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The Social and Economic Value in Innovation Medicines

The Social and Economic Value in Innovation Medicines. Patrizia Carlevaro Head of the International Aid Unit - Lilly Syria, Damascus April 25 and 26, 2005. Leading Causes of Death – estimates for 2002 DALYs. Death rates for all causes: 57 million in 2002. Ranked by Importance.

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The Social and Economic Value in Innovation Medicines

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  1. The Social and Economic Value in Innovation Medicines Patrizia Carlevaro Head of the International Aid Unit - Lilly Syria, Damascus April 25 and 26, 2005

  2. Leading Causes of Death – estimates for 2002 DALYs Death rates for all causes: 57 million in 2002 Ranked by Importance Cause % of deaths in the world • Ischaemic heart disease 12,6 • Cerebrovascular disease 9,7 • Lower respiratory infections 6,8 • VIH/AIDS 4,9 • Chronic obstructive pulmonary disease 4,8 • Perinatal conditions 4,3 • Diarrhoeal diseases 3,2 • Tuberculosis 2,7 • Trachea/bronchus/ lung cancers 2,2 • Road traffic accidents 2,1 Source: WHR, 2004

  3. 2004 Leading Health Problems 10 Disease Burdens in DALYs Ranked by Importance Cause % of DALY * in the world 1 Prenatal conditions 6,5 2 Lower respiratory infections 6,1 3 HIV/AIDS 5,7 4 Unipolar depressive disorder 4,5 5 Diarrhoeal diseases 4.2 6 Ischaemic heart disease 3,9 7 Cerebrovascular disease 3,3 8 Malaria 3,1 9 Road Traffic accidents 2,6 10 Tuberculosis 2,3 Source: WHR, 2004, Annex Table Burden of disease in DALYs * DALY : Disability Adjusted Life Years

  4. Health Problems for the Year 2020 10 Main Causes of DALY Ranked by importance Cause % of DALY* in the world 1 Ischaemic heart disease 5,9 2 Unipolar depression disorders 5,7 3 Road traffic accidents 5,1 4 Cerebrovascular diseases 4,4 5 Chronic obstructive pulmonary disease 4,1 6 Lower respiratory infections 3,1 7 Tuberculosis 3,1 8 War 3,0 9 Diarrhoeal diseases 2,7 10 VIH/AIDS 2,6 Source : WHO Report on Health in the World 1999 * DALY : Disability Adjusted Life Years

  5. Population Life Expectancy Rises Africa Asia Latin America & Caribbean North America Europe Every year more prescription drugs are being prescribed to the elderly population 90 Syria 70.5 80 70 60 50 40 30 20 10 0 1970 2000 2030 Source: UN, The population Prospects, 2002 Update

  6. Pharmaceutical discoveries since the 1950s have helped to cut death rates for chronic as well as acute conditions Treatment Disease Rheumatic Fever and Rheumatic Heart Disease Arteriosclerosis Ulcer of Stomach and Duodenum Antibiotics 83% ACE inhibitors, beta-blockers, nitrates 74% H2 blockers, proton pump inhibitors 72% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percent Drop in Age-Adjusted Death Rate Source: PhRMA, 1998, Boston Consulting Group, 1993, et U.S. National Center for Health Statistics, 1998.

  7. Medicine contributes a lot to health…but other factors are important as well 1-Environment 1-Environment 2-Genes 2- Genes 2- Genes 1- Environnement Genetic Disorders Cystic Fibrosis Huntington’s Chorea Hemophilia Chronic Diseases Alzheimer Disease Adult Diabetes Asthma Cancer Cardiovascular Diseases Depression Communicable Diseases HIV/AIDS Hepatitis Tuberculosis Malaria

  8. Revolution in Research and Technology Chemistry Biology Genetics Manual Work Computer Robotic New medicines transform people lives

  9. cellular pharmacology and molecular niology genetic engineering chronic degenerative diseases associated with aging, inflammation, cancer enzymes biotech products receptors Lipids lowerers, ACE-inhibitors serendipity natural products and derivatives H2-antagonists beta-blockers NSAIDs psychotropics penicillins sulphonamides aspirin Medical Innovation in chronological order 1900 1950 1960 1970 1980 1990 2000 2010 2020 2030 Source: Lehman Brothers Pharmaceutical Research.

  10. Research & Development is a critical factor for the progression of discovery The average price from development to launching a new product on the market is close to 1 Billion $. 115 m 359 m 500 m 802 m1 Billion 1970 1980 1990 2000 2004 (Hansen) (DiMasi-OTA) (B.C.G). (Tuft's Center) (Tuft’s Center) Source : PhRMA

  11. One As many as 10,000 compounds must be screened to eventually find that becomes an approved drug. Research and development expenditures pay for the work on the other 9,999 too.

  12. The pharmaceutical industry has less time to recover its investments in research & development While a patent provides 20 years of protection from the application filing date, the exclusive commercial period is on average from 11-12 years or less, because of the time it takes to develop the product and get it approved for sale.

  13. Compound Success Rates by Stages Compound Success Rates By Stage Discovery (2-10 years) 5000 - 10.000 screened 250 enter pre-clinical testing 5 enter clinical testing 1 approved by the FDA Pre-clinical Testing Laboratory and animal testing Phase I. 20-80 healthy volunteers used to determine safety and dosage Phase II. 100-300 Patient volunteers used to look for efficacy and side effects Phase III. 1000-5000 Patient volunteers used to monitor adverse reactions to long term use FDA Review / Approval Additional Post-Marketing Testing YEARS Source: PhRMA Center for Study of Drug Development, Tufts University, 1995

  14. Pharmaceutical Industry Investment in R&D 1980-2004 12.6% increase from 2003 R&D Abroad & Domestic (US) * * $2.0 * Estimated in 2004 $8.4 $26.0 $38.8 $10.5 Source: PhRMA 2004

  15. Total R&D as a Percentage of Total US Sales 18.0 18.3 18.8 18.4 Source: PhRMA 2004

  16. PhRMA companies estimated to spend a record $38.8 billion worldwide on research and development of new products in 2004. More than 106 m USD per day

  17. Pharmaceutical manufacturers invest a much higher percentage of sales in research and development than virtually any other industry.

  18. R & D Investment as a Percentage of Sales, year 2000 17.9% 15.6% R&D Global Research-based Pharmaceutical Companies* 12.8% Drugs & Medicines 10.5 % Computer Software & Services 8.4% Electrical & Electronics 7.8% Office Equipment and Services 5.3 % Telecommunications 4.7% Leisure Time Products 3.9% Automotive 3.8% Aerospace & Defense 1.2% Metals and Mining 0.7% Paper & Forest Products All Industries, excluding « Drugs and Medicines » 3.9% •“Research-based Pharmaceutical Companies” based on ethical pharmaceuticals sales and ethical pharmaceutical R&D only as tabulated by PhRMA. “Drugs and Medicine” category based on total R&D and sales for companies classified within the “Drugs and Medicine” sector tabulated by Standard & Poor’s Compustat, a division of McGraw-Hill.

  19. Companies have shorter and shorter times during which they can market their new drugs and companies to recoups their expenditures spent on R&D

  20. Inderal - 1965 10 Tagamet - 1977 6 Capoten - 1980 6 4 Seldane - 1985 4 AZT - 1987 Celebrex - 1999 0.25 0 2 4 6 8 10 Shrinking Period of Market Exclusivity Between Introduction of Breakthrough Medicines and Competing Innovators Years of Exclusivity Inderal (beta blocker for cardiovascular diseases); Tagamet (H2 antagonist for ulcers); Capoten (ACE inhibitor for cardiovascular diseases); Seldane (antihistaminic for allergies); AZT (antiviral for HIV/AIDS) Source: PhRMA, 2000; The Wilkerson Group, 1995

  21. From Laboratory to Patient It takes patience, money and dedication for the long trip from the laboratory bench to medicine chest. But it’s a journey well worth the time and expenses, because it saves and improves millions of lives

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