The J&J Diabetic Vitality Program

Addressing the Growing Problem of Diabetes in China

Ray Costantini Emily Jantz Jarrett Payne Beth Roser Drew Smith

TEAM CERES INNOVATION

A Daunting Problem

• At least 30 million diabetics in China

• 70-90% are undiagnosed

• At least 21-27 million undiagnosed Chinese diabetics - likely many more

A Different Perspective

Increasing the diagnosis rate by only 10%

means that more than 1 million additional

Chinese diabetics will have the opportunity

to be treatedChinese character for

both “Adversity” & “Opportunity”

These Challenges Provide Opportunity

Barriers to Diagnosis

Lack of Public Awareness

• Even among health care providers

Volume

• 5-7% prevalence

– Diagnosis of 1M requires screening

20M

– Time consuming and impractical

– Expensive

Requires a System of Intervention

2. Screening

3. Diagnosis

4. Education

5. Retention

Vitality Centers

EZ Read Test Strips 1. Awareness

EZ Read Diabetic Screen

• Simple reagent-based urine diagnostic test

• High levels of sugar in the blood lead to sugar in the urine

• Performed at home (FOBT model)

• Principle used in the past to monitor treatment effect

What is it?

Similar device designed to test for

urine protein

EZ Read Diabetic Screen

• Very low cost - established technology

• Easier than a home pregnancy test

• Completely non-invasive

• Highly limited non-diabetic positives

• Bypasses lack of awareness - brings screening to the patient

Benefits

Distribution

Bringing screening to the patient

• Provide EZ Strips in heavily trafficked pedestrian areas

• Verbal instructions and education

• Printed instruction & disease information

• Provide free J&J branded products - bandages, pens, etc.

From Screening to Diagnosis

• Provide location of local Vitality Center in the event of positive test strip results

• Additional incentives offered at Vitality Centers» Positive EZ Test Strip results» Diagnosed with diabetes

– Glucometer test strips?– “Razor and blades” model?– Diabetic product “coupon books”?

Follow-up at Vitality Centers

Diabetic Vitality Centers (Emily)

• This is a description of the Vitality Centers

• Additional source of undiagnosed patients via word-of-mouth

• Potential function as Co-op center

• This describes how the patients would be referred to health care providers for follow-up

Cost Analysis

20 million People tested

x 5 Test strips per person

100 million Total test strips needed

x $0.01 Cost per test strip

$1 million Total production costs

÷ 1M Number new diagnoses

$1 Cost per new diagnosis

Test Strips

Cost Analysis

20 million People tested

x 5 Test strips per person

100 million Total test strips needed

x $0.05 Cost per test strip

$5 million Total production costs

÷ 1M Number new diagnoses

$5 Cost per new diagnosis

Test Strips

Cost Analysis

• Low cost

–Simplicity of structures

–Low cost staffing

• Self-sustaining through retail function

• Cost sharing through partnering

Vitality Centers

Value Proposition

Patient and Community

• Earlier diagnosis

• Less complications and disabilities

• Better medical outcomes

• Resources

• Improved productivity among controlled diabetics

"We are responsible to the communities in which we live and work and to the world community as well." - Johnson & Johnson Credo

Value Proposition

Health Care Providers

• Increased referrals and larger patient base

• More able to effect change

• Less time spent on patient education means more time available for treatment

"We believe our first responsibility is to the doctors, nurses and patients...” - Johnson & Johnson Credo

Competitive Advantage

• Dramatically larger consumer base for J&J diabetic products

• Increased consumer brand recognition

• First mover advantage into undiagnosed population

• Strengthened healthcare provider and government relations

• Easily transferable to other developing markets...

"Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed… New equipment must be purchased, new facilities provided, and new products launched." - Johnson & Johnson Credo

Competitive Advantage (Continued)

Easily transferable to other developing markets...

India?

Estimated 22 million undiagnosed diabetics...

Implementation

• Number of newly diagnosed diabetics as a percentage of EZ Read kits provided

• Relative utilization of various Vitality Center locations

• Rate of diabetic complications among newly diagnosed diabetics

• Number of successful physician referrals

• Number of diabetic supplies sold

• Change in Market Share, Sales & Profits

Metrics of Success

Implementation Plan

Initial Steps

Partnering, Technology Acquisition, Design and Production

2008 2009 2010 2011 2012 2013

Vitality CenterPartnering

EZ Test Strip Design & Production

Implementation Plan

2008 2009 2010 2011 2012 2013

BeijingVitality CenterSite Selections EZ Test Strip

Distribution Site Selection

First 6 Months

Test Strip distribution sites chosen based on Vitality Center locations

Implementation Plan

Second 6 Months

Begin staffing and training 1-2 months prior to initial EZ Test Strip distribution

2008 2009 2010 2011 2012 2013

Initial Vitality Center

Completion

EZ Test Strip Distribution

Staffing & Training

Implementation Plan

Year 2

Notes on this phase go here

2008 2009 2010 2011 2012 2013

Evaluation, Feedback and

Adjustment

First 6 Monthsof Operations

Continued Feedback, Expansion and Refinement throughout China

Implementation Plan

2008 2009 2010 2011 2012 2013

Second Phaseof Beijing

Vitality Centers

Expand to Second Major Chinese

Metropolitan Area

Years 3 through 5

Evaluation of India Sites?

Implementation Plan

• Partner with major insulin production company

• Design and production of EZ Test Strips

• Site Selection of initial Beijing Vitality Centers

• Initial EZ Test Strip distribution site selection

• Vitality Center staffing and training

• Design and completion of initial Vitality Centers

• Initial distribution of EZ test strips

• Evaluation of Success Matrices with feedback and adjustment

• Second phase Vitality Centers and EZ Test Strip distribution

• Evaluation for India Vitality Center and EZ Test Strip Distribution sites

Schedule (I’ve left this in as a reference only)

Conclusion

Question and Answer