SARI 2014 PRESENTATION

11 MARCH 2014

“HAS THE REGULATION OF PHARMACEUTICALS SIGNIFICANTLY INCREASED THE COST WITHOUT

ADDRESSING THE KEY WEAKNESSES IN PROVIDING PATIENTS ACCESS TO MEDICINES”

STAVROS NICOLAOU ASPEN PHARMACARE

OVERVIEW

Practical View – Perfect market is an analytical point of departure, not something that occurs in reality.

Getting the fine balance right

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“OVER EURO 1 BILLION TO PAY”

Part of Anti-Counterfeit Measures – Serialisation

EU Commission $1.35bn to keep supplying

Unique 2D barcode on every pack unless exempt “Unique ID” – Serialisation

Workload & Complexity

Ceased 3 production projects and modified a dozen more

Average set up costs EURO 50m

EURO 300m/packaging line upgrade existing equipment with high speed printers and bar coding capabilities

Euro 200k per line for tamper – evident packaging

120 lines over 10 sites

Maintenance of high speed printers

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WHAT DOES IT TAKE TO HAVE AN ACCESSIBLE, AFFORDABLE, EFFECTIVE, EQUITABLE AND

SUSTAINABLE HEALTHCARE SYSTEM?

SA MARKET EVOLUTION – SNAPSHOT OF THE ENVIRONMENT

Demographic and Epidemiological shifts

Disease Burden

Demand vs. Supply Management

Drug shortages and out of stocks

Regulation

New Procurement Rules

Product and Supply Chain Complexity

Predatory Pricing

Barriers to Entry

Trade Rules

Exchange Rate Considerations

Newer Technologies

Cost and Usage

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PAST DECADE

Patent Cliffs / Blockbuster Draught

Restructuring of Agencies

Regulatory Changes

Pharmerging Markets

Rising API costs in India an China

Shrinking Operating Margin

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Ethical/Branded R12.38 bn

(R12.21 bn)

OTC R7.54 bn

(R7.04 bn)

Generic R6.64 bn

(R5.80 bn)

Other R1.53 bn

(R1.37 bn)

9 Aspen market share 16.2%

PRIVATE PHARMACEUTICAL MARKET South Africa

Market growth rates:

• Total market

• Ethical/Branded

• Generic

• OTC

6.3%

1.4%

14.5%

7.0%

Total Private market value as at June 2013 R28.10bn

(2012: R26.44bn)

Source: IMS DATA JUNE 2013

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REGULATION GLOBALLY HAS INCREASED… AMOUNT OF DATA TO

BE DEVELOPED AND SUBMITTED

Time to market throughout development and Reg process

Fast track processes become overloaded

Cost leads to in market double take GMP vs. ROI

GMP on commodity API API prices

Serialisation

Post-Reg amendments

Alignment of Regulatory requirements to procurement needs

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THESE COST NEED TO BE RECOVERED

SPECIFIC DAY TO DAY EXPERIENCES

Under resourcing / Under funded, yet compliance and requirements

Factory re-alignments

API source amendments

Old meds called up

WHO PQ

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