the us pharmaceutical market_doug long

The US Pharmaceutical Market: What’s In?, What’s Out? and What’s Ahead?,

BY: Doug Long, VP Industry Relations

Presented to NCPDPPresented to NCPDP

May 18, 2011

2011 Strategic management presentation

All reproduction rights, quotations, broadcasting,publications reserved. No part of this publication may bereproduced or transmitted in any form or by any means,electronic or mechanical, including photocopy, recording, orany information storage and retrieval system, withoute p ess itten onsent of IMS HEALTHexpress written consent of IMS HEALTH.

The global pharmaceutical market performance declined in 2010 declined in 2010

Global Pharma Historical Market Dynamics & Current Environment

Global Sales and Market GrowthPharma market challenges

• The US/top 5 Europe/Japan no longer the main growth drivers

• The economic crisis impact has been different across pharmaceutical markets

• Biotechnology, a big growth area, affected by lack of investment fundsaffected by lack of investment funds

• New product launches are not replacing revenues lost to generic competition, especially in primary care

The most att acti e a eas fo g o th • The most attractive areas for growth are in emerging, generics and specialty markets

Source: IMS Health, MIDAS, Dec 2010

Top 10 markets sales and growth Audited markets in 2010Audited markets in 2010

2010

CountrySales, US $

Billions% Market

Share% Growth,

Constant US $CAGR

2006-2010

10 Key Markets 614.9 100 3.9 5.0

United States 310 7 50 5 3 3 4 6United States 310.7 50.5 3.3 4.6

Japan 85.8 13.9 0.4 2.4

Germany 40.0 6.5 3.0 3.6

France 38.9 6.3 0.9 2.738 6 3 0

China 32.8 5.3 21.9 23.9

Italy 25.2 4.1 2.2 3.7

Spain 22.0 3.6 2.6 6.6

Canada 21.6 3.5 2.6 6.4

United Kingdom 20.3 3.3 3.8 4.2

Brazil 17.5 2.9 20.1 13.5

Source: IMS Health, MIDAS, Dec 2010

In both specialist and primary care we have winners and losers

Primary care driven

and losers

Specialist driven

Global RankSalesUS$bn

%MarketShare

%Growth

Top 10 208.2 45.6% 4.2%

Global RankSalesUS$bn

%MarketShare

%Growth

Top 10 185.4 56.8% 7.7%

55 3 16 9% 7 4%Lipid regulators 36.4 8.0% 3.7%

Respiratory agents 28.9 6.3% 7.8%

Anti-ulcerants 28.4 6.2% -5.6%

Angiotensin II antag 26 6 5 8% 7 6%

Oncologics 55.3 16.9% 7.4%

Antipsychotics 24.9 7.6% 9.2%

Autoimmune agents 20.1 6.1% 15.3%

Antidiabetics 15.8 4.8% 12.7%Angiotensin II antag. 26.6 5.8% 7.6%

Antidepressants 20.0 4.4% 2.5%

Antidiabetics, oral 17.5 3.8% 11.9%

Platelet aggr. inhib. 15.2 3.3% 3.8%

Antidiabetics

HIV antivirals 15.1 4.6% 14.4%

Anti-epileptics 12.4 3.8% -11.2%

Narcotic analgesics 11.9 3.7% 7.8%

Vitamins & minerals 12.7 2.8% 6.8%

Cephalosporins & combs. 11.3 2.5% 7.3%

Non-narcotic analgesics 11.1 2.4% 2.5%

Erythropoietins 10.7 3.3% -1.2%

Hospital solutions 9.5 2.9% 7.9%

MS therapies 9.5 2.9% 12.6%

Source: IMS Health, MIDAS, MAT Sep 2010

The generics market reaches $107.5bn; generics growth is four times higher than overall growthgrowth is four times higher than overall growth

Source: IMS Health, MIDAS, Market Segmentation, MAT Dec 2010, Rx only. *Market Segmentation universe

After strong growth recovery in 2009; 2010 sales growth slows to 2 3% and 1 0% TRX growth

Dollars GrowthTRx Growth

growth slows to 2.3% and 1.0% TRX growth

8

9

10

$300

$310

4

4.5

54

5

6

7

$280

$290

CH

AN

GE

S$ B

N .

2.5

3

3.5

GE

.

e B

N

.

5.1%2.1%

2

3

4

$260

$270

% C

Sale

s US

1

1.5

2

% C

HAN

G

TRx V

olu

me

0

1

$250

$260

2006 2007 2008 2009 20100

0.5

32006 2007 2008 2009 2010

1.0%2.3%

Source: IMS Health, National Sales Perspectives, Dec 2010 Source: IMS Health, National Prescription Audit, Dec 2010

US market growth in 2010 was 2.3%

20$350

15$250

$300

GE

BN

5

10

$100

$150

$200

% C

HAN

G

ALE

S U

S$B

0

5

$0

$50

$100

SA

Source: IMS Health, National Sales Perspectives, Dec 2010

US prescription growth is 1.0% for 2010

105.0

US Growth Rate

7

8

9

10

4.0

5.0

E B

N

3

4

5

6

2.0

3.0

TR

X P

PG

TR

X V

OLU

ME

0

1

2

3

1.0

T

-10.0

Source: IMS Health, National Prescription Audit Plus, Dec 2010

The largest segments of the US market had b l k t th tbelow market growth rates

Sales Growth (2010)

Total market: +2.3%

Brands: -0.7%Branded generics: Generics: Brands: 0.7% generics: +4.5% +21.7%

Traditional Pharma: 1.9% Specialty: 4.0%

Small molecules: 0.5% Biologics: 6.6%

Retail: 2.0% Institutional: 3.0%

$0 $50 $100 $150 $200 $250 $300

Sales $BN

Retail: 2.0% Institutional: 3.0%


US Pharmaceutical Market: 2010

Brand prescription growth continues to decline in 20102010

Unbranded generics

Absolute growth of prescriptions

200

250

Unbranded genericsBrandsBranded generics

0

50

100

150

TR

xs

MN

200

-150

-100

-50AC

T

-200

2006 2007 2008 2009 2010

Source: IMS Health, National Prescription Audit, Dec 2010

Growth remains low for both segments, but growth rates converge in latest periodsrates converge in latest periods

16% US

MAT Nov 2010

% M k t

10%

12%

14%

$

Primary care driven

Specialist driven

Primary care driven

56%

% Market share US$

4%

6%

8%

GRO

WTH

US$ Specialist

driven44%

% Absolute h US$

2%

0%

2%

%

2006 2007 2008 2009 MAT Nov 2010

% G

Primary care driven

Specialist

21%

change US$

-4%

-2% 2010 Specialist driven

79%

Source: IMS Health, National Sales Perspectives, Nov 2010

Sales and TRx share brands and generics

Branded Generics Disaggregated

100%%Dollars %Total prescriptions dispensed

14.6% 15.6% 16.2% 16.8% 17.8% 19.9%

57.7% 61.2% 65 3%70%

80%

90%

100%

AR

E

85.4% 84.4% 83.8% 83.2% 82.2% 80.1%

65.3%69.6% 72.2% 75.4%

40%

50%

60%

MA

RK

ET

SH

A

42.3% 38.8% 34.7% 30.4% 27.8% 24.6%

0%

10%

20%

30%

% M

0%

2005 2006 2007 2008 2009 YTD Nov 2010

2005 2006 2007 2008 2009 2010

Brands GenericsSource: IMS Health, National Sales Perspectives, Nov 2010, Branded generics disaggregated,Source: IMS Health, National

Prescription Audit, Branded generics disaggregated, Dec 2010

US is impacted by continued patent expiries, and historically low contribution from new productshistorically low contribution from new products

US market growth: 2009=5.2%; 2010=2.3%

• Protected brands “list" price growth

• Increasing generic volume and less price

• Protected brands volume decline

• Slow uptake of recently launched products

i ideflation• H1N1/CCF• Fewer safety events

• Patent expiries• Greater substitution of

generics

• Demographic factors• Approvals of innovative

therapies

Source: IMS Health, Market Prognosis, IMS Consulting, Sep 2009

The economic crises impact all stakeholdersTh d f h i l i h f i !The danger for pharma is losing share of voice!

Stakeholders Likely reactions

Patients1•Significant increase in price sensitivity•‘Down-trading’ to cheaper drugs or generics•Deferral of treatment

2•Reduced spend on promotion •Rationalisation of product lines• Mergers/acquisitions

•Cash flow and credit issues

Manufacturers

3

•Cash-flow and credit issues•Reduced inventories to minimise financial exposure•Increase in distribution costs•Consolidation among local distributors

Distributors

4•Changed prescribing practices •Increase generic / therapeutic substitutionHealthcare Providers

5 Payers•Shifting costs to patients•Increased focus on evidence and value5 Payers Increased focus on evidence and value•Formulary control intensifies

Patient visit trends remain negative with -4.7% growth in MAT Nov 2010growth in MAT Nov 2010

2%

4%

6%

WTH

Patient Visit Growth

-4%

-2%

0%

ING

MAT

GRO

W

10%

-8%

-6%RO

LLI

-10%

Jan-0

8

Mar-

08

May-0

8

Jul-

08

Sep-0

8

Nov-0

8

Jan-0

9

Mar-

09

May-0

9

Jul-

09

Sep-0

9

Nov-0

9

Jan-1

0

Mar-

10

May-1

0

Jul-

10

Sep-1

0

Nov-1

0

ROLLING MAT

Source: IMS Health, National Disease and Therapeutic Index, Nov 2010, Confidence Interval shown (+/-3.9%)

The declines in consumer sentiment in the US were not matched by TRx declines or claimsnot matched by TRx declines or claims

Market Indicators Indexed to January 2007

100

110

120

70

80

90

IND

EX

40

50

60

7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0

Index of Consumer Sentiment

Index of Employment

Monthly Claims

TRX

Jan-0

7Fe

b-0

7M

ar-0

7Apr-

07

May

-07

Jun-0

7Ju

l-07

Aug-0

7Sep

-07

Oct

-07

Nov

-07

Dec

-07

Jan-0

8Fe

b-0

8M

ar-0

8Apr-

08

May

-08

Jun-0

8Ju

l-08

Aug-0

8Sep

-08

Oct

-08

Nov

-08

Dec

-08

Jan-0

9Fe

b-0

9M

ar-0

9Apr-

09

May

-09

Jun-0

9Ju

l-09

Aug-0

9Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-1

0Fe

b-1

0M

ar-1

0Apr-

10

May

-10

Jun-1

0Ju

l-10

Aug-1

0Sep

-10

Source: IMS Health, National Prescription Audit, Sep2010, LifeLink Sep2010; Reuters / University of Michigan Surveys of

Data for the last month of reported claims remains volatile until late reporting physician’s claims are added

Consumers, Sep 2010; Bureau of Labor Statistics, Sep 2010; Car sales from Bureau of Economic Analysis, National Economic Accounts, Last Revised in Dec 2010

US market grows 2.3% in 2010

Channels US$bn% Market

% Growth

2010

Channels US$bn Share

% Growth

Retail 167.3 54.4 2.0

Chain/Mass 108.1 35.2 2.6

Independents 37.9 12.3 1.3

Food stores 21.3 6.9 0.5

Mail Service 52.6 17.1 2.1

Institutional 87.6 28.5 3.0

Clinics 36 2 11 8 4 2Clinics 36.2 11.8 4.2

Hospitals 31.9 10.4 0.6

Long-term care 14.8 4.8 6.4

Home health care 2.5 0.8 -0.6

HMO 1.1 0.4 0.4

Others 1.0 0.3 -1.2

Total 307.5 100.0 2.3


The US market prescriptions grew at 1.0%, driven by chainsby chains

2010

Channels TRxs mn% Market

Share% Growth

Retail 3,646 92.0% 1.2

Chain/Mass 2,173 54.8% 2.1

2010

Chain/Mass 2,173 54.8% 2.1

Independents 748 18.9% -0.8

Food stores 490 12.4% 0.5

Mail Service 235 5.9% -1.0

Non retail channels 319 8.0% 0.9

LTC 319 8.0% 0.9

Total 3,965 100.0 1.0

Source: IMS Health, National Prescription Audit, Dec 2010

Absolute growth of leading therapy classes

DollarsAC

US$mn Total Rx dispensed

ACTRxs mnUS$mn TRxs mn

Antipsychotics,oth 1520.7 Anti-depressants 7.7

Analogs of human insulin 1205.9 Seizure disorders 7.3

Analeptics 971.1 Codeine & comb 6.4

Anti-platelets,oral 650.8 Vitamin D 6.2

Antiarth,biol resp mod 637.9 Lipid regulators 5.9

Alzheimer-type dementia 598.9 Analeptics 4.4

HIV antiviral combination 550.9 Calcium blockers 4.2

GI anti-inflam 518.3 Biguanides 4.1

Neurological disorders 505.1 Benzodiazepines 3.3

Codeine & comb 466.2 Mus relx,non-surg 2.7

Source: IMS Health, National Sales Perspectives, Nov 2010, National Prescription Audit, Nov 2010

Relative growth of leading therapy classes

Dollars%

GrowthTotal Rx dispensed

%GrowthGrowth Growth

HIV integrase inhib 58 Vitamin D 47

Biguanides 40 Antinauseant 5HT3 antag 35

Pneumococcal 38 Dpp-4 Inhib 16

fMiscellaneous,oth 32 Specific antagonists 15

Antineoplastics,misc,oth 31 Antihyperlipidemic agt 12

Neurological disorders 30 Analeptics 10

Newer gen psycother agt 29 H2 antagonists 8

Hormones,androgens 28 Analogs of human insulin 8

Ophth preps,oth 26 Ophth corticoids 8

Ophth anti-inflam,oth 24 Alpha-beta blocker 7


Absolute declines of leading therapy areas

DollarsAC

US$mn Total Rx dispensed


Ace inhibitors -242.0 Proton pump inhib -1.6

Calcium blockers -261.6 Narc cgh/anthst -1.8

Quinolones, systemic -269.2 Angiotensin II antagonists -1.8

Immunosup/transplant age -419.3 Glitazones -1.9

Platinum coordination -471.6 Quinolones, systemic -2.2

Anti-migraine -500.6 Macrolides & related -2.3

Herpes Antivirals -527.7 Synth narc,analg -2.4

UT benign prostate -806.5 O/C estrogen/progestogen -2.4

Seizure disorders -1663.0 Beta blockers -2.4

Proton pump inhib -2257.2 Osteoclast Inhibitors -4.1


Fastest growing products-Absolute growth

DollarsAC

US$mnTotal Rx Dispensed

ACTRxsmnUS$mn TRxsmn

venlafaxine hcl er (tev) 877 metoprolol succin (wts) 9.8

Prevnar 13® (Pfz) 732 amlodipine besy (lu.) 9.2

Crestor® (Azn) 694 simvastatin (lu.) 8.9

Copaxone® (Tvn) 559 hycd/apap (qlt) 8.2

enoxaparin sod (sdz) 540 gabapentin (am9) 7.6

Abilify® (Ots) 535 lisinopril/hctz (lu.) 6.3

Plavix® (Bsa) 534 omeprazole (rx) (myn) 6 2Plavix® (Bsa) 534 omeprazole (rx) (myn) 6.2

budesonide (tev) 508 azithromycin (tev) 5.9

Humira® (Abt) 405 albuterol (myn) 5.8

Atripla® (Bmg) 368 prednisone (w-w) 5.7

Source: IMS Health, National Sales Perspectives, Jan 2011, National Prescription Audit, Jan 2011

Relative growth of leading products

Dollars%

GrowthTotal Rx Dispensed

%GrowthGrowth Growth

valacyclovir hcl (rby) >999 amlodipine besy (lu.) >999

venlafaxine hcl er (tev) >999 albuterol (myn) >999

Prevnar 13® (Pfz) >999 valacyclovir hcl (rby) >999

enoxaparin sod (sdz) >999 amlodipine besy (gmk) >999

amphetamin salt er (glb) 682 metoprolol succin (wts) 908

pantoprazole sod (spi) 342 gabapentin (am9) 665

ti h l ( d)budesonide (tev) 235 paroxetine hcl (zyd) 275

Renvela® (Gzy) 144 furosemide (rby) 253

Trilipix® (Abt) 144 alendronate sod (wts) 239

oxaliplatin (t+p) 135 ranitidine hcl (gmk) 193oxaliplatin (t+p) 135 (g ) 193


Fastest declining products-Absolute declines

DollarsAC

US$mnTotal Rx Dispensed


Tricor® (Abt) -271 simvastatin (drl) -4.4

Prograf® (Aes) -274 hycd/apap (mkr) -4.4

pantoprazole sod (Pfz) -307 alendronate sod (tev) -4.5p p ( ) ( )

Cellcept® (Roc) -325 simvastatin (aob) -4.6

Arimidex® (Azn) -434 amoxicillin (tev) -4.7

Yaz-28® (Byh) -443 cephalexin (tev) -4.8

Lovenox® (S.A) -550 Lipitor® (Pfz) -6

Effexor Xr® (Pfz) -1311 prednisone (wts) -6.9

Valtrex® (Gsk) -1524 Effexor Xr® (Pfz) -7.1

Flomax® (B.I) -1772 amlodipine besy (myn) -7.1Flomax® (B.I) 1772 amlodipine besy (myn) 7.1

Source: IMS Health, National Sales Perspectives, Jan 2011, National Prescription Audit, Jan 2011

Absolute Growth Vs. Yr. Ago-Companies

Dollars AC US$BN TRx AC TRx mn$

Novartis (incl Sandoz) 2.3 Mylan Labs, Inc. 35.7

Lilly 1.2 Lupin Pharma 33.5

Teva lTeva 1.2 Amneal Inc 30.6

AstraZeneca 0.9 Novartis (incl Sandoz) 24.7

Bristol-Myers Squibb 0.8 Qualitest Products 21.0

Gilead Sciences 0 8 Z d Ph 18 3Gilead Sciences 0.8 Zydus Pharma 18.3

Global Pharma Corp 0.7 Glenmark Pharma 12.4

Novo Nordisk 0.7 Teva 12.4

Otsuka America Ph 0 6 W t W d 11 2Otsuka America Ph 0.6 West Ward 11.2

Mylan Labs, Inc. 0.5 Northstar Rx 10.1

Source: IMS Health, National Sales Perspectives, Sep 2010, National Prescription Audit, Sep 2010

Sales of leading corporations (Top 10)

% Market

MAT Nov 2010

US$mn% Market

Share% Growth

US Industry 306,689 100.0 2.8

1 Pfizer (incl Greenstone) 26,292 8.6 -5.0

2 M k & C 18 838 6 1 4 8

Leading corporations

2 Merck & Co 18,838 6.1 -4.8

3 AstraZeneca 18,401 6.0 2.1

4 Novartis (incl Sandoz) 15,361 5.0 18.7

5 Lilly 14,222 4.6 9.0

6 Roche (incl Genentech) 13,721 4.5 -3.0

7 GlaxoSmithKline 13,655 4.5 -9.2

8 Teva 13,627 4.4 12.9

9 Johnson & Johnson 12,748 4.2 -1.79 Johnson & Johnson 12,748 4.2 1.7

10 Amgen Corporation 12,675 4.1 1.7

Top 10 159,542 52.0 1.0


Sales of leading corporations (11-20)

% Market

MAT Nov 2010

US$mn% Market

Share% Growth

11 Abbott 10,824 3.5 2.6

12 Sanofi Aventis 10,464 3.4 -6.4

13 B i t l M S ibb 9 684 3 2 9 3

Leading corporations

13 Bristol-Myers Squibb 9,684 3.2 9.3

14 Boehringer Ingelheim 6,507 2.1 -12.2

15 Takeda 6,014 2.0 -25.6

16 Eisai Corp 4,706 1.5 8.2

17 Forest Lab 4,694 1.5 8.1

18 Mylan Labs, Inc. 4,601 1.5 18.1

19 Gilead Sciences 4,596 1.5 19.9

20 Otsuka America Ph 4,566 1.5 15.30 Otsu a e ca 4,566 5 5 3

Top 20 104,332 73.8 0.8


$98 bn at risk to generic competition in the US by 20152015

Value of products at risk 2004-2015

$98 bn

Source: IMS Health, MIDAS, Market Segmentation, Sep 2010

More innovative products will be lost than gained in the next few years if FDA approvals remain at the current levelfew years if FDA approvals remain at the current level

2014(f)2014(f)

2011(f)

2012(f)

2013(f)

2014(f)

2011(f)

2012(f)

2013(f)

2014(f)

2008

2009(f)

2010(f)

( )

2008

2009(f)

2010(f)

( )

2005

2006

2007

2005

2006

2007

0 5 10 15 20 25 30 35 40 45 50

2004

# NCE APPROVALS

05101520253035404550

2004

# NCE PROTECTION EXPIRIES

Source: FDA, IMS Health, Market Insights Team Analysis, Oct 2009

Global launches of innovative products declining, d i b f i d tdriven by fewer primary care products

NCH

ES

OF

NCE L

AU

NU

MBER O

31Source: IMS Health, New Product Focus, Jan 2011. *Preliminary estimate

Active pipeline continues to grow in each stage of clinical development except Phase I

1600Phase I Phase II

clinical development except Phase IN

E

1 205

1,36812541231

11301062

9901200

1400 Phase III Pre-reg/reg

S I

N P

IPELI

N

1,205

572

11591093

995941

893734648

990933

864807

800

1000

PRO

DU

CTS

363340334290299

274 287284258

142139138131130120200

400

600

OF

ACTIV

E

142139138131130110 102 116 120

0

200

June-02 June-03 June-04 June-05 June-06 June-07 June-08 June-09 June-10

# O

Source: IMS Health, R&D Focus, Jun 2010 and previous year slides

Global R&D pipeline compared against previous yearyear

2,721

Number of active products in the pipeline to date = 6,119

,

1 763

1,2531,516

1,763 (patterned segment) Specialist Driven Products

444

185420

958601

172 103

833915

272

Phase I20.5%

Phase II24.8%

Phase III7.3%

Pre-reg/reg3.0%

Pre-clinical 44.5%

172 82

% share of active pipeline

103

Source: IMS Health, R&D Focus, Jun 2010

Leading franchises in the global R&D pipeline

Phase III, pre-registered, registered1. Cancer (109)2. CNS (51)3. Vaccines (51) 4. Cardiovascular (49)4. Cardiovascular (49)5. Anti-infectives & Antivirals (39)6. Diabetes (33)7. Genito-urinary & Hormones (32)8. Arthritis/Pain (26)8. Arthritis/Pain (26)9. Respiratory (22) 10. Dermatology (16)11. Gastrointestinal (16)12. Metabolic (15)( )13. Blood (12)14. Ophthalmics (11)15. Immune system (7)

Source: IMS Health, R&D Focus, Jun 2010

2008 FDA approvals of NCEs took place in a challenging environmentchallenging environment

Fewer new product submissions24 in 2008* vs. 34 in 2007

Fewer “me-too” productsDelayedor denied Restricted or denied market access36 complete

Restricted market access21 Risk 26 NCE approvals

i d l

36 complete response or not-approvable letters

21 Risk Evaluation & Mitigation Strategies

Review delays20% of PDUFA goals missed in 2008*

FDA staff shortage

Source: IMS, Market Insights Research. *Jan-Oct 2008.

71 “traditional” drugs have REMS programs

Program Complexity

75%

60

70

80

40

50

60

23%

20

30

0% 2% 0% 0%0

10

MG MG + CP CP + ETASU + IS MG + ETASU MG + ETASU + IS MG + CP + ETASU + IS

Source: Center for Healthcare Supply Chain Research

68 “specialty” drugs have REMS programs

Program Complexity

57%

50

60

30

40

AranespEpogen/ProcritNplate

19%

4% 7%9%10

20

NplateSabrilOnsolisZyprexa Relprevv

4%3%

7%9%

0

10

MG MG + CP CP + ETASU + IS MG + ETASU MG + ETASU + IS MG + CP + ETASU + IS

Source: Center for Healthcare Supply Chain Research

REMS programs and a more active FDA safety program will bring new risk/benefit dynamic

Voluntary AE reportingAE ReportsFrom public, Point-of-Care,Other safety data

R l t d i i

program will bring new risk/benefit dynamic

Pre Market Safety Data

FDA Analysis of Safety Profile

Industry, Governmenty

sources Regulatory decisions

Safety Profile• Statistical (SAS, STATA)• Clinical• Integration of all

information

Large data sets• HMD• CMS• VA• Other

Registries

Oth

Electronic HealthRecords• GPRD• VA DOD• Cigna (?)

Registries• Personal

health records• Drug specific• Disease

specificData communication

Drug Use Data• IMS• Verispan• US• Prevnar (?)

Other surveillanceSystems• NEISS• TESS• DAWN

Industry driven studies

Source: FDA PDUFA IV Information Technology Plan, DRAFT, Dec 2007

Medicare Part D and Medicaid are growing!

% TRx Dispensed

100

42 49 55 60 65 68 71 73 74 73 72 72

2120191915

75

100

1313

1211

10 11

65 68 71 73 74 73 72 72

66 64 63 63 6150

44 38 33 29 25 21 19 16 14 14 14 12 11 10 9 9 8

10 11 11 11 11 13 14 168 8 8 9 10

0

25

4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Cash Medicaid All Other 3rd Party Medicare Part D

Source: IMS Health: National Prescription Audit (NPA) Plus 7, Xponent PlanTrak

Debate in the US on healthcare reform was broadly centered on core issues of access affordability and centered on core issues of access, affordability and quality

• Providing insurance to the currently uninsured

• Improving the quality of care that is deliveredQualityAuninsured deliveredQualityAccess

• Lowering costs of existing activities

• New sources of funding

Affordability

funding

The most certain impacts are negative in the short term but more positive or uncertain longer termterm but more positive or uncertain longer term

UpsideExpanded coverage of current uninsuredcurrent uninsured

Expanded Medicaid coverageReform of insurance practices

Closure of donut hole

IMP

AC

T

pIndependent Payment Advisory BoardPatient Centered Outcomes Res. Inst.Pilots, demonstration projectsPreventive care incentivesPhysician payment

Medicaid rebate

Annual feesBiosimilar regulatory pathway

sunshine rules

increases

Part D donut hole subsidyDownside

2010 20192014TIMING

The reforms will move tens of millions of people to or from coverage types by 2019

400

from coverage types by 2019

COVERAGE AFTER REFORMImpact on 2019

(Mn)Vs no reform Vs 2010

300

350

400

LLIO

NS)

Exchanges

Unins ed

+24 +24

-32 -27

Vs. no-reform Vs. 2010

200

250

F P

EO

PLE

(M

IL Uninsured

Nongroup/Other

Employer

-32 -27

-5 -2

-4 +8

50

100

150

NU

MBER O

F Employer

Medicaid/CHIP

Medicare

+16 +11

0 +14

0

50

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: CMS, CBO Healthcare Reform Reconciliation Bill Analysis, Mar 2010

Sales and prescription performance-2011

% Growth of prescription productsTotal market

10% 2007

2008

Total market

5 0%WTH U

2009

2010

MAT Feb 2011

YTD Feb 2011

3.8%3.2%

1.8%

5.0%

2.1%2.3%2.6%

2.0%

4.0%4.6%5%

% G

ROW

1.8%1.1% 1.2%

0%Sales TRx

Source: IMS Health, National Sales Perspectives, Feb 2011 IMS Health, National Prescription Audit, Feb 2011

What’s In?

• Slower market growth

• Generics & Patent Cliff

• Specialty is growing but at a slower pace

• RX to OTC

• Private label OTC

• Chain & Mass, Mail service, Clinics, & LTC

M di id & M di P t D• Medicaid & Medicare Part D

• Cough, Cold and Flu

• Price Increases• Price Increases

• REMS

• Drug ShortagesDrug Shortages

What’s out and what’s ahead???

What’s Out? What’s Ahead?What’s Out?• Brand growth

• Innovation

What’s Ahead?• Government

− Medicaid• Innovation

• R&D

Offi i it

− Medicare Part D

− Health Care reform

− Generic User fees• Office visits

• Elective surgery

− Generic approval backlogs

− More FDA inspections

− AMP

− Biosimilar Pathway

− REMS

− Patent SettlementsPatent Settlements

Thank youVisit www imshealth com for more Visit www.imshealth.com for more

information on IMS’ Viewpoint

Doug Long [email protected]

the us pharmaceutical market_doug long

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