What can the innovative pharma industry give to Hungary

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1 AIPM Contact person: Némethi Erika, Director What can the innovative pharma industry give to Hungary Thomas Straumits Chairman, AIPM Medicina Conference 30 May, 2017

2 SOCIETY - HEALTH

3 78,9 77,9 77,8 77,4 77,0 76,0 75,0 74,7 74,5 74,5 78,3 78,1 76,4 75,5 75,4 83,3 83,2 82,8 82,3 82,1 81,9 81,8 81,7 81,6 81,5 81,4 81,4 81,4 81,3 81,3 81,2 81,2 80,9 80,7 83,3 82,7 82,2 Unfavourable outlook for life in Hungary Mortality rate: 45% more vs EU average Death rate per people Life expectancy at birth: Five years below the EU average Years % EU 28 HUNGARY EU 28 Hungary Source: Eurostat Database completed with data from OECD Health Statistics Three-year average ( )

4 Innovative medicines has made major contribution to advances in life expectancy Population weighted mean life expectancy increase Innovative medicines are estimated to have contributed to 73% of this improvement once other factors are taken into account (e.g. income, education, immunization, reduction in risk factors, health system access). 77,0 76,5 76,0 75,5 75,0 74,5 74,0 73,5 73,0 72,5 Increase of 1.74 years 27% 73% 72, Other Contribution of Innovative Medicines 2009 Source: Lichtenberg, F: Pharmaceutical innovation and longevity growth in 30 developing OECD and high-income countries, (2012)

5 Mortality rate: Highest in Europe Cancer 500 Age-standardised rates per population Women Men Total

6 Medicines significantly increased chances of survivalbut benefits in Hungary lag behind Percent Decline in Cancer Mortality Rates Since to All Cancers -21% -22% -15% -8% EU5 (159 persons / 100 thousand) Canada Japan South Korea -17% Mexico -24% USA -21% Australia -12% Hungary (239 persons / 100 thousand ) highest in Europe Source: 1 WHO Mortality Database (accessed February 2016). Inclusion of 15 new oncology molecules in 2016

7 The pharma industry contributes in many areas Co-financing of pharma budget Price-volume agreements to provide affordable medicines Drug donations and early access programs (compassionate use) Clinical study medication free of charge Patient support programs Support to screening and prevention programs

8 We invest heavily into safe supply of medicines to Hungarian patients National Medicines Verification System (NMVO) investments start in box= 10 years of research in 1000 s of patient years + Unique identifyer on each individual box to eliminate counterfeit medicines

9 Only people in good health are able to be a productive workforce

10 We invest in the Hungarian economy 70 B 205 B 0,9% of GVA 100 B Every year we pay app. 20% of the pharma budegt: in 2016 HUF 70 bn Contribution to the national economy by HUF 205 mrd to (0,9% of the Gross Value Added) Our member companies invest in production sites and research centers in Hungary (e.g. GSK vaccines production site, Servier Research Institute, Roche SSC) We conduct clinical research in Hungary Providing the most modern medicines for free to patients/year App. 100 bn HUF impact (2015) this could be increased by 20-30%

11 Pharma industry taxes ~10% of total industry taxes of national economy 5. számú ábra Az egyes szektorok különadóterhelése a ben hatályos különadók vonatkozásában Forrás: KSH 7,87% 9,38% 0,08% 0,87% 4,15% 3,95% pénzügyi/biztosítási szektor energiaszektor közművek telekommunikációs szektor reklámipar 8,03% 57,10% dohányipar 8,57% gyógyszeripar élelmiszeripar baleseti adó (lakosságot is terheli) Source:

12 We support SME-s and local pharmaceutical research IMI: The largest public and private partnership of research and development cooperation launched by the European Commission and the Efpia (European Federation of Pharmaceutical Industries and Federations) The Semmelweis Universitiy is now a consortium partner in the IMI2: Big Data for Better Outcomes (BD4BO) programme Objective: To identify and address opportunities for data-driven healthcare system transformation based on data and tools.

13 PATIENS ACCESS AND CHANCE

14 The real value of innovative medicines can not be realized when access is very slow Oncology therapies delay to reimbursement was 3,7 years. In other V4 countries it is 1,3-2,1 years*. P&R Process w/hta, budget impact, lowest EU list price Budget PV Agreements Procuremen t process to high-value drugs Modification of Ministeral Decrees Publishing list price and reimbursement * National HC reports

15 What is the right level of public pharma expenditure? Different calculation methods are used worldwide Relying on OECD numbers can be misleading in Hungary - payback of pharmaceutical manufacturers is not included Comparison to V4 countries is more relevant than to high GDP countries In Hungary app. 20% of the pharma budget is financed by the pharmaceutical manufacturers (through special taxes and risk-sharing agreements)

16 Central-European Study - under publication - shows weak point of pharmaceutical spendings in Hungary compared to V4 V4 Poland, Czech Rep., Slovakia, Hungary Time frame: Hungary has the lowest level of net pharmaceutical expentitures within the V4 countries The economic growth of Hungary is not reflected in the level of pharmaceutical public expenditures. Health care is not a priority area Source: Central-European study under publication From 2017: new Sávos clawback on NPP results in risks of supply in therapies of severe diseases

17 Hungarian net public pharmaceutical expenditure is the lowest, same as Slovakia where population is half of Hungary Source: Central-European study under publication

18 Public health care spendings are the lowest in the V4 countires

19 AIPM is ready to partnership with the HC government to improve the access to innovation Ready to continue going to the table with constructive proposals Best Practice Sharing from other European countries to increase efficiency in use of resources Horizon Scanning to help tailoring pharma budgets to the real patient needs Contribute to National Plans on Public Health Prioritiy areas (Cardio-and Cerebrovascular, Oncology, Diabetes) We welcome the focus on health screening initiatives that was announced Invest into Health Literacy to increase health-awareness

20 THANK YOU ÖNNEK FOR MIBEN YOURSEGÍTHETÜNK? ATTENTION AIPM Contact person: Némethi Erika, Director Arthur Hunt Group Kapcsolat: Julia Szűcs, Head of Talent & Leadership Solutions Hungary