it has been reported,”

said Alicea.

Jaime Sanabria, general manager of

EcoElectrica, another member of the session

panel, said the Peñuelas site, as well as the rest

of the industry, “is waiting on Prepa’s business

plan to see how the future will be shaped and

what the requirements would be, so we can

evaluate if we will participate and undergo

future expansions.”

Meanwhile, Greg Bu�ngton, vice president of

Carib Energy and Crowley, which began

importing natural gas to the island in

September for the local Coca-Cola operations,

pinpointed to the benefits of cool energy

produced during the re-gasification process of

natural gas. He said the cool energy can be used

in manufacturing cooling towers, adding

e�ciency to operations, in addition to the

environmental and cost benefits of natural gas.

In terms of natural gas costs for the next 10 to 15

years, the international markets expect prices to

level out and then go down, thanks to the

increase in production in the United States,

which will allow for exports of that fuel, said

Mark Hanson, country manager, Gas Natural

Fenosa.

Eduardo Bhatia, president of theSenate of Puerto Rico.

From left to right: Greg Bu�ngton, vice president of Carib Energy and Crowley, Juan Alicea, executive director of Puerto Rico Electric Power Authority, Jaime Sanabria, general manager of EcoEléctrica, and Mark Hanson, country manager of Gas Natural Fenosa.

The impact of the Puerto Rico tax reform on

economic development was also discussed

during PIA’s Annual Meeting with a panel

moderated by CPA Enrique Alejandro from

Pfizer, featuring Carlos Serrano, Esq., partner

Reichard & Escalera; economist Joaquín

Villamil from Estudios Técnicos, and Angel

Marzán, Esq., under secretary of Internal

Revenues.

Serrano presented a history of tax reforms

implemented on the island in recent history,

while Marzán presented proposals currently

being considered in “Hacienda,” including the

move towards a Good and Service Tax and

revisions to the property tax structure.

While these topics are central to the reform,

specific proposals have not yet been presented

because the Government is waiting for KPMG

firm recommendations, since they are currently

working on the 2014 Tax Reform Project.

Economist Villamil expressed concern for the

possible outcome of the reform, saying, “the tax

system has become a political issue, and when

that happens, reason goes out the door. We

need to have a very strong reform of the tax

system, but now it’s a political discussion and

experience has shown us what may occur in

those cases.”

Annual Meeting

at a GlanceUnder the slogan “36 years caring for Puerto Rico,” PIA held its 25th Annual Meeting at the Wyndham Río Mar Beach Resort in Río Grande on Thursday, October 30, where speakers presented detailed information regarding the pharmaceutical industry, public health and local energy issues, among other topics.

Senator Eduardo Bhatia, president of the Senate of Puerto Rico, delivered a message about energy costs and Puerto Rico’s economic development. Bhatia also discussed di�erent investment strategies regarding fiscal reform.

Paul Hudson, president of AstraZeneca in the United States and executive vice president of AstraZeneca in North America, presented new ideas to benefit patients such as visiting seniors in their homes and learning if they are adherent to therapy and medication usage. (Details in this edition.)

Ricardo Zayas, vice president of global pharmaceutical and API manufacturing at Bristol Myers Squibb, highlighted the importance of understanding the global supply network and spoke about pharmaceutical manufacturing in Puerto Rico and countries around the world.

at a Glance

From left to right: Ricardo Rivera, executive director of ASES, Enrique Baquero, representative of the Association of Hospitals of Puerto Rico, and Darren Washington, leader of the Patient Outcomes Committee.

Ricardo Zayas, vice president of global pharmaceutical and API manufacturing at Bristol Myers Squibb.

Dr. Je�rey Brenner, executive directorat Camden Coalition of HealthcareProviders.

Doug Long, vice president of industrial relations at IMS Health, discussed the drug market in Puerto Rico and stated that it grew 9.3% with reported sales of $3.170 million (August 2013 to August 2014). He said $2.006 million accounted for branded products (10.4% growth), $928 million for generics (10.1%), $162 million for branded generic products, and the other $75.4 million for non specified products. (Details in this edition.)

Dr. Je�rey Brenner, executive director at Camden Coalition of Healthcare Providers, presented strategies towards the care of high utilizers in the US healthcare system and established some comparisons with Puerto Rico.

The Annual Meeting concluded with concurrent sessions on various topics including energy in Puerto Rico, the impact of fiscal reform, and patient outcomes initiatives.

Juan Alicea, executive director of Puerto Rico Electric Power Authority, and Ángel Marzán, under secretary of Internal Revenues, participated in the energy and tax reform sessions, among other panelists and leaders from pharmaceutical companies and hospitals in Puerto Rico.

Industry Briefs

Romark in Manatí

The pharmaceutical company Romark Laboratories will start construction in January of 2015 in the former facilities of Schering Plough in Manatí with an investment of $110 million, as announced by Governor Alejandro García Padilla on December 5, 2014.

The company is expected to create over 200 job opportunities within a three-year period and should be operationally ready by the end of 2015.

Romark Laboratories will be dedicated to the discovery, development, and distribution of molecular treatments for cancer as well as other illnesses.

Sanofi’s animal health division, Merial, will acquire Merck’s manufacturing facility in Barceloneta, which was scheduled to shut down in December of 2014.

The proposed transaction requires approval from the United States Federal Trade Commission. As part of the agreement, Merial will retain the approximately 200 Merck Barceloneta employees currently employed at the formulation and packaging site.

If approved, the acquisition will allow Merial to expand its global manufacturing operations and make use of the site’s expertise in chewables’ manufacturing technology. The facility has been involved in and will remain responsible for manufacturing and packaging Merial’s industry-leading Heartgard® and Heartgard® Plus products.

Merial Acquires Merck Facility

2014Review in Photos

Pharmaceutical IndustryAssociation of PR, Inc.

25th Annual Meeting

12 Regulatory MeetingFDA/PIA 12 Regulatory MeetingFDA/PIA

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2014 Review in Photos

PIA in the News

INNOVATION

THAT CARES