Sustainable business in Emerging Markets Jens Pii Olesen Head of Marketing  International Operations
Slide no  <ul><li>Agenda </li></ul><ul><li>How did we begin </li></ul><ul><li>New opportunities in Pharma </li></ul><ul><l...
How did it begin? Slide no  <ul><li>Keen founders  </li></ul><ul><li>First export in 1933/34 </li></ul><ul><li>Production ...
New opportunities in pharmaceuticals Slide no
WW pharmaceutical sales growth 70% of growth outside developed markets Slide no  $955bn $130bn $55bn $765bn 2009E 2014E De...
N-11 some overlap but 7 others… Slide no
“ P” considerations Slide no
Portfolio Brands lives long in Emerging Markets Slide no  l Source: IMS 2009: (BRIC + South Korea, Mexico, Poland, Taiwan,...
Pricing Prices are reasonable Slide no  l Source: IMS 2009: (BRIC + South Korea, Mexico, Poland, Taiwan, Hungary, Romania,...
Profit Lower prices are made up by lower costs Slide no  69 100 Sources: OM estimation using AZ (72%) and SA (66%) annual ...
Partnerships Slide no  Agency Agency w sales force Govt & Health authorities Sales Office Affiliate Any sales +2m +10m +30...
Slide no  <ul><li>Conclusions </li></ul><ul><li>EMs important for Novo Nordisk future  </li></ul><ul><li>Market choice not...
 
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Novo Nordisk BeyondBRIC

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  • Nordisk Insulin Lab. 1936 NPH. First whale insulin 50kg pancreas. South Polar Sea. 1888-1971
  • Egypt &amp; India
  • Emerging markets projected to grow at a 12% CAGR from 2009-2014
  • Countries not in N-11 but in IMS Tier 3 are: Venezuela, Argentina, S. Africa, Thailand, Ukraine, Poland and Romania. N-11 overlap: Mexico, Egypt, Turkey, Pakistan, Indonesia, Vietnam, Only N-11 (not in IMS proj.): Nigeria, Iran, Bangladesh, Philippinnes, S Korea
  • Today NN is established in 40 emerging markets – so I asked the some colleagues who took the decisions in the 1980s what principles they worked by
  • Novo Nordisk BeyondBRIC

    1. 2. Sustainable business in Emerging Markets Jens Pii Olesen Head of Marketing International Operations
    2. 3. Slide no <ul><li>Agenda </li></ul><ul><li>How did we begin </li></ul><ul><li>New opportunities in Pharma </li></ul><ul><li>” P” considerations </li></ul><ul><ul><li>Portfolio </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Profit </li></ul></ul><ul><ul><li>Partnerships </li></ul></ul><ul><li>Conclusions </li></ul>
    3. 4. How did it begin? Slide no <ul><li>Keen founders </li></ul><ul><li>First export in 1933/34 </li></ul><ul><li>Production established 1950s </li></ul><ul><ul><li>S. Africa, Algeria, India </li></ul></ul><ul><li>First export market department 1970s </li></ul>Novo Nordisk International Operations turnover 2010 ~ Novo Nordisk in 1995
    4. 5. New opportunities in pharmaceuticals Slide no
    5. 6. WW pharmaceutical sales growth 70% of growth outside developed markets Slide no $955bn $130bn $55bn $765bn 2009E 2014E Developed Markets Other Markets Source: IMS. Developed markets: EU-15, Norway, Switzerland, Iceland; US, Canada, Japan, Australia, New Zealand. 30% 70%
    6. 7. N-11 some overlap but 7 others… Slide no
    7. 8. “ P” considerations Slide no
    8. 9. Portfolio Brands lives long in Emerging Markets Slide no l Source: IMS 2009: (BRIC + South Korea, Mexico, Poland, Taiwan, Hungary, Romania, Egypt, Algeria, Saudi Arabia, South Africa, Ukraine, UAE Branded originals ~$50bn (~28%) Branded generics ~$90bn (~50%) Commodity generics ~$10bn (~5%) ~$30bn (~17%) Total ~$180bn Patented originals
    9. 10. Pricing Prices are reasonable Slide no l Source: IMS 2009: (BRIC + South Korea, Mexico, Poland, Taiwan, Hungary, Romania, Egypt, Algeria, Saudi Arabia, South Africa, Ukraine, UAE Branded originals 70-100% Branded generics 50-80% Commodity generics Cost+ 100% EU prices Patented originals
    10. 11. Profit Lower prices are made up by lower costs Slide no 69 100 Sources: OM estimation using AZ (72%) and SA (66%) annual reports and IR reports. P re-R&D operating margin (excluding central costs), indexed to typical established markets. FTE cost analysis: Internal competitor analysis Typical emerging markets Typical established markets People cost index: US/EU: 100 Brazil: 40 Russia: 30 China: 25 India: 4
    11. 12. Partnerships Slide no Agency Agency w sales force Govt & Health authorities Sales Office Affiliate Any sales +2m +10m +30m <ul><li>Input from the “old timers”: </li></ul><ul><ul><li>Partners/People determines success </li></ul></ul><ul><ul><li>Open & honest </li></ul></ul><ul><ul><li>Keep them close </li></ul></ul><ul><ul><li>Incentivise optimal behaviour </li></ul></ul><ul><ul><li>Get rid of bad apples quickly </li></ul></ul><ul><ul><li>Follow up in the market </li></ul></ul>
    12. 13. Slide no <ul><li>Conclusions </li></ul><ul><li>EMs important for Novo Nordisk future </li></ul><ul><li>Market choice not always clear </li></ul><ul><li>Portfolios similar across markets </li></ul><ul><li>Price fit operating costs </li></ul><ul><li>Partnerships will be the key to success </li></ul>

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