the specialty and hospital environment -...
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The Specialty and Hospital environment
Sarah Rickwood VP European Thought Leadership
December 2015
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• Key Global trends – Continued rise of biologic and specialty medicines
– The impact of the pipeline
– Budgetary challenge and budgetary headroom
• The European Specialty and hospital environment
– Key segments: Biologics, Oncology
• European specialty and hospital futures
– Cell and gene therapy
• Conclusions
IMS Health Confidential
Agenda
The prescription medicine world is an increasingly specialty focused environment
2
Source: IMS Market Prognosis and LifeCycle, Oct 2014, at ex-manufacturer price levels, not including rebates and discounts. Contains Audited+Unaudited data. Contribution to growth based on LCUS$. Note: developed includes North America, Europe and Japan
42% of the late stage pipeline of the top 20 companies focuses on
specialty products
About 60% growth in developed* markets
will be lead by specialty areas
• Concentration of competition o Majority specialty o Focus on developed markets
• All competing for the same budget o Hospitals / Specialists o Budgets unlikely to grow in Europe
• Intense focus on the same specialists o Oncology o Specialty pool and their time does not
grow
• Limited pool of patients o Determined by biomarkers o Orphan drugs
3
Specialty and biologics drive global growth in Rx value
Source: IMS Health, MIDAS, MAT Q2 2015; (*) IMS definition: Specialty products defined as medicines that treat specific, complex chronic diseases with four or more of the following attributes: Initiated only by a specialist, require special handling and administration; unique distribution; High cost; warrants intensive patient care; might require reimbursement assistance
1,000
900
800
700
600
500
400
300
200
100
0
Sal
es, U
S $
bn
2015
944
78%
22%
2005
545
86%
14%
1,000
900
800
700
600
500
400
300
200
100
0 2015
944
73%
27%
2005
545
84%
16%
Global: specialty (*) sales (billion US$), list price, excludes rebates and discounts
Global: Biologic sales (billion US$), list price, excludes rebates and discounts
Specialty Traditional Non-Biologic
Biologic
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And European Rx value growth is particularly driven by specialty medicines
Source: IMS Market Prognosis, Oct 2014, at ex-manufacturer price levels, not including rebates and discounts. Contains Audited+Unaudited data. Contribution to growth based on LCUS$. $US used for Argentina and Venezuela due to hyperinflation
Share of absolute growth 2013-2018 by region, specialty and traditional
Adaption from global use of medicine, 2018
44% 56%
Japan $11-14Bn growth
Traditional Specialty
Key Takeaway: While all developed markets will be driven by majority specialist growth, Europe is an extreme outlier in percentage terms because austerity forces payers to reserve funds for specialty NCEs (US still leads in absolute terms
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4% 7%
4% 3%
1% 2%
1% 7%
-2% 1%
-1% 8%
2% 9%
12% 7%
12% 15%
9% 4%
10% 24%
1% 3%
There is a long term shift to hospital in many markets
Source: IMS Health market prognosis Sept 2015; Audited segments only, Italy DPC excluded; Russia DLO excluded; Brazil & Mexico hospital = non-retail; US retail includes drug and food store only; US hospital includes hospital and clinic sectors only
63%
61%
88%
51%
65%
44%
48%
79%
89%
80%
83%
56%
34%
38%
42%
32%
45%
44%
17%
16%
10%
41%
7%
8%
10%
7%
Turkey
Russia - 4%
India 1% 10%
Brazil - 4%
UK
Netherlands
Italy
France 3%
Spain
Germany - 0% 12%
Japan 1%
US 3%
4%
Retail share Hospital share change by 2019 Hospital share 2014
Retail Hospital
5 year CAGR (2015-19) 2014 to 2019 value share of retail vs. hospital (Total pharma markets)
+4% hospital over retail
-4% hospital under retail
6
12 16 6 7
13 7 10 14 12 11
5 9
8 5 4
8 8
7 16 14
17 9
15 13
17 9
12 11
12 21
New mechanism Orphan Existing mechanism
New molecular entities launched globally 2005-2014
6.7 7.2 5.6 6.3 8.8
1.1 2.2 2.6 2.8
3.1 0.3
0.2 0.5 1.1 1.4
1.0 1.3
13.4
1.7 1.9 2.0 2.0
2.0
2010 2011 2012 2013 2014
Traditional Oncology HIV Viral Hepatitis Other Specialty Medicines
Global new brand spending growth US$Bn
Source: IMS Institute for Healthcare Informatics, The Role of Generic Medicines in Sustaining Healthcare Systems: A European Perspective, June 2015.
Significant advances in therapy can have profound effect
The surge in recent innovation is drawing heavily on healthcare budgets
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Specialty launch numbers rise, as does specialty share, except Italy/Spain
Source: IMS Health, MIDAS, Year 2014, Rx only. IMS analysis
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
10 15 20 25 30 35 40 45 50 55
NC
Es
Mar
ket S
hare
of S
peci
alty
Rx
Mar
ket
Number of NCEs launched in the two time periods
NETHERLANDS
UK
SPAIN
ITALY
GERMANY
FRANCE
UK
SPAIN
ITALY
GERMANY
FRANCE
NETHERLANDS
Country Innovation profile – Specialty (generally hospital, often biologic/injectable, serious diseases, eg autoimmune, cancer) (NCEs launched vs. Market Share achieved)
The specialty market of NCE across the EU5 is evolving • The number of NCE launches between
2005-2009 versus 2010-2014 has increased in every country (average of NCE launches has passed from 33 to 43)
• NCE launches increased significantly in France, Germany and UK.
• NCE launches take also increased over time in the EU5 with the exception of Italy and Spain, which also suffer from share per NCE deterioration
• Germany is the leading country for specialty NCE launches whereas France leads the market in take with 18.3%. France also leads in terms of share per NCE
NCEs 2005-2009 period NCEs 2010-2014 period
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Specialty generics will be a larger part of future small molecule cost saving opportunities The opportunities for new primary care generics remain, but new specialty small molecule generics will become an increasingly large share of opportunity.
Source: IMS MIDAS MAT Q4 2014; Market seg countries only; small molecules only; LoE exposure given as previous year sales in US$, for 2015-2020, 2014 sales have been used
LoE
exp
osur
e (U
S$
bn)
2017 2016 2014 2013 2015 2018 2020 2019 2012 2011
4.7 4.3 9.4 5.0 6.6
2.0 4.7 4.6
2.6 2.5
9.2 12.9 21.6 16.3
21.8 23.1 24.3
18.5 50.5 37.0
Specialist Traditional
Exposure based on 2014 sales: Due to higher specialty drug growth, future specialty share of exposure may be more dramatic than depicted
Small molecule LoE exposure 2011-2020
35%
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Orphan drug (OD) approvals surge in Europe, making ~1/3 of all NCE’s launched in 2014
Source: European Medicines Agency July 2015
3 2
2
1
3
3
5
1
0
2
4
6
8
10
12
14
H1 2015
4
2014
14
2013
7
2012
9
2011
5
2010
3
2009
6
2008
6
All ODs Oncologic ODs
Number of ODs in Europe with European market authorization (MA) and orphan designation
Vigorous patient advocacy, medical breakthroughs, legislative incentives, venture capital investment and industry collaboration, are dramatically changing the landscape of rare disease research
• Oncology represents the largest category of products, including blockbusters such as Revlimid and many other high earning products such as Tasigna, Sprycel and Nexavar
• ~15% are Alimentary Tract and Metabolism products, which include many of the most expensive ODs such as the enzyme replacement therapies
• Cystic Fibrosis treatments account for 6% of all approved ODs (Cayston, TOBI Podhaler, Bronchitol, Kalydeco)
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• Key Global trends – Continued rise of biologic and specialty medicines
– The impact of the pipeline
– Budgetary challenge and budgetary headroom
• The European Specialty and hospital environment
– Key segments: Biologics, Oncology
• European specialty and hospital futures
– Cell and gene therapy
• Conclusions
IMS Health Confidential
Agenda
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A growing share of biologics in development will be in areas largely new to biologics
Indications in development* (Traditional vs. non traditional biologic area)
Top Indications in non traditional biologic areas
25 20 15 10 5 0 195
Heart Failure
Kidney Disease Parkinson
All others
Dermatitis Peripheral Vasc.Dis.
Ebola
COPD HCL
Osteoarthritis
MD Resp. Syncytial V.
Tuberculosis Osteoporosis
Malaria
Allergy Eye Disease
Alzheimer Asthma
HIV
HCL: Hypercholesterolemia MD: Muscular Dystrophy
Total ~ 22-26% biologic pipeline
Source: IMS Health R&D cycle Jan 2015. The number of indications in the Pipeline is defined as the number of compounds currently at a life cycle stage between Clinical and Registration. Indications based on highest phase for associated molecule.
(Indications with 3 or less compounds in development, non cancer)
22%
29%
35%
14%
Non Traditional Traditional Traditional (cancer) All others
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Biosimilars continue to make steady progress...
Source: Secondary research. List not exhaustive. (*) at ex-manufacturer price levels, not including rebates and discounts.
ROW
Europe
2015 Jan Mar Jun
Market trends
Regulatory
FDA approves first biosimilar
Zarxio
Samsung submits Enbrel Biosimilar
application to EMA
Jul
Market trends
Regulatory
Samsung submits infliximab
biosimilar to EMA (March)
Omnitrope sole subsidised
somatropin from Jan 2015 in NZ
Granix close to 20%
penetration USA
Aug
Finland stands behind
interchangeability of biosimilars
Sep
Enbrel BS approval south
Korea
Novartis launches Zarxio in US at
15-percent discount to Neupogen
Hospira launches first BS mAbs
Inflectra in major European markets
Biosimilar 15% share of Spanish infliximab market
(June only)
Lilly/BI launch Lantus BS in UK (15% list price
discount)
Australia to recommend pharmacy-
level substitution of biosimilars
2015
Celltrion files rituximab with
EMA
Dec
Biosimilar 90% share of Danish
infliximab market (July only)
13 Source: IMS MIDAS monthly Sep 2015. Denmark data from MIDAS Monthly Restricted database. Penetration calculated in treatment days (TD); *Bulgaria, Latvia excluded because only biosimilar manufacturers present in market; **FirstWord physician poll, June 2015
Infliximab biosimilar has shown strong uptake in tender markets, more moderate in others
Infliximab Monthly uptake - European markets
Infliximab September uptake*
Nordic countries top for uptake (and published discounts), EU5 slow growth
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
Up
take
, TD
France Germany Spain UK Italy Belgium Sweden Norway Finland Czech Republic Ireland Austria Romania Poland Slovakia Slovenia Croatia Portugal Denmark
Positive initial data from Nor-switch study for biosimilar infliximab announced at 2015 EULAR. Physicians expect these types of studies to encourage real-world switching, with nearly a third of rheumatologists expecting switch data to drive
'significant' usage of biosimilars in existing TNF-inhibitor patients**
Country September volume penetration of biosimilar
Denmark 96% Poland 87% Norway 80% Finland 39% Croatia 31% Hungary 21% Czech R. 19% Portugal 18% Italy 16% Spain 15% UK 14% Germany 13% Romania 11% Sweden 9% Slovakia 7% France 7% Ireland 4%
14 14
In terms of innovation oncology continues to dominate the late stage pipeline
29
0
50
100
150
# A
ctiv
e P
rogr
ams
indi
catin
g th
erap
y cl
ass*
Res
pira
tory
18
Bloo
d co
agul
atio
n
18
GI P
rodu
cts
19
Dia
bete
s
19
Oph
thal
mol
ogy
19
Antib
acte
rials
22 D
erm
atol
ogic
s 23
Vacc
ines
Oth
er C
NS
30
Pain
40
Onc
olog
ics
137
Small molecules Biologics
Most Active Therapy Areas in the Pipeline (Phase III to Registered)
* Some programs in pipeline are multi-indicational and are assigned to multiple ATC classes. Source: IMS R&D Focus, Nov 2014
15 IMS Health Confidential
Immuno oncology will disrupt budget management
• Emergence of PD-1s and PD-L1s
• Durable treatment responses
• Personalized medicine and genomics
• Defining treatments based on mutations / pathways over tumor types
Immunotherapy/ Targeted Agents
• Synergistic effects of combining targeted therapies and/or chemotherapies
• Exploration of previously thought “failed” or “mediocre” agents
• Blocking and / or stimulating multiple pathways
• Maximum value for $/spent
• Limited access to high cost novel interventions in oncology
• Regional availability
• Delisting of onco drugs from reimbursement list
• Payment by Use allows multiple (net) price points to be set for one product
• Identification of use that is not consistent with the population
• Opens the door to a variety of innovative schemes
• What constitutes good “value” in oncology
• Adapting physician behaviors
• Innovative payment models
• Individual vs. Societal value
• Cost-benefit analyses and drug scorecards
Combination Regimens Rationing Value in
Cancer Care Payment by
Use
Innovation Sustainable access and value
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• Key Global trends – Continued rise of biologic and specialty medicines
– The impact of the pipeline
– Budgetary challenge and budgetary headroom
• The European Specialty and hospital environment
– Key segments: Biologics, Oncology
• European specialty and hospital futures
– Cell and gene therapy
• Conclusions
IMS Health Confidential
Agenda
17
Cell and gene therapy have the potential to revolutionise hospital treatments and outcomes
Cell therapies
Treatments in which intact, living human cells are injected in to a patient with the intention of therapeutic benefit
Gene therapies
Treatments which introduce functional genes in to cells in place of missing or defective ones in order to correct genetic disorders. The most common way this is done by utilising a viral vector
Unique qualities
• Highly specific • Personalised • Potentially curative • Scientifically designed
• Complex • Novel – untested • Immunogenic • Oncogenic
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Major companies are now actively engaged
Source: IMS Health Thought Leadership analysis March 2015; IMS Health Pharma Deals; deal values given are including milestones; * Novartis has opt-in rights for GSK’s current and future oncology R&D pipeline;
Autologous CAR T-cells
$1.1 Bn
2012 2013 2014 2015
Autologous CAR T-cells
Allogeneic CAR T-cells
$265 Mn Autologous
Dendritic cells $495 Mn
Parkinson’s gene therapy
$845 Mn
Autologous TCR therapy
$350 Mn
License for Glybera &
adenovirus vector pipeline
$40 Mn
Ocular gene therapy
2011 2010
Autologous T-cells for
MS $225 Mn
Autologous CAR T-cells
$941 Mn
Hemophilia gene therapy
$280 Mn
Cardiovascular gene therapy $2.3 Bn
Autologous CAR T-cells
$250 Mn
*
Cel
l the
rapy
G
ene
ther
apy
Hearing loss gene therapy
$216 Mn
Allogeneic CAR T-cells
$850 Mn
\
Haemophilia gene
therapy $252 Mn
ADA-SCID gene therapy
Oncolytic virus $1 Bn
Ophthalmology gene therapy
$1.2 Bn
Autologous CAR T-cells
$1.1 Bn
Stem cells, Blood
diseases $600 Mn
Haemophilia gene therapy
$321 Mn
Transition to specialty will see a paradigm shift in companies’ commercial models
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Past Paradigm Future Paradigm
Promotional Precision, broad bandwidth
Geographic Reach Geographic Focus – Selective approach
Promotional Scale, bandwidth
Effective prescriber segmentation – targeting of
prescribers
Competitive advantage driven by
Competitive advantage driven by
That, plus effective patient segmentation – supporting
healthcare systems in identification of patients
We see a transition from scale, reach and prescriber focus, to precision, selective geographies and patient-centricity joining prescriber segmentation
20
• Key Global trends – Continued rise of biologic and specialty medicines
– The impact of the pipeline
– Budgetary challenge and budgetary headroom
• The European Specialty and hospital environment
– Key segments: Biologics, Oncology
• European specialty and hospital futures
– Cell and gene therapy
• Conclusions
IMS Health Confidential
Agenda
Six key challenges for the next five years •Specialty products drive developed market growth, but not pharmerging- specialty competition geographic ally concentrated
•Growth gap between pharmerging and developed narrower now than in a decade
Geography
•Specialty is driving protected value growth and global top 20 are key drivers •Global top 20 will be overwhelmingly specialist focused by 2020 •Biologic products enter traditionally non biologic therapy areas
Portfolio
•European payer environment hardening even more because overall budgets are flat but increasing demands on specialist/hospital budget
•Choices will be made between drugs and increasingly between therapy areas Payer
•Majority of IP now originated from sub-top 20 companies, even if they don’t commercialise
•As new launches become ever more specialist, smaller companies can increasingly launch their own products
Partnership
•After almost a decade of biosimilar experience, penetration in Europe remains highly diverse
•First mAb biosimilar is now rolling out across major Europe; potential to squeeze original biologics in autoimmune
Biosimilars
•Gilead, Actavis, Biogen, Celgene, Shire all companies that are or could be top 20 with a non traditional approach to pharma
•What can be learned from their generally lean structures and rapid decision-making?
New competitors
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