Australian healthcare trends

1. Australian healthcare trends Suite 15/20 Young St Neutral Bay NSW 2089

2. Consultations With ... General Practitioners Specialists KOLs Nurses Pharmacists Representatives Carers Health consumers

3. Overview • Industry Responses Global Themes Medication Of Risk End of Blockbuster drug era Drug Re-positioning Greater investment in Orphan Drugs Pressure to cap rising public health spend P-Health Initiatives Technology-Based Monitoring

4. Overview • Industry Responses Global Themes Rise of Functional Foods & Bevs Increased Consumer Engagement Personalised Medicine Rising promotion & use of natural and alternative therapies Increased Demand for Rx Choices Increased Consumer Influence on Rx Increased pharma engagement with consumers

5. End of Blockbuster Drug Era

6. The Patent Cliff • 20 years ago, many new and powerful drugs launched • Many now coming off patent • In US, >$100 billion of branded drug sales expected to go generic 2010 - 2015 • In Aus, Lipitor predicted savings to Govt of • $529 mill in 2012-13 • $546 mill in 2013-14

7. The Medication Of Risk • medication to prevent illness • people educated to expect health/ well being benefits that REMOVES the NEED FOR PERSONAL RESPONSIBILITY Egnicotine patches • increased role for drugs that modulate emotions and behaviour • Next Steps • Products for memory enhancement • Multi-function drugs • e.g. Sanofi’sAcomplia • Medications for social anxiety disorder & generalised anxiety disorder and for ‘naughty kids’ Big Pharma & Natural Therapy co’s seeing unprecedented profits in disease prevention

8. Orphan Drug Pipeline increasingly active • Probability of market approval ~13%. • 1988, 253 orphan drugs -> 36 approved • 2011, 2507 orphan drugs -> 393 approved • Pharma increasingly working with rare-disease support orgs to advocate for market access and cement relationships

9. Govt Preparedness to Pay for Orphan Drugs High In Aust Higher likely re-imbursement than many other markets

10. Pressure to cap rising public health spend

11. Public Sector - Initiated P-Health • To combat rising health costs, incl rising spend on originator drugs • Govt Public Health Aims • Developing new foods to prevent illness • Finding new ways to diagnose disease early • Using genes & proteins to predict & prevent ill health • Objectives • Help Australians live longer • Reduce rising cost of health care Public sector becoming an important competitor in disease prevention products

12. Encouraging Consumers to Self-Regulate • Nutritional Analysis Kiosks and software • for specific medical conditions (e.g. diabetes/ special diets)

13. Earlier Identification Intelligent toilets • test urine for glucose, kidney disease (eventually even cancer) • Test faeces to measure weight and fat content • let you know if there's anything unusual going on

14. Diagnosis Outside Healthcare Settings

15. Treatment & Monitoring Outside Healthcare Settings Remote Patient Monitoring

16. Increased consumer engagement

17. Rise in patients blogs / forums

18. Bio-oil 600 Youtube videos

19. Increased Information Access -> Empowerment • Customer switching costs are low • Don’t define themselves as patients ‘Person Living with .....’ rather than ‘patient’ given it references the individual’s complete experience • a ‘chronic condition’ rather than ‘disease’ Consumers becoming more educated and discerning,

20. Health Is No Longer Just Physical Mental/Emotional Health Environmental Health Physical Health • Heart disease • Physical Appearance • Food Scares • Stress • Depression & • Anxiety • Animal Welfare • Soil erosion, pollution • Toxins • Vegetarian Products • Natural • Organics • Herbal Products • Aromatherapy • Vitamins & Minerals • Better For You products • Weight loss products • Cosmeceuticals • Nutraceuticals Concept of Health has come a long way from Norm’s ‘Life Be In it’ message

21. Failure of western medicine to solve major health issues Realisation that it • does not have all the answers • Is one of a range of options Greater Willingness to Try Alternatives

22. Pharma Brand Positioning Much More Important • Pharma manufacturers are concerned to raise their parent brand image • Significant spend Consumer Empowerment means pharmabrands need to have good corporate image to engender long term support

23. Increased Prevention & Treatment Choices

24. Rise of Functional Foods & Beverages • XANGO • The whole fruit puree of the Mangosteen fruit • Powerful natural antioxidant & anti-inflammatory Why would anyone use a drug, if you can get the same benefits from a food?

25. Mainstream manufacturers making functional products Disease prevention claims (e.g. anti-cancer) currently restricted Functional Foods & Beverages Functional foods an increasingly popular alternative to preventive medicines “

26. Natural Therapies • Australians spend ~$2.3 billion a year (4 x their spend on pharmaceuticals) • 120% increase in spend since 1993 • Over half of Australians use • ~40% with chronic diseases use • 60% of women & 44% of men (and increasing) visit alternative practitioners Significant and growing use reflecting consumer preferences

27. Colonic irrigation Vit C injections Oxygen therapy Naturopathy Chiropracty Lycopene Zinc Ginkgo Biloba

28. Natural Therapies Patterns of Use • To complement rather than replace conventional treatment • pragmatically select treatments to best fit particular medical and health problems • Upsurge in use as • anti-depressants • cholesterol reducers • improving CV health Beliefs • Look for safety above proven clinical efficacy • Wide availability from non-pharmacy outlets and derivation from natural products has promoted perceptions of safety. The ‘wellness’ market often demonises pharmaceutical products

29. Reasons For Growth • Disillusionment with orthodox medicine/ hospitals given perceptions of reduced quality of care. • Dissatisfaction with doctor-patient interactions • Practitioners regarded as more convincing, informative, considerate and available • many using evidence-based methods Consumers increasingly dissatisfied with using just prescription pharmaceuticals

30. Strong DTC Advertising Presence

31. Increased consumer influence on treatment decisions

32. Self-Dx & Treatment A Growing Possibility Will Growing Availability of Cheap OS product erode local sales?

33. A challenge for Pharma and HCPs • pressure to increase counseling & support • nurses and allied HCPs’ increasingly important in providing credible patient information Industry Responses… Patient Support Programs? Personalised Medicine?

34. Personalised, Integrative Medicine • ‘the capacity to predict disease development and influence decisions about lifestyle choices or to tailor medical practice to an individual’ • Uses knowledge of individual metabolism or genetic make-up History • ABX resistance testing (bacterial infection) • Viral resistance testing (eg HIV) • Genomic Medicine • Gene Sequencing • Genetic Mutation testing (eg breast cancer, IBD) • Drugs targeted to narrower indications, hence limited populations • Well established in Europe & US

35. Personalised, Integrative Medicine Can facilitate disease prediction, prevention and treatment : • determine if increased risk of disease, followed by promotion of and support for compliance with prevention • Diagnosing earlier using optimal surveillance, allowing more effective interventions or treatment options; • enhancing therapeutic efficacy by ensuring the most appropriate drug is used and that dosing takes into consideration any genetic variants, which may influence metabolism of the drug; • avoiding preventable drug related complications and side effects

36. Personalised, Integrative Medicine • Opened Aug 2012 • Incorporates a wellness centre offering complementary therapies eg acupuncture, massage, mind body therapy.

37. Genea Holistic • to add safe and comprehensive complementary healthcare to our world leading fertility science and care – giving you the best possible chance of conceiving a healthy baby. • aims to deliver you the maximum benefit from complementary healthcare to give you the best possible chance of a healthy baby. • individualised programs that address your particular needs and incorporate the most appropriate treatments for you

38. Earlier identification and treatment of risk factors for disease • Increase in self-prescription & self-medication • Convergence of pharmaceuticals, complementary medicines, functional foods & beverages • Increasing community adoption of preventive health measures

39. At point of purchase: • Self-service computer technology to help diagnose, prescribe and dispense on-line • Self-service terminals in supermarkets • Consumers can plug in age, family medical history & lifestyle • Provide a printout of recommended vitamins, herbs, supplements and food choices • One-stop shop model of product purchase • Specialised pharmacies

40. Pharma Industry Opportunities Closer relationships with end-users • Increasing consumer awareness of Big Pharma’s community involvement • Complementary medicine partnerships to • boost consumer perceptions of a ‘holistic health’ provider • better monitor/control disease management • Sponsoring ‘wellness’ clinics and disease screening services • Micro-chip technology (implants) to record health/disease status and monitor drug intake Capitalising on the political trend towards disease prevention

41. Micro Chipping Consumers VeriChip™ - There when you need it • Used to access a subscriber-supplied database providing personal information • Cannot be lost, stolen, misplaced or counterfeited. • Can be scanned when necessary • Provides instant access to a Subscriber Registry - secure, password protected web access. Future potential to track brand-switching …?