Thomas Cueni, Secretary-General of Interpharma, gave a presentation at the Life Science Forum Basel 2010 titled "The Healthy Picture: 'Life Science Quo Vadis?'". He discussed how the economic crisis has led to increased pressure on healthcare spending and cost containment efforts by EU governments like price cuts and rebates. However, the pharmaceutical industry has continued to grow exports and innovation remains important for driving economic growth. Cueni argued that drug innovation has significantly contributed to declining cancer mortality rates. He expressed optimism about future medical advances through 2020 but recognized challenges from heightened scrutiny of relative efficacy and cost-effectiveness.

1. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
The Healthy Picture:
"Life Science Quo Vadis?"
Thomas Cueni
Secretary-General, Interpharma
Life Science Forum Basel, June 23rd 2010
10-06-09
The economic crisis… 2
June, 2010
 Strongest economic slowdown for decades
 Recession in all OECD-countries
 Outlook for Switzerland (seco, march 2010)
 GDP:
2009: - 1.7%
2010: +1.4% due to exports
 Unemployment rate:
2009: 3.8%
2010: 4.3%
 Worldwide economic situation recovers faster from its
breakdown than expected – fragile situation due to national
debts (euro crisis)
 Swiss export sector hit by crisis
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2. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
… is not a pharma crisis 3
June, 2010
 Pharma exports still growing
 Foreign trade statistics for pharmaceutical products, vitamins and
diagnostica from january to december 2009 against previous year:
+5.1%
 Total pharma exports 2009: 58.1 billion CHF
 Pharma exports by trade blocks:
 Europe -0.5%
 Asia +22.0%
 North America +22.7%
 So far no return to protectionism as previously feared
 Everybody is suffering – pharma with a time lag (Eurozone)
Share of GVA* as percentage of
4
aggregate economy, 2008
June, 2010
*
* GVA: Gross Value Added
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3. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
EU- governments grappling to reduce
5
their large budget deficits (1)
June, 2010
Germany
 Seeking quick savings: consensus on drug cost reduction package
 Price freeze for all reimbursed drugs until end 2013
 Increase of the mandatory rebate from 6 to 16% as of 1/8/2010
 Early benefit assessment. If no additional therapeutic value (ATV) reference pricing, if
ATV mandatory negotiation with national association of sickness funds
Greece
 Ministerial Decree providing across-the-board price cuts of up to 27% for patent-
protected drugs
 Several companies suspend distribution of some of their products on the Greek market
Sweden
 Basic agreement for zero growth
 Introduction of value-based pricing with a number of potential reforms currently on the
table
EU- governments grappling to reduce
6
their large budget deficits (2)
June, 2010
Ireland
 Changes to the pricing mechanisms of branded products
 Increased pressure to cut the prices of generics
 Short-term price reductions: 40% on 300 patent expired drugs
 Increase of social insurance rebate from 3,53 to 4%
 In return extension of basic agreement until March 2010
Denmark
 Ad hoc reassessment of reimbursement status of medicines following patent expiry
 Likely change of reimbursement status for important drugs (hypertensives): public
savings estimated up to 40 Mio. €
 New advisory council on hospital medicine RADS
Italy
 A series of cost-containment measures on pharmaceuticals including
 Mandatory reduction of 12.5% on the price of off-patent medicines from June until
December 31st 2010
 Potential tender for off patent medicines
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4. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
EU- governments grappling to reduce
7
their large budget deficits (3)
June, 2010
Spain
 First cost reduction package for patent expired drugs in March 2010
 An average 25% price reduction for all generic medicines (except for medicines
whose retail price is lower than € 3.12) to be implemented by July 2010
 Changes to the reference price system
 Second package announced in May 2010
 Compulsory rebate of 7.5% on sales of medicines (in-patent and off-patent) not
included in the reference price system applied to the whole medicine chain
(industry, wholesalers and pharmacies), each one with its corresponding margin,
dragged through to the end
Portugal
 Second set of measures to reduce the public deficit (following a first set of measures
adopted in March 2010):
 Reduction of expenditure in hospitals
 Reduction of the price for in vitro diagnostics for diabetes;
 Reduction of prices of medicines starting with generics;
 Implementation of audits to pharmaceutical expenditure with NHS
EU- governments grappling to reduce
8
their large budget deficits (4)
June, 2010
France
 Reduction of National growth target for health insurance expenditure
 Early application of price cuts for several therapeutic classes: contractually-agreed price
reductions by mid-2010: expected savings: 100 million €
UK
 Health care must find efficiencies of at least £15 – 20 billion in the next three years
 New government plan for health includes:
 a renewed commitment to introduce a system of „value-based pricing‟ for
medicines
 reform the National Institute for Clinical Excellence (NICE)
 £200m more for cancer medicines
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5. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
Economic crisis leads to increasing
9
payer pressure & cost cuttings
June, 2010
2010-2014 Compound annual growth rate (CAGR): price and volume elements
30%
China
25%
20%
VOLUME GROWTH %
Brazil
15% Turkey
Venezuela
South Korea India 30.5% Price
14.1% Vol
Spain
10% Thailand South Africa
UK
Canada Argentina
Poland
5% Japan Russia 12.5% Price
France Italy 7.5% Vol
US Indonesia
Germany
0%
Mexico
-5%
-10% -5% 0% 5% 10%
PRICE GROWTH %
Source: IMS Health, Market Prognosis, Mar 2010
Further factors challenging the
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pharmaceutical industry
June, 2010
 HTA is an important challenge facing the industry in Europe, there are
several more hurdles with immediate significance
 HTA is not a political platform against which other environmental factors
can be addressed
 The dollar's climbing value threatens to pressure
sales in coming quarters especially for U.S.
drug makers that are big exporters
to Europe but has the opposite effect
for European companies
Currency effects
Pressures on
healthcare
spending
National,
regional and
local pricing
and access
decisions
HTA
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6. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
Focal point for industry: innovation 11
June, 2010
 Innovation is the engine driving economic growth – but the
economic debate too much focused on prices
Quelle: Medicines in Development for Cancer; PhRMA 2009
Milestones in cancer treatment
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since 1997
June, 2010
 Today, every second cancer case can be treated successfully
1997 Approval of Rituxan, the first monoclonal antibody, to treat non-
Hodgkins lymphoma
1998 Approval of Tamoxifen based on it's ability to reduce the risk of
breast cancer by half in high risk women
2001 Approval of Gleevec to treat chronic myeloid leukemia
2004 Approval of Avastin for the treatment of metastatic colorectal cancer
2006 Approval of adjuvant (Post Surgery) Herceptin for early stage HER2-
positive breast cancer based on data that show the drug results in a 52
percent improvement in preventing recurrence
2007 Approval of Nexavar for primary liver cancer, making it the only drug
approved for liver cancer
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7. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
Powerful stories beat dry statistics 13
June, 2010
Higher survival rates due to
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drug innovation
June, 2010
The decline in cancer mortality rate is attributable
 up to 25% to drug innovation;
 up to 40% to imaging innovation (computed tomography
(CT) scans, MRI etc.) and
 only 7% to the decline in (lagged) incidence (e.g. earlier
diagnosis, cancer control activities, screening etc.).
F.R. Lichtenberg, „Has medical Innovation reduced Cancer Mortality?“, National Bureau of Economic Research
Working Paper No. 15880 (Cambridge, MA: NBER, April 2010)
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8. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
Outlook 15
June, 2010
Contribution to Global Growth, Const US$ 2014 Market Share, US$
US EU5 Japan Canada
South Korea Rest of Europe* "Pharmerging" Rest of World
Rest of World
100%
7% 6% 6% 6% 6% 5% 6%
90%
US
Pharmerging 33%
80% 24%
35% 40%
42%
70% 47% 49%
52%
60%
4%
2%
2% 5% Rest of
50% 6% 2%
3% 1% Europe*
12% 2% 5% 4% 7%
40% 3% 11% 2%
1% 2%
1%
6% S. Korea
2% 9% 5% 2% EU5
10% 13% 8% 2% Japan 16%
30% 6% 7% Canada 10%
7% 2%
20% 8%
28% 26% 27% 26%
10% 23%
17%
0%
*Russia, Turkey, Poland, Romania, Ukraine
2009 2010(f) 2011(f) 2012(f) 2013(f) 2014(f) are excluded from Europe, included in
“Pharmerging”
Source: IMS Health, Market Prognosis, Mar 2010. New Pharmerging definition
Global corporate performance 16
June, 2010
RAN 1989 2009
K
1 Merck & Co (US) Pfizer (US)
2 Bristol-Myers Squibb (US) Merck & Co (US)
3 Glaxo (UK) Novartis (CH)
4 SmithKline Beecham (UK) Sanofi-Aventis (F)
5 Ciba-Geigy (CH) GlaxoSmithKline (UK)
6 American Home Prod. (US) AstraZeneca (UK)
7 Hoechst (DE) Roche (CH)
8 Johnson & Jonhson (US) Johnson & Jonhson (US)
9 Bayer (D) Lilly (US)
10 Sandoz (CH) Abbott (US)
Source: IMS Health, 20010
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9. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
Stakeholder 17
June, 2010
European European assessment
European assessment of
EMA Patients
of cost-effectiveness
Assessment relative
by EU body efficacy
Dimension of centralisation
European Small MS
Commission
Coordination/
collaboration
Industry?
HTA
agencies
Big MS
Assessment
by national
agency Sickness
funds
National assessment National assessment
National of relative efficacy of cost-effectiveness
Relative Cost-
Perspective of assessment
Efficacy effectiveness
Scientific assessment Scientific assessment Broader assessment based
based on RCTs based on real-life evidence societal/health care priorities
2015: the market we would like to be
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is a place where…
June, 2010
 The marketing authorization is protected from economic or non-
scientific consideration;
 At launch, all eligible patients have access at a price that reflects
the value;
 Early dialogue with regulators and payers is established to align
expectations and reduce uncertainty and increase predictability at
national/local level;
 The burden of clinical development costs is reduced by one clinical
development plan that meets the needs of both regulators and
payers;
 The acceptance of a new generation of clinical trials design
(adaptive trials, surrogate endpoints, predictive biomarkers) is
increased.
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10. Life Science Forum Basel 2010
The Healthy Picture:"Life Science Quo Vadis?"
Thomas Cueni; Interpharma
Pharmacological vision for 2020 19
June, 2010
 Major value added for patients
 Biomarkers enable development of more targeted therapies
and help speed up clinical development
 Stem cell research, systems biology and nanotechnology will
be exploited to using biotech in researching and
manufacturing drugs and vaccines
 New forms of delivery – safer and more effective
 Substantial advances in therapies for cancer, dementia,
metabolic, inflammatory and infectious disease
 More customized programmes for early detection, prevention
and treatment of common diseases
Quo Vadis? 20
June, 2010
Arcadia, the fountain of youth
by Lucas Cranach
Entrance to Hades,
by Rodin
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