Introduction to Pharma and Healthcare Industries 2024 PDF

Better Managers for a Better World Introduction to Pharma and Healthcare Industries Market dynamics, Key players, Regulatory framework, Drug development process November 11, 2024 Costas Piliounis MSc in Pharma and Health Management  Professor’s Profile...

Better Managers for a Better World Introduction to Pharma and Healthcare Industries Market dynamics, Key players, Regulatory framework, Drug development process November 11, 2024 Costas Piliounis MSc in Pharma and Health Management  Professor’s Profile Costas Piliounis Professor of Management Short descriptive biography: Education: Msc Chemistry – University of Patras, Greece Started my career in Food Industry in R+D and later in MSc Food and Management Sciences, University of Production. London From 1987 till 2017 I worked in Novo Nordisk where I had several leadership positions: Head of Middle East & Africa Head of Marketing and Business Development in International Operations Head of Spain and Portugal Head of Italy, Greece, Cyprus and Malta Hobbies: Travelling, Basket ball, Mentoring talented From 2017 I have established PNValue, an investment and people. consulting company. Through PNValue I invest in startup companies with focus Email contact: in eHealth. [email protected] 2 www.RomeBusinessSchool.com Contact details email: [email protected] Mobile: 00306944306625 00393455235730 3 Course Objectives Understand basics of the Pharma and Healthcare markets Discuss the key drivers that can impact the market going forward Overview of key players Discuss the role of regulatory authorities Overview of the drug discovery process 4 Learning outcomes: After the lecture, you will be able to: Understand key issues of Pharma and Healthcare markets Become familiar with various challenges authorities and industry are facing Prepare for the upcoming classes of Regulatory affairs and R&D 5 Reading Books: Leadership and Management in Healthcare, Neil Gopee and Jo Galloway, 2016 Transformational Leadership in Healthcare, Dr Dorine Fobi-Takusi, 2022 Forecasting for the Pharmaceutical Industry, Arthur Cook (ZS), June 2024 Deep medicine, Eric Topol, 2019 The AI revolution in Medicine, Peter Lee, 2022 6 Reading Industry reviews: IFPMA : The Pharmaceutical Industry and Global Health, 2022 EFPIA : The Pharmaceutical Industry in figures, 2022 IQVIA : The Global Use of Medicines 2024 Deloitte: The rise of global companies 2018 WHO : Global spending on health: Coping with the pandemic 2024 7 Healthcare Market Most of the information on this presentation are extracted from the 2023 Global Health Expenditure Report (WHO). The report focuses on health spending in 2021, the second year of the COVID-19 pandemic. Following massive disruptions to health systems, economies and societies with the onset of the pan- demic in 2020, 2021 ushered in a critical new phase as COVID-19 infections and deaths rose sharply. Yet 2021 was also a period of adaptation, as economies slowly recovered from the sharp downturn in 2020 and new COVID-19 vaccines were rolled out. 8 Healthcare Market Health is a priority for individuals as well as for governments around the world. With 2021 numbers the expenditure on Health is estimated to $9.8 trillion or 10.3% of the Global GDP. 9  Healthcare Market. Global spending on health reached US$ 9.8 trillion in 202 Government US$ 6.2 trillion (62.9%) 79% of the spending comes Private US$ 3.6 trillion from 18% of the global (38.6%) population leaving in high income countries Note: Data are the sum of total health spending in US dollars across 188 countries. The conversion from national currency units to US dollars is based on country-specific exchange rates in 2021. Data source: WHO Global Health Expenditure Database, 2023. 10 Significant discrepancy on the spending on Health. Health spending as a share of GDP remained higher in 2021 than before the COVID-19 pandemic 9 High income Health spending as a share of GDP 8 Upper-middle income 7 6 Low income 5 (%) Lower-middle income 4 2000 2005 2010 2015 2021 Data source: WHO Global Health Expenditure Database, 2023. 11 Year-to-year growth of health spending per capita varied across income groups in 2020 and 2021 Low income Lower-middle income Upper-middle income High income Year-to-year growth of health spending (%) 40 20 0 –20 12  Discrepancies monitored across income groups The composition of health spending by type of health care provider changed little from 2019 to 2021 across all income groups, with spending at hospitals accounting for the largest share of total health spending Hospitals Ambulatory care Pharmacies Preventive care provider Health admin Other Low Income 2021 26 14 25 13 11 10 2019 29 15 26 10 11 9 0 20 40 60 80 100 Middle income 2021 42 19 23 3 6 8 2019 41 19 25 2 4 8 0 20 40 60 80 100 High income 2021 40 24 16 3 4 14 2019 40 24 18 1 3 14 0 20 40 60 80 100 Share of total health spending (%) Data source: WHO Global Health Expenditure Database, 2023. 13 Key Stakeholders in Healthcare 1.Patients: The primary focus of the healthcare system, whose needs and experiences drive healthcare delivery. 2. Healthcare Providers: This group includes doctors, nurses, specialists, and other healthcare professionals who deliver care to patients and they are the backbone of the system 3. Healthcare Organizations: Hospitals, clinics, and long-term care facilities that provide services to patients 4. Payers: Insurance companies and government programs (like Medicare and Medicaid) that finance healthcare services. 5. Pharmaceutical Companies: Organizations that research, develop, and market medications and vaccines. 6. Medical devices Companies: Organizations the research, develop and market various devices for the healthcare market. 7. Regulatory Bodies: Government agencies that oversee healthcare practices and ensure compliance with laws and regulations (e.g., FDA, CDC, EMA, AIFA). 14 Key Stakeholders in Healthcare 8. Public Health Organizations: Entities that focus on health promotion and disease prevention at the community and population levels. 9. Researchers and Academics: Individuals and institutions focusing on healthcare studies, innovation, and the advancement of medical knowledge. 10. Advocacy Groups: Organizations that represent specific patient populations or health issues, advocating for policy changes and improved healthcare access. Each of these stakeholders plays a crucial role in shaping healthcare policies, systems, and practices. 11. Humanitarian organization, NGOs: Non-profit organizations focusing on lower income groups and weaker members of the society. ( UNICEF, Gates foundation, WDF etc) 15 Pharmaceutical Industry R&D companies Biopharmaceuticals Generic drug manufacturers Over the Counter Companies Speciality Pharma Companies Vaccine Manufacturers Consumer health Companies Contract Manufacturers Contract Sales Companies Market Research and Services Companies 16 Global Market for Medicines and Key Drivers 17  Global spending, including COVID-19 vaccines and therapeutics, is forecast to exceed pre-pandemic outlook by $1.2Tn to 2028 Changes in the historical and projected global medicine spending model due to COVID-19, 2019– 2028, US$Bn 0 Spending outlook change Incremental spend for COVID-19 vaccines & therapeutics 13 12 due to COVID-19: 0 Current outlook excluding COVID vaccines $1,203Bn, 2020–2028 Pre-COVID-19 outlook 12 13 = 0 0 29 28 2,238 83 2,107 COVID-19 vaccine spending: 0 1,985 116 1,736 1,868 $213Bn 0 3 1,607 ($190–$230Bn) 1,446 1,485 1,271 1,306 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 + Cumulative difference, US$ Billion COVID-19 therapeutics: +12 1,203 +12 $96 Billion ($85-115Bn) 913894 + +12 +11 670617 +11 468 306 386 198 205 213 COVID-19 disruption impact: 167 186 184 19619181 +11 10316 66 151 126 75 86 91 96 +11 3 51 63 +$894Bn 2020–2028 0 47 +11 -62 -59 -53 -75 -44 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Cumulative difference in non-COVID spending from pre-COVID-19 levels Cumulative Covid-19 vaccine spending Cumulative COVID-19 therapeutics Total cumulative difference from pre-COVID-19 levels Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 5  Per capita use of medicines varies by GDP with use in higher income countries typically higher than in lower income ones Defined daily doses (DDD) per capita by region compared to per capita gross domestic product PPP, current international dollars 1,400 Western Europe Japan 1,200 1,000 Eastern Europe Latin America North America DDD per capita 2023 800 600 Asia-Pacific 400 India Size of China bubble: 500Bn 200 Total 2023 250Bn 100Bn DDDs Africa & Middle East 0 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 GDP PPP per capita 2023 (current international dollars) Source: IQVIA Institute, Dec 2023; The World Bank, Jul 2023; International Monetary Fund, Oct 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 7  The global medicine market — using invoice price levels — is expected to grow at 5–8% CAGR through 2028 to about $2.3Tn Global medicine market size and growth 2014–2028 including estimated COVID vaccine and therapeutic spending Forecast 2,500 25% 2,000 20% % Growth Constant US$ Spending US$Bn 1,500 15% 1,000 10% 500 5% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Global Spending US$Bn % Growth Constant US$ Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 8 Spending and volume growth are following diverging trends by region Spending and volume growth by region Spending growth through 2028 60% expected to be high, driven by 55% 'mix' (wider use of novel drugs Eastern Europe at higher average prices) India 2024 – 2028 Percent spending growth 50% Above average volume and 45% spending growth through 2028 North America Latin America 40% Asia-Pacific constant US$ 35% Africa & Middle East Western Europe 30% 25% 20% China 15% Below average spending growth, with expanded 10% Below average volume and access to novel drugs driving spending growth spending growth through 2028 faster than volume 5% 0% Japan -5% 0% 5% 10% 15% 20% 25% 2024–2028 percent volume growth defined daily doses (DDD) Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 9 Higher global spending growth occurred in key regions after the pandemic, particularly in 2023 in North America Spending growth globally and in 9 regions, total market excluding COVID-19 vaccines and therapeutics, const US$ 2019–2028 20% Global North America Western Europe Asia-Pacific Japan 15% 6–9% 6–9% 5–8% -2–1% 4–7% $2,225-2,255Bn $1,050-1,080Bn $120–140Bn $84-104Bn $390-410Bn 10% 5% 0% -5% 20% Africa & Middle Latin America Eastern Europe India China 15% East 2–5% $185–215Bn 10% 5% 7.5–10.5% 7–10% 0% $108–128Bn $38–42Bn 4.5–7.5% 6-9% -5% $63–67Bn $110-$130Bn Spending growth 2024-28 CAGR Const US$ 2028 Spending Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 10 Spending growth is driven by mix — the change in the average cost of medicines — in many key regions Spending growth globally and in 9 regions, total market excluding COVID-19 vaccines and therapeutics, const US$ 2014–2028 60% Global North America 60% Western Europe 60% Asia-Pacific Japan 60% 10% 48.2% 7.5% 50% 50% 45.1% 44.4% 50% 50% 42.1% 42.9% 41.9% 1.2% 39.1% 7.4% 40% 36.0% 36.7% 1.4% 40% 34.8% 40% 6.8% 40% 5% 4.8% 11.9% 30.3% 6.3% 29.5% 13.9% 30% 30% 30% 30% 4.5% 10.2% 5.5% 39.3% 19.3% 18.4% 3.2% 18.3% 2.6% 43.9% 20% 0% 20% 20% 37.0% 35.1% 32.8% 20% 28.2% 31.1% 24.0% -3.1% -3.5% 10% 10% 20.1% 10% 18.3% 10% 16.7% 16.5% 8.9% -0.3% 0% 0% 0% 0% -5% 60% Africa & Middle Latin America 100% Eastern Europe 80% India China 90% 50% East 80% 70% 65.8% 41.2% 50% 69.0% 76.8% 61.7% 80% 40% 70% 60% 9.1% 51.2% 40% 34.7% 60% 12.8% 33.7% 51.6% 54.7% 50% 28.8% 60% 30% 24.7% 26.5% 50% 34.6% 30% 6.5% 41.8% 8.1% 18.8% 10.1% 40% 20.5% 40% 9.8% 40% 30% 20% 20% 30% 67.8% 48.9% 20.8% 13.3% 48.2% 20.5% 28.2% 20% 46.6% 20% 37.0% 19.8% 10% 4.1% 23.6% 34.4% 32.0% 20% 32.4% 10% 8.6% 16.5% 10% 10% 9.2% 11.9% 5.6% 0% 0% 3.4% 0% 0% 0% 0.7% 2024- 2014- 2019- 2024- 2014- 2019- 2024- 2014- 2019- 2024- 2014- 2019- 2024- 2014- 2019- 2028 2018 2023 2028 2018 2023 2028 2018 2023 2028 2018 2023 2028 2018 2023 5-year aggregate spending growth Volume Growth Mix Growth Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 11 Oncology and obesity lead growth while immunology slows due to biosimilars; many other classes growing in mid-single digits Top 20 therapy areas in 2028 in terms of global spending with forecast 5-year CAGRs, const $USBn 5-Year CAGR 2028 Spending 2024–2028 const US$ Oncology 440 14-17% Immunology 192 2-5% Diabetes 184 3-6% Cardiovascular 126 2-5% CNS 103 6-9% Respiratory 99 3-6% Mental Health 81 9-12% Infectious diseases 75 3-6% Obesity 74 24-27% GU sexual health 62 3-6% GI products 52 3-6% Pain 50 4-7% HIV antivirals 44 2-5% Ophthalmology 38 4-7% Musculoskeletal 32 4-7% Dermatology 30 4-7% Vaccines ex Flu and COVID 30 7-10% Blood coagulation 29 2-5% Lipid regulators 22 15 4-7% Cough, Cold incl flu vaccines & antivirals COVID-19 vaccines and therapeutics 13 4-7% -17 to -14% Source: IQVIA Forecast Link, IQVIA Institute, Dec 2023 12 Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science.  Oncology and obesity will lead growth through 2028 while immunology and diabetes growth will slow Global historic and forecast growth for top 20 therapy areas 20% 30% Forecast 5-YR CAGR 2024–2028 Forecast 5-YR CAGR 2024–2028 Mental Health 10% Oncology Forecast 5-YR CAGR 2024–2028 Vaccines ex Flu and COVID Obesity CNS 15% 25% Cough Cold incl flu vaccines & antivirals Ophthalmology Pain Musculoskeletal Dermatology Infectious diseases Immunology 5% GU sexual health Lipid regulators Blood coagulation Respiratory 10% 20% GI products 10% 12% 14% 16% 18% 20% Diabetes 65% 70% 75% HIV antivirals Cardiovascular Historic 5-yr CAGR 2019-2023 0% -5% 0% 5% 10% 15% 20% $350Bn Size of bubble: Historic 5-yr CAGR 2019–2023 Spending in $100Bn 2027 $25Bn Source: IQVIA Forecast Link, Dec 2023 13 Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science.  Global oncology spending to reach $440Bn by 2028, with growth accelerating from novel drugs, slowed by biosimilars in later years Global oncology spending and growth Forecast 500 25% 2024–2028 Key metrics 450 Spending constant US$Bn +104% total % Spending growth constant US$ 400 20% spending growth 350 (14–17% CAGR) 300 15% 250 +$224Bn 200 10% 150 100 5% ~+100 new 50 oncology drugs 61 69 79 90 102 117 137 155 172 190 216 252 302 353 400 440 0 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Spending Growth Source: IQVIA Forecast Link, IQVIA Institute, Dec 2023 Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 14 Immunology spending growth will slow to 2-5% through 2028 from biosimilar impact as volume growth continues at 12% annually Global immunology spending and growth 250 Forecast 25% 2024–2028 Key metrics Global spending constant US$Bn 200 20% 192 186 +12% per year % Spending growth constant US$ 180 174 volume growth 150 166 15% 160 142 +$32Bn 123 100 107 10% +20% 95 (2-5% CAGR) 83 73 50 62 5% Average cost 52 per day 42 35 -$11 to $23 0 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Spending Growth DDD growth Source: IQVIA Forecast Link, Dec 2023 Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 15  Global obesity spending has accelerated in the past 2 years from novel drugs with a significant upside if more widely reimbursed Global obesity spending and growth Forecast 140 2024–2028 Key metrics 120 Spending constant US$Bn +212% total 100 spending growth (24–27% CAGR) 80 60 +$50.1Bn 40 Pipeline of new 20 treatment modalities and improving 0 reimbursement 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Range of scenarios Base case Source: IQVIA Forecast Link, IQVIA Institute, Dec 2023 Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 17  New therapies in Alzheimer’s and anxiety/depression are expected to drive spending growth in neurology Leading CNS disorders global market growth dynamics 45% Size of bubble: $25Bn 40% Spending in $10Bn Global % CAGR const US$ 2024–2028 35% Alzheimer's Disease 2028 $2Bn 30% 25% 20% Anxiety/Depression Epilepsy 15% Migraine Parkinson's Disease 10% 5% Gout Schizophrenia/Bipolar Other CNS 0% ADHD Multiple Sclerosis -5% Other Pain -10% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% Global % CAGR const US$ 2019–2023 Source: IQVIA Forecast Link, IQVIA Institute, Dec 2023 Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 18 The outlook for next generation biotherapeutics includes significantly uncertain clinical and commercial successes Cell, gene and RNA therapeutics 45 40 Global spending constant US$Bn 35 30 25 20 15 10 5 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Range of scenarios Base case Source: Company Financials; IQVIA Institute, Dec 2023 19 Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. The Global Use of Medicines 2024 U.S. Market Overview 20  The U.S. market is forecast to grow 2–5% CAGR over the next five years on a net-basis, down from 5.3% CAGR for the past five years U.S. medicine spending and growth at invoice-level and estimated net 2014–2028, excluding COVID-19 vaccines and therapeutics Forecast 1,010 00 5-Year 5-Year 943 5-Year CAGRs CAGRs 881 CAGRs 827 00 Invoice Invoice 769 Invoice CAGR 711 CAGR CAGR 7.9% 645 7.6% 6-9% 589 545 00 Net 30% 521 Net 37% Net 47% 493 456 465 below below below 437 390 invoice invoice invoice 00 Net CAGR Net CAGR 498 521 537 Net CAGR 446 458 489 00 5.9% 386 413 5.3% 2-5% 318 331 331 344 363 363 291 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Net sales Invoice to net difference Source: IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 21 Spending in the U.S. is expected to increase by $299Bn through 2028, driven by new and existing brands Spending and growth drivers in US 2018–2028 Const US$Bn Forecast 2018 2023 2028 spending spending spending Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 22  New brand spending in the U.S. is projected to be higher than the last five years, but comprises a smaller share of spending U.S. new brand spending Forecast Total 2014−18 = $135Bn 40 12% Total 2024−28 = $119Bn New brands % of total brand spending New brand spending US$Bn 35 Total 2019−23 = $99Bn 10% 30 8% 25 20 6% 15 4% 10 2% 5 25 35 34 22 18 22 15 18 14 28 33 26 22 20 19 0 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 US NAS 58 Average launches projected at 50–55/year 47 48 30 42 57 49 54 69 38 Launches (55-60) (250–275 launches within 5-years) New brand spending New brands share of brand spending Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 23  A harrowing launch environment exists amid access and costs pressures as payers and manufacturers prepare for new policies Difficult launch environment Increase in access restrictions Proposed Part D changes Launch success is elusive Competitive dynamics matter Reform potential a constant ✓ Depressed first year sales, regardless of ✓ Rising number of blocked products in 20212 ✓ Removes coverage gap1 therapy area ✓ Specialty patients 20% more likely not to fill a ✓ Adds manufacturer liability in initial and ✓ Smaller, specialty population products prescription vs 20133 catastrophic phases1 perform well ✓ 25% abandonment in specialty for Part D patients4 Average first-year gross sales per brand (Millions, USD) 100% CPI adjusted to Dec 2022 dollars $180 90% 21% $158 31% 29% $160 37% New Patient Starts (% NBRxs) 80% $136 $134 $131 45% $140 $127 70% 12% $120 $114 $107 11% 12% 60% 10% $100 $89 50% 11% $80 $71 $65 40% $60 30% 67% $40 58% 60% 53% 20% 44% $20 $- 10% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (54) (69) (72) (40) (54) (69) (52) (59) (69) (51) 0% 2013 2015 2017 2019 2021 Filled Abandoned Rejected Average Gross Sales (CPI Adj. - Dec… Sources: IQVIA LAAD Claims Data, 2021; Published national formularies; 1IQVIA Thought Leadership; 2, 3, 4IQVIA US Market Access Strategy Consulting analysis. 24 Source: National Sales Perspective; Center of Launch Excellence, IQVIA. Projected Data through July 2023. Reluctant patient engagement signals space for change, including new avenues to reach care Economic factors can impact choice to seek care, but a new normal has arrived 0.8% -2.3% -5% +3% 3.1% 3.7% YoY growth in YoY growth in Office visits Elective proc. Inflation rate Unemployment RX Utilization vs ‘22 Economy peak (Dec ‘23) TRx vs ‘22 NBRx vs ‘22 vs ‘22 rate (Dec ’23) Volume Cumulative change in key engagement metrics 2023 vs 2022 Where are patients going? TRx NBRx Elective procedures Office claims 10% Weight loss program/clinics Fitness and wellness 8% Weight Watchers, Jenny Centers 6% Craig, Nutrisystem, etc. Year over Year % Change Holistic Wellness Expansion 4% Primary care doctors’ Telemedicine companies 2% offices Ro Health, Calibrate, Found, Traditional Entry Point etc. 0% -2% Specialty care office Employer incentive/Online -4% Endo, CV, Hep/Gastro, OB- pharmacies -6% GYN, Sleep Apnea, Oncology Omada, PushHealth, Honeybee -8% -10% Jan Mar May Jul Sep Nov Traditional healthcare Patient-driven care paths Source: National Prescription Audit (NPA); Medical claims data, IQVIA Notes: Channel prescriptions not normalized for Rx size. The Economics Daily: U.S. Bureau of Labor Statistics (bls.gov) 25 The impact of exclusivity losses will increase to $146Bn over 5 years, including significant biosimilars U.S. impact of brand losses of exclusivity 2019–2028, US$Bn Forecast 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 -1.8 -2.1 0 -4.2 -0.4 -4.1 -6.9 -6.2 -7.9 -7.9 -5 -5.7 -10.3 -9.2 -10.6 10 -9.7 -7.8 -7.3 -11.4 15 -12.4 -19.2 -14.0 -14.1 -16.4 20 -17.6 -26.9 -29.3 -23.3 25 -24.4 -24.4 30 35 40 -36.1 -37.2 $14.7Bn $44.4Bn $39.5Bn $106.0Bn $59.1Bn $145.5Bn Biologic Small $ Total brand loss due to LOE Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Nov 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 26 U.S. market dynamics to watch Areas of high impact on system spend and patient care The Inflation Reduction Act will continue to 2024 is about POLICY reshape spending (and treatment) trends as seizing the impacts arrive moment When and where of treatment ✓ System-wide change disrupts PARTICIPATION is shifting, creating the status quo, for everyone opportunities for change ✓ Open space for innovation in patient access, treatment, and care LOE, biosimilars, and multi-indication products ✓ AI can create the way forward, PORTFOLIO will determine the future with responsible and precise characteristics of the use treatment market 27 The Global Use of Medicines 2024 Europe Market Overview 28 Spending in Europe is expected to increase by $70Bn through 2028, driven by new brands Spending and growth drivers in France, Germany, Italy, Spain, and UK 2018–2028 const US$Bn Forecast 2018 2023 spending spending 2028 spending Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Nov 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 29 The impact of exclusivity losses will reach $32Bn over 5 years, with more than half due to the availability of biosimilars EU4+UK impact of brand losses of exclusivity 2019–2028, US$Bn Forecast 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0 -1.0 -0.7 -0.1 -1.2 -1.4 -0.7 -1.7 (1) -0.7 -2.1 -2.1 -0.9 -2.9 (2) -1.6 -1.4 (3) -2.2 -2.2 -2.7 -5.7 -6.1 -3.2 (4) -4.2 (5) -4.4 -3.6 -4.4 (6) (7) -6.3 -2.4 -6.5 (8) -2.6 (9) -8.1 -8.7 10) $5.2Bn $8.5Bn $17.6Bn $14.5Bn $13.8Bn $32.2Bn Biologic Small $ Total brand loss due to LOE Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Nov 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 30  New brand spending in EU4+UK is projected to be higher than the last 5 years but a smaller share of spending EU4+UK new brand spending, excluding COVID-19 vaccines and therapeutics Forecast Total 2014−18 = $54Bn 15 15% Total 2024−28 = $50Bn New brands % of total brand spending Total 2019−23 = $36Bn New brand spending US$Bn 10 10% 5 5% 7 12 12 11 12 9 7 7 7 6 8 11 12 10 9 0 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 EU4+UK 27 Average launches projected at 35–40/year NAS 42 38 28 41 35 29 40 50 41 (25-29) (175–200 launches within 5-years) Launches New brand spending New brands share of brand spending Source: IQVIA Market Prognosis, Sep 2023; IQVIA Institute, Dec 2023. Global Use of Medicines 2024: Outlook to 2028. Report by the IQVIA Institute for Human Data Science. 31 2024 will be a crucial year for EU legislation which affects medicines use across the continent Reform of the EU AI Act Substances of Human European Health Data Pharmaceutical legislation Cross sectoral rules for AI Origin (SoHO) Space Once in a generation change Some important AI uses in New rules on what is a Enabling cross border to pharmaceutical legislation medicine (esp. patient facing substance of human origin healthcare and the Ambitious goals with respect and therapeutic decision Intestinal microbiota included secondary use of data to equity of access to making) will be classified as alongside blood, tissues and Likely adopted in 2024 with medicines across the EU high risk, with new cells provisions beginning to requirements for compliance apply from 2025. Regulatory Data Protection Enhanced regulation, quality used as main lever to achieve Likely adopted in 2024, requirements and protections aims with most provisions for donors and recipients applying from 2026 Some key elements likely Likely adopted in 2024 with settled in 2024 implementation from 2027 Greater equity in access to Regulation of AI related to Harmonises regulation on a Promoting single market in EHR, and use of medicines medicines use wider group of SoHO Medicines use, Devices and AI across EU 32 Harmonisation of EU Health Technology Assessment also moves to reduce inequities of medicine use across the EU EUnetHTA 21 consortium ended in September last year and the EU HTA Coordination Group and subgroups were set up, now awaiting the first of the four implementation acts to be put out for public consultation Regulation passed Begin to take effect EU HTA covering European Parliament on all therapy areas 13/12/2021 01/01/2025 2021/22 2025 2028 2030+ Open HTA Guidance Questions Phases Cancer Therapies Comparability to national Orphan Drugs & ATMPs assessments Timeline unclear for the All other Areas start of the national HTAs ▪ EUnetHTA Service ▪ Member states collaborate on the creation of Joint Clinical Assessments (JCA) Handling of the Agreement and Joint Scientific Consolations (JSC) manufacturers data at the Details ▪ Consortium of 12 EU/EEA national level ▪ Solid scientific basis for pricing and reimbursement decisions that will remain member states at the national level --------------------------------------- ▪ Development of ▪ JCA are not legally binding but member sates need to give “due consideration” EU Methods paper essential methodologies ahead of to ensure consistency ▪ Maximum transparency of the data submitted by the applicant EU HTA regulation across member states Source: IQVIA EMEA Thought Leadership; IQVIA HTA Accelerator 33  2024 will also be a year where the EU focuses on medicines supply chain resilience Causes of fragility EU Actions to improve resilience Concentration of supply Supply diversification Approx. 60% of APIs produced in Asia, The EU’s Critical Medicines Alliance and especially China and India associated Act may lead to reshoring Procurement and reimbursement Funding and reimbursement flexibility Inflexible purchasing frameworks can lead to Supply chain Member States will share best practices in products being withdrawn for economic reasons pricing and reimbursement and undertake joint security procurement for certain medicines ”Deglobalisation” Preparedness As standards diverge and tensions rise, the risk The EU will support stockpiling and has of non-cooperation and export bans rises identified ”critical medicines*” and pursue joint procurement** to mitigate shortages Lack of transparency Technology solutions Global supply chains are (often deliberately) The EMA is using data-sharing and analytics to opaque and data collection can be poor anticipate and act on shortages. *first EU list of 200+ critical active substances published December 2023, **of antimicrobials initially 34 Market access environment in Europe see further reforms impacting medicines use Cost-containment is the common theme; selective launch and supply challenges accompany UK ▪ New Voluntary Scheme for Branded Germany Medicines, Pricing, Access and Growth ▪ Cost containment law (GKV-FinStG) less (VPAG) in effect from Jan ‘24 effective than anticipated ▪ £14 billion savings over 5 years1 ▪ Mandatory rebate increase saved €1.3 bn France returns to previous rate of 7% ▪ Industry concerns that medicines may fail ▪ 2024 Projet de loi de financement de to reach patients (eg Opdualag, a cancer la Sécurité sociale (PFLSS) allows Rx agent, not launched in Germany in 2023) spending to increase 4.9% in ‘242 ▪ Pricing pressure remains Italy Spain ▪ Cost containment as a priority ▪ HTA reform disrupted by snap ▪ Pharmaceutical spend ceiling to grow elections with new govt to focus on from 14.9% to 15.5% by 20242 faster access and new HTA system ▪ Attempts to improve innovative & aligned with EU HTA2 orphan medicines funding EU launches the Critical Medicines Alliance to explore topics incl. local manufacturing, procurement strategies and supply diversification to allow better strategic autonomy for essential medicines3 Source: IQVIA EMEA Thought Leadership; (1) gov.uk; (2) IQVIA country expertise; (3) EMA; 35 The Global Use of Medicines 2024 China Market Overview 36 By volume, China is leading the growth among all regions in the next five years, reflecting its strong underlying demands Historical and projected use of medicines by region, 2018-2028 Defined Daily Doses (DDD) in billions Underlying Demands Drivers 1.4 Bn population base Aging population (18.7% are 60+) Improved healthcare service system, especially improved accessibility in rural places Both NRDL and VBP are elevating drug usage volume Source: IQVIA Institute, Dec 2023 37 In terms of value spending, new original medicines will continue to be the essential driver of China market growth China medicine spending by product type 2014-2028 Key Dynamics Synchronized China launch Original Accelerated new drug approval brands Faster to NRDL Active innovation and R&D Non- GQCE accelerating Gx original replacement brands VBP pressure Moving to retail channels OTC & Policy encouragement Others Facing national VBP Unbranded VBP pressure products GQCE setting standards and filtering out low-quality GX Source: IQVIA Institute, Dec 2023 38 Four leading trends in China: opportunities for global players to navigate the China market 1. Encouraging Investments 2. Source of Revenues Notable Trends in China 3. Source of Innovations 4. Fast-growing Technologies Source: IQVIA analysis 39 1 Encouraging Investments In line with promoting the healthcare industry, China has strengthened its supportive policies to ensure a favorable investment climate for MNCs 2021-2023 Chinese supportive policies for foreign pharma companies 2021.03 2021.10 2022.06 2022.10 2023.01 2023.08 ✓ Optimize services for foreign ✓ Strengthen services for foreign ✓ Encourage MNC to set up R&D investment and promote the enterprises in 8 aspects, centers in China and improve opening up of pharmaceutical including drug & medical device R&D convenience for MNC industry