Generic market trends in Europe

Transcription

1 Generic market trends in Europe Oslo, May 6, 2010 Per Troein, Vice President Strategic Partners, IMS Health EMEA June 2009

2 Agenda Drug cost is becoming a key issue during the recession Resent trends in how to manage generic cost Outlook 2

3 In 2009 the global pharma market showed more positive growth rates than expected Global market sales & Key regions growth forecast vs actuals 2009 Growth* Key Markets % UK 5.3% Value sales (US $ Bn) % 15% 10% 5% 0% Growth (US Const. $) France 0.6% Italy 4.3% Spain 6.4% Netherlands -3.3% Switzerland 3.2% Denmark 4.7% Norway 4.7% Sweden 2.2% 0-5% Romania 18.5% Global sales US growth Japan growth (f) 2009 Actuals Global market growth Top 5 Europe growth Pharmerging mkts growth Poland 10.2% Ireland 4.1% Global market 6.7% Source: IMS Health MIDAS December 2009, Market Prognosis June 2009.

4 Price has significant impact on the growth numbers both positive and negative % CONTRIBUTION TO GROWTH 20% 15% 10% 5% 0% -5% -10% Spain UK Italy Volume and mix New products Price Growth Germany France Denmark Ireland Switzerland Belgium Sweden Finland Norway Portugal Netherlands Russia Turkey Poland US Source: IMS Health, MIDAS, PADDs elements of growth MAT Dec

5 Specialist care growth decreasing in Norway but primary care rising above European average Original brands: Primary vs. Specialist care Europe* Norway 100% 100% 90% 14% 90% 14% 80% 12% 80% 12% Share of European value sales 70% 60% 50% 40% 30% 20% 10% 8% 6% 4% 2% Growth of sector Share of European value sales 70% 60% 50% 40% 30% 20% 10% 8% 6% 4% 2% Growth of sector 10% 0% 10% 0% 0% % 0% % Primary care share Specialist care share Primary care growth Specialist care growth Source: IMS Health MIDAS MAT December 2009 *European Market Segmentation countries only 5

6 The main event 2009 was certainly what happened with the GDP growth Developed markets Real GDP Growth Pharmerging markets Real GDP Growth 4% 25% 20% 2% 15% 0% 10% % GROWTH -2% -4% -6% 1Q08 3Q08 1Q09 3Q09 Developed 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 US 3Q13 5% 0% -5% -10% -15% 1Q08 3Q08 1Q09 Pharmerging Turkey Mexico 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 China Russia 1Q13 3Q13 Source: Economist Intelligence Unit (EIU); group growth based on GDP in constant US$ (Q309 exchange rate) 6

7 The global economic crisis has started to impact drug spend Small Scale of recession Structural issues in healthcare funding get focus but impact is 2011 and beyond Immediate impact on pharma growth is smaller than expected and forecasts are revised up YTD Sep 08: 4.2% YTD Sep 09: 4.2% Short term deficit spending and budget pressure 2011 and beyond greater pressure on cost containment Commitment to healthcare continues to drive volume High out of pocket costs have less impact due to lower average prices YTD Sep 08: 19.2% YTD Sep 09: 20.1% Substantial impact on consumer behaviour as disposable income declines Large US YTD Sep 08: 1.9%; YTD Sep 09: 4.9% Ex US: YTD Sep 08: 6.1% YTD Sep 09: 7.7% Low out of pocket Share of costs YTD Sep 08: 16.2% YTD Sep 09: 10.2% High out of pocket Source: IMS Market Prognosis Oct 2009; Scale of recession: low out of pocket countries = change in Deficit % of GDP 2007 to 2009; high out of pocket countries = change in % GDP growth

8 Pharma spend not always reflected in life expectancy Link between drug use and life expectancy in an ageing world ( ) 85 Life expectancy Romania Poland Bulgaria Turkey Netherlands Czech Norway Slovakia Hungary Sweden Switzerland Italy Portugal France Austria Germany Belgium Canada UK Finland Greece Ireland Denmark Spain Japan US Russia What can be done to improve drug expenditure efficiency? Drug use ( ) per capita Source: Drug use per capita: IMS Health Market Prognosis, Life expectancy: United Nations (average for period) 8

9 The statin market 2009 illustrates savings options for payers Original Brands Protected NLP Generics Total Share / Dose Share / Dose Share / Dose Total POL 0% % % DNK 14% % % FIN 9% % % SWE 15% % % DEU 7% % % NOR 3% % % CZE 3% % % GBR 29% % % AUT 18% % % HUN 11% % % NLD 39% % % PRT 24% % % FRA 44% % % ESP 5% % % ITA 51% % % BEL 38% % % CHE 46% % % GRC 44% % % IRL 76% % % Source: IMS Health Monthly MIDAS, RQ:Nov-09. Market share in volume (SU) and price in Euros/tab at MNF level.

10 The statin market 2009 illustrates savings options for payers Original Brands Protected NLP Generics Total Share / Dose Share / Dose Share / Dose Total POL 0% % % DNK 14% % % FIN 9% % % SWE 15% % % DEU 7% % % NOR 3% % % CZE 3% % % GBR 29% % % AUT 18% % % HUN 11% % % NLD 39% % % PRT 24% % % FRA 44% % % ESP 5% % % ITA 51% % % BEL 38% % % CHE 46% % % GRC 44% % % IRL 76% % % Source: IMS Health Monthly MIDAS, RQ:Nov-09. Market share in volume (SU) and price in Euros/tab at MNF level.

11 Norway use a product mix with fewer generics then some other countries VOLUME MARKET SHARE % (SU) Generics share of total market 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% USA GERMANY UK DENMARK TURKEY SWEDEN FRANCE SPAIN ITALY NORWAY JAPAN Source: IMS Health, MIDAS, Market Segmentation, MAT December 2009, Rx only 11

12 Agenda Drug cost is becoming a key issue during the recession Resent trends in how to manage generic cost Outlook 12

13 Generic market characteristics highlights differences in generic pricing, prescribing, and dispensing policies National level Pharmacist level Physician level Patient level Generic Market Characteristics AT DK FR DE IT NL CH UK National generic substitution targets * Use of generic price reference categories Discounts / claw-back given to sick funds/insurers Generic substitution required at pharmacist level Generic substitution encouraged at pharmacist level Pharmacist incentives to use cheap generics Voluntary discounts given at pharmacy level Physicians encouraged to prescribe by INN * Physicians encouraged to prescribe generically * Physician s are price sensitive (prescribing budgets) Generic prescribing targets for physicians Patients are cost sensitive Patients can influence product choice *Dependent on the region and/or type of product 13

14 Based on these characteristics, markets can be defined according to the key influencers and decision makers for generics Market categorisation according to key influencers and decision makers for generics Payer centric Payers are the key decision makers and leverage their powers over other stakeholders to gain alignment Prescriber & Patient centric The prescriber has the right to choose what is right for the patient. In addition, the patient has the power to influence choices as well. Pharmacist centric The generic usage is driven by pharmacists, where decisions are made based on their ability to earn more money 14

15 Market categorisation according to key influencers and decision makers for generics Payer centric Prescriber & Patient centric Pharmacist centric 15

16 The implication of different levels of centricity is a very different operating model for generic manufacturers Relative costs associated with manufacturing generics for each market type Payer centric Payer Pharmacist hybrid Pharmacist centric Pharmacist-Prescriber/ patient hybrid Prescriber & Patient centric Complete Hybrid 16 Relative Cost: Low High

17 Prescriber & patient centric markets provides them with the choice Market categorisation according to key influencers and decision makers for generics Payer centric Prescriber & Patient centric Pharmacist centric 17

18 Greece, as a country, is in a crises drug spend has to be a part of the solution One of the highest drug cost/capita in Europe Hospital drug bills 3 years behind Temporary cost cutting rules implemented New drug bill passed; Prices for originals will be set as the average of the 3 lowest in EU cap on reduction Price for generics will be 72% of the price for the original If sales of generics increase > 5%, their price shall drop by 2,5% Reference price is an average of both generics & originals All products will be discounted with 3% to sickfunds No mandatory substitution or prescribing The plan could deliver a 20% cost reduction European perspective; Low prices for protected drugs but high usage Medium prices for NLP original products but still high usage Among the higher prices for Generics 18

19 Spain is also implementing new policies New agreement was reached quickly in March 2010 to cut the healthcare deficit; principal focus was generics and prices; Price cuts for generics - average 25% expected Reference prices will now be based upon the cheapest generic, not the average of the cheapest 3. Off-patent brands price reduction to get down to reference price level increased from 30% to 50% Reference price system can be updated on ad-hoc basis to include new molecules that have just lost patent protection (probably within 1-3 months of loss of patent protection). Previously the system was only updated once a year.

20 Prescriber centric markets still mandates cuts at patent expiration Switzerland New mechanism put in place reducing the original price after expiration Generics are priced 40% below the manufacture selling price of the original France Italy Generics must be priced 55% below the manufacturer selling price of the branded original before its price is cut at expiry Leading generics are reimbursed at an average reference price for similar products Price of the original product is also cut by a minimum of 12% when generics enter the market The first generic entrant must be priced at a minimum of 20% below the original, in practice they are priced 45% below Subsequent generics are reimbursed at a reference price of all therapeutically similar drugs

21 Payer centric markets pass the low cost of generics on to the payer Payer centric Prescriber & Patient centric Pharmacist centric 21

22 Market exclusivity is guaranteed for suppliers of generics products who are prepared to discount Germany Non public discount arrangements set up with sick funds Pharmacist obliged to dispense discount version irrespective of what the physician writes on the prescription Denmark Bi weekly price changes Lowest wins the market for the period Sweden Competitive bid process means that the lowest price product deemed substitutable wins 100% of the market for 1 month (rising to four months later 2010) 22

23 Sweden s generic strategy has delivered reduced generic prices but does it maximize the available savings If current TLV preferred rules are applied then we would see drop of 13% in April 2010 Index to Price index 1 of generic products sold in the exchangeable Swedish market with generic competition MAT MARCH Generic Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May Volume weighted price index 2 Based on current month volume and average preferred supplier price per exchange/cluster group next and second next coming month. Note: For those packs where cluster group is missing or exchange/cluster group do not have a preferred supplier, the future price is multiplied with current month volume of that pack. Source: IMS Health Sweden Sell-out data MAT MARCH

24 In Sweden, not all molecules are highly competitive, the mechanism that erodes price is lacking % of market share Accumulated market share according to sales ranking of molecules and number of competing companies within each molecule Source: IMS Sell-Out database MAT May-09 % of molecules ranked by sales Accumulated Market share # of companies # of competing companies

25 The Dutch generic market will no longer be as one-sided payer centric The market used to be Pharmacist centric generics where very profitable for pharmacist (and wholesalers) In July 2008, the first preference contract was established by sickfunds directing the generic sales to one preferred manufacturer at very low prices. Work increased for pharmacist and wholesaler but payment decreased drastically Smaller modifications has been done ongoing From January 2010, one insurance company has signed a contract with 80% of pharmacies on generics paid by capitation the IDEA model 1 month supply of any of 400 generic products cost 2.40 plus dispensing fee The control is again back to the pharmacist/wholesaler/ manufacture 25

26 Agenda Drug cost is becoming a key issue during the recession Resent trends in how to manage generic cost Outlook 26

27 Over the next 5 years 40% of current protected sales will loose patent protection Europe: Estimated value of patent expiry [2009 Protected sales: $Bn] 10 $9,241M $8,886M SALES ($ Billion) $5,484M Others Keppra Nexium Lovenox Others Diovan Lipitor Arimidex Taxotere Lovenox Symbicort Others Seretide Aricept Seroquel Zyprexa Lipitor $6,817M Others Viagra Singulair Plavix $5,398M Others Seretide Savings depends on existing usage, mix original/generics, and generic and original price Source: IMS Health MIDAS Market Segmentation June 2009 Products shown have >$500M sales in 2009 *Assumptions based on no price erosion following generic entry to the market. Expiry dates: MAT June 27

28 We will continue to see market changes to achieve more savings Payer centric Prescriber & Patient centric Pharmacist centric 28

29 The market for molecules without patent protection going forward The % of all drugs used being generics will increase Some countries will have low prices also for originals after expiration making share of generics less relevant Price levels on generics are likely to become a smaller fraction of the original price before expiration 29

30 Generic market trends in Europe Oslo, May 6, 2010 Per Troein, Vice President Strategic Partners, IMS Health EMEA June 2009