Hale & Tempest

The Global Pharmaceutical Industry(MNC & Generic) in Transition

Dr. Brian W Tempest

www.briantempest.com

The Global Generic Summit – Barcelona, Spain

5th March 2009

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Healthcare pressures out to 2050

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GDP Decline & Economic Melt Down

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Public Health Reform Continues

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Rising R&D Budgets

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Big Pharma Sales Cocentration

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But the Product Pipeline..

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Mergers Don’t Produce Synergy

Hale & TempestSources: AXA Framlington

Company Expiry2010

Expiry2012

Expiry2011

Pfizer Aricept - $800m Lipitor - $12.1bn

Xalatan - $1.6bn

Viagra - $1.7bn

Detrol - $860m

Geodon - $1.1bn

Astra Zeneca Arimidex - $2.2bn Seroquel - $4.7bn Symbicort - $3.7bn

Sanofi-Aventis Taxotere - $2bn US Plavix - $3.8bn

Avapro - $2.1bn

Lovenox - $3.1bn

BMS US Plavix - $4.8bn

Avapro - $1.3bn

Abilify - $2.1bn

GSK Advair - $3.8bn Avandia - $2.5bn

Patent Expiry Dates

41%

38%

34%

30%

23%

% at Risk

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USA New Brand Products

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Sector Enquiry – R&D expenses

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45,000 Pharma Jobs

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double digit growth to single growth focus on 7 developed markets to 7 emerging markets

primary care to specialists, small molecules to biotech EU Sector Enquiry

a slump in R&D innovation - the next 5 years being similar

$84b patent expiries in 2010, 2011, 2012 15 out of 18 top companies have announced restructuring

Big Pharma in Transition

Hale & TempestSources: 1. IMS Midas, March 20052. Earth Trend Data Tables 2005

82% of the World population accounts for only 12% of the Global Pharma sales

Region Pharma Sales Population

North America

Europe

Japan

$255 b 47%

$158 b 30%

$59 b 11%

332 5%

725 11%

128 2%

Asia/Africa/Aus

Latam

88%

$41 b 8%

$20 b 4%

18%

4711 73%

558 9%

12% 82%

Worldwide $533 b 100% 6454 100%

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Generic Industry Consolidation

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The Asian Race to Prosperity

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Indian Healthcare’s 1987 Companies

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The Education Advantage

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India – USA Expansion

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Chinese Healthcare 3751 Companies

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China Global Generic Companies

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Japan - Generics supported by Gov

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Competition is rising, India feels confidant and strong A number of major European Generic Companies for sale Focus in the hospital Injectables sector

First Chinese ANDA

Branded-Generic FTC deals are growing

M&A – 5 big pharma evaluating generic targets

Indian Manufacturing units to double from 2000 to 2010

Generic Companies in Transition

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% Share of Global Growth – IMS

Hale & TempestSources: Goldman Sachs 2007

Top 5 Global Pharma Markets 2020

Rank Country Size

1.

2.

3.

4.

5.

USA

China

Japan

France

India

$ 475b

$ 125b

$ 61b

$ 51b

$ 43b

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Germany – Payers Contracting

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Number of Almus Suppliers

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USA – A New President

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A New World Order

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KSR vs. Teleflex USA Supreme Court decision USA Bilateral FTAs amended –Columbia, Peru, Panama

Compulsory Licensing by Thailand, Canada under WTO German reimbursement review, UK PPRS, Poland, Hungary

FDA setting up offices in China , India, ME, SA, EU

Brazil generics booming , Japan generics rising

Impact of wholesaler brands and pharmacy chains West Europe vs. Central/East Europe vs. South Europe

Pharma Markets in Transition

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In this Era of Transition & Change

for Big Pharma, Generics & Markets

there is a Serious Search

for Profitable Sectors and

Profitable Competitive Strategies

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The Tempest Crystal Ball

•India will continue to be a Key Driver in the Global Generic Industry

•Competition is rising – Post TRIPs Indian companies will evolve

•Discovery companies will continue to be attracted to India for CT, EDC, MO. China will be perceived to be stronger in biology/ tox •IP changes in US, EU & Developing World will slowly favor Generics

•Alliances between Western Biotech and Asians companies will expand. M&A PE deals will grow

•How to use Asia will become the key opportunity

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Thank You