PwC is a global professional services firm that provides audit, tax, and consulting services. It has established a Personalized Medicine practice to help clients respond to trends in personalized healthcare. PwC has worked on several initiatives involving personalized medicine, including establishing a genome research institute in Arizona and facilitating partnerships between institutions in the US and Luxembourg to advance bioscience research. PwC utilizes surveys, interviews, and research to develop reports on trends in healthcare, including the growth of personalized medicine.

1. October 7th, 2011PwC Health Industries AdvisoryDraftOhio State – 4th Annual Personalized Health Care National ConferenceGerry McDougallPartner, U.S. Personalized Medicine & Health Sciences LeaderPrivate and Confidential

2. PwC and our Personalized Medicine Practice – Established in July 1998 with the merger of Price Waterhouse and Coopers & Lybrand, PwC is the world’s largest professional services firm. Globally, PwC’s revenue is over 30 billion dollars, of which close to 10 billion is consultancy.PwC provides a full range of business services, which include audit, accounting and tax advice; management, health care, information technology and human resource consulting; and financial advisory services including mergers & acquisitions and project finance.PricewaterhouseCoopers (PwC) is a global firm that draws upon the talents of more than 165,000 people in 150 countries.6/7/20112PricewaterhouseCoopers LLP

3. PwC and our Personalized Medicine Practice – PwC's Healthcare Strategy is predicated on our ability to understand and help clients respond to key trends and to serve all sectors on the healthcare continuum10/7/20113PricewaterhouseCoopers LLP

4. PwC and our Personalized Medicine Practice – PwC’s Definition:A holistic, individualized model of care that examines each individual’s unique makeup and designs appropriate strategies for maintaining wellness and treating illness.“The application of genomic and molecular data to better target the delivery of healthcare, facilitate the discovery and clinical testing of new products, and help determines a person’s predisposition to a particular disease or condition”(Senate bill sponsored by Senator Obama, 2007)“A form of medicine that uses information about a person’s genes, proteins, and environment to prevent, diagnose, and treat disease”(US National Cancer Institute)Personalized Medicine has many different definitions, and is broader than just molecular genomicsPricewaterhouseCoopers LLP“The right treatment for the right person at the right time”10/7/20114

5. PwC and our Personalized Medicine Practice – PwC was engaged – first by the State of Arizona and then by Jeff Trent and Dan Von Hoff- to design and implement, from the ground up, a genome research and technology institute for the advancement of bioscience and biomedicine in Arizona.

6. Key PwC efforts included:

7. Feasibility study and assessment

8. Affiliation agreements with academic and clinical partners

9. Business and financial planning

10. Strategic, operational, facilities planning

11. Overall operational implementation

12. Board development PwC has been and continues to be involved in many TGen initiatives - TGen: Translational Genomics Research Institute: Development of a Research Institute, creation of a partnership10/7/20115PricewaterhouseCoopers LLP

13. PwC and our Personalized Medicine Practice – PwC was the subject of an in-depth news article detailing its work with Luxembourg, partnering them with TGen to bring an integrated Biobank Center to LuxembourgPwC was engaged by the government of Luxembourg to assist them in diversifying their economy into the biosciences. Partner Gerry McDougall was interviewed by the news agency about PwC’s’ leadership of this initiative - Highlights include:PwC became involved through a series of discussions in creating strategic partnerships with TGen and other leading US Institutions in the biosciences. TGen has served as the spark that has catalyzed Arizona’s life sciences effort over roughly the past decade and was used as the case study by the Government of Luxembourg in developing their conceptual model for a bio economy.

14. Luxembourg will complement what has been done in Europe by focusing initially on molecular diagnostics, and becoming a center of excellence around molecular diagnostics, in order to enable the early detection of diseases. Their aim is to not compete in established areas already, but to create a niche where they can take advantage of their geographic location.

15. PwC goal with Luxembourg was to deliver knowledge transfer over the next three to five years, so that Luxembourg has the world-class sophistication to do the research — proteomics and systems biology. PwC helped facilitate the training of Luxembourg scientists in the US and then re-establish themselves back in Luxembourg once the infrastructure is in place.

16. Luxembourg aimed to develop its center of excellence’ for bioscience by establishing a trans-Atlantic series of collaborations with three US-based institutions: The Partnership for Personalized Medicine, the Institute for Systems Biology, and TGen.

17. PwC was the initial facilitator of these partnerships which drove over $250M into these US research organizations, and developed the plans for each of the new ventures. 10/7/20116PricewaterhouseCoopers LLP

18. PwC and our Personalized Medicine Practice – The PricewaterhouseCoopers (PwC) Health Research Institute developed this report. It identifies and discusses significant trends reshaping health systems around the world, specifically the creation of a new, more efficient primary health system -- one that is patient centered and takes into account the evolving power of individuals. To complete this report, PwC:Surveyed more than 590 health leaders in over 20 countries, including the UK, Germany, the Netherlands, the US (50), Canada, South Africa, Australia, New Zealand, Argentina, Brazil, China and India, central Europe, Scandinavia, the Middle East and Asia.

19. Conducted over 200 in-depth interviews globally (55 in the US) of top executives in government, hospital systems, insurance companies, physician groups, pharma and life science companies and technology firms in 25+ countries.

20. Surveyed 3,500 consumers (500 per country) in over 20+ countries including the UK, Germany, the Netherlands, Norway, the US, Canada, and Australia.HealthCast report: The Customization of Diagnosis, Care and CureThrough International Project Work and Global Research, we have Developed a Deep Knowledge Base Regarding International InitiativesOne example – the development of our HealthCast 2010 report:PricewaterhouseCoopers LLP10/7/20117

21. The Personalized Medicine Market – 2008Total Market: $210-215bn2015Total Market: $344-452bnNutrition & Wellness Total: $185bn Complementary & Alternative Medicine:$35bnHealth Clubs & Spa:$35bnNutrition & Wellness Total: $292bn CAGR’08-’15Complementary & Alternative Medicine:$41bnHealth Clubs & Spa:$61bnNutrition/ Organic care:$112bnMedical Retail:$3bnPersonalized Medical Care Total: $4-9bn RPM/ Telemedicine:$0-5bnEMR: $2bnNutrition/ Organic care:$181bnNutrition & Wellness7%CORE P4 Total: $21bn Medical Retail:$10bnThe Market Potential is HugePricewaterhouseCoopers LLPDM: $2bn7%Personalized Medical Care Total: $9-118bn Nutrition/OrganicEsoteric Lab Services:$5bnEsoteric Test Sales:$4bn 2%Comp & Alt Medic.EMR: $6bnRPM/ Telemedicine:$0-109bn22%Medical RetailHealth Clubs & Spa10%DM: $3bnCORE P4 Total: $42bn Targeted Therapeutics:$12bnPersonalized Medical Care44%RPM/Telemedicine23%-92%Esoteric Lab Services:$11bnEsoteric Test Sales:$10bn EMR15%Molecular Diagnostics: $3bnDisease Mgmt6%10%CORE P4Targeted Therapeutics:$21bnEsoteric Lab Serv.10%Esoteric Test Sales13%Targ. Therapeutics9%Note: Totals may differ due to roundingMolecular Diagnostics: $7bnFigures Not Drawn to Scale1 Reflects upper range of RPM/Telemedicine“One of the innovation areas with the highest impact will be the whole field of early and correct diagnoses.” - Mars di Bartolomeo, Luxembourg Minister of HealthPwC Health Industries Advisory • 10/7/20118

22. A New Emerging ParadigmPricewaterhouseCoopers LLPSickHealthyVulnerableAffectedThe Personalized Medicine Market – Expanded view of Health & WellnessTraditional view of Health & WellnessTreatmentDeliveryConsumerProblemDiagnosisTreatment PlanTreatmentDeliveryPatientProblemDiagnosisTreatment PlanResort/SpaPreventativeHospitalSurgeryPatientDiagnosisHome/GymEmotional(Social / Spiritual)Preventative & ChronicGroup/CommunityPhysicianDiagnosisChronicPhysicalDiscomfortPhysicianPhysician/nurseClinicSurgeryMentalPhysician office/ClinicNurseDiagnosisChronic & ClinicalPreventativePhysicalASC/Outpatient centerAlternativeDiagnosisPhysician officeExamClinicalPreventativeHospitalCDC Definition of Wellness – covers all phases of patient well being10/7/20119

23. The Broad Health and Wellness Perspective of a Large Global Consumer Products Company Demonstrates the Wealth of Potential Strategic Partners10/7/201110PricewaterhouseCoopers LLPKey players:Molecular DiagnosticsThe Personalized Medicine Market – Sports Nutrition ProgramsDigital Coaching ProgramsHealthE-GamesHealth-Based Social MediaPersonalizedFitnessWellness Mobile ApplicationsWeight Management Centered MediaExergame Equipmentand Fitness CentersPersonalMonitoringSportsEntertainmentWellness MarketTechnologySports Nutrition ProgramsHealth Data AggregationNutrition / Consumer GoodsHealthcareEmployer Initiatives to Decrease Health Costs Personalized Skincare & CosmeticsPersonalized Medicine / Genetic TestingFunctional Foodsand DrinksCommunity Based Awareness InitiativesPersonalized Health and Lifestyle CoachingGovernment Initiatives to Decrease Health CostsActivity Managementand Wellness ProgramsHome Health Monitoring

24. – Social Media puts pressure on scientists, politicians and funders to alter research priorities despite absence of credible scientific evidenceAn MS theory coined in 2008 about how MS was not an autoimmune disease but rather a vascular disease caused by blockages in the brain received a lot of internet attention in Canada

25. more than 500 Facebook pages, groups or events devoted to the theory

26. tens of thousands of followers

27. A poll shows more than half of Canadians are familiar with the theory

28. Resulted in demands for clinical trials for controversial treatment

29. Reports have sparked a national debate about whether publicly funded trials should be conducted and whether MS patients should have immediate, publicly funded access to the vein-widening treatment known as venoplastyResearch Priorities Can Be Altered By Social Media10/7/201111PricewaterhouseCoopers LLP

30. A Closer Look at Diagnostics – Supports the decision to treatPredicts likelihood of an adverse reaction Better outcomesLower treatment costsPrevents warnings and recallsCountless patients will benefit from molecular diagnostics which informs their clinical treatment based on their individual genotype

31. 1,800 diagnostic tests available now

32. 5-10 new diagnostics tests per week

33. Diagnostics provide value at every stage of clinical careU.S. Healthcare≈ $2 T*Over 72% of all medical decisions are made based on the $14B IVDU.S. LabBillings$55 B<3% of total spendSpending on Diagnostics is the Most Efficient Use of Health DollarsPricewaterhouseCoopers LLPU.S. IVD Revenue$14B<.7% of total spendSource: Noel Doheny10/7/201112

34. A Closer Look at Diagnostics – SusceptibilityMonogenetic

35. ComplexDiagnostics are the Foundation of Personalized Medicine10/7/201113PricewaterhouseCoopers LLPRisk Analysis(modeling)PredictionRisk MitigationPreventionRisk monitoringEarly DetectionInterventionStratification

36. Target ID/Validation

37. Rx algorithms

38. PGX

39. Therapeutic monitoringPrognosisCompanion DrSource: Dr. Franklyn G. Prendergast, Mayo Clinic

40. The Importance of HIT – Health intelligenceHealth managementOfferingsQuality & efficiency managementDecisionsupportProviderHealth planChannelsChronic care managementHealth planHealth outcomes & economicsProviderHealth informaticsHealth informaticsEmployerMedicationtherapymanagementElectronic Patient Information NetworkDemand for information-enabled health services Clinical research optimizationLife SciencesPublic sectorHealth & wellness managementSafety surveillanceClinical,financial & operationaldataConsumerPublic sectorDisease/ bio-surveillancePersonal health records(Shared decision making)Data network Information Systems will Serve as the Foundation for Personalized Medicine10/7/201114PricewaterhouseCoopers LLP

41. The Importance of HIT – Personalized medicineRichness and timeliness of informationDistinctiveCompetitive advantageHealth management(Systemic management of outcomes)AdvancedMarketadvantageHealthcare measurement(Quality, safety, Outcomes and cost)Advanceddecision supportOpportunitiesFoundationalBuilding blocks to successOrganizations grow their informatics competency, which increases the availability and portability of secure and protected clinical informationHealth managementalgorithms and toolsAnalytical competencies and toolsIntegrated patient records Evolution of evidence-based medicine knowledge baseRequired capabilitiesHIT Systems fall on an Evolutionary Continuum that Supports Personalized Medicine10/7/201115PricewaterhouseCoopers LLP

42. The Multiple Myeloma Example – DIAGNOSTICSTARGETSBIOMARKERSSEGMENTATIONTARGET IDLongitudinal StudyLS Tissue BankLS Data BankCure for Multiple MyelomaInnovative Clinical TrialsPatient Focused OutcomesBio-Infomatics and Data AnalyticsGenomicsInitiativeMMRC Tissue BankDrug PoolNovel & Existing DrugsIntegration of the Personalized Medicine Value Chain – Biology to Cure – will be Critical to Curing Multiple MyelomaPricewaterhouseCoopers LLP10/7/201116

43. The Multiple Myeloma Example – WISERFASTERThe MMRF/C must Balance its Focus on Accelerating Drug Development with Identifying the Right Drug(s) for the Right Patient(s) PricewaterhouseCoopers LLPMMRFResources10/7/201117

44. The Changing Healthcare Landscape – Healthcare Reform Landscape10/7/201118PricewaterhouseCoopers LLP

45. The Changing Healthcare LandscapeAdvances in PM will Influence the Full Healthcare ContinuumPricewaterhouseCoopers LLPFinancial Reimbursement – Fee for Service(APR-DRG)Capitation or Global PaymentAPC and EAPGRBRVSPay for PerformanceEpisode or Bundled PaymentsBenefit ChallengesActuarial calculations disruption and redefinition

46. Services need to be defined as covered versus excluded category.

47. States may require specific test benefits.

48. Medicare statute excludes “screening” services unless previously enumerated, but the border between screening & diagnostic services is sometimes problematic.Coding ChallengesLengthy process for new code development

49. CPT: uncertain granularity of Tier 1 codes, and lack of granularity of Tier 2 codes

50. Multiple methodology-based or misc. (NOC) CPT codes (incl. molecular diagnostics “stacking” codes

51. Laboratory test CPT coding is not well suited to coding for information servicesCoverage and Evidence Standards ChallengesCoverage determination that has few standards, varies widely from test to test,

52. CMS’s coverage determination process lacks sufficient predictability in its evidence requirements

53. Human factors confound coverage review, especially gaps in technical expertise and ability to determine true valuePayment and Diagnostics Reimbursement ChallengesCharacteristics of the CLFS and PFS make their application to payment problematic

54. Payment system anchored in the costs of tests developed and performed decades ago, and applied inconsistently

55. Payment-setting process fails to recognize their clinical utility and economic valueVolume based Value based, quality, outcomesPaymentHealthcare ContinuumPrevention and WellnessMonitoring and Management of Condition(s)Risk AssessmentDiagnosisPrognosisClinical Decision Making for TreatmentHospital based / Acute Integrated, outpatient, patient centeredCare VenueDiagnostic tests to complement traditional risk factors

56. Risk assessment based on genomic and proteomic profiles and information

57. Used for definitive diagnosis and disease typing

58. Better accuracy in diagnosis through tests with improved specificity

59. Focus on prevention and prediction of disease rather than reaction to it

60. Probabilistic health history through DNA sequence

61. Early warning about predisposition could promote healthier lifestyles

62. Recurrence monitoring

63. Monitoring for treatment efficacy

64. Leverage population based therapeutic research

65. More targeted treatment for mgmt. and late stage

66. Used to predict efficacy or safety response for specific treatments

67. Right treatments at right time for right patients

68. Genomic and information based clinical decisions

69. Less variability

70. Assess severity and/or risk of recurrence

71. Informed decisions on clinical decisions and pathway

72. Know what is true stage of disease progression

73. Reduced possibliity of side effectsRecords / Info.Paper, Fragmented Electronic / Usable / TransparentAccountability for care, cost, and outcomes is shifting during the US era of reformHealthcare Delivery ModelsOne size fits all PersonalizedTreatmentAcute Care ManagementACOChronic Care ManagementMedical HomesSpecialty Medical HomesEpisodes of CareFocus on late-stage detection and intervention (High cost, variable quality and outcomes)

74. Multiple reimbursements for fragmented (siloed) care versus integrated management of patient needs

75. Medical professionals paid for illness versus wellness

76. Inadequate social and economic incentives for wellness

77. Inadequate medical training/understanding of genetics/genomics/proteomicsAccountability? Clearer risk, accountability, costRisk Share10/7/201119

78. The Changing Healthcare Landscape – Financial ReimbursementHealthManagementCareDeliveryFee-for-serviceFull capitationEpisodicPreventiveChronicWellnessPayer Landscape Continuum10/7/201120PricewaterhouseCoopers LLP

79. The Changing Healthcare Landscape – PaymentVolume basedPerformance basedTowards Accountable Care Organizations10/7/201121PricewaterhouseCoopers LLPVenueHospital basedIntegrated, outpatientRecordsPaperElectronicTreatmentOne size fits allPersonalizedAccountable Care Organizations: Patient Centric Model 1990200020102020

80. – PwC will be a key contributor to the initiative intended to:Foster and apply disruptive innovation to effect transformative, systemic change in health care

81. It is designed to provide stakeholders in the health care with an actionable plan

82. Led by Harvard Business School professor Clayton Christensen, creator of the theory of disruptive innovation.

83. The Roadmap will draw from and build upon Christensen’s analysis of how disruptive forces can be put to work to help effect systemic change in diagnosis and patient care. National Initiatives: The Forum on Personalized Health Care Announces Launch of The Roadmap for Personalized Health Care 10/7/201122PricewaterhouseCoopers LLP

84. – Several articles yesterday as follow up to the ASCO Conference in Chicago, applaud the new wave of personalized cancer treatments in developmentPersonalized Medicine has Momentum10/7/201123PricewaterhouseCoopers LLP

85. – Gerry McDougallPersonalized Medicine LeaderPricewaterhouseCoopersgerald.mcdougall@us.pwc.com(617) 530-4471For additional insight, see our publications:10/7/201124PricewaterhouseCoopers LLP