Development Outlook for European Industry in current Economic - - PowerPoint PPT Presentation

Challenges and Opportunities for Generic Medicines Development

Outlook for European Industry in current Economic Recession

Gudbjorg Edda Eggertsdottir December 6, 2012

Watson acquires Actavis

• Acquisition value EUR 4.25 billion (USD 5.5 billion)
• Acquisition closed 31 Oct 2012
• Creates 3rd largest global generics company
• ~$8.0 billion projected 2012 pro forma combined revenue
• 17,000 employees
• Strengthened commercial position with footprint in 60+

countries

• 30+ manufacturing facilities; ~44 billion unit capacity
• 12 global R&D centers

Two powerful, profitable and rapidly growing companies into one exceptional global business

Global Powerhouse

Our global marketplace

60/+ countries 5 billion potential customers Top 3 in 12 markets Top 5 in 16 markets

Watson Will Continue to Grow

• Well-Defined, Balanced Growth Strategy
• Global Generics
• Global Brands and Biosimilars
• Anda Distribution
• Supported by Leading Global Supply Chain
• Substantial Investment in Internal Growth
• Significant investment in internal R&D
• Investments in people/resources to support

marketing and sales growth

• Financial Strength to Drive External Growth
• Expanding market/geographic access through Actavis

acquisition

Key role of generic and biosimilar medicines

Affordability Accessibility Availability Generic Medicines

• Approximately $30bn can be saved globally by improving

suboptimal use of generics*

• Japan has the biggest opportunity, followed by Cyprus

*IIHI Ministers Report 17.09.12 from IMS Institute for Healthcare Informatics

Opportunities

• Global generic spending is growing by over 10% a

year to reach around $415 billion by 2016*

• Fastest growth in pharmerging markets
• Europe‘s share in growth drastically reduced
• New emerging markets with high purchasing

power (Russia, China, Middle East, Africa)

• Demographic changes (ageing and growing

populations) both in Europe and globally

• Patent expiries in developed countries

*IMS Market Prognosis 2012

Challenges

• Increasing regulatory requirements to manage more

complex operations

• New pharmacovigilance requirements
• Anti-counterfeit measures – implementation of FM directive
• Unique identifier
• API controls
• Management of continuity of supply
• Increasing competition from countries outside Europe
• Lack of level playing field
• Market access barriers and delays as identified in the EC

Sector Inquiry

• Strong price pressure in the EU

Influence of recession

• n pharma market

Pharmaceutical growth trend in Europe is a major concern

Cost-containment and austerity measures a key driver

Europe 2001- 2005

CAGR 8%

2006- 2010

CAGR 6%

2011- 2015

CAGR 1-4% Regions

Source: IMS Market Prognosis 2011

Top 5: 7% 5% 0-3% Other West: 8% 4% (-1)-2% East: 13% 11% 6-9%

Payers in Europe have implemented cost containment measures targeting pharmaceutical supply and/or demand

Supply side Demand side All reducing growth

• Reference pricing
• Volume controls
• Mandatory price cuts
• Rebates and clawbacks
• Faster to implement
• Widely seen in crisis struck (IMF)

countries

• Promotion of generics
• Prescribing budgets
• Patient co-payment
• Risk sharing agreements
• Slower to implement
• Long-term sustainability
• Technology often

required

69% 21% 10%

Brand Generic Other

Generic penetration will continue to grow based on patent expiries and economic pressures

Source: IMS Market Prognosis, Sep 2011

Sales by Segment

52% 40% 8% 63% 28% 9%

$610Bn $876Bn $1,120Bn 2010 2005 2015

Biosimilar Products in the 7MM

Despite impressive growth biosimilars still account for very small portion of biologics sales (~3% of the relevant drug classes in terms of US$ in 2011)

50 100 150 200 250 300 350 400 2007 2008 2009 2010 2011

US$mm

epoetin theta epoetin zeta epoetin alfa filgrastim somatropin

~107% CAGR %, 2007-11 $20mm $76mm $144mm $256mm $365mm Source: IMS Health, MIDAS, MAT Q4 2011; Actavis research

7MM – US, Japan, France, Germany, Italy, Spain and UK

Regulatory hurdles

Key hurdle: lack of right for EU companies to manufacture during SPC

• Global competition from

key emerging markets (India, South Korea, Russia, China, Brazil)

• Lack of provision for

advanced manufacturing during SPC in Europe

Emerging Markets

SPC

EU generics industry

Key hurdle: Major increase in costs due to the Falsified Medicines Directive

• The implementation

costs of possible new anti-falsification technologies for the EU generic industry could reach € 1 billion.

WARNING

€ 1 billion

Key hurdle: Possible shortages due to API supply problems

API sourced from outside the EU 75% API sourced from the EU 25%

API Supply

• EU is implementing a new requirement for API imported into the EU – written

confirmation of GMP status

• Key supplying countries must get prepared (India, China, etc.)

How can we strengthen the industry?

Europe 2020 Barroso commission II

• Three mutually reinforcing

priorities:

I. Smart growth: developing an economy based on knowledge and innovation. II. Sustainable growth: promoting a more resource efficient, greener and more competitive economy. III. Inclusive growth: fostering a high-employment economy delivering social and territorial cohesion.

Export Loss of EU Generic and Biosimilar Medicines Industry

Period of market loss to EU companies Date of international competition 20 year patent + Up to 5 year SPC

Leading countries in number of

Canidates for biosimilars

European Generic Medicines Industry: Major Contributor to Employment and Development

European countries with generic medicines R&D and manufacturing European countries with generic medicines manufacturing

Source: EGA Internal survey 2010

Updated 2010.10

EU2020 Industrial Policy – priorities for generic and biosimilar medicines industry

• Creating a sustainable internal market for generic and biosimilar

medicines

• Creating sustainable pricing and reimbursement
• Tax exemptions and funds for generic R&D
• Tax initiatives for manufacturing jobs
• Fostering market access in third countries
• Advanced manufacturing for export
• Eradication of non-tariff barriers in 3rd countries
• Improved mutual recognition of API inspections
• Better regulation
• Harmonisation of quality standards to ICH Standards
• Establishing global development for biosimiliar medicines

EU-US Task force

• EGA and GPhA jointly support setting up a High Level Working

Group on Growth and Jobs to create opportunities for the European and American industries in the globalised economy.

• EGA and GPhA have put forward practical priority measures for our

industry:

• global development and international harmonisation of data

requirements for approval of biosimilar medicinal products

• single development programme and international harmonisation of

data requirements for approval of generic medicinal products

• mutual recognition of compliance inspections
• not mismatching the EU and the US IP rights systems
• advanced manufacturing provision

Global development of biosimilars

• We are very close to a breakthrough!
• Europe is now willing to embrace the concept of

a global reference product for biosimilars

• Also US FDA, and Canadian authorities have

indicated willingness to support global development.

• Generics remain key in containing costs post

patent expiry

• Generic penetration continues to vary based on

specific country drivers

• Massive savings can still be made globally by
• ptimizing use of generics
• Price reductions continue to exert pressure on

generics

• Sustainable price & reimbursement systems

need to be implemented

• Reference pricing systems need to be improved
• Regulatory requirements need to fit the

purpose

• If it isn’t a problem, don’t fix it!
• International harmonization is key

Final comments

Thank you!