Australia’s Health Care System Overview

AUSTRALIA Australian population ~20 million people 6 states, 2 territories Problems of access in rural Australia. Flying doctor service. The Royal Flying Doctor Service provides medical services to remote stations and communities. The Kimberly and Pilbara regions of Western Australia are at a crisis point due to a chronic lack of GPs. Increased use of telehealth services due to lack of access. Indigenous population 427,000 Life expectancy at birth for Aboriginal and Torres Strait Islander people is 20 years below that of the total population. COMPANY CONFIDENTIAL

Australian population ~20 million people

6 states, 2 territories

Problems of access in rural Australia.

Flying doctor service. The Royal Flying Doctor Service provides medical services to remote stations and communities.

The Kimberly and Pilbara regions of Western Australia are at a crisis point due to a chronic lack of GPs.

Increased use of telehealth services due to lack of access.

Indigenous population

427,000

Life expectancy at birth for Aboriginal and Torres Strait Islander people is 20 years below that of the total population.

AUSTRALIA cont’d Universal healthcare is divided between the federal and state governments. Public and private sectors both play a role. Medicare, which is funded out of general tax revenue, pays for hospital and medical services. Medicare covers all Australians, pays the entire cost of treatment in a public hospital, and reimburses for visits to doctors. Most people are required to make a co-payment for subsidized pharmaceuticals. Elective surgeries can carry long waits at public hospitals. Waiting lists almost nonexistent for the most urgent elective surgery for heart disease and cancer. Long waiting lists for orthopedic surgery and cataract surgery. COMPANY CONFIDENTIAL

Universal healthcare is divided between the federal and state governments.

Public and private sectors both play a role.

Medicare, which is funded out of general tax revenue, pays for hospital and medical services.

Medicare covers all Australians, pays the entire cost of treatment in a public hospital, and reimburses for visits to doctors.

Most people are required to make a co-payment for subsidized pharmaceuticals.

Elective surgeries can carry long waits at public hospitals.

Waiting lists almost nonexistent for the most urgent elective surgery for heart disease and cancer.

Long waiting lists for orthopedic surgery and cataract surgery.

AUSTRALIA cont’d Medicines and pharmaceuticals are directly subsidized by the Commonwealth Pharmaceutical Benefits Scheme (PBS). The PBS provides subsidies for about 600 kinds of drugs in nearly 1,500 formulations. Additional drugs are added when assessed as meeting safety, quality, effectiveness, and cost-effectiveness criteria. Most people are required to make a co-payment for subsidized pharmaceuticals. No DTC marketing (only US and New Zealand) and there was recently a big push for more transparency between HCPs and pharmacos. The Code of Conduct Pharmacos must disclose all “sponsored events”. Gifts, “entertainment”, lavish meals are banned. Companies found to have breached the Code of Conduct face fines of up to $200,000 per breach. COMPANY CONFIDENTIAL

Medicines and pharmaceuticals are directly subsidized by the Commonwealth Pharmaceutical Benefits Scheme (PBS).

The PBS provides subsidies for about 600 kinds of drugs in nearly 1,500 formulations.

Additional drugs are added when assessed as meeting safety, quality, effectiveness, and cost-effectiveness criteria.

Most people are required to make a co-payment for subsidized pharmaceuticals.

No DTC marketing (only US and New Zealand) and there was recently a big push for more transparency between HCPs and pharmacos.

The Code of Conduct

Pharmacos must disclose all “sponsored events”.

Gifts, “entertainment”, lavish meals are banned.

Companies found to have breached the Code of Conduct face fines of up to $200,000 per breach.

AUSTRALIA cont’d The cost of Rx medicines to the Federal Government through the Pharmaceutical Benefits Scheme (PBS) is around $4.9 billion per year - $1 in every $10 spent by Australian governments on healthcare.* For medicines listed on the Pharmaceutical Benefits Scheme (PBS) the Government pays any cost of the drug over $28.60 for general patients and $4.60 for concession cardholders. Once concession card holders have spent $197.60 on the PBS or had 52 scripts in a year, the price per prescription falls to zero. The safety net for general patients is $726.80, after which prescriptions cost $3.80.** According to a study by Victoria University, prices paid to manufacturers for medicines in Australia are 25-45% lower than in Western Europe and 40-200% lower than in the United States and Switzerland. COMPANY CONFIDENTIAL * this is fairly old data * this is data from June 2004

The cost of Rx medicines to the Federal Government through the Pharmaceutical Benefits Scheme (PBS) is around $4.9 billion per year - $1 in every $10 spent by Australian governments on healthcare.*

For medicines listed on the Pharmaceutical Benefits Scheme (PBS) the Government pays any cost of the drug over $28.60 for general patients and $4.60 for concession cardholders.

Once concession card holders have spent $197.60 on the PBS or had 52 scripts in a year, the price per prescription falls to zero.

The safety net for general patients is $726.80, after which prescriptions cost $3.80.**

According to a study by Victoria University, prices paid to manufacturers for medicines in Australia are 25-45% lower than in Western Europe and 40-200% lower than in the United States and Switzerland.

Register Now for Upcoming Webinar Thank you for viewing our presentation! We’d like to invite you to our upcoming webinar: Taking the Pulse® Asia: Physicians and Emerging Information Technologies Friday, April 3, 2009, 9:00am & 3:00 pm Manhattan Research President Mark Bard will preview the latest technology adoption and integration trends in physician practices across Japan, China, South Korea, Taiwan, and Australia from the Taking the Pulse Asia market research and advisory service. Mr. Bard will review the importance of key topics such as the Internet, impact of Web 2.0 technologies, email communication, PDAs/smartphones, search engine reliance, tech-enabled sales reps, and electronic medical records. Register Now! Choose from two sessions: Friday, April 3, 2009, 9:00am & 3:00 pm Register here: www.manhattanresearch.com/webinars