global pharmaceuticals & biotechnology industry

360 Degree CEO Perspective of the Global Healthcare Industry

© 2008 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan

© 2008 Frost & Sullivan, All rights reserved www.frost.com

The CEO’s Perspective of the Complex Business Universe

CEO

GLOBAL

Political&

Regulatory

EmergingOpportunities

Cultural

BEST PRACTICES

GrowthFunctions Growth

Team

Growth Process

CareerDevelopment

CUSTOMER

NonCustomer

Demo-graphics

Behavior

Competitor’sCustomers In-Direct

CompetitionCompetitive

Strategy

CompetitiveBenchmarking

EmergingCompetition

COMPETITIVE

ECONOMIC

Country Risk

Economic Trends &Issues

EconomicThreats

Economic Trends

EmergingTechnology

NewApplications

DisruptiveTechnologies

TECHNOLOGY

IndustryExpansionPotential

IndustryConvergence

IndustryShifts

INDUSTRY

ExternalIndustryImpact

IndustryIntegration


Agenda

Global Healthcare Industry OutlookA Overview By AreaB

Top 10 Global Healthcare Trends1.

The Triple Healthcare Crisis2.

Shifting Healthcare Expectations

Hot Spots & Emerging Geographies

5.

Convergence in Healthcare

PESTLE Analysis7.

3.

4.

6.

Opportunity Analysis – Major Areas8.

Healthcare Paradigm Shift

Pharmaceuticals & Biotechnology 1.

2.

3.

4.

Clinical Diagnostics

Medical Devices

Medical Technologies


Global Healthcare

Industry Outlook

Shifting Healthcare Expectations

Convergence in Healthcare

The Triple Healthcare Crisis

Healthcare Paradigm Shift

Hot Spots & Emerging Geographies

PESTLE Analysis

Opportunity Analysis

Top 10 Global Healthcare Trends


ProjectedImpact on the

HealthcareIndustry

High Impact

Low Impact

Certainty

Low High

2007 – 2020

Top 10 Global Healthcare Trends

Power Patient Generation

Hospitals go Virtual

Innovation vs. Knowledge

Drugs getSmarter

Patients become Customers

Devices become monitors, monitors

become devices

Shift to Personalised Healthcare

Healthcare globe trotters

Cyber Docs

Prevention Before Cure


Patient Centred Care

2010 20202015

Power PatientGeneration

Major Trend

Patients become healthcare Kings and Queens, Medical communities become interconnected while doctor-patient relationship goes virtual.

Patients Become Customers

Personalised Healthcare

Healthcare Globe Trotters

Hospitals Go Virtual

SmarterDrugs

Devices Become Monitors

Innovation vs. Knowledge

CyberDocs

Prevention Before Cure

1

2

3

4

5

6

7

8

9

10

Baby Boomer Retirement StartsPatients become

healthcare Kings and QueensPatients gain access to

health quality information

ConsumerismHolistic health and well being

One Stop ShopCustomised Products Home Services

Genetic TestingTargeted Clinical Trials

Information based medicineMajor diseases understood at molecular level

Wellness Care Presymptomatic diagnostics & treatments

Immediate Treatment abroadbecomes an option

"medical tourism" crossesthe US$2 billion mark

Private Companies invest in facilities and services abroad

All departments/buildings within hospitals are connected

Medical communities (1°, 2° care)become interconnected

Regional/Country-wide Connectivity

Non-invasive delivery Drug cocktails will enhance productivity, memory,and physical performance

Disease management Remote Patient Monitoring Self-monitoring

War for Medical TalentMedical professionals keep up with knowledge growth.

Baby Boomer Retirement Starts

Virtual face to face doctor- patient relationship

Perform routine diagnostics with predictive precision

Cheaper care available to more people in need

Early Treatment Implementation of IT Precise therapy becomes reality


15% of patients admitted to hospital

suffer an adverse event.

8% of adverse events result in death.

6% of adverse events result in

permanent disability.

10-20% of all adverse events is

caused by medication errors.

10-15% of hospital admissions

occur because providers do not have

access to previous care records.

20% of laboratory tests are requested

because the results of previous

investigations are not accessible.

Healthcare is challenged by three interlockingcrises that make present healthcare systemsunsustainable:

Rising Costs,

Changing Demographics

Quality

The Size of the Problem – Quality

Healthcare is challenged by three interlocking crises that make present healthcare systems unsustainable


If current trends hold, by 2050 health care spending will almost double claiming 20 – 30% of GDP for some economies.

In almost all countries worldwide, per capita healthcare spending is rising faster than per capita income.

No country can spend an ever-rising share of its output on health care, indefinitely. Spending growth must eventually fall inline with growth in per capita income.


In 2000, 10% (606 million) of the global population wasaged 60+. By 2050 this will be more than 21% (2 billion).

People aged 60+ utilize 3-5 times more healthcareservices than younger people.

75% of people aged 60+ have one chroniccondition, while 50% have two or more chronicconditions.

Chronic diseases account for more than 60% of allhealth care spending.

Health economics dictate a shift in spending – awayfrom treating and towards predicting, diagnosing andmonitoring

The balance between young and old is shifting. Ageing related and chronic diseases, are becoming significant. More people living with multiple long term illness and conditions.


Healthcare

Entertainment & Media

Customised ProductsHome Services

Retailing & Finance

Customer service Comparison ShoppingSelf-ServiceSpecial Offers

Manufacturing & Distribution

Faster time to marketOne Stop ShopAnytime Anywhere CareSupply Chain Integration

Consumer experiences in other markets affecting expectations from healthcare

Health care that iscustomized tomonitor, diagnose, educate, and interveneregardless of location ortime-will be common.

Freedom to makeown decisions

Greater variety ofproviders, products andservices e.g. expensivehealth plans and alternativemedicine services

Power patients have increased accessto computers and informationthrough multiple channels to seek andanalyse health information


Predictive tests

Disease Management

Gene Mapping & Functional Analysis

Tailored Treatments-Genomic/Proteomics based

Preventative Programmes

Health Management

Bio Chips: Controlled Released

Delivery Systems

Telemedicine

Remote Patient Monitoring

Drug Delivery

IT / Digital Information Systems

Nanotechnology

Convergence in healthcare enables personalisation, targeted medicines, new drug delivery mechanisms, virtual patient monitoring tools, allowing a preventative approach to healthcare

Medical Devices

Medical Technologies

Life Sciences

Technology…….Enables it

Economics………………Require it

Demographics………….Demand it


Riding on a wave of technical innovations Healthcare will change from an acute “find it and fix it” system to a “wellness tracking” system

Current Healthcare Systems

Suffer from the

“RADAR” Syndrome

Electronics Health Records (EHRs)

Chronic Disease Management Systems

Personal Digital Assistants

Disease Management Program

Home monitoring devices

Personal Health Records

Web- based education and support

Patient Scan

Good Chronic

Disease care

Patient Support

Tools

Telehealthfor virtual

interactions

Sharable PersonalHealth

Records

Web portalsto EHR

Systems

Provider Support

Tools

System oriented to acute illness

Patient’s role not emphasised

Follow up sporadic

Prevention overlooked

Patient then disappears from radar screen

Patient Appears (falls sick)

Patient is treated “find it and fix it”

Patient is discharged

Future Healthcare Systems

Must Apply a

“GPS” Logic


A modern healthcare system is on the horizon demanding a Healthcare Paradigm Shift

Fragmented Patient Flow Integrated & automated

...From

Invasive Diagnosis & Treatment

Less invasive, Preventative,image based

Provider Centric Focus Patient Centric

Centralised – Hospital Monitor De-Centralised–Shift to Community

One Size Fits All Approach Personalised Medicine

Therapeutics/Diagnostics/Devices Tools “Theranostics”

Treating Sickness Objective Preventing Sickness – “Wellness”

...To


Threats arise from unconventional players outside the traditional healthcare boundary

Telecommunication Companies

2007 : Orange launches "Connected Hospital", itsfirst e‐healthcare offering designed to improvepatient comfort and care quality

Consumer Product Companies

Chemical Companies2007:Roche and ToyamaChemical enter licensingagreement to develop potentialbreakthrough drug to treatrheumatoid arthritis

Employers & Government2007 : Integrated HealthcareManagement in the US has beenlaunched as the systematic application ofprocesses and shared information tooptimize the coordination of benefitsand care for the healthcare consumer

Agriculture & Food CompaniesBiotech is the changing face of agriculture.Biotech crops were planted in 18 countries in2004. By 2010, it is projected that 15 millionfarmers will grow genetically modified crops onup to 375 million acres in 30 countries.

2008: Virgin Group launched a newhealthcare network. The first of six “one‐stopshops” clinics will offer extra NHS and privateservices including dentistry, screening, apharmacy and complementary therapiesalongside GP practices. Ultimately, offeringwider options for patients.

2007 : SUPERMARKETS in the UK areincreasingly becoming one‐stop‐shops foreverything by branching out intohealthcare, with everything from in‐storepharmacies to blood tests, blood pressurechecks and health checks on your lungs.

Healthcare Companies


A Look at the Future: Patient Centric Health & Wellness Care

Web of Care

Smart eHomes

Mobile EHR

Health Robots

Implantable eCare

Wearable BioSensors

NanoCare

Decision Support



Regenerative Medicine

Pre-emptive Medicine

Digital Medicine

NanoMedicine

EcoMedicine

Self Care

Diet &

Nutrition

Humor &

Joy

Lifestyle & Stress

Reduction

Mind Body & Spirit

Exercise&

Fitness

My Health & Wellbeing Databases

Doctors& Medical

Team

Coaches&

Advocates

OnlineSupport

Communities

Friends&

Family

eHealthAdvisorNetwork


U.S.Huge healthcaremarket andgrowing, largeopportunities, nicheplayers will be moresuccessful

CanadaRelatively high governmentspending on healthcare, smallnumber of local marketplayers, sizeable market

Hot Spots and Emerging Geographies

Germany/SwitzerlandHigh spending onhealthcare, large market withnot too many marketplayers, increasing focus oneHealth and digitization

UK/Scandinavian CountriesHigh government spending onhealthcare IT, large market, highnumber of healthcare IT players.

IndiaLarge market, low operating costs, excellentlocal skills, high localcompetition, Distribution hub to the Middle-and South-East of Asia

Hong KongHigh governmentspending onhealthcare, smalldomesticmarket, gateway toChina

Australia & New ZealandHigh government spending onhealthcare IT, small number of localmarket players, increasing focus oneHealth and digitization

Sub-Saharan AfricaLimited current governmentspending on healthcareIT, increases planned in thefuture. Private sectordeveloping increasing focuson eHealth. Moderate numberof players mainly operatingfrom South Africa.

Brazil & MexicoTwo largest healthcare markets in Latin America and growing at a sustained pace

Venezuela & ColombiaConstituting part of the Andean Region are the fastest growing countries in many HC categories due to large public investment


PESTLE Analysis – Timeline

Increase influence by regulatory bodiesPOLITICAL Increasing harmonisationGrowing Political Focus and Pressure on Healthcare

Spend per capita on health globally grows

ECONOMICDivide between the EU, US and rest of the world grows

Global ‘Not for Profit’ PharmaSupply for developing countries

Reduction in pharma growth(business model changes)

Patient Centric Healthcare

SOCIAL Increasing pressure from patient groupsHealth awareness (prevention)Ageing population

InternetTECHNO-LOGICAL

Information Based Systems

LEGALTherapeutics>Theranostics (Rx/Dx)

ENVIRON-MENTAL

Mergers and Acquisitions

Personalised healthcareMedical Ethics Health educationRaised consumer expectations Increasing customer awareness

Pharmacogenomics

Drug Design

Genomic Drugs

Health card / Smart CardsCombined diagnostics and therapeutics

Customised treatmentsDirect to Patient Advertising

Biogenerics/biosimilars

Privacy

Faster Drug Approvals Medical Errors / Safety

Genetic Discrimination

Biotech companies transition to Pharma companies

Development of specialist therapy providers

Impact of HIV and other pandemics

2010 20202015


Opportunity Analysis – Major Areas (Europe), 2007-2012

ProjectedRevenues

In 2012($ Billions)

High Revenues

Low Revenues

Growth Rate (2007-2012)

Low High

Drug Discovery

Patient Monitoring

Pharmaceuticals

Biotech


Medical Devices

Medical ImagingHealthcare IT


Global

Pharmaceutical &

Biotechnology

Trends

Pharmaceuticals,Blockbuster Model

Biotech, Generics,Local Players

Integrated Model,Gene Therapy,Global Players

?

Key Trends

Emerging Markets

Snapshot of Potential Opportunities

Market Data


DiagramChanges in the Global Pharmaceutical Environment Require Pharmaceutical and Biotech Companies to Adapt to Changing Business Models

Pre 2005

Blockbuster Model

2015

Niche Drugs and R&D

2020

Integration & Supply Chain

Integrated packages of products and services

Patient monitoring & compliance

Pharma and medical devices providingsophisticated and efficacious solutions

Integration of pharma, diagnostics, medicaldevices, patient monitoring and healthcare IT

Will result in a high profile, risk free, userfriendly, low cost and safe healthcare solution

Preventative Healthcare & Wellness

Astounding growth in the vaccinesindustry

Marketing of Value Added Services

Genomics and proteomics expected toreduce R&D times

‘In life testing’ will take over the currentclinical trial process. Continuous datamonitoring can be done by the regulatorsduring the testing process. Clinical trialswill eventually become shorter

Supply chain functions will evolve to a revenuegenerating model. Products and services will bemarketed through the supply chain

Just –in time manufacturing, novel deliverymethods and direct to consumer distribution willbe adapted from other industries like theautomotive industry

Automated dispensing of drugs

Smart cards / internet to store patients details

2015

2020

Opportunitiesin the GlobalPharma Market


Cancer represents the highest potential for revenue generation and growth in the future

ProjectedRevenues In

2012

High Revenues

Low Revenues

Growth Rate (2007-2012)Low High

Established Treatments

Unmet Needs


Can

cer P

ipel

ine

2007

–Sp

lit b

y Ph

ase

III &

I

Increasing Focus on Biologics in the Future Cancer Related Drugs Constitute Half of the Current Biotech Pipeline.

Phase III: 5-10 years to launch

Phase I: 10-15 years to launch

Cancer vaccines are an emerging technology that are likely tocreate the next wave of growth in the biotechnology industrybecause of better safety profiles and minimal side effects

Other: Includes genetic disorders, skin disorders, eye conditions, growth disorders, transplantation

Monoclonal Antibodies constitute half of the Phase III biotechpipeline. More Monoclonal Antibodies are likely to reach themarket in the next 5-10 years.

2007


The Next Five Years will see more than 70 Major Drugs come Off-patent in the Major Markets within US and Europe. Beyond 2011 Increasing Focus on Biologics

US14 drugs lose patent protection(include super blockbustersEffexor and Fosamax, andpotentially Advair)

EUNine drugs lose patentprotection in at least one of themajor European countries(including both Fosamax andEffexor)

USFive major drugs losepatent protection(includes Prevacid)

EUSeven drugs lose patent protection in at least one of the major countries (including Nexium, Pantozol and Cozaar)

USPatent protection expires for 10major drugs in the US (includesthe superblockbusters Seroqueland Zyprexa, plus three otherblockbusters)

EUFour of these, includingZyprexa, lose patent protectionin three major Europeancountries, as do seven otherdrugs, most notably Lipitor inNovember 2011

USThe US patent for Lipitorexpires and for 12 otherdrugs (includes theblockbusters Levaquin,Cozaar and Protonix)

EUFive drugs become exposedto generic competition withKeppra the most significantof these

Decreasing numberof small moleculepatent expiresbeyond 2013

Biologics will be thefocus within hospitalsin the injectables field

Within the EU and US,there is increasingcompetition from lowcost competitors

Source: IMS

2008 2009 2010 2011Beyond

2011………

Market Size (2007-2012)


DiagramGene Therapy will Drive the Market in the Longer Term. Technologies such as Pervasive computing are Important in Improving the Drug Discovery Process.

Defining diseases moreaccurately and creatinghealthcare packages forpatients with specific diseasesubtypes. Resulting inPremium Drugs and thelaunch of health care kiosksoffering one-stop-shopservices

Semi Block Busters, Patent

Expiration Strategies

Gene Therapy,

Growth Rate

Op

po

rtu

nit

ies

Biologics: Targeted Treatment

Solutions, Integrated Solutions

Gene therapy uses genes to treat orprevent disease. In the future, thistechnique will allow doctors to treat adisorder by inserting a gene into apatient’s cells instead of using drugsor surgery

Genomics / ProteomicsCellomics

SmartTags

Petaflop & Grid

computing Future Technology

Trends

Predictivebiosimulation

Advanced storage solutions

Pervasive computing

Web-scale mining

A disease led approach creates a new discovery anddevelopment model. Technology will improve the process e.g.making in-life testing more cost efficient. This bringssignificant changes for pharma companies in terms of time,development costs and success rates to man.


Shift in Growth from Mature Markets to Emerging Markets

Central and Eastern Europe

High unmet needs in Cardiovascular and respiratory disease treatments

Increasing private healthcare expenditure – co-payments on the rise

Markets are dependant on parallel imports for innovative medicines

Russia, Poland, Czech and Hungary demonstrating healthy R&D climate

Turkey: Ability to produce active ingredients and finished products

Brazil

Latin American hub for FDI andexports to neighboring nations

Government policies favourgenerics use – branded drugs’revenues are low

Recognized potential for CRO andCMO growth – still indevelopment phase

Argentina

Approval of ‘Generics law’-patients choose betweenbranded and generic drugs

Marketing strategy focused onpatients, moving away fromphysicians

Emerging market with hugepotential for R&D outsourcing

India

Highly skilled labor and low costs – attractivemarket for partnerships (CRO, CMO) (APIs)

Pharmaceutical companies with global presence

US FDA approved labs – preferred destinationfor R&D outsourcing

Weak IP protection – a concern

Singapore

US-Singapore FTA – Asia-Pacific Manufacturing hub

Highly competent facilities for clinical trials and drugdevelopment

Favorable investment policies – Asia-Pacificheadquarters of major foreign pharma companies

China

API manufacturing hub

Increasing competency in R&Doutsourcing

Anti-infectives and Cardiovasculardrugs – fastest growing markets

Improved IP laws – potentiallyattractive climate for FDI

Korea

Innovative capabilityand well developedindustry


Global


Trends

Key Trends

PEST Analysis


Market Data

Neglected sector Hottest areaIntegrated with other HC sectors


DiagramIncreased patient driven initiatives have secured diagnostics considerable market growth potential causing significant healthcare cost savings

2005

Secondary Care

2010Primary Care

2015Home Care/ Self Testing

Changes inthe demandfor healthcarediagnostics

Patient DrivenAvailable personalised healthcare and choice

Patient knowledge through multiple channels

Public pressure on government

One stop shop

Consumer responsive providers, products and services.

Demand VolumeAffordability

Waiting Lists

Public Anxiety

Development of demand management policies and strategies e.g. demand driven financing

Information Technology Imaging

Pharmaceutical / Biotechnology

IVD


Snapshot of Potential Opportunities - Global


2012

High Revenues

Low Revenues



The next 10 years will witness the Integrations of in vivo, in vitro, and IT in the advancement of personalised medicine

Predict Diagnose TreatInform

Screening and evaluate risk pre-

disposition

Symptom based diagnosis

Diagnosis

Prognosis/Assessment

General Staging

Surgical Staging

Surgery guidance

Therapy selection

Therapy planning

Therapy

Monitoring long term

Follow up Diagnosis of recurrence

e.g. PCR, Immunoas

say

e.g. CT,MR , PET/CT and

Nuclear medicine

e.g. PACS, electronic

health records and medication

management

e.g. CT/MRI radiation treatment, Mammography IVD Test and PET/CT

new marker

IN VITRO ITIN VIVO

PHARMA

INTEGRATION of in vivo, in vitro, and IT in the advancement of personalised medicine

IN VIVO

IN VITRO

Earlier Diagnosis

Gain more specific disease information

Define best individual therapy

Knowledge based decision support through integrated IT


Instrumentation and Automation

Point-of-care Testing

Cancer Testing

Molecular Testing

Pharmacogenomics

Growth Rate

Op

po

rtu

nis

tic

Seg

men

ts

Earlier Diagnosis

Less Invasive Genetic Testing Encourages Patient Screening.

Adverse and Ineffective Drug Reactions Drive Clinical Acceptance of Pharmacogenomic Tests

Diagram

Efficient Decision Making and Optimisation of Treatments through POCT

Automation is a One Time Investment Concept

Earlier diagnosis, less invasive testing and adverse drug reactions drive clinical acceptance of pharmacogenomic tests.


PEST Analysis of the Global Clinical Diagnostics Market

ELISAPCR

Microarrays

Isothermal based amplification techniques

Nano-diagnostics

Technological

Social

Economical

Political

Ageing population

Increasing incidence of diseases

Lateral flow tests

Increased harmonization in the global market

More regulatory challenges

Concerns over global harmonization of IVD regulations

Reimbursement for new tests

Less skilled laboratory technicians

Challenges likely to prevail

More understanding from payer groups

More adoption of pre analytical automation

Total laboratory automation

Demand for quality healthcare

Emerging infectionsFocus on public health from

the government

Evidence based diagnosis

Bio threat Tele medicine

POCT

POCT

2007 2010 2015


European

Medical Devices

Snapshot

Hospital based Intervention

Reduced Hospital stay and increase

in homecare

Holistic solutionsIntegrating pharma,

diagnostic& monitoring elements

?

Key Trends

PEST Analysis


Market Data


2005Price, After sales service, Reliable, frequent deliveries

2007Safety, comfort and mobility, Delivery and service, Price

2010Comfort, mobility & safety, efficiency, One-stop combination solutions

Changing Customer

Focus

Buying Power: The changing priorities of Customers changes device markets

The ambulatory, homecare and public access market expands rapidly

Increased awareness of infection control strategies opens alternative product differentiation avenues

Cost-cutting in purchasing opens up opportunitiesfor low cost producers

Outsourcing in production base and/orservices reduces production costs

Challenge

Opportunity

Fast diffusion of innovation heats up competition

Cost-containment initiatives reduce profit margins

Large scale purchasing orders give buyer advantage and often result in price squeeze

and/or bundling type practices

Opportunity

Opportunity

Opportunity

Challenge

Challenge“Pricing willbecome lessimportant in thesense that pricematching willbecome easieras companiesbecome morenimble”

“Opportunities for differentiation moveinto emphasis on safety, comfort andmobility along with delivery and service”

“Efficiency in sourcing becomesmore important, hence completesolutions and comprehensiveportfolios are preferred”


Snapshot of Potential Opportunities – Europe, A Rapidly Expanding Market


2012

High Revenues

Low Revenues



Developing/Growing MarketsMature Markets

Raw Markets

Aligning Market Vision: Opportunities in the Medical Devices Market

UK

France

Germany

Italy

Ireland

Czech Republic

Poland

Hungary

Albania

SerbiaCroatiaTissue engineering and combination devices. Mergingdevices with biological elements

Implanted diagnostics and monitors enabled by sensors

Disease management approach

Novel drug delivery platforms in unmet needs andindications – Hep C, Chronic Pain, Depression

Patient Monitoring

Medical Procedure

Initial Event

At Risk

Wellness

Therapeutic Device

Future

Dis

ease

man

agem

ent

vs. d

evic

e ce

ntre

d

Scandinavia

Russia


Taking Stock and Looking Forward: PEST Analysis

Minimally invasive surgicaltechniques along withcombination devices increaselevel of technical sophistication

Patient data management systems and freedom ofinformation change supply management strategies

Fast diffusion of technologies in medical devices leads to rapid rate of obsolescence and increased emphasis on technical research

2007 2010 2015

Medical tourism andstandardisation of medicalprovision changes marketpotential and emphasis ona global basis

Changes in the Medicaldevice directive and otherstandardisation measuresregulate markets

Moving production baseand/or outsourcing results intrade agreements andpolitical overtures

Rationalisation and reduction of hospitalresources creates additional pressure

Diagnosis Related Groups rationalise thepurchase and use of devices

Single currency stimulates Pan-European trade

Changes in the dynamics of healthcare provisionaffect funding and change routes of patient care

An increasingly aging Europeanpopulation has implications forhealthcare provision

Ambulatory and user-friendly devices along with combinationdevices expand the scope of medical device equipment

Migration and changes in genetic make-up ofpopulations affects healthcare strategies

Technological

Social

Economical

Political


Global

Medical

Technologies

Trends

Key Opportunities

Future

Key Trends

Revenues

Disparate/ModularSystems

Clinical SystemsPersonal Health

Management Tools


2007Volumetric Imaging SystemsWeb Based PACS

2010Multimodality SystemsMobile/Roaming PACS

2015Image Enabled Electronic Health Records

Medical Imaging

Interoperability Key to Adoption in an Increasingly Patient-centric Healthcare Delivery Model

2007

Networked Modular Systems

2010Move from Critical Care towards Sub Acute Care

2015Monitoring of Patients at Home

Patient Monitoring

2007

Clinical Systems

2010Next Generation Integrated Clinical & Financial Systems

2015Personal Health Management Systems & Tools

Healthcare IT

MedicalImaging

Healthcare IT

PatientMonitoring

The 3 areas are converging driven by a reorganization of HCdelivery. From large scale hospital care with high density ofspecializations and technologies to a network of competencecentres achieving high quality outcome and economies ofscale, linked with primary and long term care facilities.


Snapshot of Potential Opportunities – Europe


2012

High Revenues

Low Revenues



Next Generation clinical, administrative and financial IT systems & applications enable medical error reduction, clinical optimization and evidence-based medicine

Mainstream Adoption by 2012

To facilitate and standardize caredelivery, investment will go into sophisticatedclinical, administrative and financial systemssuch as the EMR, CPOE, PACS, ERP andEnterprise Scheduling Systems.

The use of wireless devices within hospitals willincrease to the point where coverage andquality-of-service issues will almost disappear.

Mainstream Adoption by 2020

Regulatory compliance will have a slow but steadyinfluence, particularly in the area of disaster recovery andbusiness continuity.

Clinical vendors offer more-comprehensive and affordableremote-hosting and high-availability options

Organizations that have already made the leap to “NextGeneration” systems will be looking to further leveragetheir investments through physician and patientportals, remote access applications and mobileextensions.

2007-2012CardiologyPACS/CIS

PACS/RISERP for

Healthcare

CPOE

Remote Monitoring

Enterprise Scheduling

ePrescribing EMR

Physician &Patient portals

eVisits

Emergency DeptAutomation

2012-2020

Patient Self-Service Kiosks

Personal “Cradle to Grave” Health Records

EMR Access Through Bedside Multimedia Terminals

Tele-Pathology

Disaster Recovery & Business Continuity

Integrated Clinical/Financial Systems

ICU Telemedicine

Ambulatory EMR

Personal Health Management Tools

Critical CareIT Systems


Next Generation clinical, administrative and financial IT systems & applications enable medical error reduction, clinical optimization and evidence-based medicine

While “return on investment”remains a critical factor for Healthorganizations when deciding ITinvestments, it will not become thesole factor in determining the valueof IT on service quality or outcomes.

Home healthcare could evolve from asporadic practice today to amainstream care delivery model in thenext 5-10 years.

Services like OnlineConsultations, In-home Vital SignsMonitoring and Online DiseaseManagement increasingly gainingmomentum.

Context ManagementCCOW Protocol

Speech Recognition

Electronic Data Interchange

Tablet PCs& PDAs

Enterprise MPI

Distributed Antenna Systems

2007-2012

Natural LanguageProcessing

VoIP

Biometrics

Business Process Management

Hand-writingRecognition

RFID

BluetoothWirelessNetworking

Grid Computing

Data Lifecycle Management

HL7 V3 Messages

SemanticInteroperability

Semantic Web

Service OrientedArchitecture

Home HealthServices

2012-2020


With the goal of creating a single view of a patient’s health information, hospitals are investing in technologies to pull together all departmental systems into an integrated EHR

Intensive CareCardiology

Nursing

Pharmacy

Radiology

Laboratory

EHR

Emergency Room

SurgeryRehabilitation

Home Care

GPs/Physicians

Billing/Finance

Integration cost represents15–20% of hospital IT budgets

Main cause is lack of adequatehealthcare IT standards

Current messaging and technologystandards are not universally usedin all product portfolios,

interoperability between systemsusing all or some of thesestandards has not beenconvincingly validated, while someof the standards conflict with oneand other.

StandardisationLegislation

Regulations Governing Healthcare Stakeholders

Initiatives Business Compliance

95/46/EC

HIPAA

Single Market Regulations

Messaging Standards

Terminology Standards

Integration Interfaces

JCAHO & NCQA

CEN TC 251

21 CFR 11

Corporate Compliance

Business Continuity

IT Security


Strong Foundations Required to Foster Widespread Adaptation of eHealth Models Medical Technologies Industry has the Opportunity to Build & Shape the Future

eHealth

Ensure ClinicianBuy-in

Encourage LargeScale Pilots

Use InternationallyAccepted Interoperability Standards

Enable Policies

Personalized Health Care

Add Value for Patients & Providers

High Quality, Safe Health Care

Individuals Self-Manage their Health

Improved Public Health

Lower Cost Health Care

Security & Fraud Detection

Foster Adoption


The magnitude of growth, the need for fast retrieval, 24/7 availability and improved record management is forcing a new look at operational data management.

2020

2015

2010

2005

Integration Images forContext Based Medicine

3D – 4D ImagesVideo Images

Digital Cardiology

Digital X Rays

Exa Bytes

Tera Bytes

Giga Bytes

2020

2015

2010

2005

On the MoveData Access

Enterprise-wide PACS

Cardiology PACS

Radiology PACS

Data Generation Data Access and Communication

Data Storage

No other industry in the past hasrequired such a phenomenal amountof data to be stored for such longperiods of time.

Enterprise-wide databases areexpected to grow 30-fold during thenext decade.

The amount of data generated, used and stored in the modern healthcare environment is increasingdramatically every year.


PACS & Software Services to Drive Growth in Medical Imaging Market

Modality markets notlikely to showconsiderable growth

Image managementtools and services tocontribute to greatermarket share.


Move from Critical Care to Sub-Acute Care Evident


Russia & China High Growth Markets for Patient Monitoring Equipment


Major EHR Tenders are Being Issued & Planned Almost on a Weekly Basis Around the World – Your Challenge is to be Prepared…

China

Plans to develop anational EHR

Canada

Infoway set up to designNational EHR - $1.2billion of governmentbacking

USA

Government ispromoting NHIN andRHIO’s investing$140 million to date.

Sweden

Developing aNational EHR

Mexico

No EHR butaim for HL7Integration

Brazil

National HealthCard Project.

Argentina

Focus on digitalradiography. EHRalso beingconsidered

Hong Kong

Territory wideMaster PatientIndex

France

EHR Mandatoryby 2008

England

Connecting forHealth – morethan $10 billionuntil 2010

Netherlands

88% of GPshave an EHR

Denmark

National EHRsince 2006

Germany

E-Health cardsince January2007

South Africa

No EHR – butinfrastructure beingdeveloped.

Singapore

EMR systembeing tendered

Malaysia

Lifetime HealthRecord by 2010

Australia

HealthConnect developing aNational InformationNetwork. New Zealand

National EHRsystem in place


Appendix


Power patients actively shaping future healthcare systems Personalisation, Mobility and Consumerism coming fast into play

1. Power Patient Generation: By 2012, 25% of patients will be power patients. More educated, wealthier, more demanding.

2. Patients become Customers: Customer services become a defining factor for the choice of providers, products andservices. “In short, it is the healthcare payers, not the drug makers, that are now defining the threshold of innovation”.

3. Prevention Before Cure: Investing in early diagnostic tools and implementing modern IT systems to manage and deliverinformation, and introduce treatment earlier, so therapy can be more precise.

4. Shift to Personalised Healthcare: Emerging of extremely specialised and highly personalised treatments based onindividual’s genetic make-up.

5. Healthcare globe trotters: Numerous countries are actively developing and promoting their medical capabilities inresponse to medical tourism. Cost of comparable treatment in South & West Asia i.e. India is on average between 10-20% of those in the West.

6. Drugs get Smarter: Personalised dosages, non-invasive delivery methods etc.

7. Hospitals go Virtual: Hospitals breaking physical silos to create virtual care networks. Bio connectivity devices becomethe standard.

8. Innovation vs. Knowledge: Cutting edge research offer novel methodologies, treatments and drugs faster than everbefore. Pace of knowledge grow is outstripping the amount and quality of skills set.

9. Devices become monitors, monitors become devices: Internet connected medical devices enter the healthcareindustry. A furious pace of innovation comes to dominate the healthcare device and medical technology industries.

10. CyberDocs: nonhuman intelligence agents, will dispense medical care to patients and doctors worldwide to save money and share expertise.


Source : SG Cowen

Oncology / Hematology, Antibiotics / Antivirals and Cardiovascular Lead the way in the Global Pharmaceutical Market in 2012 in terms of Market Size

Others: Include Transplant, Sleep Disorders, Alzheimer's, Incontinence, Orphan Diseases, Sex Dysfunction, Ophthalmology, Obesity, Pain

Cardiovascular DiseaseSecondary prevention measuresand new therapies are shiftingtreatment from inpatient toambulatory care setting.

DiabetesCell therapy, better monitoringand new pharmacologicaltreatments should reducemortality in the long term.

CancerThe treatment model ischanging from acute to chronicdisease management asmortality rates fall. Newtreatments likely to havesignificant costs. Demand likelyto grow in primary caresettings.

Respiratory DiseaseNo major treatment improvementson the horizon. Unmet needsexist.

Global Mortality

New markets will continue to emerge in obesity, aging. Targeted therapies will drive the well-established cancer and cardiovascular indications.

Number of diabetes patients globally to reach 350 million

by 2025

New threats to health like Pandemic avian flu and SARS


Pharmaceuticals: High growth from the Asian Regions. Biotech: EU & Canada will see Strengthening Pipelines, Revenue Growth, Profitability & Capital Generation

PfizerGSKSanofiAventisRocheAstraZeneca

GSKSanofiAventisRocheAstraZeneca Novartis

Pharmaceuticals Biotech

* Ranked by Market Cap (2007)

Source: IMS + Frost & Sullivan Estimates Source: Ernst & Young + Frost & Sullivan Estimates

* Emerging Markets include China, India, Brazil, Russia, Mexico, Turkey and S. Korea

US approachingmaturation in thebiotech industry

Generic and biogenericdrugs will continue tobe a focus in the Asiancountries (e.g. India foroutsourcing researchand clinical tests)

Further Consolidation and M&As???

1.2.3.4.5.

Ran

k

GenetechAmgenGilead SciencesCelgeneBiogen Idec

1.2.3.4.5.

Ran

k*


Opportunities in Cellular Assays, Information Tools and Microfluidics for Drug Discovery and Development

Basic Research

TargetValidation

TargetIdentification

Assay Development HTS

LeadDiscovery

LeadOptimisation

Clinical Trials

Manufacture &Launch

Marketing & Sales

FDA Approval

Preclinical Phase

DrugCandidateScreening

Genomics, Proteomics, Combinatorial Chemistry

ADME/ToxIn-Silico

Screening

Assay Development

Understanding the complexity ofbiological systemsImproving the science of predictingthe toxicology of emerging clinicalcandidatesReliable data analyses to optimisethe selectivity of drug candidateleadsIntelligent cell screening: Assayautomation and robotics toimprove efficiency and productivityEffective training and protocols forcell based assay technologiesOutsourcing high capacity cellculture to take advantage of costefficiencies

Lead Discovery

Protein structure elucidationScreening librariesIn silico tools and software

Lead Optimisation

In silico approachOverlap of lead discovery andoptimisation as more technologiesenable the researchers to seekoptimal drug characteristics at thelead discovery stageDesigning and selecting drugswith optimal ADME/Toxprofiles

Preclinical and Clinical Testing

Technologies for improving efficiencies in clinical trialsPharmacogenomics approachesElectronic data captures allows researchers to enter, store andretrieve study data electronically to minimize errors and reducetrial times. It is used throughout the trial process, particularly forclinical data and central laboratory data.

Target Identification

Microarray toolsTools to identify genes orproteins that may correlatewith a disease process

Target Validation

Tools to determine the down-regulation of gene expression andprotein inhibitionIn silico tools for targetprioritisation

Outsourcing

The Rise in the Number ofBiological Drugs isExpected to Boost theContract ManufacturingMarket

Biosimilars areincreasingly being viewedas a potential businessopportunity for CMO’s

Two of the high growthareas for CMOs arelyophilization andmanufacturing of sterileproducts

Virtual drugdevelopment companiesrepresent the nextevolutionary step inoutsourced drugdevelopment, outsourcinga large majority of theirfunctions to a network ofcontractors. They include avariety of players includingstart-up companies, non-profit enterprises anddivisions of large,established pharmaceuticalcompanies.

Opportunities for CROmanufacturers in Phase 0trials, biosimilars andspecialist therapeuticareas


Established Markets like NA and Europe continues to dominateCombined will hold around 3/4th of the global market by 2012

Note:North America - US and CanadaLatin America - Brazil and Mexico Europe - France, Germany, Italy, Russia Spain and UKAsia Pacific - China, Japan, Korea India, Indonesia and TaiwanROW - Africa and Australia

0

10

20

30

40

50

60

2007 2012

$34.9

$50.2

Bill

ions

North America43%

Europe34%

Latin America2%

Asia Pacific15%

ROW6%

2007

North America40%

Europe36%

Latin America2%

Asia Pacific14%

ROW8%

2012


Molecular Diagnostics, POC testing and SMBG lead the way in the global market in 2012

Per Cent of Revenues by Area, Global (2007-2012)


Expanding Cardiovascular and Orthopaedics applications Change market status-quo in 2012 (All Europe)

Others: Neurology, Hearing Aids, Endoscopes, Durable Medical Equipment, Dialysis, Biomaterials & Haemostats, Disposable Surgical Supplies, Fitness Equipment, Cosmetic & Aesthetics and Dental Equipment. The segment also includes some components of imaging and monitoring devices that fall into the grey area between medical devices, medical imaging and patient monitoring.

Per Cent of Revenues by Area, Europe (2007-2012)Market Size, Europe (2007-2012)