Global Pharmaceutical Market Trends


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  • APAC no. of patients : Non small cell lung cancer : 500,000 Breast cancer : 250,000 Colorectal : 200,000 Generics and biosimilars: Drivers of growth are Governments focUS$ on cost effective medication, as well as need to increase HC coverage (e.g. China’s National essential drug list expected to benefit generic companies), US$e of branded generics due to loss of patent of key CV blockbUS$ters (US$$ 600 million of these blockbUS$ter sales in 2010) and increased availability and US$e of biosimilars (e.g. HGH EPO) More than 500 biotechnology-derived medicines are in development. • Spending on biologics estimated to grow by 20-25% in 2010, compared to an average of 5% for small molecule drugs. • 60% of the current biopharmaceutical pipeline is protein-based, and 40% of those drugs in Phase III are biologics. • 50% of approved pharmaceuticals in 2010 will be biotechnology products. Global sales of biologics are expected to reach $90 billion in that same year, $10 billion of which will be off-patent. • US$e of biologics in Asia still in early stages – e.g. <5% of RA patients are on biologics, growing by >25% yearly. Cost is a major limiting factor for patient access
  • Global Pharmaceutical Market Trends

    1. 1. Global Pharmaceutical Market Trends Rhenu Bhuller GVP, Pharmaceuticals & Biotechnology Frost & Sullivan BioMalaysia 3 rd November 2010
    2. 2. Agenda 2 3 1 Global Pharmaceutical Market Trends Future Trends and Opportunities The Healthcare World is Changing
    3. 3. The Healthcare World is Changing
    4. 4. <ul><li>Cost Containment </li></ul><ul><li>Reimbursement changes </li></ul><ul><li>“ Pay for Performance” </li></ul><ul><li>Comparative effectiveness </li></ul>The Healthcare World is Changing <ul><li>National HC spend more than $100B </li></ul><ul><li>Expanding medical coverage – 500M rural population </li></ul><ul><li>$1B direct hospital investment by 2012 </li></ul><ul><li>Quality & service-related press focus </li></ul><ul><li>Patient “right to choose” in draft NHS charter </li></ul><ul><li>NHS quality charter </li></ul><ul><li>Quality accounts need to be published </li></ul>U.S. Reform China build-out U.K. <ul><li>Cost Challenge </li></ul><ul><li>Access Challenge </li></ul><ul><li>Quality Challenge </li></ul>
    5. 5. Demographics Drive Access Concerns Globally... <ul><li>China </li></ul><ul><li>1,300 Million population </li></ul><ul><li>3 Million hospital beds </li></ul><ul><li>2.2 beds/1000 people </li></ul><ul><li>1.4 doctors/1000 people </li></ul><ul><li>60,396 hospitals </li></ul><ul><li>Japan </li></ul><ul><li>127 Million population </li></ul><ul><li>1.8 Million hospital beds </li></ul><ul><li>9.9 beds/1000 people </li></ul><ul><li>2.7 doctors/1000 people </li></ul><ul><li>7,785 hospitals </li></ul><ul><li>India </li></ul><ul><li>1,100 Million population </li></ul><ul><li>0.8 Million hospital beds </li></ul><ul><li>0.7 hospital beds/1000 people </li></ul><ul><li>0.6 doctors/1000 people </li></ul><ul><li>13,896 hospital </li></ul><ul><li>Australia </li></ul><ul><li>27 million population </li></ul><ul><li>0.213 Million hospital beds </li></ul><ul><li>7.9 hospital beds / 1000 people </li></ul><ul><li>2.5 doctors/ 1000 people </li></ul><ul><li>1,317 hospitals </li></ul><ul><li>Korea </li></ul><ul><li>48 Million population </li></ul><ul><li>0.283 Million ho spital beds </li></ul><ul><li>5.5 hospitals beds/1000 people </li></ul><ul><li>1.7 doctors/1000 people </li></ul><ul><li>997 Hospital </li></ul><ul><li>Taiwan </li></ul><ul><li>23 Million population </li></ul><ul><li>0.136 Million hospital beds </li></ul><ul><li>5.9 beds per 1000 of the population </li></ul><ul><li>1.6 doctors /1000 people </li></ul><ul><li>556 hospitals </li></ul>Source: Frost & Sullivan
    6. 6. The Balance Between Young and Old Is Shifting <ul><li>In 2000, 10% (606 million) of the global population was aged 60+ </li></ul><ul><li>By 2050, this will be more than 21% (2 billion) </li></ul><ul><li>75% of those aged 60+ have one chronic condition - 50% have two or more chronic conditions </li></ul>
    7. 7. Malaysia: Increasing trend in healthcare expenditure <ul><li>The per capita health spending also showed a progressive increase from RM318 in 1997 to RM917 in 2006m increase of more than 2 folds. </li></ul><ul><li>The total expenditure of health has consistently increased from RM 8,2 billion in 1997 to RM 24.4 billion in 2006 which is a 3 fold increase. </li></ul><ul><li>The total expenditure for health as a % of Gross Domestic Product (GDP) has gradually increased from 2.9% in 1997 to 4.3% of GDP in 2006. </li></ul><ul><li>However, healthcare spending in Malaysia is still sub-optimum – Singapore and India have higher % TEH as % of GDP than Malaysia. </li></ul>Trend of total healthcare expenditure (TEH) Per capita spending on health, 1997-2006 (RM, Nominal Value) Source: Malaysia National Health Accounts Primary Care Expenditure, MOH, 14 Apr 2008
    8. 8. Malaysia Pharmaceuticals & Biotechnology Market Growth of cancers and lifestyle diseases propel the market Pharma & Biotech Revenues, US$ Mn, 2009-2012 Market Drivers Market Restraints <ul><li>Large number of counterfeits and concern for quality of generics </li></ul><ul><li>Government tenders favour domestic manufacturers </li></ul><ul><li>Growing usage of traditional/herbal medicine </li></ul><ul><li>Growing demand for lifestyle diseases drugs e.g. cancer, cardiovascular, diabetes </li></ul><ul><li>Drug price controls lacking in private sector </li></ul><ul><li>Strong government support for generics </li></ul>
    9. 9. Global Pharmaceutical Market Trends
    10. 10. Global Pharmaceutical Market . . . A USD880 billion market in 2011 driven by emerging markets
    11. 11. However . . . pharmaceutical R&D productivity declines
    12. 12. The Next Five Years Will See More Than 70 Major Drugs Come Off-Patent In The Major Markets Within US And Europe. Beyond 2011 Increasing Focus On Biologics US 14 drugs lose patent protection (include super blockbusters Effexor and Fosamax, and potentially Advair) EU Nine drugs lose patent protection in at least one of the major European countries (including both Fosamax and Effexor) US Five major drugs lose patent protection (includes Prevacid) EU Seven drugs lose patent protection in at least one of the major countries (including Nexium, Pantozol and Cozaar) US Patent protection expires for 10 major drugs in the US (includes the superblockbusters Seroquel and Zyprexa, plus three other blockbusters) EU Four of these, including Zyprexa, lose patent protection in three major European countries, as do seven other drugs, most notably Lipitor in November 2011 US The US patent for Lipitor expires and for 12 other drugs (includes the blockbusters Levaquin, Cozaar and Protonix) EU Five drugs become exposed to generic competition with Keppra the most significant of these Decreasing number of small molecule patent expires beyond 2013 Biologics will be the focus within hospitals in the injectables field Within the EU and US, there is increasing competition from low cost competitors 2008 2009 2010 2011 Beyond 2011……… Market Size (2007-2012)
    13. 13. Major Pharma Patent Expirations - Summary 2008 14 drugs face patent expiration Total sales at stake: $11 billion Biggest losses: Advair for asthma (maker:GlaxoSmithKline, U.S. sales: $2.8 billion) Effexor XR for depression (Wyeth, $2.2 billion) Risperdal for schizophrenia (Johnson & Johnson, $1.5 billion) Fosamax for osteoporosis (Merck,$1.5 billion) 2009 12 drugs face patent expiration Total sales at stake: $8.5 billion Biggest losses: Prevacid for ulcers (makers: Abbott Laboratories and Takeda, U.S. sales: $3.3 billion) Lexapro for depression (Forest Laboratories, $1.9 billion) Topamax for epilepsy and nerve pain (Johnson & Johnson, $1.3 billion) Lamictal for epilepsy and bipolar disorder (GlaxoSmithKline, $1 billion) 2010 17 drugs face patent expiration Total sales at stake: $8.5 billion Biggest losses: Cozaar/Hyzaar for high blood pressure (maker: Merck, U.S. sales: $5.5 billion) Abilify for schizophrenia (Bristol-Myers Squibb and Otsuka, $1.1 billion) Aricept for Alzheimer's (Eisai and Pfizer, $600 million) Flomax for enlarged prostate (Abbott Laboratories, $600 million 2011 <ul><li>21 drugs face patent expiration </li></ul><ul><li>Total sales at stake: $15 billion </li></ul><ul><li>Biggest losses : Lipitor for high cholesterol (maker: Pfizer, U.S. sales: $6 billion) </li></ul><ul><li>Protonix for ulcers (Wyeth, $2 billion) </li></ul><ul><li>Actos for diabetes (Takeda, $1.6 billion) </li></ul><ul><li>Zyprexa for schizophrenia (Lilly, $1.6 billion) </li></ul><ul><li>Levaquin for bacterial infection (Johnson & Johnson, $1.3 billion) </li></ul>
    14. 14. The pharmaceutical industry . . . In transition <ul><li>T he pharmaceutical and biotechnology industry is in a state of transition. </li></ul><ul><li>Companies are reorganizing to evolve and reinvent themselves in order to maintain growth centers in the face of a myriad of serious challenges. </li></ul><ul><li>Overall, companies are looking to align with areas of growth opportunity as well as new business strategy and product development paradigms. </li></ul><ul><li>Outsourcing of both manufacturing and internal functions (e.g. sales) is ‘fashionable’ </li></ul>A State of Transition <ul><li>Importance of India and China as global markets – other Asian affiliates have to ‘fight’ for global attention and investments. </li></ul><ul><li>Change in consumption patterns in emerging markets – but focus still on primary care. Growth for Asia seen in specialist disease areas – CNS, oncology </li></ul>Growing Influence of Emerging Markets Pharma Industry challenges Patent expiry of major global blockbusters Increasing acceptance of generics and pricing pressures Increasing regulatory scrutiny measures/reforms Buy local Working in ‘hybrid’/niche areas, as opposed to blockbuster mentality <ul><li>Providing adequate health care to cater to the demographic pressure. </li></ul><ul><li>Demand for medical care, and therefore healthcare spending, grows faster than the economy, new models of financing are needed. </li></ul>Pressure? Opportunities? ‘ Saturated developed markets’ – low unmet need
    15. 15. Future Trends and Opportunities
    16. 16. Changes In The Global Pharmaceutical Environment Require Pharmaceutical And Biotech Companies To Adapt To Changing Business Models Blockbuster Model Niche Drugs and R&D 2020 Integration & Supply Chain <ul><li>Integrated packages of products and services </li></ul><ul><li>Patient monitoring & compliance </li></ul><ul><li>Pharma and medical devices providing sophisticated and efficacious solutions </li></ul><ul><li>Integration of pharmaceuticals, diagnostics, medical devices, patient monitoring and healthcare IT </li></ul><ul><ul><li>Will result in a high profile, risk free, user friendly, low cost and safe healthcare solution </li></ul></ul><ul><li>Preventative Healthcare & Wellness </li></ul><ul><ul><li>Astounding growth in the vaccines industry </li></ul></ul><ul><li>Marketing of Value Added Services </li></ul><ul><li>Genomics and proteomics expected to reduce R&D times </li></ul><ul><li>‘ In life testing’ will take over the current clinical trial process. Continuous data monitoring can be done by the regulators during the testing process. Clinical trials will eventually become shorter </li></ul><ul><li>Supply chain functions will evolve to a revenue generating model. Products and services will be marketed through the supply chain </li></ul><ul><li>Just –in time manufacturing, novel delivery methods and direct to consumer distribution will be adapted from other industries like the automotive industry </li></ul><ul><li>Automated dispensing of drugs </li></ul><ul><li>Smart cards / internet to store patients details </li></ul>2015 2020 Opportunities in the Global Pharma Market Pre 2005 2015
    17. 17. Confidential to Frost & Sullivan and Invida #1 #2 #3 #4 #5 <ul><li>Globally the top 5 scoring therapeutic segments stand out as the most attractive segments in the global markets. Key drivers of these markets include their market size, high degree of innovation, strong growth rates and attractive levels of reimbursement </li></ul><ul><li>Over the next decade, biotechnology companies are expected to stay focused on producing innovations aimed at treatment of Autoimmune, Cancer, Neurological, and Cardiovascular diseases </li></ul>Source: Frost & Sullivan Global Therapeutic Disease Clusters & Attractiveness in Asia
    18. 18. The Biologics Market is Growing . . . “Even a 20% price reduction on just six off-patent biopharmaceutical products would save the EU some euro dollar $1.6 ($2.4) billion each year,&quot; EGA president Greg Perry
    19. 19. and Growing . . . Product Sales Have More than Doubled Every 5 Years Since 1995 <ul><li>CAGR is >25% </li></ul><ul><li>Over 60 new biotech products approved in last 5 years </li></ul><ul><li>Sales of Biologics (2006) ~ $ 65bn </li></ul><ul><li>Sales of top 20 Biologics (2006) : $ 48 bn (GCSF & EPO among top 20) </li></ul><ul><li>Biosimilar market growth –compound annual rate of 135% by 2010 </li></ul><ul><li>• Biosimilarmarket value –Estimated at $ 16.4 bn by 2011 </li></ul>
    20. 20. Biosimilars . . . Getting crowded . . . ROI remains a challenge <ul><li>LONDON, 2008 April 25 (APM) -First-generation biosimilar medicines &quot;will not make any money,&quot; analyst Frances Cloud of Nomura Code has told a European Generics Association meeting. </li></ul>Increasing regulatory hurdles SEA, China, India, Korea, EU, Japan, US US •Somatropin: Omnitrope(Sandoz); ccretropin(Congene/Apotex) EU •EPO: Retacrit®, Silapo®(Hospira/Stada), Binocrit, Epoietinalpha-Hexal, Abseamed(Sandos/Hexal/Medice)•Somatropin: Omnitrope(Sandoz); Valtropin(BioPartners)•Filgrastim: TevaGrastim, Ratiograstim, ratiopharmfilgrastim, Biograstim-pending EC final approval (Teva/Ratiopharm/CT) India •>40 products and >10 companies. Insulin: (Biocon), Wosulin(Wockhardt)•EPO: Wepox(Wockhardt), Epofit(Intas), Erypro(Biocon)•Filgrastim: Grafeel™(Dr Reddy’s), Neukine®(Intas)•Rituximab: Reditux™(Dr Reddy’s) Korea •EPO*: (Dong-A), (LG Life Sciences), Epokine(CJ Corp)•Filgrastim: Leukine(CJ Corp)•Somatropin: (Biotechnology General), (Dong-A), (LG Life Sciences) China • EPO*: 13 companies• Filgrastim: 17 companies• Somatropin: 4 companies Competitors with their own cGMP proprietary manufacturing system & sound understanding of regulatory affairs and intellectual property are anticipated to lead this market
    21. 21. <ul><li>Cardiovascular : ~US$ 600 mn of blockbuster sales going off patent in 2010/2011 </li></ul><ul><li>By 2025 : India 70 mn diabetics , China 50 mn diabetics </li></ul>0 <ul><li>0 </li></ul><ul><li>0 </li></ul><ul><li>APAC Oncology market 2010: ~US$ 3 bn; up from US$ 1.4 bn in 2004. </li></ul><ul><li>Growth from early diagnosis of cancers and targeted therapy in top 3 types of cancer: lung cancer, breast cancer and colorectal cancer </li></ul>Source: Frost & Sullivan. Cardiovascular and metabolic diseases Lifestyle diseases Vaccines, Biologics and biotherapeutics Branded generics & biosimilars Oncology <ul><li>Use of ‘nibs’ and ‘mabs’ in multiple indications ranging from oncology to pain and CNS. APAC biologics market 2010 : ~ US$ 5 bn </li></ul><ul><li>Asia building up local vaccine product across a range of adult and paediatric vaccines. Potentially a $3 billion market in 2010. </li></ul><ul><li>Rise in prescriptive aesthetics, currently dominated by mid-size pharma APAC : ~US$ 3 billion </li></ul><ul><li>Global smoking cessation market : ~US$ 2bn. Increase in lung cancer and female smokers in Asia drive market </li></ul><ul><li>APAC generics and biosimilars market 2010 : ~US$ 20 bn; 35% growth rate </li></ul><ul><li>APAC biosimilars : EPOs and HGH are growing markets </li></ul><ul><li>APAC HGH market : ~US$ 100 mn in 2010; represents < 5% of global market </li></ul>Top Growth Opportunities : APAC Pharmaceuticals and Biotech Market
    22. 22. Global Growth Shift in Opportunities . . . From Mature Markets To Emerging Markets <ul><li>Central and Eastern Europe </li></ul><ul><li>High unmet needs in Cardiovascular and respiratory disease treatments </li></ul><ul><li>Increasing private healthcare expenditure – co-payments on the rise </li></ul><ul><li>Markets are dependant on parallel imports for innovative medicines </li></ul><ul><li>Russia, Poland, Czech and Hungary demonstrating healthy R&D climate </li></ul><ul><li>Turkey: Ability to produce active ingredients and finished products </li></ul><ul><li>Brazil </li></ul><ul><li>Latin American hub for FDI and exports to neighboring nations </li></ul><ul><li>Government policies favour generics use – branded drugs’ revenues are low </li></ul><ul><li>Recognised potential for CRO and CMO growth – still in development phase </li></ul><ul><li>Argentina </li></ul><ul><li>Approval of ‘Generics law’- patients choose between branded and generic drugs </li></ul><ul><li>Marketing strategy focused on patients, moving away from physicians </li></ul><ul><li>Emerging market with huge potential for R&D outsourcing </li></ul><ul><li>India </li></ul><ul><li>Highly skilled labor and low costs – attractive market for partnerships (CRO, CMO) (APIs) </li></ul><ul><li>Pharmaceutical companies with global presence </li></ul><ul><li>US FDA approved labs – preferred destination for R&D outsourcing </li></ul><ul><li>Weak IP protection – a concern </li></ul><ul><li>Singapore </li></ul><ul><li>US-Singapore FTA – Asia-Pacific Manufacturing hub </li></ul><ul><li>Highly competent facilities for clinical trials and drug development </li></ul><ul><li>Favorable investment policies – Asia-Pacific headquarters of major foreign pharma companies </li></ul><ul><li>China </li></ul><ul><li>API manufacturing hub </li></ul><ul><li>Increasing competency in R&D outsourcing </li></ul><ul><li>Anti-infectives and Cardiovascular drugs – fastest growing markets </li></ul><ul><li>Improved IP laws – potentially attractive climate for FDI </li></ul><ul><li>Korea </li></ul><ul><li>Innovative capability and well developed industry </li></ul><ul><li>Malaysia </li></ul><ul><li>Small domestic market </li></ul><ul><li>Explore opportunities in CMO, CRO, halal meds </li></ul>
    23. 23. Thank you