Dossier Statististics 2006

The Pharmaceutical Industry in EuropeKey data: 

The Pharmaceutical Industry in Europe Key data Values in € million unless otherwise stated (*) Data relate to EU-25, Norway and Switzerland since 2004 Source: EFPIA member associations (official figures) – (e): EFPIA estimate Eurostat (EU-25 trade data 1995-2005)

Pharmaceutical production in Europe1980-2005 (€ million): 

Pharmaceutical production in Europe 1980-2005 (€ million) Source: EFPIA member associations (official figures) – Data 2005: EFPIA estimate

Pharmaceutical employment in Europe 1985-2005: 

Pharmaceutical employment in Europe 1985-2005 Note: as of 2004 data include Malta, Poland and Slovenia Source: EFPIA member associations (official figures) – Data 2005: EFPIA estimate

Employment in pharmaceutical R&D in Europe (1985-2005): 

Employment in pharmaceutical R&D in Europe (1985-2005) Cyprus, Czech Rep., Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal Slovakia: data not available Source: EFPIA member associations – Data 2005: EFPIA estimate

Slide5: 

Pharmaceutical R&D expenditure in Europe € million Source: EFPIA Member Associations (official figures) – Data 2005: EFPIA estimate

European total pharmaceutical exports, imports & trade balance 1985-2005 (€ million): 

European total pharmaceutical exports, imports & trade balance 1985-2005 (€ million) Note: All data based on SITC 54; Data 2005: EFPIA estimate Source: Eurostat (1995-2005); Norway, Switzerland: EFPIA Member Associations (official figures)

EU Trade balance – High technology sectors (€ million) – 2004: 

EU Trade balance – High technology sectors (€ million) – 2004 Source: Eurostat

Slide8: 

Shares of top 5 sectors in total R&D investment by top 942 companies by main world region in 2004 Note: Data relate to the top 942 companies with registered offices in the EU (242 companies), Japan (198 companies), the USA (398 companies) and the Rest of the World (104 companies), ranked by size of their R&D investment level (over € 32.7 million) Source: The 2005 EU industrial R&D investment scoreboard, European Commission

Slide9: 

Sector R&D investment as % of all sectors EU top 700 companies - 2004 Note: Sector of economic activities according to the Financial Times Stock Exchange (FTSE) index classification Data relate to the top 700 companies with registered offices in the EU ranked by the size of their R&D investments (over € 4.1 million) Source: The 2005 EU industrial R&D investment scoreboard, European Commission, DG Research

Slide10: 

R&D/Sales ratio for industrial sectors (%) EU top 700 companies - 2004 Note: Sector of economic activities according to the Financial Times Stock Exchange (FTSE) index classification Data relate to the top 700 companies with registered offices in the EU ranked by the size of their R&D investments (over € 4.1 million) Source: The 2005 EU industrial R&D investment scoreboard, European Commission, DG Research

Slide11: 

Source: IMS MIDAS, MAT February 2006 (totals do not add due to rounding) Breakdown of the world pharmaceutical market – 2005 sales

Pharmacy Market Growth Rate2005 (%): 

Pharmacy Market Growth Rate 2005 (%) Source: IMS Retail Drug Monitor, 12 months to December 2005 Note: US: including sales through mail order channels; Japan: including hospital sales; Average growth rate for Europe (top five markets): + 4%

Breakdown of the world pharmaceutical market 1990 - 2005: 

Breakdown of the world pharmaceutical market 1990 - 2005 Total pharmaceutical market value 1990: 135,900 million Euros 173,000 million Dollars Total pharmaceutical market value 2005: 454,867 million Euros 565,900 million Dollars Source: IMS MIDAS, MAT February 2006

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Total pharmacy market (at ex-factory prices) Average annual growth rate 1994-2004 Source: EFPIA member associations, PhRMA, JPMA

Total pharmacy market (at ex-factory prices)Average annual growth rate 1994-2004: 

Total pharmacy market (at ex-factory prices) Average annual growth rate 1994-2004 Source: EFPIA member associations, PhRMA, JPMA

Total pharmacy market (at ex-factory prices)Average real annual growth rate 1994-2004: 

Total pharmacy market (at ex-factory prices) Average real annual growth rate 1994-2004 Source: EFPIA member associations, PhRMA, JPMA

Global corporate performance (worldwide): 

Global corporate performance (worldwide) Source: IMS Health MIDAS December 2005

Leading products (worldwide): 

Leading products (worldwide) Source: IMS MIDAS December 2005

Slide19: 

Pharmaceutical R&D expenditure in Europe, USA and Japan, 1990-2005 € million, current exchange rates Data 2005: estimate EFPIA & PhRMA Source: EFPIA member associations, PhRMA, JPMA

Slide20: 

Source: EFPIA member associations, PhRMA, JPMA Pharmaceutical R&D Expenditure Yearly growth rate (Europe vs USA)

Slide21: 

Note: R&D expenditure in Europe, USA & Japan used as proxy for worldwide expenditure Source: EFPIA member associations, PhRMA, JPMA Breakdown of Worldwide Phramaceutical R&D Expenditure 1990-2004

Slide22: 

Note: R&D expenditure in Europe, USA & Japan used as proxy for worldwide expenditure Source: EFPIA member associations, PhRMA, JPMA Breakdown of Worldwide Phramaceutical R&D Expenditure 2004

Slide23: 

Pharmaceutical R&D expenditure in Europe, USA and Japan, 1990-2005 Million of national currency units* * National currency units: Europe: € million; USA: $ million; Japan: ¥ million x 100 Data 2005: estimate EFPIA & PhRMA Source: EFPIA member associations, PhRMA, JPMA

Slide24: 

New Molecular Entities 1986-2005 Source: SCRIP Publications - EFPIA calculations (according to nationality of mother company)

BiopharmaceuticalsEurope versus USA (2005): 

Biopharmaceuticals Europe versus USA (2005) * 2004 data Source: Ernst & Young, ‘Beyond Borders, The Global Biotechnology Report, 2006’ (data relate to publicly traded companies)

Share of Global Biotechnology Revenues Publicly traded companies (2005) : 

Share of Global Biotechnology Revenues Publicly traded companies (2005) Note: Global revenues of € 50,765 million (USA: 38,413; Europe: 7,862; Canada: 2,077; Asia/Pacific: 2,413) Source: Ernst & Young, ‘Beyond Borders, The Global Biotechnology Report, 2006’

Share of Global Biotechnology R&D Expenses Publicly traded companies (2005) : 

Share of Global Biotechnology R&D Expenses Publicly traded companies (2005) Note: Global R&D expenses of € 16,410 million (USA: 12,844; Europe: 2,630; Canada: 685; Asia/Pacific: 251) Source: Ernst & Young, ‘Beyond Borders, The Global Biotechnology Report, 2006’

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Source: CMR International Number of new molecular entities (NMEs) and biotechnology products first launched worldwide 1990-2004

ROUTE OF A NEW SUBSTANCE FROM DISCOVERY TO PATIENT’S ACCESS: 

ROUTE OF A NEW SUBSTANCE FROM DISCOVERY TO PATIENT’S ACCESS Patent application 1 medicinal product 0 5 years 10 years 15 years 20 years Patent expiry Acute toxicity Pharmacology Chronic toxicity Phase I clinical trials Phase II Phase III Registration and transparency Price Reimbursement Pharmacovigilance SPC (supplementary protection certificate) max. + 5 years 10 years of research 2 to 3 years of administrative procedures Source : « Recherche & Vie », LIM (AGIM) 1

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Estimated full cost of bringing a new chemical or biological entity to market (million of 2000 €) Note: Data have been expressed in € million, 2000 euros Source: J.A. Di Masi, R.W. Hansen, and H.G. Grabowski, ‘The Price of Innovation: New Estimates of Drug Development Costs’, Journal of Health Economics 22(2003): 151-185

R&D: Scientific Risk: 

R&D: Scientific Risk Source: Based on PhRMA analysis, updated for data per Tufts Center for the Study of Drug Development (CSDD) database. Introduction/Registration Development Basic Research Post-Marketing Surveillance Clinical Tests (Humans) Preclinical Tests (Animals) 1 2 2-5 5-10 10-20 3,000-10,000 Phases IV III II I

Slide32: 

Allocation of R&D investments by function Source: PhRMA, Annual Membership Survey 2006 (percentages calculated from 2004 data)

Slide33: 

R&D as a percentage of sales 1985-2005 Source: EFPIA Member Associations (official figures) – (e): EFPIA estimate

R&D Expenditure as a percentage of GDP (2004): 

R&D Expenditure as a percentage of GDP (2004) Note: Switzerland: 2001 data; China, Italy, Japan, Portugal, USA: 2003 data Source: EUROSTAT, Statistics in Focus, Science and Technology, 6/2006, ‘R&D expenditure in Europe’, First preliminary data; EUROSTAT

EU / US ‘Global’ Environment: 

EU / US ‘Global’ Environment USA Basic patent (20 years) Patent Term Restoration – max 5 years, 1984 Biotech Patent, 1983 Orphan Drug Act, 1984 Same levels of IPRs across all States Bayh-Dole Act + National Institutes for Health Economic environment (direct access to a large unified market; competitive market pricing) EUROPE Basic patent (20 years) SPC – max 5 years, 1992 Biotech Patent 2000-yet to be applied in some MS Orphan Drug Reg., 2000 Lower IPRs in some EU MS (+ EU enlargement) European Framework Research Programme Economic environment (no direct market access; price controls; parallel trade)

EU/US ‘Healthcare’ Environment: 

EU/US ‘Healthcare’ Environment USA A less regulated health system and no monopsony Difference between payer and supplier of health care services Scientific and economic system which is flexible and ready for changes and renewals (universities, small enterprises and high-tech laboratories, integration between schools and enterprises, etc) Financial and fiscal incentives for scientific and technological innovation (access to credits and capital, incentives, flexibility at work, company aids, etc) EUROPE National health services depending on the restrictive requirements of public budgets (welfare, Maastricht, etc) No difference between payer/buyer and regulator of health care services Rigid economic environment marked by fragmented legislation and policies (lack of a single economic European market) Limited incentives to scientific and technological innovation (financial, credit and fiscal incentives)

Product life cycle in US and Europe: 

Product life cycle in US and Europe Time Sales Europe US Delay in Market Access Govt budget wasted as result of lack of generic competition European policies do not reward innovation but neutralise generic competition: prices of generics are much lower in the US than in Europe. Main target of savings For EU governments

Slide38: 

66 % USA 24 % Europe 4 % Japan 6 % ROW Innovation – Market penetration Geographical breakdown (by main markets) of sales of new medicines launched during the period 2001-2005 Note: New medicines cover all new active ingredients marketed for the first time on the world market during the period 2001-2005 Source: IMS Health MIDAS MAT December 2005

Innovation – market penetration: 

Innovation – market penetration Geographical breakdown (by main markets) of sales of new medicines launched Source: IMS Health MIDAS MAT December 2005 57% USA 25% EUR 5% JPN 13% ROW 1995 - 2000

Impact of Cost Containment Policies on Industry: 

Impact of Cost Containment Policies on Industry EFPIA Calculations – (p): provisional - (e): estimate Data relate to the 7 largest EU markets (Belgium, France, Germany, Italy, Netherlands, Spain, U.K.) Total market value in 2003: Euro 90,342 million (Source: IMS) Total market value in 2004: Euro 95,762 million (p)

Share of Parallel Imports in Pharmacy Market Sales (%) - 2004: 

Share of Parallel Imports in Pharmacy Market Sales (%) - 2004 Note: Paralle trade was estimated to amount to € 4,200 million (value at ex-factory prices) in 2004. Source: EFPIA Member Associations

Pricing – International referencing: 

Pricing – International referencing

Slide43: 

Average time delay between marketing authorisation and effective market access – all products (MA 31/12/2000 to 31/12/2004) *For Poland, the true delay could not be calculated as no new innovative products have been reimbursed for almost seven years Blue bars represent time period (30 June 2000 – 30 June 2004) Source: IMS, May 2005

Diffusion of Medicines in EuropeCurrent situation: 

Diffusion of Medicines in Europe Current situation Market authorization does not mean access for the patient There are huge differences between a possible optimal treatment and the treatment in reality There are also huge differences in the provision of innovative medicines between European countries Many patients do not receive "up-to-date" therapies with new medicines

Percentage of eligible patientsreceiving statins: 

Percentage of eligible patients receiving statins Source: Diffusion of Medicines in Europe, Oliver Schöffsky, December 2002

Slide46: 

Source: OECD Health Data 2005, Statistics and Indicators for 30 countries, October 2005 EFPIA calculations (non-weighted average for 19 EU & EFTA countries) Breakdown of total health expenditure in Europe - 2003

Slide47: 

The case of introducing inhaled corticosteroid in asthma management An audit carried out among 50 patients with severe asthma attending a specialist asthma clinic in Leeds showed that, after six months, adding inhaled corticosteroid in the disease treatment led to an increase in steroid costs from £1,374 to £6,91. However, the costs of hospital admissions fell from £28,427 to £6,146 with a combined effect of reducing healthcare costs by £16,744 or 56%. Source: The Value of Medicines (Asthma), ABPI