Post on 24-Oct-2014
The US Pharmaceutical Market: Trends, Issues, & Outlook
BY: Doug Long, VP Industry RelationsPresented to NCPOJanuary 7, 2011
All reproduction rights, quotations, broadcasting,publications reserved. No part of this publication may bereproduced or transmitted in any form or by any means,electronic or mechanical, including photocopy, recording, orany information storage and retrieval system, withoutexpress written consent of IMS HEALTH.
2011 Strategic management presentation
2010 YTD November sales growth slows to 2.3% and 1.1% TRX growth
$0
$50
$100
$150
$200
$250
$300
$350
2005 2006 2007 2008 2009 YTDNov2010
0
1
2
3
4
5
6
7
8
9
10DollarsGrowth
SALE
S U
S$B
N
% C
HAN
GE
Source: IMS Health, National Sales Perspectives, Nov 2010
0
1
2
3
4
5
2005 2006 2007 2008 2009 YTDNov2010
0
1
2
3
4
5TRxUS TRx growth
TRX V
OLU
ME
BN
% C
HAN
GE
Source: IMS Health, National Prescription Audit Plus, Nov 2010
5.1%
1.1%2.3%
2.1%
US market growth in MAT Oct 2010 was 3.2%; 2.4% in YTD 2010
0
5
10
15
20
$0
$50
$100
$150
$200
$250
$300
$350
% C
HAN
GE
SALE
S U
S$B
N
Source: IMS Health, National Sales Perspectives, Oct 2010
OTC dollar sales showing 2% sustained growth over timeHighest growth of 4.9% achieved in 2007
$17
$18
$19
$20
$21
$22
$23
2005
2006
2007
2008
2009
Lat
52 W
ks
SALE
S U
S$B
N
(5.0)
0.0
5.0
10.0
15.0
% G
RO
WTH
US$
Source: IRI Infoscan Total US FDMx Latest 52 weeks ending July 11, 2010
0.0
1.0
2.0
3.0
4.0
5.0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
MAT S
ep 201
0
TRX V
OLU
ME
BN
-1012345678910
TRX P
PG
US Growth Rate
Source: IMS Health, National Prescription Audit Plus, Sep 2010
US prescription growth at 1.5% for MAT Sep 2010
6
162
100
40
80
45 39
020406080
100120140160180200
2006 2007 2008 2009 MAT Nov2010
YTD Nov2010
AC T
Rx M
N
Incremental prescription growth
Source: IMS Health, National Prescription Audit, Nov 2010
Absolute TRx growth
Brands are declining in script volume
2.3%
-0.1%
16.7%
-5%
0%
5%
10%
15%
20%
YTD Sep 2010
% G
RO
WTH
1.0%
5.9%
-10.5%-15%
-10%
-5%
0%
5%
10%
YTD Sep 2010
% G
RO
WTH
Source: IMS Health, National Prescription Audit, Branded generics disaggregated, Sep 2010
Source: IMS Health, National Sales Perspectives, Branded generics disaggregated, Sep 2010
Jan 2010 to Sep 2010Jan 2010 to Sep 2010% Growth US$ % Growth TRx
Branded Generics Disaggregated
Total market Brands Generics
Brand growth declines to -0.2% in MAT Nov 2010
2.8%
-0.2%
5.4%
22.1%
1.0%
5.2%6.7%
3.8%
-5%
0%
5%
10%
15%
20%
25%
MAT Nov 2010
% G
RO
WTH
Total Market Brand Branded GenericGeneric Primary Care Driven Atcs Specialist Driven AtcsBiologic Molecules Oncologics
Twelve months ending Nov 2010% Growth US$
Source: IMS Health, National Sales Perspectives, Nov 2010
Growth remains low for both segments, but growth rates converge in latest periods
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2006 2007 2008 2009 MAT Nov2010
% G
RO
WTH
US$
USPrimary care drivenSpecialist driven
Primary care driven
Primary care driven
Specialist driven
Specialist driven
21%
56%
79%
44%
MAT Nov 2010
Source: IMS Health, National Sales Perspectives, Nov 2010
% Market share US$
% Absolute change US$
US is impacted by continued patent expiries, and historically low contribution from new products
Source: IMS Health, Market Prognosis, IMS Consulting, Sep 2009
US market growth: 2009 5.2%;
• Protected brands “list" price growth
• Increasing generic volume and less price deflation
• H1N1/CCF• Fewer safety events
• Demographic factors• Approvals of innovative
therapies
• Protected brands volume decline
• Slow uptake of recently launched products
• Patent expiries• Greater substitution of
generics
-8.0-6.0-4.0-2.00.02.04.06.08.0
10.0
Mar
-06
Jun-
06
Sep
-06
Dec
-06
Mar
-07
Jun-
07
Sep
-07
Dec
-07
Mar
-08
Jun-
08
Sep
-08
Dec
-08
Mar
-09
Jun-
09
Sep
-09
Dec
-09
Mar
-10
Jun-
10
Quarter Ending
AC U
S$B
N
Protected Brands - Volume Protected Brands - Pricing New BrandsExisting LOE New LOE Old GenericsNew Generics Safety Net Growth
Protected brand volume growth has declined to negative levels in 2010
Growth by Segment
Source: IMS Health, National Sales Perspectives, June 2010
-0.40-0.21
-0.04
0.480.48
0.240.02
0.390.11
-0.32-0.26
-0.32-0.36
-0.12-0.03
-0.36-0.49-0.58-0.79-0.32
-0.93-0.91
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Mar
-05
Jun-
05
Sep
-05
Dec
-05
Mar
-06
Jun-
06
Sep
-06
Dec
-06
Mar
-07
Jun-
07
Dec
-07
Mar
-08
Jun-
08
Sep
-08
Dec
-08
Mar
-09
Jun-
09
Sep
-09
Dec
-09
Mar
-10
Jun-
10
Sep
-10
CO
NTR
IBU
TIO
N T
O G
RO
WTH
US$B
N All Other Therapies Cough, Cold & Flu
Cough, cold, and flu has contributed negative growth in 2010
Source: IMS Health, National Sales Perspectives, Sep 2010
Growth by Segment
Patient visits remain below peaks in 2006
Source: IMS Health, National Disease and Therapeutic Index, Nov 2010
TOTAL PATIENT VISIT IN US
1,529 Nov10
1,616 Aug09
1.563 Jun04
1.656 Jun05
1.641 Jun06
1.653 Jun07
1.676 Sep05
1.607 Jun08
1.671 Dec06
1.450
1.500
1.550
1.600
1.650
1.700
1.750
1.800Ju
n-03
Aug
-03
Oct
-03
Dec
-03
Feb-
04Apr
-04
Jun-
04Aug
-04
Oct
-04
Dec
-04
Feb-
05Apr
-05
Jun-
05Aug
-05
Oct
-05
Dec
-05
Feb-
06Apr
-06
Jun-
06Aug
-06
Oct
-06
Dec
-06
Feb-
07Apr
-07
Jun-
07Aug
-07
Oct
-07
Dec
-07
Feb-
08Apr
-08
Jun-
08Aug
-08
Oct
-08
Dec
-08
Feb-
09Apr
-09
Jun-
09Aug
-09
Oct
-09
Dec
-09
Feb-
10Apr
-10
Jun-
10Aug
-10
Oct
-10
ROLLING MAT
PATI
ENT
VIS
ITS B
N
Source: IMS Health, National Disease and Therapeutic Index, Nov 2010, Confidence Interval shown (+/-3.9%)
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
Jan-
08
Mar
-08
May
-08
Jul-
08
Sep
-08
Nov
-08
Jan-
09
Mar
-09
May
-09
Jul-
09
Sep
-09
Nov
-09
Jan-
10
Mar
-10
May
-10
Jul-
10
Sep
-10
Nov
-10
ROLLING MAT
RO
LLIN
G M
AT
GRO
WTH
Patient Visit Growth
Patient visit trends remain negative with -4.7% growth in MAT Nov 2010
Patient visit growth trends vary among classes; antipsychotic recovering and DPP-IV continue growth
Source: IMS Health, National Disease and Therapeutic Index, Nov 2010
-15%
-10%
-5%
0%
5%
10%
15%Sep
-08
Nov
-08
Jan-
09
Mar
-09
May
-09
Jul-
09
Sep
-09
Nov
-09
Jan-
10
Mar
-10
May
-10
Jul-
10
Sep
-10
Nov
-10
ROLLING MAT
RO
LLIN
G M
AT
GRO
WTH
Patient Visit GrowthStatinsPPIAnti-PsychoticsRes Fixed Dose CombDPP-IVAntiplatelets
The economic crises impact all stakeholdersThe danger for pharma is losing share of voice!
Patients1
2
3
4
Stakeholders
•Reduced spend on promotion •Rationalisation of product lines• Mergers/acquisitions
•Cash-flow and credit issues•Reduced inventories to minimise financial exposure•Increase in distribution costs•Consolidation among local distributors
•Changed prescribing practices •Increase generic / therapeutic substitution
Likely reactions
Manufacturers
Distributors
Healthcare Providers
•Significant increase in price sensitivity•‘Down-trading’ to cheaper drugs or generics•Deferral of treatment
5 Payers•Shifting costs to patients•Increased focus on evidence and value•Formulary control intensifies
The declines in consumer sentiment in the US were not matched by TRx declines or claims
40
50
60
70
80
90
100
110
120
Jan-
07Fe
b-07
Mar
-07
Apr
-07
May
-07
Jun-
07Ju
l-07
Aug
-07
Sep
-07
Oct
-07
Nov
-07
Dec
-07
Jan-
08Fe
b-08
Mar
-08
Apr
-08
May
-08
Jun-
08Ju
l-08
Aug
-08
Sep
-08
Oct
-08
Nov
-08
Dec
-08
Jan-
09Fe
b-09
Mar
-09
Apr
-09
May
-09
Jun-
09Ju
l-09
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan-
10Fe
b-10
Mar
-10
Apr
-10
IND
EX
Index of Consumer SentimentCar SalesIndex of EmploymentTRX
Source: IMS Health, National Prescription Audit, Jun 2010, LifeLink Apr 2010; Reuters / University of Michigan Surveys of Consumers, Jul 2010; Bureau of Labor Statistics, Jul 2010; Car sales from Bureau of Economic Analysis, National Economic Accounts, Last Revised on Aug 2010
Data for the last month of reported claims remains volatile until late reporting physician’s claims are added
Market Indicators Indexed to January 2007
Prescriptions grow 1.1% in MAT Nov 2010
Channels TRxs mn % Market Share % Growth
Retail 3,645 92.0 1.1
Chain/Mass 2,171 54.8 2.3
Independents 749 18.9 -0.9
Mail service 236 6.0 -0.8
Food stores 489 12.3 0.2
Non retail channels 318 8.0 1.0
LTC 318 8.0 1.0
Total 3,964 100.0 1.1
MAT Nov 2010
Source: IMS Health, National Prescription Audit, Nov 2010
US market grows 2.3% in YTD Nov 2010
Channels US$bn % Market Share % Growth
Retail 198.5 71.5 2.0
Chain/Mass 97.6 35.2 2.6
Mail service 47.3 17.1 2.1
Independents 34.2 12.3 1.3
Food stores 19.2 6.9 0.2
Institutional 79.2 28.5 2.9
Clinics 32.8 11.8 4.2
Hospitals 29.0 10.4 0.7
Long-term care 13.3 4.8 6.2
Home health care 2.2 0.8 -0.2
HMO 1.0 0.4 -3.9
Others 0.9 0.3 -1.7
Total 277.6 100.0 2.3
YTD Nov 2010
Source: IMS Health, National Sales Perspectives, Nov 2010
Drug accounts for 58% of total OTC sales volume and grew at 2.2% in latest 52 weeks period
Channels Sales US$bn % Market Share % Growth
FDMx $22.1 100.0 2.2
Drug $12.9 58.2 2.2
Food $6.8 30.9 1.2
Massx $2.4 10.9 5.2
Last 52 Wks
Source: IRI Infoscan Total US FDMx Latest 52 weeks ending July 11, 2010
• 22
1416
10
19
15
25 25
10
19
810
0
5
10
15
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
CO
NSTA
NT
US$B
N
0%
2%
4%
6%
8%
10%
12%
% O
F PR
IOR Y
EAR'S
SALE
S
Const US$bn
% of Prior Year's Sales
$95bn at risk to generic competition in the US by 2014
Value of products at risk 2004-2014
Source: IMS Health, MIDAS, Market Segmentation, Jun 2010
$95bn
• 23
25.4
10.3
19.2
24.8
15.2
0
5
10
15
20
25
30
35
2010 2011 2012 2013 2014
CO
NSTA
NT
US$B
N
0%
2%
4%
6%
8%
10%
12%
% O
F PR
IOR Y
EAR'S
SALE
S
Const US$bn
% of Prior Year's Sales
$95bn at risk to generic competition in the US by 2014
Value of products at risk 2010-2014
Source: IMS Health, MIDAS, Market Segmentation, Jun 2010
$95bn
LOE date changes since March 2010 forecast
•Lovenox LOE date from future unknown to 6/2010 ($2.6b)
•Strattera from 5/2015 to 8/2010 ($510m) - patent invalidated Aug 2010 for lack of enablement/utility
•Alimta from 9/2011 to 7/2016 ($930m)- patent term extension granted
• 24
15.2
24.8 25.4
10.3
19.2
7.1
6.15.7
4.6
4.2
3.8
3.4
3.0
2.9
2.7 2.7
2.6
0
5
10
15
20
25
30
35
2010 2011 2012 2013 2014
CO
NSTA
NT
US$B
N
ALL OTHERS LIPITOR NEXIUM PLAVIXADVAIR DISKUS SEROQUEL SINGULAIR ACTOSOXYCONTIN CYMBALTA ZYPREXA LEXAPROLOVENOX Total LOE sales
$95bn at risk to generic competition in the US by 2014
Value of products at risk 2010-2014
Source: IMS Health, MIDAS, Market Segmentation, Jun 2010
LOE date changes since March 2010 forecast
•Lovenox LOE date from future unknown to 6/2010 ($2.6b)
•Strattera from 5/2015 to 8/2010 ($510m) - patent invalidated Aug 2010 for lack of enablement/utility
•Alimta from 9/2011 to 7/2016 ($930m)- patent term extension granted
8
12 12
4 5
11
1
2
3
14
1
11
9
8
62
2 110
8
19
10
2525
15
19
10
1614 13
0
5
10
15
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
CO
NSTA
NT
US$B
N
Biologics protection expiries
Small molecule protection expiries
Long term LOE exposure
Value of products at risk 2004-2020
Source: IMS Health, MIDAS, Market Segmentation, Jun 2010
Key Biologics and U.S. Patent Expiries
Brand Name Molecule Year Launched Patent Expiry Year U.S. Sales (US$b)
NEUPOGEN FILGRASTIM 1997 2009 $0.9
ENBREL ETANERCEPT 1989 2012 $3.1
EPOGEN/PROCRIT EPOETIN ALFA 1989 2014 $4.7
LANTUS INSULIN GLARGINE 2001 2014 $2.7
COPAXONE GLATIRAMER ACETATE 1997 2014 $1.8
HERCEPTIN TRASTUZUMAB 1998 2014 $1.4
NEULASTA PEGFILGRASTIM 2002 2015 $2.9
AVONEX INTERFERON BETA-1A 1996 2015 $1.3
REBIF INTERFERON BETA-1A 2002 2015 $0.9
HUMIRA ADALIMUMAB 2002 2016 $2.6
RITUXAN RITUXIMAB 1997 2016 $2.5
ARANESP DARBEPOETIN ALFA 2001 2016 $1.3
AVASTIN BEVACIZUMAB 2004 2017 $2.9
LUCENTIS RANIBIZUMAB 2006 2019 $1.2
REMICADE INFLIXIMAB 1989 2021 $3.1
Source: IMS Health, MIDAS MAT Jun 2010
%Dollars %Total prescriptions dispensed
87.5% 86.4% 86.1% 85.8% 85.3% 83.4%
44.0% 40.3% 36.5% 32.3% 29.6% 26.4%
12.5% 13.6% 13.9% 14.2% 14.7% 16.6%
56.0% 59.7% 63.5% 67.7% 70.4% 73.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 YTDSep2010
2005 2006 2007 2008 2009 YTDSep2010
% M
AR
KET S
HA
RE
Brands Generics
Generic Share continues to grow
Source: IMS Health, National Sales Perspectives, Sep 2010, National Prescription Audit, Sep 2010, Branded generics disaggregated
Branded Generics Disaggregated
Brands Contribution to growth is declining
2006
Brands74%
26%
MAT Sep 2010
Brands32%
Generics68%
Source: IMS Health, National Sales Perspectives, Branded generics disaggregated, Sep 2010
AC = +$10bnAC = +$23bn
% Contribution to growth US$
Branded Generics Disaggregated
Average cost of treatment for major therapy areas has declined significantly in recent years
• Across 9 therapy areas that now account for over 25% of total sales, an average 38% reduction in the daily cost of therapy has occurred within 12 months
• The impact of loss of exclusivity of a major product affects the average cost for the total therapy area
• Over the past seven years, generics share of total scripts has increased from 51% to 74%− The market available for direct generic substitution has increased from
61% of total scripts to 81%− The percentage of scripts dispensed as generic when one is available
(“generic efficiency rate”), has increased from 84% to 92%
• Most major molecules that have lost exclusivity now have over 10 generic competitors
• Price competition within the generic market is intense and contributing to the decline in average therapy costs
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Aver
age
Antin
ause
ant 5
Ht3 A
ntag
onist
Bisp
hosp
hona
tes
Prot
on Pum
p In
hib
Lipid
Regu
lator
s
Alph
a-Be
ta B
locke
r
Antid
epre
ssan
ts
Non-b
arbit
urate, O
ther
s
Calci
um B
locke
rs
Antim
igran
e
Anti-
epile
ptics
% C
HA
NG
E IN
CO
ST
PER
DA
Y (
12
MTH
S P
OS
T EV
ENT)
(W
HO
LES
ALE
)An average 38% reduction in the daily cost of therapy has occurred in many major classes with recent expiries
Source: IMS Health, National Sales Perspectives, National Prescription Audit, Dec 2009
Lipid Regulators
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Jan-
05Ap
r-05
Jul-0
5Oc
t-05
Jan-
06Ap
r-06
Jul-0
6Oc
t-06
Jan-
07Ap
r-07
Jul-0
7Oc
t-07
Jan-
08Ap
r-08
Jul-0
8Oc
t-08
Jan-
09Ap
r-09
Jul-0
9Oc
t-09
Lipid regulators
Zocor generic
Source: IMS Health, National Sales Perspectives, National Prescription Audit, Dec 2009
CO
ST
PER D
AY
($)
Lipid Regulators
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Jan-
05Ju
l-05
Jan-
06Ju
l-06
Jan-
07Ju
l-07
Jan-
08Ju
l-08
Jan-
09Ju
l-09
Jan-
10Ju
l-10
Jan-
11Ju
l-11
Jan-
12Ju
l-12
Jan-
13Ju
l-13
Jan-
14Ju
l-14
Lipid regulators (projected)
Lipitor generic
Source: IMS Health, National Sales Perspectives, National Prescription Audit, Dec 2009
CO
ST
PER D
AY
($)
33
The leaky bucket
50-70%go to
pharmacy
48-66%come out ofpharmacy
25-30%are takenproperly
15-20%are refilled
as Rx’d
100 Rxs
Industry figures derived from IMS data
972943
893582
468406383364359
332-113-118-129-130-144
-211-220
-308-1,002-1,027
(in-line products) Antidiabetics
(in-line products) Autoimmune disease
ACE Inhibitors (generic Altace)
Source: IMS Health, National Sales Perspectives, Jun 2010
Major therapy class losses are driven by generic entries
(in-line products) Anti-Alzheimers
(new products) Respiratory Agents(in-line products) Antipsychotics(in-line products) HIV Antivirals
(in-line products) Anti-Platelets
(new products) Anti-Acne Preps
(in-line products, new products) ADHD Therapies(in-line products) Oncologics
BPH Products (generic Flomax)
Calcium Antagonists (in-line products)
Advanced Imaging Agents (in-line products)
IMM-Glob Antivirals (in-line products)
Fluoro-Quinolones (in-line products)
Antiulcerants (generic Prevacid)
Immunosuppressants (in-line products)
Anti-epileptics (generic Topamax, Lamictal)
Anti-migrane (generic Imitrex)
Top ten classes accounting for gains & losses in US in YTD June 2010
GAIN OR LOSS US$MN
$-4.1bn in loss
$10.2bn in gains
Antacid tablets and mineral supplements grew more than $100mn each in the latest 52 weeks with 1&2 Letter Vitamins and cold/allergy/sinus at nearly $100mn
Leading classes by absolute growth US$mnAbsolute sales
growth $mn
Total OTC $22,141 $482
1 ANTACID TABLETS $1,240 $126
2 MINERAL SUPPLEMENTS $1,629 $115
3 1 & 2 LETTER VITAMINS $496 $96
4 COLD/ALLERGY/SINUS TABLETS/PACKETS $2,635 $92
5 MULTI-VITAMINS $877 $57
6 EYE/LENS CARE SOLUTIONS $971 $37
7 WEIGHT CONTROL/NUTRITIONALS LIQ/PWD $932 $34
8 LIQUID VITAMINS/MINERALS $185 $30
9 LAXATIVE/STIMULANT LIQ/PWDR/OIL $354 $27
10 ADULT INCONTINENCE PRODUCTS $712 $25
Last 52 Wks
Source: IRI Infoscan Total US FDMx Latest 52 weeks ending July 11, 2010
Private Label had the strongest absolute growth followed by Nature’s Bounty
Dollars ACUS$mn
Private Label PRIVATE LABEL 552
Natures Bounty US NUTRITION 69
Nature Made PHARMAVITE CORP 35
Sensodyne GLAXOSMITHKLINE 25
One A Day BAYER AG 20
Olay PROCTER & GAMBLE 18
Claritin MERCK 17
Advil PFIZER 13
Poise KIMBERLY CLARK CORP 12
Alcon NESTLE S.A. (SWITZERLAND) 11
Source: IRI Infoscan Total US FDMx, Latest 52 weeks ending July 11, 2010
1,253
Phase I20.5%
1,516
Phase II24.8%
444
Phase III7.3%
185
Pre-reg/reg3.0%
Global R&D pipeline compared against previous year
Source: IMS Health, R&D Focus, Jun 2010
Number of active products in the pipeline to date = 6,119
2,721
Pre-clinical 44.5%
420958
601172 82
% share of active pipeline
103
1,763
833915
272
(patterned segment) Specialist Driven Products
22 25 2217
11
21 2214 11 12
19 18
1516
1115
13
914
6 126
7 10
3741
33 32
24
30
36
2023
18
2628
11-139
13-15
11
26-28
20
0
5
10
15
20
25
30
35
40
45
50
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
YTD
2010
(f)
Primary care drivenSpecialist driven
Applications on FDA’s review calendar in 2H 2010 are unlikely to bring total NCE count above prior year levels
NU
MBER
OF
NCE
APP
RO
VALS
Source: FDA, IMS Health, Market Insights Team Analysis, Sep 2010
Expected major 2010-11 NCE launches include 11 products with blockbuster potential
Source: IMS Health, Market Insights, Sep 2010. Potential blockbuster
Product Company Indication Stage Launch
Daxas (roflumilast) Forest Respiratory (Chronic Obstructive Pulmonary Disease) Marketed 2010
Menveo (meningitis vaccine) Novartis Vaccines (meningitis) Marketed 2010
Prevnar 13 (13-valent pneumococcal vaccine) Pfizer Vaccines (bacterial infection) Marketed 2010
Prolia (denosumab) Amgen Osteoporosis Marketed 2010
Provenge (sipuleucel-T) Dendreon Vaccines (prostate cancer) Approved 2010
Gilenya (fingolimod) Novartis Multiple sclerosis Approved 2010
apixaban BMS Proteinase inhibitors (thrombosis) Pre-reg 2010-11
belatacept BMS Immunosuppressants for organ transplants Pre-reg 2010-11
Brilinta (ticagrelor) AZ Platelet aggregation inhibitors (acute coronary syndrome) Pre-reg 2010-11
Benlysta (belimumab) GSK, HSG Autoimmune disease (lupus, RA) Pre-reg 2010-11
ipilimumab BMS Oncology (metastatic melanoma) Pre-reg 2011-12
telaprevir Vertex/J&J Viral Hepatitis Products (hepatitis C) Pre-reg 2011-12
bapineuzumab Wyeth Alzheimer’s disease Phase III 2011-12
dapagliflozin BMS/AZ Diabetes (type II diabetes, weight mgmt) Phase III 2011-12
iniparib Sanofi-Aventis Oncology (breast cancer) Phase III 2011-12
vorapaxar / TRA Merck Proteinase inhibitors (acute coronary syndrome) Phase III 2011-12
Pre Market Safety Data FDA Analysis of
Safety Profile• Statistical (SAS, STATA)• Clinical• Integration of all
information
Voluntary AE reportingAE ReportsFrom public, Point-of-Care,Industry, Government
Drug Use Data• IMS• Verispan• US• Prevnar (?)
Other surveillanceSystems• NEISS• TESS• DAWN
Large data sets• HMD• CMS• VA• Other
Industry driven studies
Electronic HealthRecords• GPRD• VA DOD• Cigna (?)
Other safety data sources
Registries• Personal
health records• Drug specific• Disease
specific
Regulatory decisions
Data communication
REMS programs and a more active FDA safety program will bring new risk/benefit dynamic
Source: FDA PDUFA IV Information Technology Plan, DRAFT, Dec 2007
2008 FDA approvals of NCEs took place in a challenging environment
Fewer new product submissions24 in 2008* vs. 34 in 2007
Fewer “me-too” products
Source: IMS, Market Insights Research. *Jan-Oct 2008.
Review delays20% of PDUFA goals missed in 2008*
FDA staff shortage
Delayedor denied market access36 complete response or not-approvable letters
Restricted market access21 Risk Evaluation & Mitigation Strategies
26 NCE approvals
Debate in the US on healthcare reform was broadly centered on core issues of access, affordability and quality
• Providing insurance to the currently uninsured
• Lowering costs of existing activities
• New sources of funding
• Improving the quality of care that is deliveredQuality
Affordability
Access
Medicare Part DRetail Rx payment type
Source: IMS Medicare National Tracking Report
Week Ending Total 2008 Total 2009 October 1, 2010
Total RXs
Current Week YTD Cum
TRx % TRx % TRx % TRx %
3,429,188,979 100.0% 3,531,115,463 100.0% 71,093,924 100.0% 2,680,853,692 100.0%
Cash 322,409,855 9.4% 309,343,038 8.8% 5,413,571 7.6% 212,953,870 7.9%
Medicaid 274,375,086 8.0% 300,350,761 8.5% 7,055,905 9.9% 256,074,256 9.6%
3rd Party minus Medicare Part D 2,171,927,926 63.3% 2,221,505,378 62.9% 43,298,792 60.9% 1,645,271,680 61.4%
Medicare Part D 660,476,112 19.3% 699,916,288 19.8% 15,325,656 21.6% 566,553,887 21.1%
Walgreens Year In Review • July 201044
The most certain impacts are negative in the short term but more positive or uncertain longer term
Closure of donut hole
UpsideExpanded coverage of current uninsured
Expanded Medicaid coverage
Medicaid price cut
Part D donut hole subsidy
Annual feesBiosimilar regulatory pathway
Downside
2010 20192014
IMP
AC
T
TIMING
Reform of insurance practices
Independent Payment Advisory BoardPatient Centered Outcomes Res. Inst.Pilots, demonstration projectsPreventive care incentivesPhysician payment
sunshine rules
0
50
100
150
200
250
300
350
400
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
NU
MBER
OF
PEO
PLE
(MIL
LIO
NS)
Exchanges
Uninsured
Nongroup/Other
Employer
Medicaid/CHIP
Medicare
Source: CMS, CBO Healthcare Reform Reconciliation Bill Analysis, Mar 2010
The reforms will move tens of millions of people to or from coverage types by 2019
COVERAGE AFTER REFORM
+24 +24
-32 -27
-5 -2
-4 +8
+16 +11
0 +14
Impact on 2019 (Mn)
Vs. no-reform Vs. 2010
0
50
100
150
200
250
300
350
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(f)
2011(f)
SALE
S U
S$BN
0%
5%
10%
15%
20%
GRO
WTH
CO
NST
US$
Sales Growth
Source: IMS Health, Market Prognosis, Sep 2010
U.S. forecast to grow under 5% in 2011 as patent expiries and lack of innovation hamper growth
US Sales and Growth, 2001-2011
$310-320
$320-330
$301
3-4% 3-5%5.5%1.6%4.0%
$281$270$247$216 $234$197$176
9.1%5.4%8.5%9.8%11.8%18.4%
$285
0
250
500
750
1,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(f)
2011(f)
SALE
S U
S$B
N
0%
5%
10%
15%
GRO
WTH
CO
NST
US$
Total world Growth
Source: IMS Health, Market Prognosis, Sep 2010
Global pharma market expected to exceed $880 bn in 2011 with growth of 5-7%Global Sales and Growth, 2001-2011
$840-850
$880-890
$812
4-6% 5-7%7.1%5.8%6.9%
$781$715$646$556 $601$497$431$395
7.2%7.3%7.7%9.1%9.1%12.1%
Longer-term upsides to pharma growth are possible
49
Growing share of healthcare budget for
pharmacotherapy
Accelerated uptake of healthcare information
technology
Increased diagnosis of asymptomatic conditions
Improved compliance and persistency rates
Expanded patient access to healthcare
Greater clinical evidence of drug efficacy
Emergence of new therapeutic platforms
Aging population and economic development
Thank youVisit www.imshealth.com for more
information on IMS’ Viewpoint
Doug Long dlong@us.imshealth.com
Branded products Rx growth is sharply negative
3.4%0.7%
5.7%
20.0%
0%
5%
10%
15%
20%
25%
MAT Sep 2010
% G
RO
WTH
1.5%
-9.3%
7.2%
-9.3%
-15%
-10%
-5%
0%
5%
10%
MAT Sep 2010
% G
RO
WTH
Source: IMS Health, National Prescription Audit, Sep 2010Source: IMS Health, National Sales Perspectives, Sep 2010
Total market Brands Unbranded generics
Twelve months ending Sep 2010Twelve months ending Sep 2010
Branded generics
% Growth US$ % Growth TRx
Sales growth for the top 10 generic companies grow at 21.1%
US$mn % Market Share % Growth
US Industry 36,863 12.1 20.0
1 Teva 7,925 21.5 12.8
2 Mylan Labs, Inc. 3,789 10.3 10.3
3 Sandoz (Novartis) 3,457 9.4 53.0
4 Watson Pharma 2,125 5.8 7.6
5 Greenstone (Pfizer) 1,470 4.0 -9.5
6 Par Pharma 1,380 3.7 18.2
7 Hospira Inc 1,173 3.2 20.5
8 Actavis US 992 2.7 93.4
9 Global Pharm Corp 980 2.7 255.3
10 Boehringer Ingelheim 878 2.4 23.7
Top 10 24,169 65.6 21.1
MAT Sep 2010Sales of unbranded generics by leading corporations
Source: IMS Health, National Sales Perspectives, Sep 2010
Top 20 generic companies grow at 17.7%
US$mn % Market Share % Growth
11 Fresenius Kabi 800 2.2 21.0
12 Ranbaxy Labs Limit 786 2.1 235.7
13 Covidien 604 1.6 -34.3
14 Lupin Pharma 540 1.5 39.1
15 Sun Pharmaceutical 476 1.3 283.6
16 Qualitest Products 463 1.3 26.1
17 Dr Reddy Inc 460 1.2 -47.6
18 Taro Pharm 403 1.1 21.1
19 Apotex Corp 368 1.0 -62.3
20 Amneal Inc 368 1.0 116.1
Top 20 29,436 79.9 17.7
MAT Sep 2010Sales of unbranded generics by leading corporations
Source: IMS Health, National Sales Perspectives, Sep 2010
Sales of leading therapy classes
US$mn % Market Share % Growth
US Industry 305,670 100.0 3.4
1 Lipid regulators 17,207 5.6 1.5
2 Antipsychotics,oth 15,717 5.1 10.0
3 Proton pump inhib 11,842 3.9 -14.5
4 Anti-depressants 11,490 3.8 1.1
5 Angiotensin II antagonists 8,653 2.8 6.3
6 Antineo monoclonal antib 8,348 2.7 6.7
7 Analogs of human insulin 7,150 2.3 19.2
8 Antiarth,biol resp mod 6,772 2.2 10.0
9 Anti-platelets,oral 6,506 2.1 11.5
10 Analeptics 6,419 2.1 15.9
Top 10 100,105 32.7 4.3
MAT Sep 2010
Leading classes
Source: IMS Health, National Sales Perspectives, Sep 2010
Sales of leading therapy classes
US$mn % Market Share % Growth
11 Erythropoietins 6,187 2.0 -2.6
12 Steroid,inhaled bronch 5,827 1.9 10.6
13 GI anti-inflam 5,266 1.7 10.9
14 Codeine & comb 5,243 1.7 11.9
15 HIV antiviral combination 5,157 1.7 13.1
16 Glitazones 4,708 1.5 1.7
17 Alzheimer-type dementia 4,438 1.5 16.4
18 Anticoag,inj 4,184 1.4 6.7
19 Leukotriene agents 4,064 1.3 9.5
20 Seizure disorders 4,047 1.3 -37.1
Top 20 149,226 48.8 3.6
MAT Sep 2010
Leading classes
Source: IMS Health, National Sales Perspectives, Sep 2010
Lipid lowering agents now rank second in Rx volume
1 Anti-depressants 247 6.3 3.0
2 Lipid regulators 243 6.1 2.8
3 Codeine & comb 204 5.2 2.7
4 Ace inhibitors 164 4.2 1.3
5 Beta blockers 126 3.2 -2.4
6 Proton pump inhib 118 3.0 -0.8
7 Seizure disorders 110 2.8 6.7
8 Thyroid hormone,synth 105 2.7 2.6
9 Calcium blockers 95 2.4 4.6
10 Benzodiazepines 90 2.3 3.4
Top 10 1,503 38.0 2.3
Source: IMS Health, National Prescription Audit, Sep 2010
Rx growth in the top 20 classes is 1.9%
US TRX mn % Market Share % Growth
11 Angiotensin II antagonists 81 2.0 -3.1
12 Antiarth,plain 79 2.0 2.5
13 O/C estrogen/progestogen 79 2.0 -3.0
14 Macrolides & related 67 1.7 0.8
15 Beta agonists 63 1.6 3.6
16 Penicillins 61 1.5 -0.3
17 Biguanides 61 1.5 6.0
18 Non-barb,oth 59 1.5 1.4
19 Antipsychotics,oth 53 1.3 1.8
20 Mus relx,non-surg 52 1.3 4.6
Top 20 2,158 54.6 1.9
MAT Sep 2010
Leading therapy class
Source: IMS Health, National Prescription Audit, Sep 2010
Dollars ACUS$mn Total Rx dispensed AC
TRxs mnAntipsychotics,oth 1423.9 Anti-depressants 7.1
Analogs of human insulin 1151.2 Seizure disorders 6.9
Analeptics 881.6 Lipid regulators 6.6
Anti-platelets,oral 671.4 Vitamin D 6.2
Alzheimer-type dementia 625.4 Codeine & comb 5.4
Antiarth,biol resp mod 614.0 Calcium blockers 4.2
HIV antiviral combination 598.1 Analeptics 4.1
Steroid,inhaled bronch 558.3 Biguanides 3.4
Codeine & comb 557.8 Benzodiazepines 3.0
Antineo monoclonal antib 520.5 Thyroid hormone,synth 2.7
Leading Absolute Growth Vs. Yr. Ago-Classes
Source: IMS Health, National Sales Perspectives, Sep 2010, National Prescription Audit, Sep 2010
Dollars ACUS$mn Total Rx dispensed AC
TRxs mnQuinolones, systemic -203.6 Hormones,estrogens -1.3
Calcium blockers -231.4 Diuretics,comb -1.5
Ace inhibitors -234.3 GI stimulants -1.6
Herpes Antivirals -344.1 Glitazones -1.8
UT benign prostate -397.4 Quinolones, systemic -2.2
Immunosup/transplant age -455.3 Synth narc,analg -2.4
Platinum coordination -520.3 O/C estrogen/progestogen -2.4
Anti-migraine -637.1 Angiotensin II antagonists -2.6
Proton pump inhib -2012.8 Beta blockers -3.1
Seizure disorders -2384.7 Osteoclast Inhibitors -3.7
Leading Absolute Declines Vs. Yr. Ago-Classes
Source: IMS Health, National Sales Perspectives, Sep 2010, National Prescription Audit, Sep 2010
Sales of leading products
US$mn % Market Share % Growth
US Industry 305,670 100.0 3.4
1 Lipitor 7,275 2.4 -4.3
2 Nexium 6,328 2.1 2.0
3 Plavix 6,002 2.0 11.0
4 Advair Diskus 4,743 1.6 3.4
5 Abilify 4,423 1.4 16.2
6 Seroquel 4,324 1.4 6.3
7 Singulair 3,984 1.3 9.3
8 Crestor 3,605 1.2 28.8
9 Actos 3,516 1.2 5.7
10 Epogen 3,349 1.1 6.8
Top 10 47,548 15.6 6.7
MAT Sep 2010
Products
Source: IMS Health, National Sales Perspectives, Sep 2010
Sales of leading products
US$mn % Market Share % Growth
11 Remicade 3,294 1.1 3.2
12 Enbrel 3,247 1.1 1.0
13 Avastin 3,152 1.0 8.4
14 Oxycontin 3,149 1.0 14.6
15 Cymbalta 3,060 1.0 12.2
16 Neulasta 2,994 1.0 1.2
17 Zyprexa 2,890 0.9 10.6
18 Humira 2,796 0.9 14.4
19 Lexapro 2,765 0.9 1.0
20 Rituxan 2,730 0.9 5.6
Top 20 77,625 25.4 6.8
MAT Sep 2010
Products
Source: IMS Health, National Sales Perspectives, Sep 2010
Watson’s hydrocodone with APAP replaces Lipitor as the most prescribed product
TRxs mn % Market Share % Growth
US Industry 3,954 100.0 1.5
1 hycd/apap 58 1.5 -3.6
2 hycd/apap 50 1.3 -3.9
3 Lipitor 46 1.2 -13.2
4 levothyroxine 41 1.0 6.0
5 lisinopril 36 0.9 2.0
6 Plavix 29 0.7 -0.7
7 amoxicillin 29 0.7 -17.4
8 Nexium 29 0.7 -5.6
9 Singulair 28 0.7 -0.1
10 simvastatin 28 0.7 40.1
Top 10 375 9.5 -2.1
MAT Sep 2010
Leading Products
Source: IMS Health, National Prescription Audit, Sep 2010
Top 20 drugs show positive growth
TRxs mn % Market Share % Growth
11 metoprolol tart 28 0.7 7.0
12 simvastatin 27 0.7 13.7
13 Lexapro 26 0.7 -7.6
14 Synthroid 25 0.6 -2.2
15 azithromycin 24 0.6 62.3
16 levothyroxine 24 0.6 9.8
17 Crestor 24 0.6 14.5
18 metformin hcl 23 0.6 7.7
19 Proair Hfa 23 0.6 -3.6
20 sertraline hcl 22 0.5 20.3
Top 20 622 15.7 2.1
MAT Sep 2010
Leading Products
Source: IMS Health, National Prescription Audit, Sep 2010
Leading Absolute Growth Vs. Yr. Ago-Products
Source: IMS Health, National Sales Perspectives, Sep 2010, National Prescription Audit, Sep 2010
Dollars ACUS$mn Total Rx Dispensed AC
TRxsmn
Crestor® (Azn) 807 metoprolol succin (wts) 9.8
valacyclovir hcl (rby) 623 azithromycin (tev) 9.4
Abilify® (Ots) 616 simvastatin (lu.) 8.1
Plavix® (Bsa) 596 cephalexin (lu.) 7.8
Prevnar 13® (Pfz) 446 omeprazole (rx) (myn) 7.2
Oxycontin® (Puf) 401 gabapentin (am9) 6.8
Atripla® (Bmg) 400 Atripla® (Bmg) 6.4
budesonide (tev) 394 pravastatin sod (tev) 6.2
venlafaxine hcl er (tev) 387 warfarin sod (tar) 5.8
Seroquel Xr® (Azn) 386 omeprazole (rx) (sdz) 5.4
Sales of leading corps
US$mn % Market Share % Growth
US Industry 305,715 100.0 3.4
1 Pfizer (incl Greenstone / Wyeth) 26,654 8.7 -3.7
2 Merck & Co (inc S-P) 19,037 6.2 -3.1
3 AstraZeneca 18,584 6.1 5.3
4 Novartis (incl Sandoz) 15,180 5.0 17.6
5 Roche (incl Genentech) 14,079 4.6 3.0
6 Lilly 14,062 4.6 9.3
7 GlaxoSmithKline 14,021 4.6 -7.3
8 Teva 13,318 4.3 10.3
9 Amgen Corporation 12,633 4.1 1.9
10 Johnson & Johnson 12,599 4.1 -5.9
Top 10 160,168 52.2 1.8
MAT Sep 2010
Leading corporations
Source: IMS Health, National Sales Perspectives, Sep 2010
Sales of leading corps
US$mn % Market Share % Growth
11 Abbott 10,791 3.5 2.2
12 Sanofi-Aventis 10,411 3.4 -7.7
13 Bristol-Myers Squibb 9,564 3.1 9.6
14 Boehringer Ingelheim 6,768 2.2 -6.3
15 Takeda 6,259 2.0 -23.3
16 Eisai Corp 4,683 1.5 9.7
17 Forest Lab 4,625 1.5 8.1
18 Gilead Sciences 4,488 1.5 21.4
19 Otsuka America Ph 4,482 1.5 16.7
20 Mylan Labs 4,337 1.4 12.0
Top 20 226,576 73.9 1.5
MAT Sep 2010
Leading corporations
Source: IMS Health, National Sales Perspectives, Sep 2010
Teva leads in prescription volume with more than 16% share
TRxs mn % Market Share % Growth
US Industry 3,954 100.0 1.5
1 Teva 639 16.2 2.0
2 Mylan Labs, Inc. 368 9.3 10.7
3 Novartis (incl Sandoz) 262 6.6 10.4
4 Pfizer (incl Greenstone) 251 6.3 -4.3
5 Watson Pharma 232 5.9 -1.0
6 Lupin Pharma 121 3.1 38.4
7 Qualitest Products 117 3.0 21.9
8 Amneal Inc 90 2.3 51.5
9 AstraZeneca 88 2.2 -5.0
10 Covidien 84 2.1 -10.0
Top 10 2,251 56.9 6.1
MAT Sep 2010
Leading corporations
Source: IMS Health, National Prescription Audit, Sep 2010
Prescription growth among the top 20 corporations at 4.1%
TRxs mn % Market Share % Growth
11 GlaxoSmithKline 75 1.9 -5.0
12 Merck & Co 73 1.9 -14.5
13 Boehringer Ingelheim 69 1.7 -2.3
14 Actavis US 68 1.7 -6.1
15 Dr Reddy Inc 62 1.6 -8.5
16 Abbott 61 1.5 -6.5
17 Lilly 49 1.2 -1.0
18 Zydus Pharma 49 1.2 60.7
19 Forest Lab 44 1.1 -5.5
20 Bristol-Myers Squibb 42 1.1 -4.2
Top 20 2,844 71.9 4.1
MAT Sep 2010
Leading corporations
Source: IMS Health, National Prescription Audit, Sep 2010
Leading Absolute Growth Vs. Yr. Ago-Companies
Dollars AC US$BN TRx AC TRx mn
Novartis (incl Sandoz) 2.3 Mylan Labs, Inc. 35.7Lilly 1.2 Lupin Pharma 33.5Teva 1.2 Amneal Inc 30.6AstraZeneca 0.9 Novartis (incl Sandoz) 24.7Bristol-Myers Squibb 0.8 Qualitest Products 21.0Gilead Sciences 0.8 Zydus Pharma 18.3Global Pharma Corp 0.7 Glenmark Pharma 12.4Novo Nordisk 0.7 Teva 12.4Otsuka America Ph 0.6 West Ward 11.2Mylan Labs, Inc. 0.5 Northstar Rx 10.1
Source: IMS Health, National Sales Perspectives, Sep 2010, National Prescription Audit, Sep 2010
THERAPY DAY AVERAGE COSTS 0310 DRAFT • Enter fixed date manually [View>Header and Footer...]70
Daily cost of therapy is declining across major therapy areas
Average price calculation: Weight Avg. Cost/Day = Tablet cost X Tabs per Day X Tablets share of class (this calculation is done at the form strength level then summed to Class )12 and 24 months post generic: average of the cost per day for available months if it is less than 12 or 24 months after the event
*If post generic timeframe has not occurred, post generic pricing (to date) is trended to full 12 or 24 month range
ClassPre
Generic avg price
12 months post generic
avg price
24 months post generic
avg price
% reduction 12 months
% reduction 24 months
Key Brand(s)
LOE month
Antinauseants 59.73 25.69 14.93 57.0% 75.0% Zofran Dec-06Bisphosphonates 2.01 1.35 0.32 32.7% 84.1% Fosamax Jan-08Proton Pump Inhib 3.15 2.84 2.76 9.6% 12.4% Prevacid* Nov-09Lipid Regulators 2.52 2.13 1.86 15.3% 26.2% Zocor Jun-06Alpha-Beta Blocker 2.45 0.60 0.49 75.5% 80.1% Coreg Sep-07Antidepressants 1.60 1.03 1.06 35.8% 33.8% Zoloft Jun-06
1.30 0.83 0.82 36.6% 36.8% Effexor Jun-08Non-barbiturate, Others 2.33 1.32 1.24 43.5% 46.9% Ambien Apr-07Calcium Blockers 1.20 0.67 0.57 44.8% 52.7% Norvasc Mar-07Antimigrane 9.35 6.47 5.82 30.8% 37.7% Imitrex Feb-09Anti-epileptics 2.35 1.24 1.12 47.0% 52.3% Lamictal* Jan-09
2.32 1.20 1.08 48.1% 53.3% Topamax* Mar-09
US biologic growth over time
US$
SALE
S G
RO
WTH
0
10
20
30
40
50
60
70
MAT Mar
1999
MAT Mar
2000
MAT Mar
2001
MAT Mar
2002
MAT Mar
2003
MAT Mar
2004
MAT Mar
2005
MAT Mar
2006
MAT Mar
2007
MAT Mar
2008
MAT Mar
2009
MAT Mar
2010
US$B
N
0
5
10
15
20
25
30Sales Growth
Source: IMS Health, MIDAS, MAT Mar 2010, US Biologic market at trade level
Rank US$MN % Market Share % Growth
US Biologic Market 65,475.2 100.0 6.5
1 L4B Anti-Tnf Products 9,482.7 14.5 9.7
2 L1X All Other Antineoplastic 8,039.5 12.3 4.5
3 A10C Human Insulin+Analogues 7,865.8 12.0 18.7
4 B3C Erythropoietin Products 6,297.8 9.6 -2.4
5 L3A Immunostim Ag Ex Intfron 5,951.5 9.1 5.5
6 J7A Pure Vaccines 3,988.0 6.1 -2.8
7 B1B Heparins 3,281.6 5.0 6.0
8 L3B Interferons 3,201.4 4.9 10.5
9 J6C Polyval Immuno-Globl I.V 1,752.1 2.7 10.2
10 B2D Blood Coagulation 1,650.5 2.5 4.5
Top 10 51,510.9 78.7 6.6
MAT Jun 2010
Source: IMS Health, MIDAS, MAT Jun 2010, US Biologic Market at trade level
US biologic leading classes 1- 10