The US Pharmaceutical Market - IMS Health -...

The US Pharmaceutical Market

Looking back and looking aheadlooking ahead

By Doug LongBy Doug LongVP Industry RelationsMarch 2, 2012

2012 Strategic management presentation

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, withoute p ess itten onsent of IMS HEALTHexpress written consent of IMS HEALTH.

•Copyright IMS Health, All rights reserved•2

The total market grew 3.7% in 2011

% Growth of prescription products

10% 2007

2008

Total market

5.3%TH

US$

2008

2009

2010

2011

3.8%3.2%

1.8%

5.3%

2.1%2.6%

3.7%

5%

% G

RO

WT

1.1% 1.1%0.8%

0%Sales TRx

Source: IMS Health, National Sales Perspectives, Dec 2011 IMS Health, National Prescription Audit, Dec 2011


Reasons for Moderation in the Growth of Drug ExpendituresGrowth of Drug Expenditures

• Increased cost sharing for consumers

• Economic downturn

• New agents Fewer novel drugs approved − Fewer novel drugs approved

− Fewer drugs achieving “blockbuster” status

• Safety concerns for various drugs

• Rx to OTC conversions

• Ongoing introduction of first time generic drugs

•4

IMS’s view of 2011 spending reflects moderating expiries increasing brand volume and price growthexpiries, increasing brand volume and price growth

1 8% 1 6%

10% •Expiry impacts were less in 2011 than in 2010; 2011

•2011 Comparison to 2010: +1 4%

•Retail+Mail Segment Contribution to Growth

5.5%5 6% 6 0%

1.8% 1.3%1.5%

1.8% 1.7%1.6%

5.6% 3.4%4%

6%

8%

KET G

RO

WTH

%

0 3%1.5%

2.0%

than in 2010; 2011 Q4 retail expiries Zyprexa and Lipitor more significant impact in 2012

2010: +1.4%

•New Brands 5.6% 6.0%

-0.5%-2.8% -2.2%

-3.0%

2.0%

-2%

0%

2%

RIB

UTIO

N T

O M

ARK

0.6%

0.2%

0.3%

0.5%

1.0%

•Protected brand

contributed more to spending growth in 2011, but remain at historically low levels.

-3.8%-3.5%

-8%

-6%

-4%

CO

NTR 0.4%

-0.1%

-0.5%

0.0%

2011 vs. 2010

•Protected brand volume growth declines moderate, as expected

•Brand pricing growth trends

i d2009 2010 2011(f)

Brand Price Brand Volume

New Brands Expiries

Generics Net Contribution

Brand PriceBrand VolumeNew BrandsExpiries

continued

•Generics dynamics influenced by more common 180’s and delayed pricing competition

•Source: IMS Institute for Healthcare Informatics, 2012; Market Prognosis Oct 2011

co pe o


Third party and Part D grew faster than market; C h d M di id ti i 2011Cash and Medicaid negative in 2011

Retail (excluding Mail) Payer RX Growth Trends

Source: IMS Health, National Prescription Audit, Dec 2011; Note Includes only retail pharmacies


Generics and Specialty outperformed the marketin 2011

Twelve months ending Dec 2011% Growth US$

13.8%15%

6.7%

10%

GR

OW

TH

3.2%4.4%

3.7%3.7%

2.1%2.8%

5%% G

0%MAT Dec 2011

Total Market Brand Branded GenericGeneric Primary Care Driven Atcs Specialist Driven AtcsBiologic Molecules Oncologicsg g

Source: IMS Health, National Sales Perspectives, Dec 2011


Generics account for 54% of the dollar growth in g2011

% Contribution to growth US$

2007 MAT Dec 2011

21%

Brands

Brands79%

46%Generics54%

AC = +$11bnAC = +$10bn

Source: IMS Health, National Sales Perspectives, Branded generics disaggregated, Dec 2011


Generics continue to post strong growth

Jan 2011 to Dec 2011Jan 2011 to Dec 2011% Growth US$ % Growth TRx

15% 10%

11.6%

10%

RO

WT 0.8%

4.5%

0%

5%

RO

WT

3.7%

2.0%

5%% G

R

-9.8%-10%

-5%

% G

R0%

YTD Dec 2011-15%

YTD Dec 2011

Source: IMS Health National Prescription Audit Branded Source: IMS Health National Sales Perspectives Branded

Total market Brands GenericsSource: IMS Health, National Prescription Audit, Branded

generics disaggregated, Dec 2011Source: IMS Health, National Sales Perspectives, Branded

generics disaggregated, Dec 2011


Spend grew 3.3% but largest segments grew slower or declinedor declined

Spending Growth (MAT Sep 2011)

Total market: +3.3%

Brands: +1.3%Branded generics: Generics: Brands: +1.3% generics: +4.3% +15.1%

Traditional Pharma: +1.4% Specialty: +6.3%

Small molecules: +1.2% Biologics: +7.0%

Retail: +3.0% Institutional: +4.0%

$0 $50 $100 $150 $200 $250 $300

Retail: +3.0% Institutional: +4.0%


Generics have the highest Dollar penetration on Oral liquids and the lowest on Injectablesliquids and the lowest on Injectables

Total ($Bil) Generics Generic Share($Bil) %

Oral Solids 181.5 28.7 15.9

Injectables 83.9 7.1 8.4

Derm 8.7 2.2 25.9

Oral Liquids 3.4 1.5 45.1

Inhalants 9 6 1 2 13 0Inhalants 9.6 1.2 13.0

Transdermals 4.4 1.1 25.6

Ophthamics 5.0 .7 15.1

Nasal Sprays 2.3 .7 28.7

All Others 22.0 .7 3.2

•Copyright IMS Health; All rights reserved•11

Nasal sprays and Injectables are the fastest growing generic forms on a dollar basisgeneric forms on a dollar basis

$ Share % chg TRX Share % chg

Oral Solids 66.3% 5.4% 88.9% 4.3%

Injectables 16.3 53.2 0.5 21.3

Derm 5.2 37.7 3.0 4.4

Oral Liquids 3.5 10.8 3.7 4.1

Inhalants 2.9 4.0 1.1 2.1

Transdermals 2 6 7 6 0 4 0 5Transdermals 2.6 7.6 0.4 0.5

Ophthalmics 1.7 20.8 1.2 33.2

Nasal Sprays 1.5 70.6 1.1 17.5

Others 1.6 18.3 0.6 6.4

•Copyright IMS Health; All rights reserved•12

Patient visits down 4.1% through Nov 2011 but recent periods consistent with expected recoveryrecent periods consistent with expected recovery

•Source: IMS Health, National Disease and Therapeutic Index, Nov 2011, 95% confidence interval (+/-3.9%)


Top 10 Therapy Classes- Absolute Growth

DollarsAC

US$mn Total Rx dispensed

ACTRxs mnUS$mn TRxs mn

Antipsychotics,oth 2039.2 Anti-depressants 9.2

Lipid regulators 1355.8 Codeine & comb 7.4

Analogs of human insulin 1241.3 Synth non-narc analg 6.2

Analeptics 1139.4 Seizure disorders 6.1

Neurological disorders 1137.8 Analeptics 4.1

Antiarth,biol resp mod 962.5 Antiarth,plain 3.4

Hepatitis Antivirals 932.5 Influenza 3.1

Dpp-4 Inhib 792.2 Antinauseant 5HT3 antag 2.5

Platelet Inhibitors 750.8 Calcium blockers 2.4

Platinum coordination 574.1 Dpp-4 Inhib 2.4

Source: IMS Health, National Sales Perspectives, Dec 2011, National Prescription Audit, Dec 2011


Top 10 Therapy Classes- Relative Growth

Dollars%

GrowthTotal Rx dispensed

%GrowthGrowth Growth

Hepatitis Antivirals 256 Influenza 78

Vitamin K Antagonists 176 Antinauseant 5HT3 antag 31

Antiarth,gout spec 173 Ophth corticoids 25

Potassium suppl,chloride 63 Dpp-4 Inhib 23

Platinum coordination 58 Synth non-narc analg 15

Neurological disorders 49 Non-narc cough alone 13

Antineo enzyme recept 48 Specific antagonists 13

Miscellaneous,oth 40 Hyperosmolar lax 10

Anti-Diab Hormone Analog 38 Morphine/opium deriv 9

Monoclonal antibodies 34 Analeptics 9



Top 10 Therapy Classes- Absolute declines

DollarsAC

US$mn Total Rx dispensed

ACTRxs mnUS$mn TRxs mn

Antihistamines alone -475.1 Quinolones, systemic -1.2

Glitazones -529.7 Diuretics,loop -1.4

Herpes Antivirals -568.1 Hormones,estrogens -1.4

Anti-depressants -703.2 Beta blockers -1.9

Quinolones, systemic -753.5 Diuretics,comb -2.0

UT benign prostate -801.9 Ace inhibitors -3.7

Erythropoietins -985.9 Glitazones -4.0

Angiotensin II antagonists -1061.8 Osteoclast Inhibitors -6.6

Alzheimer-type dementia -1612.8 Antihistamines alone -9.3

Proton pump inhib -1850.5 Synth narc,analg -14.7



Top 10 Therapy Classes- Relative declines

Dollars%

GrowthTotal Rx dispensed

%GrowthGrowth Growth

Miotics & glaucoma,oth -18 Nitrites & nitrates -6

B-Lactam,increased activ -19 Alpha blockers,alone,com -6

Herpes Antivirals -25 Beta/A-B Bl W/diur -8

Anti-parkinsons -26 Human insulins -9

Ace inhibitors -27 Positive inotropic agent -9

Vitamin D -30 Diuretics,comb -10

Quinolones, systemic -34 Osteoclast Inhibitors -22

Alzheimer-type dementia -36 Glitazones -22

Antihistamines alone -36 Antihistamines alone -33

UT benign prostate -39 Synth narc,analg -69



Top 10 Therapy Classes- Dollar basis

% Market

MAT Dec 2011

US$mn% Market

Share % Growth

US Industry 319,849 100.0 3.7

1 Lipid regulators 18,624 5.8 7.9

2 A ti h ti th 18 120 5 7 12 7

Leading classes

2 Antipsychotics,oth 18,120 5.7 12.7

3 Anti-depressants 10,878 3.4 -6.1

4 Proton pump inhib 9,601 3.0 -16.2

5 Analogs of human insulin 8,762 2.7 16.5

6 Antineo monoclonal antib 8,619 2.7 3.3

7 Antiarth,biol resp mod 7,957 2.5 13.8

8 Analeptics 7,854 2.5 17.0

9 Platelet Inhibitors 7,764 2.4 10.79 Platelet Inhibitors 7,764 2.4 10.7

10 Angiotensin II antagonists 7,394 2.3 -12.6

Top 10 105,573 33.0 4.1



Top 11-20 Therapy Classes- Dollar basis

% Market

MAT Dec 2011

US$mn% Market

Share % Growth

11 Steroid,inhaled bronch 6,061 1.9 3.3

12 GI anti-inflam 5,885 1.8 9.6

13 HIV ti i l bi ti 5 849 1 8 10 8

Leading classes

13 HIV antiviral combination 5,849 1.8 10.8

14 Erythropoietins 5,110 1.6 -16.2

15 Codeine & comb 4,789 1.5 -8.3

16 Leukotriene agents 4,656 1.5 12.0

17 Immune system adjuncts 4,365 1.4 7.6

18 Immunologic interferons 4,157 1.3 4.6

19 Glitazones 4,100 1.3 -11.4

20 Seizure disorders 4,034 1.3 1.80 Se u e d so de s 4,034 3 8

Top 20 154,580 48.3 3.0



Top 10 Therapy Classes- TRX basis

% Market

MAT Dec 2011

TRX mn% Market

Share % Growth

US Industry 4,024 1.0 0.8

1 Anti-depressants 259 6.4 3.7

2 Li id l t 247 6 1 0 4

Leading therapy class

2 Lipid regulators 247 6.1 0.4

3 Codeine & comb 214 5.3 3.6

4 Ace inhibitors 164 4.1 -2.2

5 Beta blockers 127 3.2 -1.5

6 Proton pump inhib 121 3.0 1.9

7 Seizure disorders 119 2.9 5.4

8 Thyroid hormone,synth 107 2.6 1.5

9 Calcium blockers 98 2.4 2.59 Calcium blockers 98 2.4 2.5

10 Benzodiazepines 94 2.3 2.2

Top 10 1,550 38.5 1.7

Source: IMS Health, National Prescription Audit, Dec 2011


Psychotherapeutics is the top class in Medicaid

Medicaid Medicare Third Party Cash

1 Psychotherapeutics Vascular agents Vascular agents Psychotherapeutics

2 Anti-infectivessystemic

Psychotherapeutics Pyschotherapeutics Analgesics

3 Analgesics Antihyperlipidemics Analgesics Vascular agents3 Analgesics Antihyperlipidemics Analgesics Vascular agents

4 Respiratory Therapy Analgesics Anti-infective systemic

Anti-infectivessystemic

5 Vascular agents Neurological disorders Antihyperlipidemics Neurological di ddisorders

6 Neurological Disorders Diabetes Respiratory Therapy Hormones

7 Gastrointestional Gastrointestional Gastrointestional Antihyperlipidemics

8 Hormones Diurectics Diabetes Antiarthritics

9 Antiarthritics Respiratory Therapy Hormones Thyroid therapy

10 Diabetes Anti-infectivessystemic

NeurologicalDisorders

Diurecticssystemic Disorders


Top 11-20 Therapy Classes- TRX basis

% Market

MAT Dec 2011

US$mn% Market

Share % Growth

11 Antiarth,plain 85 2.1 4.1

12 Angiotensin II antagonists 83 2.1 2.0

13 O/C t / t 78 1 9 0 6

Leading therapy class

13 O/C estrogen/progestogen 78 1.9 -0.6

14 Macrolides & related 69 1.7 3.2

15 Biguanides 63 1.6 2.6

16 Beta agonists 63 1.6 1.9

17 Penicillins 62 1.6 1.7

18 Non-barb,oth 60 1.5 1.0

19 Mus relx,non-surg 55 1.4 4.2

20 Antipsychotics,oth 54 1.3 2.50 t psyc ot cs,ot 54 3 5

Top 20 2,223 55.3 1.9



Top 10 Products- Absolute growth

DollarsAC

US$mn Total Rx DispensedAC

TRxsmnUS$mn TRxsmn

Eloxatin® (S.A) 952 simvastatin (a6d) 9.5

enoxaparin sod (sdz) 907 furosemide (rox) 7.3

Incivek® (Vre) 838 amoxicillin (sdz) 6.6

methylphenidate er (wts) 771 hycd/apap (qlt) 6.6

Copaxone® (Tvn) 702 lisinopril (wok) 6.3

Crestor® (Azn) 638 omeprazole (rx) (drl) 6.3

Abilify® (Ots) 631 citalopram hbr (am9) 6 2Abilify® (Ots) 631 citalopram hbr (am9) 6.2

Plavix® (Bsa) 626 sertraline hcl (cm7) 6

Humira® (Abt) 602 amoxicillin (w-w) 5.3

gamunex-c (gfl) 556 lisinopril (qlt) 5.3



Top 10 Products- Relative Growth

Dollars%

Growth Total Rx Dispensed%

GrowthGrowth Growth

Incivek® (Vre) >999 lisinopril (qlt) >999

methylphenidate er (wts) >999 metoprolol succin (wok) 560

Pradaxa® (B.I) >999 lisinopril (wok) 537® ( )

gamunex-c (gfl) >999 amoxicillin (w-w) 512

atorvastatin ca (wts) >999 simvastatin (a6d) 499

Gilenya® (Nvr) >999 furosemide (rox) 399

Xgeva® (Aai) >999 zolpidem tart (qlt) 209

Yervoy® (Bmp) >999 fluticasone prop (hit) 167

docetaxel (ho&) >999 alprazolam (qlt) 160

Colcrys® (Asc) 811 citalopram hbr (am9) 140Colcrys® (Asc) 811 citalopram hbr (am9) 140



Top 10 Products- Dollar basis

Products Company US$mn% Market

Share % Growth

US Industry 319,849 100.0 3.7

1 Lipitor® PFZ 7 664 2 4 5 7

MAT Dec 2011

1 Lipitor® PFZ 7,664 2.4 5.7

2 Plavix® BSA 6,765 2.1 10.2

3 Nexium® AZN 6,151 1.9 -2.7

4 Abilify® OTS 5,187 1.6 13.9

5 Advair Diskus® GSK 4,633 1.5 -1.8,

6 Seroquel® AZN 4,630 1.4 6.4

7 Singulair® MSD 4,588 1.4 12.6

8 Crestor® AZN 4,401 1.4 17.0

9 Cymbalta® LLY 3,663 1.1 16.0

10 Humira® ABT 3,530 1.1 20.5

Top 10 51,211 16.0 8.4



Top 11-20 Products- Dollar basis

Products Company US$mn% Market

Share % Growth

11 Enbrel® AAI 3,506 1.1 6.5

MAT Dec 2011

12 Remicade® CTO 3,472 1.1 5.1

13 Actos® TAK 3,435 1.1 -3.0

14 Neulasta® AAI 3,315 1.0 10.1

15 Rituxan® GTC 3,005 0.9 8.8

16 Zyprexa® LLY 2,963 0.9 0.1

17 Copaxone® TVN 2,955 0.9 31.2

18 Lexapro® FOR 2,923 0.9 3.9

19 Oxycontin PUF 2,877 0.9 -6.8

20 Epogen® AAI 2,770 0.9 -16.720 Epogen® AAI 2,770 0.9 16.7

Top 20 82,433 25.8 6.2



Top 10 Products- TRX basis

Company TRxs mn% Market

Share % Growth

US Industry 4,024 100.0 0.8

1 hycd/apap WTS 59 1 5 1 2

MAT Dec 2011

Leading Products

1 hycd/apap WTS 59 1.5 1.2

2 hycd/apap MKR 46 1.1 -3.9

3 levothyroxine MYN 44 1.1 5.3

4 lisinopril LU. 42 1.0 9.9

5 Lipitor® PFZ 41 1.0 -9.8p

6 simvastatin LU. 32 0.8 6.3

7 Plavix® BSA 28 0.7 -4.6

8 Singulair® MSD 28 0.7 -2.0

9 azithromycin TEV 26 0.7 8.7

10 Crestor® AZN 26 0.6 4.4

Top 10 372 9.3 1.0



Top 11-20 Products- TRX basis

Company TRxs mn% Market

Share % Growth

11 Nexium® AZN 26 0.6 -9.7

MAT Dec 2011

Leading Products

12 levothyroxine LNN 25 0.6 4.3

13 metoprolol tart MYN 25 0.6 -8.4

14 hycd/apap QLT 25 0.6 36.2

15 Synthroid® ABT 24 0.6 -4.4

16 Lexapro® FOR 24 0.6 -9.0

17 Proair Hfa T9V 23 0.6 5.2

18 ibuprofen (rx) AM9 22 0.5 5.0

19 trazodone hcl TEV 20 0.5 7.3

20 amoxicillin TEV 20 0.5 -30.320 amoxicillin TEV 20 0.5 30.3

Top 20 605 15.0 -0.4



Top 10 Growth Companies- Absolute Growth

Dollars AC US$BN TRx AC TRx mn$

Watson Pharma 1.4 Camber Pharma 22.5

Novartis (incl Sandoz) 1.2 Lupin Pharma 22.5

Bristol Myers Squibb d hBristol-Myers Squibb 1.1 Endo Pharma Inc. 22.1

Mylan Labs, Inc. 0.8 Boehringer Ingelheim 17.9

Gilead Sciences 0.8 Zydus Pharma 17.8

Merck & Co 0 8 A l I 16 0Merck & Co 0.8 Amneal Inc 16.0

Novo Nordisk 0.8 Wockhardt America 15.6

Vertex Pharma 0.8 Watson Pharma 15.3

Roche (incl Genentech) 0 7 N th t R 14 0Roche (incl Genentech) 0.7 Northstar Rx 14.0

Shire Us Corp 0.7 Accord Healthcare 11.3



Top 10 Growth Companies – Relative Growth

Dollars%

Growth TRx%

GrowthGrowth Growth

Url Pharma Inc 183 Internatl Labs >999

Camber Pharma 171 Legacy Pharma Pkg >999

Cadista Inc 147 Rhodes Pharma >999Rhodes Pharma >999

Anchen Pharma 144 Ingenus Pharma >999

Sagent Pharma 128 Unichem Pharma Usa 420

Northstar Rx 118 Accord Healthcare 261

Wockhardt America 100 Ascend Labs 195

Glenmark Pharma 79 Carlsbad Tech 179

Corepharma 78 Solco Healthcare 167

bi d hAurobindo Pharma 67 Camber Pharma 144



Top 10 Pharma only contributed 4.1% of the market’s dollar growth in 2011

% ABSOLUTE CHANGE US$

2007 MAT Dec 2011

% ABSOLUTE CHANGE US$

All Others19 5%

Top 104.1%

Top 11-20

20.6%

Top 1059.9%

19.5%Top 11-

2042.7%

All Others53.2%



Top 10 Companies- Dollar Basis

% Market

MAT Dec 2011

US$mn% Market

Share % Growth

US Industry 319,849 100.0 3.7

1 Pfizer (incl Greenstone) 25,121 7.9 -7.7

2 A t 19 897 6 2 2 0

Leading corporations

2 Astrazeneca 19,897 6.2 2.0

3 Merck & Co 19,343 6.0 4.1

4 Novartis (incl Sandoz) 19,242 6.0 6.9

5 Teva 15,062 4.7 -5.3

6 Lilly 14,868 4.6 4.2

7 Roche (incl Genentech) 14,468 4.5 5.1

8 Amgen Corporation 13,075 4.1 3.1

9 GlaxoSmithKline 12,864 4.0 -6.79 GlaxoSmithKline 12,864 4.0 6.7

10 Johnson & Johnson 11,948 3.7 -5.9

Top 10 165,888 51.9 -0.3



Top 11-20 Companies- Dollar Basis

% Market

MAT Dec 2011

US$mn% Market

Share % Growth

11 Sanofi-Aventis 11,765 3.7 -3.9

12 Abbott 11,470 3.6 5.6

13 B i t l M S ibb 10 851 3 4 11 2


13 Bristol-Myers Squibb 10,851 3.4 11.2

14 Boehringer Ingelheim 6,970 2.2 9.5

15 Takeda 5,975 1.9 -0.4

16 Gilead Sciences 5,480 1.7 17.2

17 Mylan Labs, Inc. 5,461 1.7 17.1

18 Novo Nordisk 5,253 1.6 17.3

19 Otsuka America Ph 5,250 1.6 13.6

20 Forest Lab 5,185 1.6 9.50 o est ab 5, 85 6 9 5

Top 20 239,548 74.9 2.0



Top 10 Companies- TRX basis

% Market

MAT Dec 2011

TRxs mn% Market

Share % Growth

US Industry 4,024 100.0 0.8

1 Teva 556 13.8 -13.4

2 M l L b I 366 9 1 3 7


2 Mylan Labs, Inc. 366 9.1 -3.7

3 Novartis (incl Sandoz) 282 7.0 -4.8

4 Watson Pharma 249 6.2 6.5

5 Pfizer (incl Greenstone) 221 5.5 -12.3

6 Endo Pharma Inc. 163 4.0 15.7

7 Lupin Pharma 156 3.9 16.8

8 Amneal Inc 114 2.8 16.3

9 Merck & Co 89 2.2 -12.09 Merck & Co 89 2.2 12.0

10 Boehringer Ingelheim 89 2.2 25.1

Top 10 2,285 56.8 -2.7



Top 11-20 Companies- TRX basis

% Market

MAT Dec 2011

TRxs mn% Market

Share % Growth

11 Astrazeneca 83 2.1 -5.3

12 Covidien 77 1.9 -3.6

13 D R dd I 75 1 9 16 8


13 Dr Reddy Inc 75 1.9 16.8

14 Zydus Pharma 71 1.8 33.5

15 Actavis US 70 1.7 2.3

16 GlaxoSmithKline 66 1.6 -11.6

17 West Ward 54 1.4 18.8

18 Abbott 54 1.3 -6.9

19 Lilly 51 1.3 2.9

20 Ranbaxy Labs Limit 50 1.2 17.00 a ba y abs t 50 0

Top 20 2,935 73.0 -1.2



….but Retail only grew 2.8% on dollars and 0.7% on TRXs

% Growth of prescription products

4.4%5% 2007

2008

Retail and mail order channels

3.2%

2.7%2.8%2.8%

WTH U

2009

2010

MAT Dec 2011

YTD Dec 2011

1.3%

0 8%

2.3%2.2%

1.1%

% G

ROW

0.8% 0.7%0.7%

0%Sales TRx

Source: IMS Health, National Sales Perspectives, Dec 2011 IMS Health, National Prescription Audit, Dec 2011


Retail grew 3.6% and Institutional 3.7% in 2011

% Market

YTD Dec 2011

Channels US$bn% Market

Share % Growth

Retail 227.3 71.1 3.6

Chain/Mass 112.5 35.2 4.1

Mail service 55 1 17 2 6 4Mail service 55.1 17.2 6.4

Independents 38.1 11.9 0.3

Food stores 21.5 6.7 0.9

Institutional 92.5 28.9 3.7

Clinics 38.4 12.0 4.5

Hospitals 32.4 10.1 1.2

Long-term care 15.2 4.8 3.0

Home health care 2.7 0.9 8.2

HMO 2.7 0.8 27.7

Others 1.0 0.3 0.6

Total 319.8 100.0 3.7



Retail and Mail grew 0.6% on scripts in 2011

MAT Dec 2011

Channels TRxs mn% Market

Share % Growth

Retail 3,695 91.8 0.6

Chain/Mass 2,212 55.0 1.8

Independents 740 18.4 -1.1

Mail service 260 6.5 -1.7

Food stores 483 12.0 -1.1

Non retail channels 329 8.2 3.1

LTC 329 8.2 3.1

Total 4,024 100.0 0.8



Generics have reached an all-time high share

100%%Dollars %Total prescriptions dispensed

13.6% 13.9% 14.2% 14.7% 16.9% 18.2%

59.7% 63.5%67.9% 70 6%

70%

80%

90%

100%

AR

E

86.4% 86.1% 85.8% 85.3% 83.1% 81.8%

67.9% 70.6% 74.0% 76.7%

30%

40%

50%

60%

MA

RK

ET

SH

A

40.3% 36.5%32.1% 29.4% 26.0% 23.3%

0%

10%

20%

30%

%

2006 2007 2008 2009 2010 MAT Dec 2011

2006 2007 2008 2009 2010 MAT Dec 2011

Brands Generics

Source: IMS Health, National Sales Perspectives, Dec 2011, National Prescription Audit, Dec 2011, Branded generics disaggregated


$93B exposed to generic competition by 2016, 80% from retail

•Value of products at risk 2006-2016, MAT Sep 2011 (US$B)

~80% from retail

40

45

50

Non-retail Retail

35 6

•2012-2016 LOE exposure:

•$93B

5.4

3 325

30

35

INIG

US$BN

22 1

35.6

24.6

18 6

30.2

21.22.1

2.33.6

4.3

3.53.3

3.8

1 910

15

20

SPEN

DI

16.0

22.1

8.8

13.7

8.9

19.416.6

14.7

9.7

11.6 13.6

6.4

15.812.4

18.6

6.210.9

7.8

2.4 2.6 1.9

0

5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016S IMS H lth MIDAS M k t S t ti S 2011 F 2006 2011 di i i t i h F

8 9

•Source: IMS Health, MIDAS, Market Segmentation, Sep 2011; For 2006-2011 spending in year prior to expiry shown; For 2012-16 MAT Sep 2011 values are shown and are not projected to reflect expected future sales


Long term LOE exposure

•Value of products at risk 2004-2020

430

35 Biologics protection expiries

Small molecule protection expiries

1

2

3

14

11

919

2525

1920

25

NT

US$BN

12 12

11

1

3

1 8

62

108

19

10

15

19

10

1614 13

10

15

CO

NSTA

N

8

4 52 1

8

0

5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

•Source: IMS Health, MIDAS, Market Segmentation, Jun 2010


Expiries in 2010 were largely exclusive; potential exclusivities to trend down through 2015exclusivities to trend down through 2015

•US Protection Expiry Exposure And Market Exclusivity Potential 2010-2015

•Source: IMS Institute for Healthcare Informatics, Aug 2011. Sales from prior years included.


Prescriptions to become more generic through 2015 with generic share reaching 87%with generic share reaching 87%

•2015 Market Share, TRX•TRX Volume BN (Retail, Mail & Long Term Care)

•Source: IMS Institute for Healthcare Informatics, 2011


2011 expiries continue pattern of rapid brand erosion

•Total •Total •Total •Total•ATORVASTATIN DISPENSED PRESCRIPTION SHARE (TRx)•Brand Prescription Share of Molecule Post-Expiry (Top Expiries 2010/2011)

•WEEKS SINCE PATENT EXPIRY•Source: IMS National Prescription Audit Weekly, January 6, 2012

WEEKS SINCE PATENT EXPIRY


FDA Approval Highlights- 2011

Highlights

35 new drugs

d h h l h l d d2nd highest total over the last decade

2 new Hepatitis C drugs

A new drug for late stage prostate cancerA new drug for late stage prostate cancer

1st new drug for Hodgkin’s lymphoma in 30 years

1st new drug for Lupus in 50 years

7 of the new drugs provide major advances in cancer treatment

Almost 50% were significant advances over existing treatments for heart attack, stroke, and kidney transplant rejection, , y p j

10 were indicated for orphan diseases, which frequently lack any therapy

2 d ( f l d f l )2 drugs (1 for melanoma and 1 for lung cancer) represent breakthroughs in personalized medicine

•46

Recent and future novel therapies do address unmet patient needspatient needs

•Selected Product Launches 2009-2013

Disease area Launched Upcoming

Arrhythmia Brinavess™ (vernakalant)Multaq® (dronedarone)

Autoimmune Simponi® (golimumab)Stelara™ (ustekinumab)

tofacitinib (JAK inhibitor)

Diabetes Nesina® (alogliptin DPPIV) canagliflozin (SGLT2)Diabetes Nesina® (alogliptin, DPPIV)Onglyza™ (saxagliptin, DPPIV)Victoza® (liraglutide, GLP-1) Bydureon™ (exenatide, GLP-1)

canagliflozin (SGLT2)dapagliflozin (SGLT2)lixisenatide (GLP-1)Tradjenta™ (linagliptin, DPPIV)

Hepatitis C Victrelis™ (boceprevir, NS3-4A PI)Incivek® (telaprevir, NS3-4A PI)

Lupus Benlysta® (belimumab)

Melanoma Yervoy™ (ipilimumab) vemurafenib

Multiple sclerosis Ampyra® (fampiridine, oral)Gilenya® (fingolimod, oral)

laquinimod (oral)ocrelizumabteriflunomide (oral)

Osteoporosis Prolia® (denosumab)Osteoporosis Prolia (denosumab)

Thrombosis/Acute coronary syndrome

Brilique™ (ticagrelor, P2T), Effient® (prasugrel, Xa)Pradaxa® (dabigatran etexilate, Xa)

Eliquis® (apixaban, Xa)

Prostate cancer Firmagon® (degarelix)Jevtana® (cabazitaxel)Provenge® (sipuleucel-T)Z ti ™ ( bi t t t )

Source: IMS Institute for Healthcare Informatics, Apr 2011Zytiga™ (abiraterone acetate)


Commercial Third Party and Medicare Part D gained share in 2011share in 2011

•Retail (excluding Mail) Dispensed Prescriptions by Payment Type

14.6% 18.4% 20 3% 20 7% 21 8% 22 2%

Cash Medicaid Commerical Third Party Medicare Part D

18.4% 20.3% 20.7% 21.8% 22.2%

66.4% 63.9% 64.4% 64.1% 62.9% 63.3% •+0.4%

11.5% 10.9% 8.3% 7.7% 6.9% 6.4%

7.5% 6.8% 7.0% 7.5% 8.4% 8.1%

2006 2007 2008 2009 2010 2011

•Source: IMS Health, National Prescription Audit, Dec 2011 ; Note Includes only retail pharmacies


We believe biosimilars will succeed because payers will increasingly see biologics as their main cost driverincreasingly see biologics as their main cost driverSavings from small molecule generics to decline after 2015

•What savings from i

•+62 •200

•+53 •253

generics?

•Only a few core small molecules to potentially

•138

yield savings in the future(Diovan, Lipitor, Seretide, Spiriva,

Seroquel, ...)

•+7.7%2010-15 CAGR

•+4.8%2015-20 CAGR

•Continuous price reduction of existing generics

•Total pharma •+4.5 - 5.0%

•Total branded •+0.5 - 1.1%

•2010-15 CAGR•Conservative estimates –

depending on the successful outcomes of PharmaCos pipeline 2015-20 CAGR could ever exceed

the 2010-15 CAGR figures

•Savings from small molecules to decline

•Source: IMS MIDAS, MAT 12/2010, IMS Institute for Healthcare Informatics

branded the 2010 15 CAGR figuresafter 2015


US forecast to 2015 up slightly; 2011 slightly ahead of prior forecast, HC reform impact up p , p pslightly

•Sales and growth forecast •Key drivers of changes to 2010/11

7%

8%

9%

10%

300

350

400

S$

•Reduced role of brands in therapy areas where high quality generics are available

•Impact of 2010 expiries deeper than 1 4%

4%

5%

6%

7%

150

200

250

WTH

CO

NST U

S

ALE

S U

S$BN

• Impact of 2010 expiries deeper than expected on brands but generic price discounts were not fully realized

•Key drivers of changes 2012-14

•1-4%

•0-3%

1%

2%

3%

50

100

150

GRO

WS •HC reform incremental demand in 2014 1.9% impact up from 1.5% in prior edition

•Timing of patent expiries shifts; peak 0%0

2005

2006

2007

2008

2009

2010

2011 (

f)

2012 (

f)

2013 (

f)

2014 (

f)

2015 (

f)

Sales Mar 2011 edition Draft Sep 2011

impact years now 2012 to 13

•New product contribution improving, but market overall continues to be hampered by the cumulative effects of l l l f i i i

Sales Mar 2011 edition Draft Sep 2011

•Source: IMS Health Market Prognosis Mar 2011 and draft Sep 2011lower levels of innovation entering 2006-10


What’s in for Pharmaceuticals?

• Slower market growth

• Generics & Patent Cliff

• Specialty is growing but at a slower pace

• RX to OTC

• Private label OTC

• Chain & Mass, Mail service, Clinics, & LTC

• Medicaid & Medicare Part D• Medicaid & Medicare Part D

• Cough, Cold and Flu

• Price Increases

• REMS

• Drug Shortages

• Specialty Innovation

• S&D•Copyright IMS Health, All rights reserved•51

What’s out and what’s ahead for Pharmaceuticals???Pharmaceuticals???

What’s Out? What’s Ahead?

• Brand growth

• Primary Care Innovation

• Government− Medicaid

• Primary Care Innovation

• R&D

Offi i it

− Medicare Part D

− Health Care reform

− Generic User fees• Office visits

• Elective surgery

− Generic approval backlogs

− More FDA inspections

− AMP

• Adherence − Biosimilar Pathway

− REMS

− Patent SettlementsPatent Settlements

− DEA enforcement•Copyright IMS Health, All rights reserved•52

Branded pharma challenges


Generic pharma challenges

Source: Morgan Stanley Research


Impacts on PBM profitability

Fewer blockbuster generic and 180 day exclusivities post 2012

AMP/AAC/RSP transparencyTransparent and pass-through models

day exclusivities post 2012

Impacts on PBM

profitability

Potential shift of covered lives from commercial employers to exchanges and Medicare Part D

Lower healthcare utilization

Rebates as an earnings stream90-day at retail gaining share

Firm generic pricing environment


Longer-term upsides to pharma growth are possiblepossible

G i h f •Growing share of healthcare budget for

pharmacotherapy

•Expanded patient access to healthcare

•Accelerated uptake of healthcare information

technology

•Greater clinical evidence of drug efficacy

•Increased diagnosis of asymptomatic conditions

•Emergence of new therapeutic platforms

•Improved compliance and persistency rates

p p

•Aging population and economic development

•56

and persistency rates economic development


Dumbest Headlines Ever

Headlines

Parents keep kids home to protest school closure

Starvation can lead to health hazards

Miracle cure kills fifth patientMiracle cure kills fifth patient

Police arrest everyone on February 22nd

The bra celebrates a pair of historical milestones this year


Dumbest Headlines Ever

Headlines

Homicide victims rarely talk to police

Man with 8 DUIs blames drinking problem

Hospital resort to hiring doctorsHospital resort to hiring doctors

New sick policy requires 2-day notice

Rally against apathy draws small crowd


The US Pharmaceutical Market

Looking back and looking aheadlooking ahead

By Doug LongBy Doug LongVP Industry RelationsMarch 2, 2012

Teva is the top RX across the board

Medicaid Medicare Third Party Cash

1 Teva Teva Teva Teva

2 Mylan Mylan Mylan Watson

3 Novartis Novartis Novartis Mylan3 y

4 Watson Watson Watson Novartis

5 Endo Pfizer Pfizer Endo

Pfi L i E d Pfi6 Pfizer Lupin Endo Pfizer

7 Amneal Endo Lupin Amneal

8 AZ BI Amneal Actavis

9 Lupin Amneal BI Lupin

10 GSK AZ AZ Covidien


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