Werte schaffen durch Innovation: “Pharma 2020”lesmueller-stiftung.de/wp-content/uploads/2010/11/... · Global USA EU5* Japan Tier 1 Pharmerging Tier 2 Pharmerging Tier 3 Pharmerging

Werte schaffen durch Innovation:“Pharma 2020”

Prof. Dr. Wolfram CariusLMU München, 26.11.2010

External Situation:Market environment and Competition

Prof. Dr. Wolfram Carius, Vortrag LMU 26.11.2010 1

1) Market environment

GeneralEconomy

Society

PoliticalEnvironment

Technology

2) Competition

WHAT DOES IT MEAN IN 2010-2014 and ≥ 2020

The pharma industry has, and is, undergoingfundamental changes


• Historical 5yr Global CAGR: 6.7%

• Increased power of market access bodies, HTA

advisors, increased complexity at sub-national

level

• Increased variety in cost containment

• Evolving generics and biosimilars dynamics

• Parallel trade dynamics

• Forecast 5yr Global CAGR: 5-8% under pressure

• Unprecedented patent cliff

• Macroeconomic factors driving cost-containment targeting pharma

• Generic penetration will continue to grow

• More financially potent launches in the next 5years vs. the last 10

• Pharmerging markets will grow in attractiveness

• Diversification into broader healthcare businessmodels

• Changing decision makers impact pharmabusiness/commercial model

Historical Growth Drivers Future Growth Drivers

New drugs are mainly parenterals and orals


Source: IMS, Tufts CSDD


Generics moving towards 50% volume but value share<15%: protected growth down to 12%


Source: IMS MIDAS mat_12_2009 SU, USD/MNF, LCD/MNF

Generics

Original Brands

ProtectedValue:Share:Growth:

Volume:Share:Growth:

Value:Share:Growth:


Value:Share:Growth:


42.8%6.8%

12.8%9.8%

42.8%-0.5%

78.6%4.4%

75.1%12.3%

32.9%7.6%

Generics

Original Brands

ProtectedValue:Share:Growth:


Value:Share:Growth:


Value:Share:Growth:


31.2%5.3%

9.4%11.4%

53.2%15.8%

82.2%20.6%

76%22.5%

42.3%16.5%

2000 2009

The fundamental challenge

Top 8Markets

The top 8 markets globally will lose ~45%of current protected brand value to 2014


Alna

Seretide

AriceptLipitor

Plavix

Seroquel

Zyprexa

Actos

Oxycontin

Singulair

LexaproNexium

Cymbalta

0

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014

SA

LES

($

Billio

ns)

.

Source: IMS Health MIDAS Market Segmentation December 2009 Products shown have >$2Bn sales in 2009*Assumptions based on no price erosion following generic entry to the market.

Top 8 markets: Estimated value of patent expiry $136Bn [2009 Protected sales: $299Bn]

Expiry dates: MAT December

$26.7Bn

$42.8Bn

$27.6Bn

$14.0Bn

$24.8Bn

About $146Bn at risk which could help Payers arrest growth

US will take the biggest hit in generic exposure over thenext 5 years


0

5

10

15

20

25

30

35

40

45

50

2010 2011 2012 2013 2014

SA

LES

($

Billio

n)

.

US Japan EU5 All OthersSource: IMS Health MIDAS Market Segmentation December 2009*Assumptions based on no price erosion following generic entry to the market.

Global: Estimated value of patent expiry $145.8Bn [2009 Protected sales: $322Bn]

Expiry dates: MAT December

$28.7Bn

$45.0Bn

$30.1Bn

$15.6Bn

$26.5Bn

High debt burden and deficit augment calls for greaterefficiency in public healthcare financing


0

20

40

60

80

100

120

140

-10-8-6-4-20Structural deficit (% of GDP)

Gro

ss

Fin

ancia

lLia

bilitie

s(%

of

GD

P)

Source: OECD December 2009

OECD Public Indebtedness 2010

Austria

Belgium

Canada

Czech Rep

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Luxembourg

Netherlands

New Zealand

NorwayPoland

Portugal

Spain

Switzerland

UK

US

OECD= -6.7%

70%

OECD= 97.4%

Biologics & emerging markets will play a driving role


Global Pharma growth will start to recover in 2013Mature markets at the lower end: Pharmerging leads


0

200

400

600

800

1,000

1,200

2009 2010 (f) 2011 (f) 2012 (f) 2013(f) 2014(f)

VALU

ESALES

US

$BN

0%

5%

10%

15%

20%

25%

30%

VALU

EG

RO

WTH

%(U

S$)

Global USAEU5* JapanTier 1 Pharmerging Tier 2 PharmergingTier 3 Pharmerging DSE Region

Source: IMS Health Market Prognosis, Sep 2010; *DSE Region: 12 countries

Pharmaco challenges

Global Pharma Historical Market Dynamics & Current Economic Environment

Mature Markets

CAGR 2010-2014

US 2-5%

Japan 2-5%

Germany 1-4%

France 0-3%

Italy 1-4%

Canada 2-5%

Spain 2-5%

UK 1-4%

S. Korea 6-9%

Mature 2-5%

Global Sales and Market Growth

Growing importance of emerging markets


8

14

19

13

14

10

Mexico

Turkey

China

India

Russia

Brazil

Pharma SalesCAGR 2007-12Percentage

Total pharmamarket, 2012USD billions

27.4

17.1

17.6

44.1

20.1

16.1

5

4

5

North America

UK

Germany 49.3

28.8

382.5

Emergingmarkets

Developedmarkets

SOURCE: IMS Market Prognosis; McKinsey analysis

A new world order will evolve through 2014, with Chinabecoming #3


2004 Rank 2009 Rank 2014 Rank

1 United States 1 United States 1 United States

2 Japan 2 Japan 2 Japan

3 France 3 Germany 3 China

4 Germany 4 France 4 Germany

5 Italy 5 China 5 France

6 United Kingdom 6 Italy 6 Brazil

7 Canada 7 Canada 7 Italy

8 Spain 8 Spain 8 Canada

9 China 9 United Kingdom 9 Spain

10 Brazil 10 Brazil 10 India

11 Mexico 11 Russia 11 Russia

12 Australia 12 Mexico 12 United Kingdom

13 South Korea 13 India 13 Venezuela

14 India 14 Australia 14 Turkey

15 Netherlands 15 Turkey 15 South Korea

16 Belgium 16 South Korea 16 Australia

17 Poland 17 Greece 17 Mexico

18 Turkey 18 Poland 18 Argentina

19 Greece 19 Netherlands 19 Poland

20 Russia 20 Belgium 20 Greece

Source: IMS Health Market Prognosis, Sep 2010. Market size ranking in constant US$

UK to drop out of top 10: volatility in 11-20 group

The European market will deliver significantly lowergrowth 2010 - 2014


29%22%

12%

7%

7%

6%

31%

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CO

NTRIB

UTIO

NTO

GRO

WTH

(CO

NST

US$)

US CanadaEU5 Rest of EuropeJapan S. KoreaPharmerging Tier 1-3 Rest of World

Contribution to global growth, Const US$ 2014 Market share

2005-09 2009-14

United States

34%

Canada2%

EU5

14%

PharmergingTiers 1-3

26%

Rest of theworld

6%

S. Korea

2%

Japan10%

Rest ofEurope

6%

Source: IMS Health Market Prognosis, Sep 2010


Curriculum VitaeProf. h.c. Dr. Wolfram Carius

Wolfram Carius, born 1961 in Zweibrücken/Germany, Prof., Ph.D., is Member of theBoard of Managing Directors of Boehringer Ingelheim GmbH since January 01, 2009,responsible for the Corporate Board Division Human Ressources and Operations.

He received his degree as pharmacist and his doctorate in pharmaceutical technologyfrom the Saarland University. In 2009 he was awarded the scientific title ofProfessor h.c. from the University of Biberach.

Wolfram Carius began his professional career as a manager of quality control atDr. Karl Thomae GmbH in Biberach. In the following years he took over differentfunctions in plant development, management and technology for BoehringerIngelheim in Germany, Japan and Brazil. Before joining the Board he wasSenior Vice President Biopharmaceuticals and member of the managing board ofBoehringer Ingelheim Pharma GmbH & Co KG, Germany and from September 2005on he was responsible for the worldwide Pharmaceuticals Production of BoehringerIngelheim GmbH as Corporate Director.

Presently he is additionally active as: Member of the controlling board, scientific advisor and professor at the

University of Biberach, Germany Advisory board member of the National Institute of Bioprocessing, Research

and Training (NIGRT, Ireland) Board member of the association of research driven pharmaceutical industry in

Germany (VFA) Member of the foreign trade association of the chemical industry in Germany

(VCI) Member of the global Pharma Manufacturing Forum (PMF)

Documents

Werte schaffen durch Innovation: “Pharma 2020”lesmueller-stiftung.de/wp-content/uploads/2010/11/... · Global USA EU5* Japan Tier 1 Pharmerging Tier 2 Pharmerging Tier 3 Pharmerging