Θεσμικός Χαιρετισμός: Μάκης Παπαταξιάρχης, Πρόεδρος, PhRMA Innovation Forum, Διευθύνων Σύμβουλος, Janssen Ελλάδος, Pharmaceutical Companies of Johnson & Johnson, Πρόεδρος, AMCHAM Pharma Committee

1. Innovation in the Pharmaceutical Industry:
Changing people’s lives - enhancing country prospects
Makis Papataxiarchis
President, Pharma Innovation Forum,
Chairman AmCham Pharmaceutical Committee
Managing Director, Janssen Pharmaceutical companies of Johnson & Johnson
2nd Health Innovation Conference
17.05.18

2. Pharmaceutical companies set the drug prices
without taking into account of the poor third
world. Given that these companies have
exclusive use of these medicines,
international criticism has begun in recent
years. Collect data on this subject and make
your point of view, documenting it with both
humanitarian and economic evidence.
The (mistaken) general perception for our industry

4. We are in a new era of medicines where breakthrough science is
transforming care with innovation treatment approaches…

6. Innovative medicines make the world a better and healthier place: they contributed
approximately 73% of the improvement in life expectancy observed from 2000–2009
1. Lichtenberg, F. R., 2014. Health Policy and Technology 3, pp. 36-58. Figure adapted from: EFPIA, 2017. Available at:
https://www.efpia.eu/media/219735/efpia-pharmafigures2017_statisticbroch_v04-final.pdf.

7. Medicines contribute to saving and extending lives
CVD
β-blockers and ACE inhibitors have reduced
mortality in patients with CVD by 34% and
40%, respectively4
HIV
Today, an HIV-positive adult receiving HAART
treatment has a life expectancy approaching
that of the general population1†
Cancer
The 5-year relative survival rate among
patients with CML increased from 21.8% to
68% between 1975 and 20135
Hepatitis C
Cure rates among hepatitis C patients have
increased from 41% to ≥95% within 15 years
due to improved treatments2,3
1.Trickey, A. 2017. Lancet HIV. http://dx.doi.org/10.1016/S2352-3018(17)30066-8.. EFPIA, 2014. Adapted from: https://www.efpia.eu/publications/data-center/value-
to-patients/hep-c-cure-rates/. 3. PhRMA, 2016 http://phrma-docs.phrma.org/sites/default/files/pdf/decade-of-innovation-chronic-disease.pdf. 4. Adorisio, R. et al., 2006.
Heart Fail Rev , 11(2), pp. 109-123. 5. Howlader, N. et al. SEER Cancer Statistics Review, National Cancer Institute website. Available at:
https://seer.cancer.gov/csr/1975_2014. 6. WHO, 2016. Vision & Mission in Immunization & Vaccines, 2015-2030.
http://www.who.int/immunization/documents/general/WHO_Mission_VIsion_Immunization_Vaccines_2015_2030.pdf?ua=1
Vaccines are estimated to avert more than 5
million deaths per year6
†Patients who started antiretroviral therapy (ART) during 2008–10 whose CD4 counts exceeded 350 cells per μL
one year after ART initiation have estimated life expectancy approaching that of the general population.

8. Between 2000 and 2012, the death rate from cardiovascular disease fell 37% in
the EU5.
Between 2000 and 2012, new therapies contributed to a 48% and 31% decline in
the diabetes death rate in Korea and Canada, respectively.2
Since 1991 there has been a 21% reduction in mortality rates from all cancers
Of the 15 million patients in Europe living with Hepatitis C Can be cured through an
8-12 week course of treatment.
Source: Health Advances analysis; 1PhRMA 2016 Prescription Medicines: Costs in Context; 2WHO Mortality Database (accessed
February 2016).2. 2EFPIA 2015 Health & Growth Evidence Compendia analysis of PhRMA 2014 25 Years of Progress
Against Hepatitis C and PhRMA 2015 Pharma Profile
Medicines are some of the most powerful tools in treating and
curing diseases
95%
37%
31%
21%
94%
Since 1991 there has been a 94% reduction in age-standardised death rates for
patients living with HIV in France

9. Improved understanding of disease and personalised care have
increased patient survival
* Medicines in Phases I through III for the treatment of all types of leukaemia and lymphoma.
Source: Health Advances analysis; a PhRMA 2015 Value of Personalized Medicine; b SEER Cancer Statistics Review
(1950-2003); c PharmaProjects (accessed February 2016); d Cancer Survival in Europe Eurocare 5 Database 2000-
2007.
http://aipm.hu/data/upload/files/rendezvenyek/From%20innovation%20to%20outcomes,%20medicines%20cost%20
in%20context.pdf.
A greater understanding of the molecular basis of disease has led to medicines targeted to leukemia
and lymphoma subtypes, improving the outlook for patients with blood cancers in Europea1
1960s 1970s TODAY1950s
 “Disease of
the Blood”
 Leukaemia
 Lymphoma
 Chronic Leukaemia
 Acute Leukaemia
 Pre-leukaemia
 Indolent Lymphoma
 Aggressive Lymphoma
5-year
survival:
<10%b
5-year
survival:
<15%b
5-year
survival:
~35%b
IMPROVED UNDERSTANDING OF THE DISEASE
 ~40 unique Leukaemia types identified
 ~50 unique Lymphoma types identified
Today, 230 medicines* c are in
development for blood cancers in Europe
Chronic Lymphocytic
Leukaemia 5-year
survival rates have
grown to 70%d
Hodgkin’s Lymphoma
5-year survival rates
have grown to 80%d

10. 0
2
4
6
8
10
12
14
16
1993 1998 2003 2008 2013
USA Spain Italy France
Canada Australia Germany United Kingdom
Highly Active Antiretroviral Therapy (HAART) has driven HIV/AIDS
mortality reductions
* Or latest year of available data: Italy (2012), France (2011), Canada (2011), Australia (2011), Germany
(2011).
Note: HIV/AIDS ASDR extrapolated for Italy in 2004-2005 and Australia in 2005.
Source: Health Advances analysis; WHO Mortality Database (accessed February 2016).
HIV/AIDS age-standardised death rates (ASDR)1 by country
1. EFPIA, 2016. Available at:
http://aipm.hu/data/upload/files/rendezvenyek/From%20innovation%20to%20outcomes,%20medicines%20cost%20in%20con
text.pdf. http://dx.doi.org/10.1016/S2352-3018(17)30066-8. 3. World Health Organization, 2015. Available at:
www.who.int/features/2015/born-hiv-free/en.
HAART
combinations
introduced
-88% -92% -87% -94%
-87% -88% -82% -73%
2017 life expectancy HIV
patients in Europe and North
America:2
Antiretroviral treatment
reduced transmission of
HIV from mothers to their
children by almost half
from 2009 to 2015.3
In some countries, fewer
than 2% of babies born
to HIV-positive mothers
are infected.3
73 years
for men
76 years
for women

11. Medicines benefit patients’ lives by reducing hospitalisation rates
A French study showed that new
drugs introduced during the
period 1995–2004 reduced the
number of hospital days in 2009
by about 11%.1
A 25% reduction in
hospitalisation rates was
observed in HIV patients treated
with boosted protease inhibitors
between 2005 and 2011.2
1. Lichtenberg, F. R., 2014. Economics & Human Biology, 13, pp. 107-127. 2. Lacombe, J.-M.et al. 2014. Journal of the International AIDS
Society, 17(3), p. 19781. 3. Asseburg, C. et al. 2012. Schizophrenia Research and Treatment, 2012 (2012), Article ID 791468, 9 pages.
4. Willis, M. et al. 2010. Eur J Health Econ, 11(6), pp. 585-94.
63
38
0
10
20
30
40
50
60
70
Before initiation After initiation
Risperidone administration status
A French study showed that new
drugs introduced during 1995–2004
reduced the number of hospital days
in 2009 by ~11%1
A 25% reduction in hospitalisation
rates was observed in HIV patients
treated with boosted protease
inhibitors between 2005 and 20112
Long-acting risperidone injections for patients
with schizophrenia reduced the mean annual
number of bed-days by 40−45%3,4

12. The overall rate of returning to work following a cancer diagnosis
has grown to over 75% due to innovative therapies a
In France, 82.1% of
working women
diagnosed with breast
cancer returned to workb
Note: In all three studies, return to work includes full-time and part-time work.
Source: Health Advances analysis; aAmir Z 2009 Cancer Survivorship and employment Occup Med; bFantoni 2010 Factors related to return to
work by women with breast cancer in Northern France J Occup Rehab; cVerdonck-de Leeuw 2010 Employment and return to work in head and
neck cancer survivors Oral Oncol.
In the Netherlands, 83% of
working individuals
diagnosed with head and
neck cancer returned to
workc
1. EFPIA. From Innovation to Outcomes: Medicines Cost in Context, 2016. Available at:
http://aipm.hu/data/upload/files/rendezvenyek/From%20innovation%20to%20outcomes,%20medicines%20cost%20in%20con
text.pdf.

13. 1.813
1.329
1.256
1.120
599
511 475
159
0
500
1.000
1.500
2.000
Cancers Neurological
Disorders
Infectious
Diseases
Immunological
Disorders
Cardiovascular
Disorders
Mental Health
Disorders
Diabetes HIV/AIDS
Medicines in Development Worldwide
Note: Defined as single products which are counted exactly once regardless of the
number of indications pursued.
Source: Health Advances analysis; Adis R&D Insight Database.
Biopharmaceutical companies
are focusing on areas of
high unmet need
Biopharmaceutical
companies have made
significant gains in
key disease areas
HIV/AIDS is now a
manageable, chronic
disease, thanks to
prior advances in
biopharmaceutical
research
With over 7000 medicines in development, the exciting new wave of
medical innovation will play a key role in addressing the challenges
faced by patients and healthcare systems

14. The pharmaceutical business model has to address and balance
complex challenges
High
sunk
cost
Low
marginal
costs
Easy
imitation
Short
time to
recoup
Road to market is
full of obstacles
Many promising
molecules do not
reach market
Production
costs do not
reflect high
investment
Generics and
biosimilars take
large market
share immediately
after patent expiry
Evidence
demands are
increasing
Profitability needed to
attract investors and
reinvestment
High risk investment
R&D is complex,
lengthy and
expensive
Only 20–30% of
marketed drugs
produce revenues
that match or
exceed R&D costs1-4
1. Grabowski. HG, Vernon, JM. Returns to R&D on new drug introductions in the 1980s. J Health Econ. 1994; 13(4): p. 383-406.
2. Rosenblatt, M. Harvard Business Review. The real cost of ‘high-priced’ drugs. 2014. Available at: https://hbr.org/2014/11/the-
real-cost-of-high-priced-drugs [Last accessed 01/12/17]. 3. Vernon, JA, Golec, JH, Dimasi, JA. Drug development costs when
financial risk is measured using the Fama-French three-factor model. Health Econ. 2010; 19(8): 1002-5. 4. Grabowski, H, Vernon,
J, DiMasi, JA. Returns on research and development for 1990s new drug introductions. Pharmacoeconomics. 2002; 20(3): p. 11-29.

15. The biopharmaceutical research and development process
From drug discovery to EMA approval, developing a new medicine on average takes at least 10 years
Basic
Research
Drug
Discovery
Pre-
Clinical
Clinical
Trials
EMA
Review
Post-Approval Research and
Monitoring
Phase 1 Phase II Phase III Phase IV
TENS HUNDREDS THOUSANDS
Post-Approval Research and
Monitoring
Number of Patients
Benefiting from Trials
1EMA-
APPROVED
MEDICINE
POTENTIAL NEW MEDICINES
Note:*The average R&D cost required to bring a new, FDA approved medicine to patients is estimated to be $2.6 billion over the past decade (in 2013 dollars),
including the cost of the many potential medicines that do not make it through to FDA approval. Key: IND: lnvestigational New Drug Application, NOA:
New Drug Application. BLA: Biologics License Application. Source: PhRMA 2016 Prescription Medicines: Costs in Context.

16. Discovering and developing new medicines is a complex, time
consuming, and highly regulated process1
Deloitte, 2014. Available at: www.janssen-emea.com/sites/default/files/High%20value-high%20uncertainty.pdf.
Consumer
electronics
Food
manufacturing
Automotive
industry
Commercial aircraft
manufacturing
Generic
pharmaceuticals
Biopharmaceutical
industry
1.2–1.5
years 2 years 4 years 5 years
6–8
years
10–12
years

17. 8.651
2.517
2.167
1.601
1.097 963 930 822 768 749
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
Number of projects by therapy area*
To tackle the high unmet need, pharma R&D is heavily focused on
cancer: 1 in 3 medicines developed in cancer
Compared to other therapy areas,
cancer R&D in the US:
 Accounts for 43% of all
preclinical and clinical R&D
projects
 Has the highest number of
projects in clinical
development
Approximately 1 in 3 medicines
developed by top pharma
companies are in cancer
Source: The Biopharmaceutical Pipeline: Innovative Therapies in Clinical Development, Analysis Group, 2017; Company
websites; clinicaltrials.gov

18. Cancer medicines development is challenging but with significant
efforts advances are being made
Source: PhRMA Chart Pack: Biopharmaceuticals in Perspective, PhRMA, Spring 2017
Melanoma†
96 unsuccessful attempts
7 new drugs
†Setbacks and advances from 1998 to 2014. Refers to drugs in development
‡Source: Patel JD, 2014.
“The scientific process is thoughtful, deliberate, and sometimes slow,
but each advance, while helping patients, now also points toward
new research questions and unexplored opportunities.”
- Clifford A. Hudis, MD, FACP‡
Chief Executive Officer, American Society of Clinical Oncology
Chief, Breast Medicine Service, Memorial Sloan Kettering Cancer Center
Professor, Weill Cornell Medical College
Brain cancer†
75 unsuccessful attempts
3 new drugs
Lung cancer†
167 unsuccessful attempts
10 new drugs

19. Only 3% of drugs in clinical development* for Alzheimer’s disease
were approved from 1998–20141
1. PhRMA, 2015.Available at: http://www.phrma.org/sites/default/files/pdf/alzheimersetbacksreportfinal912.pdf
* Phase 1 or later development.

20. Despite Great Progress, Challenges loom threatening continued
innovation and patient access to medicines
INNOVATION IS HARDER
AND MORE COSTLY
INVESTMENT IN INNOVATION
INCREASINGLY RISKY
Higher regulatory hurdles
Increased cost of R&D
Longer, more complex clinical trials
Complex HTA processes delaying patient access
Clinical guidelines and restrictive cost-effectiveness requirements limiting access to best care
Contracting and tendering limiting therapeutic options
Fiscal austerity measures
Flourishing parallel trade
Unknown IP environment
Government payers encouraging off label
use of therapies to save money
CHALLENGES EXIST IMPEDING
PATIENT ACCESS
BIOPHARMA
INNOVATION

21. Evidence requirements are increasing across the product lifecycle1,2
Available at: http://www.ehcca.com/presentations/intpharmacon9/wartenberg_2_1.pdf.
2. EFPIA, 2015. Available at: http://www.efpia.eu/topics/innovation/research-development.

22. We need a public environment that recognizes and rewards
risk taking

23. 0
20
40
60
80
100
120
140
160
180
200
Total procedures per trial
protocol (median) (e.g.
blood work, routine
exams, x-ray, etc)
Total investigative site
work burden (median
units)
Total eligibility criteria Clinical trial treatment
period (treatment
duration of the protocol,
median days)
Number of case report
form pages per protocol
(median)
2000-2003 2008-2011
64%
Increase
48%
Increase
25%
Increase
211%
Increase57%
Increase
The R&D process is highly regulated1
PhRMA. Biopharmaceuticals in Perspective, Spring 2016.
Available at: http://phrma-docs.phrma.org/sites/default/files/pdf/chart-pack-biopharmaceuticals-in-perspective.pdf.

24. 4.5
years
7.0
years
11.0
years
Pre-discovery
Drug discovery
Pre-clinical testing
Phase 1 clinical trial
Phase 2 clinical trial
Phase 3 clinical trial
The odds of success are low, which makes developing medicines a
risky undertaking
£436 million
£533 million
£710 million
£916 million
£1.1 billion
£1.15 billion
5,000 – 10,000 candidates
10 – 20 candidates
5 – 10 candidates
2 – 5 candidates
1 – 2 candidates
1 medicine available for
patients
5.5
years
8.5
years
12.5
years
Of 10,000 promising molecules only 1 or 2 might make it as an approved drug1
Number of medicinal
candidates per phase of
development
Cumulative average
years to develop
successful medicine
Cumulative average cost
to research and develop
successful medicine
1. Adapted from ABPI.
Available at: http://www.abpi.org.uk/our-work/library/industry/Documents/Medicine%20development%20process.pdf.
Licensing approval

25. Profitability incentivises investment in a high-risk business
and the reward for providing access to innovative medicines
“Just as the interest rate on bank deposits is a payment for the use of depositors’ money (or capital), the return on an
investment in R&D is a payment the company or its investors get from the use of their capital. Riskier investments
require higher dollar returns… The rate of return that investors must be able to expect from money invested with a
given level of risk is referred to as the investment’s “cost of capital”1
1. US Congress, 1993. Pharmaceutical R&D: Costs, Risks, and Rewards, OTA-H-522. US Government Printing Office, Washington, DC.
Pharma is a business,
and like any other
business it requires
investment to ensure
growth.
Investment in R&D is
necessary for
innovation.
Continued investment
is required for the cycle
of innovation.
This relies on the
investors getting a
return.

26. While the industry model works at the macro (business) level, only
20–30% of marketed drugs recoup R&D costs1–4
Proportion of
marketed drugs that
match or exceed
R&D costs
Proportion of
marketed drugs that
fail to recoup
R&D costs
Grabowski. HG, Vernon, JM. Returns to R&D on new drug introductions in the 1980s. J Health Econ. 1994; 13(4): p. 383-406. 2. Rosenblatt, M.
Harvard Business Review. The real cost of ‘high-priced’ drugs. 2014. Available at: https://hbr.org/2014/11/the-real-cost-of-high-priced-drugs
[Last accessed 01/12/17]. 3. Vernon, JA, Golec, JH, Dimasi, JA. Drug development costs when financial risk is measured using the Fama-French
three-factor model. Health Econ. 2010; 19(8): 1002-5. 4. Grabowski, H, Vernon, J, DiMasi, JA. Returns on research and development for 1990s
new drug introductions. Pharmacoeconomics. 2002; 20(3): p. 11-29.

27. The private sector has traditionally made the largest R&D contributions in
translating basic research findings into therapeutic advances
Medicine discovery
Identifying a
molecule that may
become a medicine
Clinical trials
required for health
authority approval
Licensing
Required to bring
medicine to market
Marketing
And post-marketing
activities (e.g.
safety review)
Return on
investment
Focusing on
understanding of
diseases and
identifying potential
targets
Royalties and
other payments
Reinvestment
Funding source largely public Funding source largely private
An analysis of the development
history of 32 drugs and drug classes
confirmed that most would not
have been developed or, at best,
would have been significantly
delayed, without private sector
scientific discoveries1
1Zycher et al. Private sector contributions to pharmaceutical science: thirty-five summary case histories. Am J Ther. 2010; 17(1): 101-20.
Basic research
Medicine development

28. There is limited time to recoup development costs before patent
expiration1
5 years 10 years 25 years20 years15 years0 years
Patent
application
Pre-clinical
development
Clinical trials
Registration/
marketing authorisation
Patent expiry
Price
Reimbursement
Pharmacovigilance
Finite time to recoup
Supplementary
protection
certificate
(SPC)
(max. 5 years)
1. EFPIA. Adapted from: https://www.efpia.eu/media/219735/efpia-pharmafigures2017_statisticbroch_v04-final.pdf.
FDA/
EMEA
EXP
Window of opportunity Extension (by SPC)

29. 29
Biopharmaceutical companies use today’s revenues to invest
in tomorrow’s treatments and cures

30. Profitability of the innovative pharmaceutical industry is in
line with that of other sectors
1. Damodaran A. Margins by Sector (Europe), 2017. Available at: http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html
Coal & related energy
Pre-tax unadjusted operating margin (%) of industrial sectors, Western Europe, 20171
-8,81
2,5
3,1
3,76
5,27
6,03
6,35
6,63
6,8
9,45
10,11
12,22
12,63
15,02
16,12
17,32
18,84
21,29
22,75
22,9
23,86
35,51
Steel
Metals & mining
Farming/agriculture
Shipbuilding & marine
Auto & truck
Transportation (railroads)
Publishing & newspapers
Air transport
Electronics (consumer & office)
Advertising
Drugs (biotechnology)
Broadcasting
Homebuilding
Software (system & application)
Beverage (alcoholic)
Drugs (pharmaceutical)
Tobacco
Green & renewable energy
Utility (water)
Investments & asset management
Real estate (operations & services)

31. Governments must look beyond medicines for real efficiency gains
1. OECD Health Statistics Database, 2015; Eurostat Database, 2015. Available at:
http://www.ehcca.com/presentations/intpharmacon9/wartenberg_2_1.pdf.
2824 2824 2824 2824 2824 2824 2824 2824 2824
683 683 683 683 683 683 683 683
176 176 176 176 176 176 176
106 106 106 106 106 106
56 56 56 56 56
52 52 52 52
40 40 40
26 261
3964
2700
2900
3100
3300
3500
3700
3900
4100
Total
healthcare
expenditure
2005
Curative and
rehabilitive
care
Long-term
nursing care
Medicines Ancillary
services
Therapeutic
appliances
Health
administration
and Health
insurance
Prevention
and public
health
Not specified
by kind
Total
healthcare
expenditure
2012
58% 16% 10% 5% 5% 4% 2% 0%
Changes in healthcare expenditure in Europe, 2005–2012

32. 32
Spending on prescription medicines is a small percentage of
total health care spending around the world

33. Despite rising healthcare budgets, the proportion spent
on medicines is decreasing
Across 20 EU countries, growth in pharmaceutical expenditure
actually lags behind growth in healthcare expenditure1
1. EFPIA analysis of OECD Health Statistics Database, 2017.
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
19.1
16.2
8.7
7.9
Pharmaceutical spend as a
proportion of healthcare
spending
Healthcare spend as a
proportion of GDP

34. At the same time, growth in other health care services will be
5 times total medicine spending growth through next decade

35. Industry is keen to engage in the debate and to partner with payers
to deliver outcomes driven sustainable healthcare systems
The objective of outcomes-focused
healthcare systems is to deliver
better patient outcomes at the
same or lower cost...
relying on quality outcome data
as starting point to improve care
cycle
Value
Patient
Health
information
Medicines
Care
management
Care deliveryMedTech
Outcome
Cost
=
Holistic approach
Feedback
and
learning
Transparent, high-quality
outcomes data
Analyze
variation
Identify
current best
practices
Change
behaviorValue
Benefits of a focus on outcomes: improved patient outcomes, reduced variation, reduced
medical cost, continuous improvement

36. Medicines are Part of the Solution…and more can be done
together
FIND SOLUTIONSPAY FOR VALUEIMPROVE EFFICIENCY
Look at all healthcare costs,
reduce administrative costs
and waste, and improve
efficiency.
Support evidence-based
care and empowered
patients and providers,
backed by sound
research and strong
quality measures.
Avoid blanket policies
that chill investment,
and collaborate to find
new approaches.
Governments, Providers, and National Payers
Biopharmaceutical Companies
CONTINUE DEVELOPING INNOVATIVE THERAPIES, PROMOTE MEDICATION
ADHERANCE, MAINTAIN EFFORTS TO SUPPORT BROAD PATIENT ACCESS

37. Thank you for your attention
Makis Papataxiarchis
President, Pharma Innovation Forum,
Chairman AmCham Pharmaceutical Committee
Managing Director, Janssen Pharmaceutical companies of Johnson & Johnson