Future of Health & Wellbeing- Key trends and business opportunities

Future of Health & Wellbeing
Key trends and business opportunities
Danilo Mazzara
Trento, April 10 2014

2
I. Global trends in the Healthcare
II. Digital Health convergence
III. Key opportunities for new venture
IV. Summary
Global Trends in the healthcare industry
Agenda

3
Innovation in the Healthcare Industry highly impacted our quality of life, over
the last 50 years we have gained 12 years more and by 2050 4,3% of total
population will have more than 80 years
Life expectancy at birth total years
(OECD Countries)
80,0
67,9
1960
17,8%
Today
World
1,4
1,5
3,7
4,8
2,1
6,8
1,6
6,4
7,2
7,4
11,4
4,3
14,5
16,7
20502011
Population over 80 years on total population
(World and selected Countries in %)
Source: Elaboration on OECD data, 2014
Global trends in the Healthcare

4
Although we live more, Chronic Diseases prevalence have been rising in all
countries (industrialized, middle income, low income), surpassing infections
as a disease burden among adults
 Chronic disease, refers to disease
lasting three months or longer
 Can be prevented trough an healthy
"life style"
 In USA an Europe , from 70% to 80% of
total healthcare cost are related to
chronic diseases management
11% 10%
9% 6%
5%6%
5%
Lung cancers
Ischemic heart
Desease
Stroke
Lower Respiratory
infections
COPD
Diarrhoea desease
4%
HIV/AIDS
Diabet mellitus
Road Ingiury
Prematury
2011
28
24%
21%
11%
5%
5%
4%
4%
27
2000
21%
20%
13%
4%
4%
The 10 leading causes of death in the world
(distribution by causes)
Chronic Diseases
Chronic Disease on the
top10 leading death causes
46% 49%
Source: Elaboration on World Health Organization, 2014

5
 4 BLN $ market
since the first
launch in 1998
Global dysfunction erectile market
(%)
Worldwide Aesthetic Market
(in billions of dollars)
K
K
Source: Allergan Annual Report, 2013
Source: Elaboration based on Evaluate Pharma and Med Tech
 Cataracts is
responsible of 50%
of global blindness
World cataracts procedures
(mln)
Alzheimer's disease or other dementias
(mln on people global)
Source: The Global Impact of Dementia, Alzheimer Disease International 2013
Live longer also means incurring in new aging related diseases and in addition
to that, people expect a better quality of life in their "silver stage"
5,0
3,2
2,3
+10%
201720122009
135,0
76,0
44,0
+3%
205020302010
32,0
20,0
+5%
20202010
5
10
40
45100
OthersLevitraCialisViagraTotal

6
Illustrated trends, generate a dramatic increase of the global healthcare
expense with deep pressures on public budget which absorbs around 60% of
the whole cost
+17,9%
2011
9,2%
1995
7,8%
7,8%
13,6%
6,8%
9,1%
17,9%
9,3%
42%
26%
54%
20%
Pubblic
Private
Jap
100
80%
USA
100
46%
EU
100
74%
World
100
58%
Total expenditure on health on GDP
(World and selected region)
Healthcare per Payors
(Government vs Private expenditure)

7
50
55
60
65
70
75
80
85
9.0004.5004.0003.5003.0001.0005000
USA
UK
Turkey
Russia
Nigeria
Mexico
Japan
Italy
Indonesia
India
Germany
France
China
Canada
Brazil
In addition to overall healthcare cost increase is necessary to balance
difference needs across the world, affordability in mature markets and the
accessibility in the emerging ones
1.100
70
Health per capita cost (ppp in $)
Lifeexpectancyatbirthtotalyears
 Affordable in mature
market
 Access the emerging
markets
 Frugal innovation
Country Population – 80 mln€
Life expectancy and Health per capita expenses per Country

8
To deal with current challenges, leading Life Sciences players have been
redefined their strategic priorities, focusing on new growth opportunities
and increasing operating model efficiency
1. Shifting global
markets
 New Markets - BRIC
 New price points
 New Supply chain models
2. Changing
Product Portfolios
3. Customer
Engagement
Revolution
4. Changing
cost base
 Replace LOE Products
 Rise of Ultra-specialty products based
on biotech (e.g. orphan drugs
 Rise of generics/ biosimilars
 New services (e.g. Care Management)
 New Customers
 New Technologies
 Multichannel engagement
 SG&A challenges
 Investment timelines
 R&D Productivity
Strategic Priorities Selected Example
NON EXHAUSTIVE

9
IV. Summary
Agenda
Agenda

10
Every business is a technology business, "SMAC" technologies are driving the
change and they are available to everyone anytime and everywhere
Share of digital companies on….
Note 1. Source: Inter-Brands
Source: Accenture Elaborations on market data, 2013
88% 84%
77%
… Most
Valuable Brands
100
23%
… Market
Capitalization
100
16%
… Fortune 100
100
12%
Technology Example (selected)
Digital Health convergence
1
The rising of Digital Economy

11
New technology waves are coming with significant grow in the mid-term
85,3
23,7
+29%
20182013
European App Economy1
(bln$)
3-D printing market2
(Printer sales, materials and associated services, bln$)
Source: Gigaom Research, Sizing the EU app economy 2014
Nota 2. CNBC on Canalys data, April 2014
16,2
2,5
2013 2018
+45%
SELECETD EXAMPLEThe rising of Digital Economy-new waves
Source: CNBC on Canalys data, April 2014

12
Sequenced human genome cost
Digital Health is the next wave of industry convergence as shown by a
number of initiatives both from Tech and Life Sciences players
Today
1.000 $
2000
3 Bln$
Time for
sequencing
10 Years 3 days
Life Sciences Players' Initiatives
Tech Players' Initiatives
Google reportedly investing hundreds of millions into its new life
extension company, Calico
Apple iWatch will be mainly about health monitoring
The Breakthrough Prize in Life Sciences is founded by A. Levinson,
S. Brin, A. Wojcicki, M. Zuckerberg and P. Chan, and Y. Milner to
recognize excellence in research aimed at curing intractable diseases
and extending human life
Merck Emerges As Top Funder Of Digital Health Start-Ups
GE Healthcare … $2 billion investment over 5 years
…. in software and analytics to better help our customers manage
the operational complexity of the healthcare systems
Johnson & Johnson (J&J) has launched the Digital Health
Masterclass (DHM) programme to help drive growth in the next
generation of digital health businesses
SELECTED EXAMPLE
ource: Accenture Elaborations on market data, 2013

13
Connected Health is the end state vision enabling the whole healthcare
ecosystem to collaborate to improve efficiency and effectiveness
 Information and data sharing
across several healthcare
players
 Access trough multiple channels
(e.g. Electronic Health Records,
Mobile Health,…)
 Boost compliance to the
treatment to reduce related
costs
 Increase efficiency and
effectiveness of the healthcare
outcomes
Connected Health Model
Key priorities
Connected Health vision and key priorities

14
Google Glass in the operating room
Brain control
There are several examples of new technologies both in consumer and
specialized healthcare
Wearable devise
Groupon
25% coupon related to health and well being
SELECTION

15
Customers have moved online
…are more connected & interactive…
…are in control of more information…
…and are increasingly mobile…
Customers (People, Patients and Physicians) are ready for the digital
revolution
Health is the #1 Search topic
60% say it influenced a treatment
decision
76bn Searches a month
>50% say online information impacts
their prescription
Physicians spend 8hrs/wk online (<
2.5 hrs with reps)
96% of Physicians use the web for
health, medical and prescription
information
…Of which > 300 mln in China
alone (inc by 33% year on year)
68% of US physicians join
physician-only social networks
>1bn Social Media users
worldwide…
>80% of doctors have smart phones
800m mobile Internet users
Mobile web to exceed fixed access
by 2014
>20.000 health-related iPhone apps
>60% of doctors actively use apps
Source: Accenture Elaborations on market data

16
Digital Healthcare is reshaping the whole "Patient Experience", they can
share their experiences and access to more than 20K apps trough mobile
Prevention
Information
Diagnosis
Treatment
Recovery
(Relapse)
Patient journey Key Functionalities
 Focus on factors associated with
overall wellness: Healthy eating,
Weight management Fitness,…
 Locate physician or healthcare
facility
 Rate and review physicians
 Appointment reminders
 Reference for common symptoms
 Diagnosis based on data
inputted/question answered
 Communication with Professionals
 Order medications from the
phone
 Medication reminder supporting
compliance
 Emergency and first aid
information
 Condition management
information
Selected Leading Example
Source: IMS Institute, Patient Apps for Improved Healthcare, October 2013

17
IV. Summary
Agenda
Agenda

18
Innovation is a key priority in the Healthcare, Start Up can have a key roles in
driving the change as shown by the huge investment by VC
"I have a dream" attitude
Patient first but then Payers
From "Product" to "Services"
Think global but act local
Be credible and take your time
9,2%
X 2,7
VC
Invesment**
25,0%
Global
Market Cap*
10,6%
GDP
Share of Healthcare sector on …. Key success factors for a Start-Up
1
2
3
5
4
Key opportunities for new venture
* Based on Global Standard and Poor's ** Based on USA and Europe (NVCA, EVCA)

19
Leading breakthrough innovation in the Healthcare comes from true life
experiences, people had the passion to solve "unmet needs"
Global Orphan drugs market
(mln $)
127,0
83,0
28,0
20122004 2018
+11%
 From 6,6% to 15.9% of
total prescription
business
"I have a dream" attitude1
 Leverage your network to
find the stimulations and
good idea
 Partner with Healthcare
Professionals to add
technology on top of clinics
 Build a true story around
your solution
Invatec (leading Italian med tech)
 Acquired by Medtronic for
350 mln $ in 2010
 "Recognized for developing novel
devices …. in collaboration with
physicians"
Source: Elaboration based on Evaluate Pharma and Med Tech and Company Press Release

20
Healthcare affordability is the top priority, new treatment need to show both
clinical and economic benefits
 Provide strong fact to show
incremental benefit
compare to existing
treatment
 Consider the whole indirect
cost related to disease
management (eg. care gIver)
 Be able to deal with multiple
stakeholders (Clinical and
Buyers)
 Innovative pricing scheme
based on value sharing
Patient first then Payers2
 Between 2008 and 2011, 17 out of
the EU’s 28 member states have
slashed their public spending on
healthcare due to austerity policies
Hospital Solutions, a new business focused on
developing novel partnerships with hospitals to provide services
directly related to hospital operational efficiency.
September 2, 2013
Same trends can be observed in USA and Emerging Markets
(eg. India recent cuts by 10% the 2014–15 the government)
EU Member with public healthcare budget cut
(100=28)
61%
29%
Source: Company Press Release

21
Customer ask for services, market niches where flexible and fast companies
can easily differentiates from established players
 Don't replace Healthcare
Professionals but
partner with them to
provide a better patient
experience
 Find with new concept
to address emerging
issues:
• Pharmacy of the Future
• Patient Mobility
• Gender
• Migrants
• Compliance
From "Product" to "Services"3
-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0
5
Adherence support
Lifestyle coaching and training
Nurse support via phone
Access to clinical trials
Physician referrals
Access to patient support forums
Measurement tracking and alert Financial assistance
Product information
Rewards program
0
20
15
10
65
60
55
35
30
25
In-home nurse support
Patient received (%, Reversed Axis)
Patientswants
Patient demand for services vs. Services already
delivered by Pharma Co.1
Note1. Accenture and Coleman Parkes Research, online survey of 2.000 respondents in the US between September and October, 2013
Launch of a New Business Focused on Comprehensive,
Evidence-Based Weight Management Interventions in the U.S.
December 20, 2013

22
Healthcare is a global market but strictly regulated at Country and Regional
levels, key partnerships are needed to accelerate route to market
Market Authorization
Regulation Authority
Price control
Pharmacy Chain
Advertising for RX
Payer
AIFA
AIFA
Yes
No
No
Public
BFARM
IQWIG
No
No
No
Statutory
Health Funds
NICE
NICE
No
Yes
No
Public
FDA
FDA
No
Yes
Yes
Ins./
Public
Regulatory specifics across Country in Prescription drugs
(Selection)
EMA  Licensing and strategic
alliances with global players
to reach more complex
market
 Multichannel distribution
which includes Direct sales
and Distributor
 Communication and
promotion mix to deal with
multiple stakeholders
4 Think global but act local

23
Long time and big investment are needed to be in the market, plan your
efforts consistently, find the right skills mix and look for sustainable partners
Time for approval Medical Device
(USA vs EU in months)
Cost new drugs
(median RD cost/new drugs in bln $)
5,3
1,8
0,4
1 2-3 > 3
7,0
31,0
11,0
54,0
EUUSAEUUSA
510K/CE MarkPMA/CE Mark
5 Be credible and take your time
4) Launch
3) Pre
Launch
12
Elapsed (months)
24 -30 6-12 3-6
Key milestones
• Therapies
effectiveness
in the animal
• Prototype
• Therapies
effectiveness in
human
• Supply chain
validation
• CE
Registration
• FDA approval
• Operating
model
released
2) Clinical Trial and
supply chain in
planning
1) Pre-
clinical
5 mln € investment needed before launch
Real example on med tech start up
# drugs
per company
Source: Elaboration based on Forbes, 2013
Source: USA National venture capital Association (NVCA)

24
IV. Summary
Agenda

25
Summary
Summary
1.Big and growing Market
2.Needs and for improvement
3.Technology as key enable to
succeed
VC
Invesment**
X 2,7
25,0%
Global
Market Cap*
10,6%
GDP
9,2%
Share of Healthcare sector on ….
* Based on Global Standard and Poor's ** Based on USA and Europe Venture Association

Thank you !
danilo.mazzara@accenture.com
Danilo Mazzara

Future of Health & Wellbeing - Key trends and business opportunities

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