Model N, yearly Global benchmarking survey on Gloval Price Management practices and techonogy. Indicative of current trends and challenges for Market Access teams to manage global pricing and the technology available to ensure optimum pricing and margins.

1. 2013 Annual Survey – Global Pricing in Life Sciences
Industry Benchmark Report
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

2. First Annual Global Pricing Survey
EXECUTIVE SUMMARY
• In general Global Pricing teams are able to work with the governance and
processes they have in place, however there are significant areas of
improvement when it comes to operationalizing these processes
• Companies are equipped with systems and tools allowing “blocking and
tackling” activities of Global Pricing, but are underequipped when it comes
to collaborating well and making fast data-driven decisions based on
advanced analytics
• Many respondents report a lack of automation, ease-of-use, maintainability
– Legacy home-grown applications are common place, and more than 1/3
of companies use Excel for Data Management, Reporting and Analytics
• More than 50% of the companies plan to invest in order to fix systems that
hamper good decision-making
2
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

3. First Annual Global Pricing Survey
To Understand How to Best Fulfill Industry Needs
44 global respondents
Survey Objectives
Russia
• Better understand industry needs
and priorities
• Continuously improve software and
services
• Share a benchmark with the pricing
community
Denmark
7
Italy
Belgium
6
10
France
Switzerland
Germany
12
United Kingdom
United States
3
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

4. First Annual Global Pricing Survey
Demographics Match Desired Industry Representation
35 individual companies represented
Alcon
Alexion
Amgen
AstraZeneca
Basilea
Biogen Idec
BioMarin
BMS
Boehringer Ingelheim
Covidien
Eisai
Eli Lilly
Ferring
Grunenthal
GSK
Double Helix
Kamedis Conseils
4
Institute Straumann
InterMune
LEO Pharma
Medtronic
Menarini
Merck KGaA
Merck Millipore
Novartis
Pfizer
Regeneron
Roche
Sandoz
The Medicines Company
Threshold Pharma
UCB
Kantar Health
Market Access Solutions
PwC
Respondent distribution
(vendors excluded)
<500M
500M - 1B
Local affiliate
1B - 10B
Region
>10B
Global HQ
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL | www.modeln.com/rainmaker
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

5. Global Pricing Today
5
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

6. Top of mind Global Pricing challenges
Team Bandwidth, Tenders, LoE are most experienced challenges
Q: Among some of the Global Pricing challenges below, which 3 have you most
experienced recently?
40%
20%
Struggled with too many price change requests
Lost price due to tenders coupled with IRP
Lost too much price at loss of exclusivity
Parallel trade as a result of wide price corridors
Lost price due to lack of global collaboration
Lost price due to inadequate launch sequence
<500M
Lost price due to lack of IRP anticipation
500M - 1B
Inaccurate or late price reporting to MoHs
1B - 10B
>10B
Lost price due to inaccurate/ out-of-date data
0
6
0.1
0.2
0.3
0.4
0.5
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

7. Industry Practices Today - GLOBAL PRICING REPOSITORY
Gaps in the areas of Integration, Collaboration, Basic Reporting
Q: How would you describe your current GLOBAL PRICING REPOSITORY across the
below components and characteristics?
Single global pricing database
Fast access worldwide
User-friendly and admin-friendly
Enables notifications, approvals
Easy reporting/ dashboards
Audit trail
Collaborative calendar of events
Integrates all necessary data sources
Have and satisfactory
7
Have but not satisfactory
Do not have
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

8. Industry Practices Today - GLOBAL PRICING PROCESS & ORG.
Domains with most satisfaction today
Q: How would you describe your current GLOBAL PRICING PROCESS & ORGANIZATION
across the below components and characteristics?
Process OK, hence slide 5
suggests issues in price
change process operations
Governance
Price change process
Launch sequencing process
Role-based user rights and responsibilities
Data ownership & update process
Have and satisfactory
8
Have but not satisfactory
Do not have
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL | www.modeln.com/rainmaker
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

9. Industry Practices Today - INTERNATIONAL REFERENCE PRICING
Many gaps, especially in Scalability, Automation, Launch Sequence
Q: How would you describe your current INTERNATIONAL REFERENCE PRICING tool
across the below components and characteristics?
Flexible and detailed reference rules
Price change impact analytics
Easy-to-use interface
Easy scenario visualization/ comparison
Launch sequencing optimization algorithm
I/O integration with other systems
Easy to add functions, pages, workflows
Have and satisfactory
9
Have but not satisfactory
Do not have
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL | www.modeln.com/rainmaker
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

10. Industry Practices Today – Global Pricing System Landscape
Industry still relies heavily on Excel! Less than 25% vendor systems
Q: Which types of software solutions are in use in your organization in the following
categories?
Database of global prices
Reference rules and price events
Global collaboration and processes
Reporting
Scenario analytics & Optimization
0
10
10
20
30
40
50
60
70
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

11. Global Pricing Tomorrow
11
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

12. Areas for improvement
High need for improvement esp. on collaboration and analytics
Q: Overall, how important is it for your team/ organization to improve on the
following…
3
2
4
1
Very important, current setup is
inappropriate/ incomplete
Important, current setup
hampers making good decision
Quite important, we have key
areas of improvement
Not too important, setup is fine
most of the time
Global Pricing
Database
12
Pricing
Historical Price
Price
Processes &
Reporting Simulation and
Collaboration
Optimization
Not important, current setup is
what we need
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL | www.modeln.com/rainmaker
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

13. Global Pricing Services
Help needed to complement skill set, bandwidth and system
Q: Which third party consulting services do you think your organization could need?
Other
IRP rules 'as a service': Initialization &
recurring updates
Product-specific strategies to best work
with/around International Pricing rules
Validation of accurate application of IRP
rules in country affiliates
Assess and design Global Pricing system and
organization strategy
International Reference Pricing (IRP)
industry benchmarking
IRP scenario analytics (price change, launch
sequence, genericization, etc)
13
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

14. Take-Aways
Investment needs to tie back to identified gaps and most value add
• 40+% have areas for improvement
hampering good business practice
in Pricing Collaboration
• 50+% have areas for improvement
hampering good business practice
in Price Simulation
• Improving capabilities in ‘13/’14 is
medium or high priority for 55%
Investment areas in
next 24 months
Competitive price database
Global pricing database
Local/ global collaboration
Reference rules management
Reporting & dashboards
Price events database
Price & launch simulation
Where will you invest
in the next 24 months?
Price change process
0% 20% 40% 60% 80%100%
Yes
14
Considering
No
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL | www.modeln.com/rainmaker
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

15. Contact Information:
Arnaud Grunwald
Senior Director
Global Pricing Strategic Initiative
arnaud@modeln.com
+ 1 650.610.4656
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

16. Coming soon ..
2014 Annual Survey – Global Pricing in Life Sciences
Industry Benchmark Report
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

17. How Model N solution helps
COLLABORATION
PRICE REQUESTS
WHAT-IF PRICE SCENARIOS
INTEGRATING DATA SOURCES
SCALABILITY / FLEXIBILITY
©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

18. Thank you!
Any question?
.
More Revenue Made Simple
18
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©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL