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Dr Ajit Shetty
Corporate Vice President Enterprise Supply Chain Johnson & Johnson (retired)Chairman Emeritus of the Board of Directors Janssen Pharmaceutica
Indian Business Chamber of Luxembourg LuxembourgJune 18, 2012
The Pharmaceutical Industry Challenges and Opportunities
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• J&J
• Janssen
• Health Care
• The Pharma Market
• Challenges
• Opportunities
• M&A
• Indian Pharma
• Conclusions
CONTENTS
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Global Leader inHealth Care
More than 250 Operating CompaniesIn 60 Countries
Selling Products in More Than 175 Countries
116,000 EmployeesWorldwide
Johnson & Johnson: Global Presence
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Johnson & Johnson Family of Companies
• Sixth-largest consumerhealth care company
• The world’s largest and most diverse medical devices and diagnostics company
• The world’s fifth-largestbiologics company
• The world’s eighth-largestpharmaceuticals company
Jesica HarringtonDiagnostic test fueled hope in her fight against cancer
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2011 Sales by Segment
$24.4B6.2%*
$14.9B(0.7%*)
$25.8B1.7%*
MD&D 40%
Pharmaceuticals 37%
Consumer23%
2011 Sales: $65.1 Billion
$ U.S. Billions
*Operational YOY change5
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Our Consumer Business Segment
2011 sales of $14.9 billion Broad portfolio of iconic CPG and OTC brands Based on sound science and technology Touching a billion lives every day
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Our Pharmaceuticals Business Segment
2011 sales of $24.4 billion
Now unified under the Janssen name
A well-positioned pipeline– Growing demand– Emerging markets– Unmet needs around the world
Recent product approvals
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Our Medical Devices & Diagnostics Business Segment
2011 sales of $25.8 billion The world’s largest medical technology business Focused on emerging markets and an aging
population Our most recent acquisition
A premier manufacturer of orthopedic devices
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Dr Paul Janssen (1926-2003)
• Founder of Janssen Pharmaceutica
• One of the most prolific researchers into new therapeutics for use in anesthesia, pain management, psychiatry, gastroenterology, mycology and many other therapeutic areas
• Received 22 Honorary Doctorates and 5 Honorary Professorships
• Holder of more than 100 patents
• Over 850 scientific publications
• In the survey Belgian of Belgians (Jan. 2004) Dr. Paul Janssen has reached the third place
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Janssen Pharmaceutica Campus
Beerse I
Beerse IIOlen
Geel
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Pain Management
• Fentanyl® / TTS
• Rapifen®
• Sufenta®
Fungal Infections
• Daktarin®
• Nizoral® Shampoo
• Sporanox®
HIV
• Intellence®
• ..........
• ...........
Psychiatry• Haldol ®• Risperdal ®
Neurology• Topamax®• Reminyl®
Gastroenterology• Imodium ®• Motilium ®
• ..........
• ..........
Portfolio of Leading Pharmaceutical Brands
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Health Care at $5.7 trillion
is 7-8% of Global GDP
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Total Healthcare Expenditure
0
2
4
6
8
10
12
14
1960 1970 1980 1990 2002
BelgiumFranceGermany
Italy
UK
US
Japan
as a percentage of GNP at market prices
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Ratio Healthcare Expenditure - Drug ExpenditureHealth Care as % of GNP
Hea
lthca
re e
xpen
ditu
re a
s %
of G
NP
Share of drugs in healthcare
USA
CHEDEU
CAN
SUE
FRA
ISLAUSNED
AUTDENNOOR FIN
BELGIUMNLZ
GBRLUXIRLSPJAP
POR
CZEGBC
14
12
10
8
6
0 5 10 15 20 25 30Gradient: 0.13
Constant: 9.99
Correlation coeff.:- 0.44 14
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Global Pharmaceutical Market
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Growth Projections for the Pharmaceutical Industry
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The Pharmaceutical Research & Development Process
Timeline / NPD Process
Discovery/Concept
Early Development(PC, Ph1, Ph2a)
Late Development
(Ph 2b, Ph 3) Post- Launch
Regulatory Review
EarlyExploration
Clinical Trials
10 - 15 YEARS ~$1B to $1.5B Investment
FDA Approved DrugsPreclinical
IND APPLICATION SUBMITTED
NDA/BLA SUBMITTED
First in Human Ph2 Ph3
Molecule
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Pharma R&D spend and new drug approval
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Global pharmaceutical market generics challenge
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J&J Counterfeit Products Position
• Our Credo responsibility
• Patients should receive genuine products
• Taking tangible steps
• Monitor markets
• Work with regulators to strengthen laws
http://www.jnj.com/connect/about-jnj/views-positions/product-safety/
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The global pharmaceutical market growth remains under pressure
The near term future belongs to the payers
PHARMA INDUSTRY
Changing sourcesof growth
Intensifyingcompetition
Shifting stakeholder power
• Increasing payer power over treatment decisions• HTA controlling access• Increasing patient power• Changes in distribution patterns
• Increasing generic penetration in large therapy areas
• Declining R&D productivity
• Mature vs. emerging markets• Primary Care vs. Specialist
driven
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Positive Trends
• Global expansion/emerging markets
• Demographics/aging population
• Unmet needs
• Advancing science and technology
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Drug Usage by Age Band
60% of drugs are used by people over 60
And this groupis growing
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Unprecedented Potential
Waiting for a solution for prostate cancer…ZYTIGA®Abiraterone AcetateFirst-in-class, novel orally administered for treatment of prostate cancer
Waiting for a more effective option for hepatitis C…
Telaprevir (VX-950)Potential first-in-class protease inhibitor
Waiting for a better
anticoagulant…
RivaroxabanFirst-in-class,
once-daily oral anticoagulant
Waiting for a more convenient way
to treat HIV…
TMC-278Oral once-daily
single agent/fixed dose
combination
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Innovative delivery technologywith therapeutic added value
• Oral controlled release
• Once-monthly injection
Rate- controlling semi- permeable
membrane
Drugcompartment 2
Laser- drilleddelivery orifice
Push compartment
OROS® : Osmotic - ControlledRelease Oral - Delivery System
Drug compartment 1
Outer coat
Water
Water
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Cross Sector SynergiesConvergent Technologies
CYPHEREVRA
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Our Vision: Comprehensive Healthcare
• Prevention
• Diagnosis
• Treatment
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Survival of the fittest: Takeovers, Mergers and JVsSmithkline RIT - BeechamRhône-Poulenc - Rorer
Kabivitrum - PharmaciaNicholas - RocheVickx Blendax - Procter & Gamble
Bristol-Myers - Squibb
Synthélabo - Delagrange & DelalandeSanofi - Winthrop
Kabi Pharmacia - FarmitaliaBrocades - YamanouchiWarner - Wellcome (OTC products)
Cyanamid - AHPRoche - SyntexRoussel - HoechstGlaxo - WellcomeBoots - Knoll
Pharmacia - UpjohnMarion Merrell Dow - Hoechst RousselRhône-Poulenc Rorer - Fisons
Ciba - SandozSankyo - Luitpold Pharma
Roche - Boehringer MannheimSanofi - Synthelabo
Astra - ZenecaHoechst-Marrion-Roussel - Rhone-Poulenc-Rorer (= Aventis)
Warner-Lambert - PfizerMonsanto - PharmaciaUpjohnGlaxoWellcome – Smithkline
Novartis acquires 20% in RocheIntense M&A activity in biotechAlza – J&JDupont- BMS
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
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Survival of the fittest: Takeovers, Mergers and JVsChugai Pharm- Hoffmann-La Roche
Hoffmann-La Roche – Novartis (Novartis owns 33% of Roche)
Pharmacia- Pfizer
Searle – Pfizer
Roche Consumer Health – Bayer
Aventis – Sanofi.Synthelabo: become Sanofi-Aventis
APS/ Berk becomes TEVA
Celltech – UCB
Genentech – Hoffmann-La Roche(Roche becomes majority owner Genentech)
Aventis Pasteur MSD becomes Sanofi Aventis MSD
Boots – Alliance Unichem becomes Alliance Boots
Altana – Nycomed
IVAX – Teva
Lifescan – becomes J&J subsidiary
Schering – Bayer becomes Bayer Schering
Wyeth - Pfizer
2002
2003
2004
2005
2006
2007
2009
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The Indian Pharmaceutical IndustryAn Awakening Giant?
Positive
• Excellent, highly skilled people
• Language is no barrier
• Cost effective
• I/P Protection ?
Improvement Areas
• Lack of patent protection
• Counterfeit
• Low prices
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India’s Potential Role as a Pharma Player
From
• A low priced generic market
• An exporter of generic products
• Large presence of counterfeit products
To
• A market that rewards innovation
• A major factor in an integrated R&D / production global effort (partnership)
• A safe and effective supply chain
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The future we can influence
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Conclusion
Global Competition in the Pharmaceutical Industry
= Competition through Innovation
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