Final Version: 21/09/2015 Pharma industry’s contribution to health and wealth Health & Wealth.

Final Version: 21/09/2015

Pharma industry’s contribution to health and wealth

www.efpia.eu

Health & Wealth

2

Health & Wealth – Rationale

The purpose of this document is to address some of the key questions regarding the contribution of the pharmaceutical industry to health and wealth in Europe:

What has been the contribution of the pharmaceutical sector to improve health outcomes in Europe ?

How are medicines contributing to economic productivity and wealth creation in Europe ?

The document has been divided in two sections which gather a rich and robust collection of evidence aiming at tackling these questions. The objective is to facilitate an evidence-based discussion amongst stakeholders including payers, policymakers and regulators.

3

Index

Health and Wealth – Rationale ………………………………………………………………………………………..................................................................................................Index ……………………………………………………………………………………………………………………………………………………………………………………………………………………………..Part I: What has been the contribution of the pharmaceutical sector to improve health outcomes in Europe ?............................................................. Europe has shown substantial improvements in life expectancy during the last 65 years………………………………………………………………………………………….

Life expectancy continues to improve today – and medicines usage has made major contribution to recent advances…………………………………………….In areas like cancer, medicines innovation continues to play a key role in increasing life expectancy………………………………………………………………………..Medicines have made substantial progress to improve patients’ conditions in many difficult areas……………….............................................................Cure rates of hepatitis C patients are rising thanks to the launch of innovative treatments………………………………………………………………………………………Improvement in treatments and earlier detection have contributed to an increase in cancer survival rates……………………………………………………………..Progress in the treatment of HIV/AIDS has contributed to a significant decline in death rates………………………………………………………………………………….Industry pipelines have historically been targeting the major unmet needs of European society…………………………………..………………………………………….The pharmaceutical industry remains firmly committed to investing in finding solutions to key unmet needs…………………………………….………..............With over 16 000 compounds currently in development, over 80% of projects are focused on degenerative diseases, non communicable diseases (NCDs) and cancer………………………………………………………………………………………………………………….......................................................................................For degenerative diseases, Non Communicable Diseases and Cancer balanced mix can be found across all phases of compound development….……………………………………………………………………………………………………………………………………….………………………………………………The industry continues to invest in innovating new oral forms in line with patient preference………………………………………………………………………………….The advent of social media and more connected patients are opening up new opportunities to support patients and physicians………………………………………................................................................................................................................................................................Innovative medicines are showing superior results in health outcomes and cost effectiveness compared to existing treatments…………………………………………………………………………………………………………………………………………………………………….…………………………………………

23

67

89

1011121314

15

1617

5

18

19

4

Index

Part 2: How are medicines contributing to economic productivity and wealth creation in Europe? ..........................................................Demographic changes and higher longevity cause major health challenges for Europe……………………………………………...…….....................Workforce reduction and increasing dependency ratio put increased pressure of society’s healthcare financing but also increase the importance of keeping working age people healthy and productive………………………………………………………………………..……………………………Chronic diseases are already a major part of healthcare bill and, unmanaged, risks factors indicate it will keep rising….........................Forecast show an acceleration in lost output due to illness; high income economies like Europe are the most exposed…......................Health-related disability increases sharply with age and across Europe there is an increase in reported disabilities……….......................With an aging population living with disabilities focus needs to shift from preventing mortality to improving quality of life and function…………………………………………………………………………………………………...........................................................................................Health is a major cause of productivity loss and early labour market exit, with many causes being addressable.....................................Keeping the population healthy and productive is a critical priority and medicines have and can continue to be part of the solution……………………………………………………………………………………………………………………………………………………………………….……………………….Reducing disability and sickness transfers, by improving outcomes, can further contribute to Europe’s ability to fund future investments…………………………………………………………………………………………………………………………………………………………….....……………………..Medicines offer an opportunity to reduce the cost of productivity loss and disability by improving workforce health……......................

Bibliography…………………………………………………………………………………………………………………………………………………………………..............................

2021

22232425

2627

28

293031

5

Part 1: key messages

Part 1: What has been the contribution of the pharmaceutical sector to improve health outcomes in Europe ?

Europe has shown substantial improvements in life expectancy over the last 65 years Life expectancy continues to improve today – and medicines usage has made major contribution to recent advancesIn areas like cancer, medicines innovation continues to play a key role in increasing life expectancyMedicines have made substantial progress to improve patients’ conditions in many difficult areas Cure rates of hepatitis C patients are rising thanks to the launch of innovative treatmentsExperience from the US shows that improvement in treatments and earlier detection have contributed to an increase in cancer survival ratesProgress in the treatment of HIV/AIDS has contributed to a significant decline in death ratesIndustry pipelines have historically been targeting the major unmet needs of the European society The pharmaceutical industry remains firmly committed to investing in finding solutions to key unmet needsWith over 16 000 compounds currently in development, over 80% of projects are focused on degenerative diseases, Non Communicable Diseases (NCDs) and cancer For degenerative diseases, NCDs and Cancer balanced mix can be found across all phases of compound developmentThe industry continues to invest in innovating new oral forms in line with patient preferenceThe advent of social media and more connected patients are opening up new opportunities to support patients and physicians

6

Part 1: health outcomes

Europe has shown substantial improvements in life expectancy over the last 65 years

Countries included are Belarus Channel, Islands, Albania Austria Bulgaria, Denmark, Andorra, Belgium, Czech Republic Estonia Bosnia and Herzegovina, France, Hungary, Faeroe Islands, Croatia Germany Poland Finland Gibraltar, Liechtenstein, Republic of Moldova, Iceland, Greece, Luxembourg, Romania, Ireland Russian Federation Italy, Netherlands, Slovakia, Latvia, Malta Switzerland Ukraine Lithuania Montenegro, Norway, Portugal, Sweden, San Marino, United Kingdom of Great Serbia, Britain and Northern Slovenia, Ireland, Spain, The former Yugoslav Republic of Macedonia.Source: United Nations: World Population Prospects – The 2012 Revision (2014) accessed via the United Nation database on life expectancy at birth (accessed in April 2015);

Life expectancy at birth in Europe (1950-2015)

50

55

60

65

70

75

80

85

1950-1955

1960-1965

1970-1975

1980-1985

1990-1995

2000-2005

2010-2015

JapanEU 15USEU-28 Average

Life Expectancy(years)

Life expectancy in Europe (years)

7


Life expectancy continues to improve today and medicines usage has made major contribution to recent advances

Source: Lichtenberg, F: Pharmaceutical innovation and longevity growth in 30 developing OECD and high-income countries, 2000 - 2009 (2012)

Contribution of innovative medicines to increase in life expectancy (2004-2009)

From 2000 – 2009, an improvement in population weighted mean life expectancy at birth of 1.74 years was seen across 30 OECD countries.

Innovative medicines are estimated to have contributed to 73% of this improvement once other factors are taken into account (e.g. income, education, immunization, reduction in risk factors, health system access).

27%

73%

72,0

72,5

73,0

73,5

74,0

74,5

75,0

75,5

76,0

76,5

77,0

2000 Other Contribution ofInnovative Medicines

20090

+1.74 years

Life Expectancy(years)

8


In areas like cancer, medicines innovation continues to play a major role in increasing life expectancy

Source: Smith, B: The Future of Pharma (2011)

Increases in life expectancy 1980 - 2008 Contribution to increased life expectancy from new treatments incl. new medicines

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

1980 2008

Life expectancy of cancer patients

(0 = base value)

Increase in life expectancy

(in years)+ 3 years

Contribution to increased life expectancy in %

83%

17%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

New Treatments/Medicines

other Total

9


Medicines have made substantial progress to improve patients’ conditions in many difficult areas

*Note: National Cancer Institute. Surveillance, Epidemiology, and End Results Program. http://seer.cancer.gov/faststats/selections.php?#Output. Rockville, Md.: National Institutes of Health. Cited in PhRMA, biopharmaceutical in perceptive, spring 2015.Source: PhRMA, biopharmaceutical in perceptive, spring 2015

HIV/AIDS In the last 20 years, progress in treatment have contributed to a decline of approximately 85% in HIV death rates. HIV has been transformed from a fatal disease to a chronic condition.

CancerNew therapies have contributed to a 22% decrease in cancer deaths since the 1990s in the USA. According to a recent study*, 83% of survival gains in cancer are attributable to new treatments, including medicines.

Rheumatoid Arthritis The treatment of this disease has significantly improved in the last two decades. While the previous treatments focused on the management of the symptoms, the current therapies target the causes of inflammation which can lead to disease remission.

Cystic Fibrosis New treatments have contributed to improve the life of patients and have increased their life expectancy.

10Note: Cure rates are based on the results of clinical trials reported by the Food and Drug Administration for different drugs against Hepatitis C. Sources: PhRMA (2014), 25 years of Progress against Hepatitis C and PhRMA (2015), 2015 profile. PhRMA (2014), 25 years of Progress against Hepatitis C and PhRMA (2015), 2015 profile.


Cure rates of Hepatitis C patients are rising thanks to the launch of innovative treatments

Cures rates and treatment period for hepatitis C patients

0

10

20

30

40

50

60

70

80

90

100

1st generation (2001-2010) 2nd generation (2011-2013) 3nd generation (2013-2014) 4th generation (2014-2015)

41% cured

63-80% cured

95-96%cured

Interferon and Ribavarin Polymerase inhibitorsProtease inhibitors

90% cured

48 weeks treatment

24-48 weeks treatment

12 weeks treatment

8 to 12 weektreatment

Combination Therapies

11


Experience from the US shows that improvement in treatments and earlier detection have contributed to an increase in cancer survival rates

National Cancer Institute website. Available at http://seer.cancer.gov/csr/1975_2012/browse_csr.php (accessed in August 2015)

5 years cancer survival rates by year of diagnosis (%)

48,9 49

50,1

52,455,3

59,961,3

63,365,9

67 68,7

74,8 74,4 76,178,9

84

85,2 86,3 88,2 89,7 89,9 90,7

46,547,9

50,5

51,5 50,9 50,7

52,5

58,8

63,9

69,771,9

67,770,1

7275,1

82,8

92,995,2

97,399,3 99,6

99,4

40

50

60

70

80

90

100

1975-1977 1978-1980 1981-1983 1984-1986 1987-1989 1990-1992 1993-1995 1996-1998 1999-2001 2002-2004 2005-2011

All types of cancer Breast cancer Non-Hodgkin Lymphoma Prostate

http://seer.cancer.gov/csr/1975_2012/browse_csr.php

12


Progress in the treatment of HIV/AIDS has contributed to a significant decline in death rates

Source: HIV/AIDS surveillance in Europe 2013, WHO Regional Office for Europe & European Centre for Disease Prevention and Control (ECDC), November 2014 cited in EFPIA, the pharmaceutical industry in figures (2015).

Number of deaths among Aids cases in Europe (Total EU/EEA)

-75%

13


Industry pipelines have historically been targeting the major unmet needs of European society

Source: Catala-Lopez, F. et al: Development of new medicinal products in the European Union (2010); A.T. Kearney analysis

Share of EMA approvals 1995 – 2009 and share of DALYs per 100,000 in EU-25 The pharmaceutical industry have to a large extent

focused their innovation on the unmet needs of EU-25 countries.

The comparative lack of output in neuropsychiatric conditions can be explained by the relatively underdeveloped basic scientific understanding of causes of these conditions. Both public and private sectors are investing.

Whilst the chart implies a more than proportionate output in infectious and parasitic diseases it is widely recognized that these conditions are a societal priority

Infectious and parasitic diseases

Respiratory infections

Maternal conditions

Malignant neoplasms

Diabetes mellitus

Blood and endocrine disorders

Neuropsychiatric conditions

Sense organ diseases

Cardiovascular diseases

Respiratory diseases

Digestive diseases

Genitourinary diseases

Musculoskeletal diseases

Congenital anomalies

0%

5%

10%

15%

20%

25%

30%

35%

0% 5% 10% 15% 20%

Shar

e of

DAL

Ys p

er 1

00 0

00 E

U-2

5 (2

004)

Share of EMA approvals 1995 - 2009

Optimal Value for society

Size of bubble illustrates share of DALYs per 100 000 in EU-25

14Note: NDC: non communicable disease ; CNS: Central Nervous System Source: EMA (European Medicines Agency): Database (accessed 2013); A.T. Kearney analysis

Share of EMA Marketing Approvals 1995-2000

Share of EMA Marketing Approvals 2007-2012


The pharmaceutical industry remains firmly committed to investing in finding solutions to key unmet needs

Cancer; 10%

Cardiovascular; 10%

CNS; 7%

Hormonal Systems;

13%

Immune System; 5%

Musculo-skeletal; 6%

Other NCD; 9%

Other ; 16%

Infectious Diseases;

23%

Cancer; 15%

Cardiovascular; 15%

CNS; 11%

Hormonal Systems;

11%

Immune System; 6%

Musculo-skeletal; 7%

Other NCD; 10%

Other ; 11%

InfectiousDiseases;

14%

15


With over 16 000 compounds currently in development, over 80% of projects are focused on degenerative diseases, Non Communicable Diseases and cancer

Source: Business Insight Database end Year 2011 via Lifescience Analytics (2012); A.T. Kearney analysis

Registered Pipeline Compounds end of year 2011

Finding solutions for unmet needs in cancer has been a major recent focus for the industry.

Growth in early stage investment in CNS reflects appreciation for the need to identify breakthroughs in major challenge of degenerative mental health diseases.

Decreasing activity in areas like cardiovascular care reflect the adequate nature of existing standards of treatment in some areas (e.g. hypertension) and some residual unmet needs (e.g. stroke prevention).

Only a small proportion of these compounds in development will reach market and of those a small proportion will be profitable

16


For degenerative diseases, Non Communicable Diseases and Cancer balanced mix can be found across all phases of compound development

Source: Business Insight Database end Year 2011 via Lifescience Analytics (2012); A.T. Kearney analysis

Registered Pipeline Compounds per phase end of year 2011

23%

38%

45%

46%

35%

31%

36%

30%

26%

37%

36%

26%

15%

24%

22%

18%

17%

22%

18%

19%

13%

17%

13%

17%

19%

13%

43%

27%

25%

26%

28%

38%

31%

41%

37%

36%

28%

35%

41%

10%

14%

12%

12%

15%

13%

14%

16%

20%

14%

18%

20%

31%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

Cancer

Central Nervous System

Infectious Diseases

Autoimmune andInflammationMetabolic and Endocrinology

Respiratory and Pulmonary

Cardiovascularand Circulatory System

Dermatology

Gastrointestinal

Ophthalmology and OptometryMusculoskeletal

DisordersKidneys and

Genitourinary System

Women's Health

Pre-clinical Phase 1 Phase 2 Phase 3

17Notes: *The graph is based on a survey fulfilled by 1,2402 patients (400 patients for each country except France = 402 patients). †The graph on medication adherence is based on a study from Lee and associates with data for 1156 subjects with type 2 diabetes. The graph shows the conversion of the patients from insulin using a vial and syringe to a prefilled insulin analog pen. The graph on healthcare costs was based on a study from Pawaskar MD et al. (2007) on diabetes II patients enrolled in the Medicaid program. Source: *daCosta DiBonaventura, M et al (2010), †Studies from Lee, W et al (2006) and Pawaskar MD et al. (2007) cited in Selam, J. (2010).

Type II Diabetes patients show a clear preference for oral treatment over injectable treatment*

Development of insulin devices have decreased annual health costs and improved compliance with prescribed treatment†


The industry continues to invest in innovating new medical devices in line with patient preference, improving compliance and reducing cost

Case Study: diabetes

82% 84%

18% 16%

0%

20%

40%

60%

80%

100%

Study Wave 1 Study Wave 2

Patie

nts

pref

eren

ce

(in %

)

Oral treatment Injectable treatment

31 764

14 8570

20 000

40 000

Vial / Syringe Insulin Devices

Tota

l ann

ualiz

ed

Hea

lthca

re c

osts

-53%

62% 69%

0%

50%

100%

Vial / Syringe Insulin Devices

Impr

oved

com

plia

nce +11%

18


The advent of social media and more connected patients are opening up new opportunities to support Patients and physicians

Source: * Changingdiabetesbarometer.com; † Peyrot, M. (2005); ∆ Vincze, G et al (2004); ♯ Blonde, L. et al (2002)

Development of mobile disease management tools

Case Study: diabetes

Situation Situation

Diabetes relies heavily on self-management†, but the majority of patients are not adhering to their recommended therapy∆.

Diabetes patients across Europe are not in good glycemic control resulting in elevated risks for severe macro- and microvascular complications*.

Regular Self-monitoring of Blood glucoses (SMBG) increases the proportion of individuals achieving their glycemic targets♯

Industry’s Response

The pharmaceutical industry has responded to the need for a more integrated way of blood glucose monitoring by establishing new paradigms around mobile and seamless disease management.

Example: ‘iBGStar system’ – an integrated system of blood glucose monitoring, data capture, -storage, and –transmitting and management tool as integrated into an iPhone

83%74%

50% 48% 44% 40%

0%

20%

40%

60%

80%

100%

Ger

man

y

Pola

nd

Fran

ce

Net

herla

nds

Italy

Swed

en

% of patients with HbA1c > 7

64%36%

0%

50%

100%

Non-adherent Adherent

0%

50%

100%

RegularSMBG

IrregularSMBG

NotMonitored

HbA1c<8 HbA1c>82

19


Innovative medicines are showing superior results in health outcomes and cost-effectiveness compared to existing treatments

Source: EMA; * Garber, A et al: Liraglutide versus glimepiride monotherapy (2009); † Davis, MJ et al: Cost–utility analysis of liraglutide (2012)

Innovative Medicines vs. existing treatments: Liraglutide (GLP-1 class) [approved 2009 by EMA]Case Study: diabetes

Medicines efficacy Quality-adjusted life expectancy Cost-effectiveness

1 Improved efficacy vs. existing treatment (sulfonylurea) in a randomized, Phase III clinical trial*

2 Improved body weight vs. existing treatment (sulfonylurea) in a randomized, Phase III clinical trial*

Mean increases in quality-adjusted life expectancy vs. existing treatment (sulfonylurea) in patients with Type 2 diabetes (added to metformin monotherapy)†

Incremental cost-effectiveness ratios vs. existing treatment (sulfonylurea) in patients with Type 2 diabetes (added to metformin monotherapy)†

-0,8%-1,1%

-0,5%

-1,5%

-1,0%

-0,5%

0,0%8,2% 8,2% 8,2%

liraglutide (1.2mg)

liraglutide (1.8mg)

sulfonylurea

BaselineHbA1c HbA1c

change from baseline

-2,1% -2,5%

1,1%

-5,0%

0,0%

5,0%

Hun

dred

s

sulfonylurealiraglutide (1.8mg)

liraglutide (1.2mg)

Body weightchange from baseline

Chan

ge in

bo

dy w

eigh

t (k

g)

0,320,28

0,000,00

0,05

0,10

0,15

0,20

0,25

0,30

0,35

liraglutide(1.2mg)

liraglutide(1.8mg)

sulfonylurea

Increase in QALY

Mean increasein QALY

9 449

16 501

00

2 0004 0006 0008 000

10 00012 00014 00016 00018 000

liraglutide(1.2mg)

liraglutide(1.8mg)

sulfonylurea

Incremental cost-effectivenessratio per QALY gained

Cost-effectivenessratio per QALY (in £)

20

Part 2: Key messages

Part 2: How are medicines contributing to economic productivity and wealth creation in Europe ?

Demographic changes and higher longevity cause major health challenges for Europe. Workforce reduction and increasing dependency ratio put increased pressure on society’s healthcare financing but also increase the importance of keeping working age people healthy and productiveChronic diseases are already a major part of healthcare bill and, unmanaged, risks factors indicate it will keep rising Forecast show an acceleration in lost output due to illness; high income economies like Europe are the most exposed. Health-related disabilities increase sharply with age and across Europe there is an increase in reported disabilities For many diseases the real cost to the system is lost productivity and new medicines are making a differenceKeeping the population healthy and productive is a critical priority and medicines have and can continue to be part of the solution Reducing disability and sickness transfers, by improving outcomes, can further contribute to Europe’s ability to fund future investmentsMedicines offer an opportunity to reduce the cost of productivity loss and disability by improving workforce health

21

Part 2: wealth & productivity

Demographic changes and higher longevity cause major health challenges for Europe

Sources: *European Commission (2015). The Aging report. †Freddie Bray et al (2012). “Global cancer transition according to human index a population based study”. Lancet oncology. 13:8. Available at: http://www.thelancet.com/journals/lanonc/article/PIIS1470-2045(12)70211-5/abstract

Demographic development in the EU-28* Projected increase of cancer in the world†

16% 16% 15% 15% 15% 15% 15% 15% 15% 15%

66% 64% 63% 61% 60% 58% 57% 57% 57% 57%

18% 21% 22% 24% 26% 27% 28% 28% 28% 28%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0-14 15-64 65 and over

+56%

12,7

22,2

0

5

10

15

20

25

2008 2030

Incidence of cancer in the world (million) †

+75%

http://www.thelancet.com/journals/lanonc/article/PIIS1470-2045(12)70211-5/abstract

http://www.thelancet.com/journals/lanonc/article/PIIS1470-2045(12)70211-5/abstract

22


Workforce reduction and increasing dependency ratio put increased pressure on society’s healthcare financing and increases the need to keep working age people healthy

Source: The European Commission (2015). The aging report.

Social impact: decline in workforce due to demographic changes (mn people)*

Ratio of workers to pensioners will decrease

335

328323

317

311306

302299 297 296

270

280

290

300

310

320

330

340

2013 2020 2025 2030 2035 2040 2045 2050 2055 2060

-12%+75%

4 workers / 1 pensioner

2 workers / 1 pensioner

2013 2060

-50%

23


Chronic diseases are already a major part of the healthcare bill and, unmanaged, risk factors indicate it will keep rising

Source: * The Economist Intelligence Unit (2012); † World Health Organisation database on obesity (accessed in April 2015); ∆ Population Reference Bureau website (accessed in April 2015); ♯ European Commission (2015) , the Aging report.

Impact of chronic diseases on distribution of healthcare bill*

Development of risk factors (obesity, urbanisation, aging)

~75% of Europe’s healthcare bill is spent on chronic diseases amounting to €700 bn*.

Chronic diseases like heart disease, diabetes, lung disease, and Alzheimer's Disease are overwhelming healthcare with soaring annual costs.

25%

75%

other chronic diseases

Increased Adult Obesity†

25% 21%12%

27% 23%13%

0%

10%

20%

30%

America Europe Global

% of population

Increased UrbanisationRates∆

Urbanisation rate (%)

51%72% 78%

0%20%40%60%80%

1950 2007 2030

+8%

Aging♯

(65+ years)

Population (mn)

93 105 125 141 148 1480

100

200

2013 2020 2030 2040 2050 2060

24


Forecasts show an acceleration in lost output due to illness; high income economies like Europe are the most exposed

Note: NCD = Non-communicable Diseases; Analysis based on EPIC modelSource: * World Economic Forum /Harvard School of Public Health (2011); † Eurostat: various databases (accessed 2015); A.T. Kearney analysis

Projected non communicable disease cost, 2011-2030*

Share of Disability Life Years and Healthy Life Years in Europe†

0

5

10

15

20

25

30

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

High income Upper-middle income

Lower-middle income Low income

Lost output, trillions (2010 US$)

77.883.3

25


Health-related disability increases sharply with age and across Europe there is an increase in reported disabilities

Source: *Harbers MM & Achterberg PW, Europeans of retirement age: chronic diseases and economic activity (2012); † OECD: Sickness, Disability and Work (2010)

Percentage of people reporting a long-standing illness or health problem (2010)*

Increase in reported disability, EU27†

1013

19

29

43

54

1115

21

32

44

56

0

10

20

30

40

50

60

16-24 25-34 35-44 45-54 55-64 65-74

Men Women

Population (in %)

year

% reporting long-term restrictions in daily activities

23.7%

25.1%

20,0

20,5

21,0

21,5

22,0

22,5

23,0

23,5

24,0

24,5

25,0

25,5

2005 2011

+6%

26


With an ageing population living with disabilities focus needs to shift from preventing mortality to improving quality of life and function

Source: Lancet: Healthy life expectancy for 187 countries, 1990–2010 (2010); A.T. Kearney analysis

Male Disability Life Years as a % of total life expectancy in 1990 and 2010

In all 27 EU countries, disability life years as % of life expectancy has increased in the period 1990 – 2010.

In future the old-age dependency ratio and the impact of chronic diseases on disability could result in additional increases with productivity losses and increases in incapacity benefits as a result.

14,1%12,6%

13,2%12,6%

13,0%12,6%

12,9%13,1%

12,6%13,0%

12,5%12,5%

12,7%12,2%

12,7%12,4%

12,8%12,6%12,6%

12,5%12,7%

12,7%11,9%

11,7%12,3%

11,9%11,6%

1,3%1,7%

0,9%1,2%

0,7%1,1%

0,7%0,4%

0,9%0,5%

1,0%0,9%

0,8%1,2%

0,6%0,8%

0,3%0,4%

0,4%0,4%

0,1%0,1%

0,8%0,9%

0,1%0,4%

0,6%

11% 12% 13% 14% 15% 16%

FinlandLuxembourg

SwedenAustria

UKDenmark

FranceCyprus

NetherlandsMalta

SloveniaItaly

GermanyIreland

BelgiumHungary

GreecePortugal

LatviaPoland

SlovakiaLithuania

Czech RepublicEstonia

RomaniaBulgaria

Spain 1990 2010

Disability life years in % of total life expectancy

12.2%12.3%

12.4%12.6%

12.8%12.8%

12.8%12.9%12.9%

13.0%13.1%

13.2%13.3%

13.4%13.4%13.4%13.4%

13.5%13.5%13.5%

13.7%13.8%13.8%

13.5%

14.1%14.2%

15.4%

27


Health is a major cause of productivity loss and early labour market exit, with many causes being addressable

Note: Percentage of people that were previously employed and answered the main reason for leaving their job was ‘Own illness or disability”Source: *Eurostat database (accessed in March 2015). European Commission: Health of People of Working Age( 2011); European Commission: Health Systems and Health care in the EU (2012)

Health as a cause of leaving job (2011)* Determinants for health-related early labour market exits in Austria

Health related causes for loss of output

2/3 of lost output are due to mental health and cardiovascular diseases.

Left last job forreasons of health

Age Group1%

9%

15%29%

13% 13%

0%5%

10%15%20%

15-2

4

25-3

4

35-4

4

45-5

4

55-6

4

Aver

age

35%

10%33%

18%4%

Mental Health

Chronic respiratory diseases

Cardiovascular diseases

Cancer

Diabetes

28%

22%

13%10%

0%

5%

10%

15%

20%

25%

30%

Men

tal h

ealth

Mus

culo

skel

etal

cond

ition

s

Card

iova

scul

arco

nditi

ons

Canc

er

% of market exists

28


Keeping the population healthy and productive is a critical priority and medicines have and can continue to play a part

Note: Disability prevalence defined as: “chronic health problem for at least six months limiting daily activities”Source: * Suhrcke M, Urban D: Are cardiovascular diseases bad for economic growth (2006) in WHO (2010); † OECD (2010)

% of GDP lost due to chronic diseases* Disability prevalence at working Age(EU countries) †

Cost-of-illness studies illustrate that cost of chronic diseases and their risk factors had a sizeable impact on high-income country’s GDP, ranging from 0.02% to 6.77%.

0,02%

0% 2% 4% 6% 8% % of GDP

6.77% 14%

0%2%4%6%8%

10%12%14%16%18%20%22%24%

Esto

nia

Hun

gary

Den

mar

kFi

nlan

dPo

rtug

alSw

eden

Uni

tde

King

dom

Ger

man

yN

ethe

rland

sSl

ovak

iaAu

stria

Slov

enia

Belg

ium

Czec

h Re

publ

icIre

land

Fran

cePo

land

Spai

nLu

xem

bour

gIta

lyG

reec

eO

ECD

Avg

.

Disability prevalence at working age

Disability prevalence (in %)

29


Reducing disability and sickness transfers, by improving outcomes, can further contribute to Europe’s ability to fund future investments

Source: * Eurostat: Structure of social protection expenditure, accessed in March 2015; †OECD: Sickness, Disability and Work (2010)

Social protection expenditure* Disability and sickness transfers as a factor of unemployment transfers†

Old age39%

Other benefits9% Family/children

8% Administration costs3%

Other expenditure1%

Unemployment5%

Disability7%

Sickness/Healthcare28%

Structure of social protection expenditure, EU-28, 2012

30


Medicines offer an opportunity to reduce the cost of productivity loss and disability by improving workforce health

Source: * Milken Institute: The Economic Burden of Chronic Disease (2007); † Respiratory Medicines Journal (2003)

Avoidable Productivity Losses, U.S., 2023* Chronic Obstructive Pulmonary Disease in some European countries: % of GDP lost due to chronic disease†

Across Europe, a significant amount of people with chronic diseases had either gone into early retirement or were contributing less than productive peers.

23%

7%

43%

21%

5%

21%

39%

0 200 400 600 800 1000

Stroke

Pulmonaryconditions

Heartdisease

Diabetes

Mentaldisorders

Hypertension

Cancer

Future Productivity losses Productivity losses avoided in the optistimic scenario

Disease Area

US$ bn

24%

18%

11% 11%9%9% 10%

6%4%

8%5%

3% 4% 4% 3%

0%

5%

10%

15%

20%

25%

30%

UK Netherlands Italy France Spain

Early Retirement Limited ability to work Higher absentiseem than peers

% of GDP

31

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EFPIA Brussels Office

Leopold Plaza Building * Rue du Trône 108

B-1050 Brussels * Belgium

Tel: + 32 (0)2 626 25 55

www.efpia.eu * [email protected]

Final Version: 21/09/2015 Pharma industry’s contribution to health and wealth Health & Wealth.

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