Facts & Figures of Pharmaceutical Industry in Italy

Transcription

1 Facts & Figures of Pharmaceutical Industry in Italy October 2012 For further information: ph.:

2 Access to Care and Innovation Pharmaceutical industry activities concur to the country development Research & Development HEALTH AND QUALITY OF LIFE More Productivity Production Direct output + Satellite industry INDUSTRIAL GROWTH More Resources Market Access ROLE IN NHS, VALUE FOR PATIENTS

3 Summary Research & Development Life expentancy increase 1 month every 4 thanks to pharmaceutical innovation Pharmaceutical sector is leader in Italy for investiments in R&D Warning signals: drop in R&D operators and clinical trials Production Pharmaceutical industry is 1 hi-tech sector per export and territorial presence More highly qualified, productive and gainful jobs Warning signals: reduction of employment in pharmaceutical sector Market Access Healthcare public expenditure in Italy and EU Medicines and vaccines as tools to improve NHS efficiency Public expenditure trend for medicines and NHS sectors World Pharmaceutical Statistics Slowing down of global pharmaceutical market; growth moves to Emerging countries Complexity and costs of pharmaceutical research Changing geography of global pharmaceutical production Competitive benchmarking Italy: aged population, lower pharmaceutical prices and expenditure compared to EU Lower prices and problematic access to innovation Pharmaceutical industry in Italy: a value that can not be lost

4 Research is life

5 Life expectancy increase 1 month every 4, the 40% due to pharmaceutical R&D Italy: life expectancy at birth (years, male and female average) 90 Italy: percentage decrease of standard mortality rate (deaths per 100 thousands inhabitants) 82 Total Total All causes Circulation system dis. from ,4-39,7 from ,6-62, Cancer -19,5-16, Respiratory -23,6-53,1 40 Digestive apparatus -42,7-61, Other causes -10,4-39,0 Research is life. More than 90% of Pharmaceutical Reasearch in Italy is supported by pharmaceutical companies Source: Istat, OECD

6 Living better and longer thanks to innovation generated by pharmaceutical industry 5 year survival rate and availability of new antineoplastic medicine Tasso di sopravvivenza a 5 anni Italy: % of over-65 reporting their health to be good Altre neoplasie 1994 Altre neoplasie media Altre neoplasie million of over-65 involved by care improvement Tumore allo stomaco, polmone, leucemie Tumore allo stomaco, polmone, leucemie Tumore allo stomaco, polmone, leucemie today Cure più tradizionali Innovatività dei farmaci Cure più innovative Pharmaceutical R&D brings both breakthrough care and incremental innovation that allows continuous improvements in life quality and steady progress for treatment efficacy, reduce side effects and ease of use Source: CERM, Istat, OECD

7 Pharmaceutical sector is leader in Italy for investments in Research and Development Data on R&D in Italy Intensity* of R&D activity in Italy (Pharmaceutical index = 100) Public R&D (43%) Non profit (3%) 9% Pharmaceutic al and RED biotech Pharmaceutical Precision and electromedical equipment Telecommunication Aeronautics and other transports Computer industry and office machinery High-medium technology sectors Engineering Electronic devices R&S intra-muros of other sectors (44%) Chemical and petroleum Manufacturing industry * average of (R&D expenditure/market) and (R&D employees/total employees) Source: processing on Istat data

8 A growing pipeline of 319 biotech products generated in network between SME and pharmaceutical companies Biotech pipeline in Italy, divided by studying phases and pharmaceutical companies biotech SME Pharmaceutical companies TOTAL Biotech industry in Italy is growing up, thanks to 238 companies that invest 24% revenues in R&D, much more than the average of manufacturing sector (1%) Pre-clinic and phase 1 92 Phase 2 39 Phase Pharmaceutical and biotech industry rely on 7 thousands research operators and invest 1,8 billions in R&D, that correspond to 9% of national research Total with an additional 84 projects of discovery Biotech SME research is concentrated in the early stages, feeding innovation of pharmaceutical companies, that have a leading role in clinical development Clinical trials of biotech products are increasing highly and represent the 30% of total More than 2/3 of biotech industry in Italy is generated by pharmaceutical companies Source: processing on Istat, Aifa, Ernst&Young-Assobiotec data

9 Warning signals: drop in R&D employment and clinical trials R&D employees in pharmaceutical industry in Italy Number of clinical trials in Italy -23% Phase I e II Phase III e IV Clinical trials represent an important financial sourcing for the Regions and Private hospitals and an opportunity for Patients to benefit from highly advanced therapies Source: Istat, Aifa data processing

10 Pharmaceutical companies are the engine of hi-tech sector in Italy

11 Key-figures of pharmaceutical industry: the first hi-tech sector in Italy 165 enterprises, 65 thousand employees (about 90% graduated) 61 thousand employees in satellite industry Export as % of total turnover for pharmaceutical industry in Italy 61% 6,000 R&D operators, 9% of pharmaceutical total (1,6% the average of manufacturing sector) 25 billion euros generated, the 61% turned on export. Italy ranks second in Europe for manufacturing after Germany 2,4 billion euros on investments: 1,2 in R&D (equal to 12% of manufacturing industry) and 1,2 in hi-tech manufacturing plants Share of pharmaceutical compared to the overall of hi-tech sectors in Italy Employees Investment (manufacturing and R&D) Export 30% 43% 47% Source: processing on Istat, Eurostat data

12 Compared with Big EU, Italy s share in manufacturing is higher than in sales Italy s role in the EU Big5 (% on total) Characteristics of pharmaceutical industry in Italy: value per employee (Manufacturing ind.=100 Pharmaceutical Manufacturing Ind. Pharmaceutical Manufacturing 23% Export Pharmaceutical Market (retail+non retail, ex factory values) 18% Investments in manufacturing and R&D Investments on environment Statistics show that Italy is a big pharmaceutical manufacturer other than a wide market, with an hi-tech specialization in pharmaceutics Source: processing on Istat data

13 Investments - % of sales Pharmaceutical companies hold a leading role in Research and Internationalization Features of italian private equity companies (total manufacturing index=100) Energia Metalli Elettronica Mezzi di trasporto Chimica Legno e Servizi Meccanica carta TOTALE Alimentare Vetro e Minerali INDUSTRIA Gomma e plastica Petrolifero Costruzioni Mobili e altri settori Tessile e abbigliamento Farmaceutica Internationalization Index* * Average of exports and sells generated by italian companies abroad, compared with revenues International investments in Italy (billion euros, investments in manufacturing and R&D intra-muros*) Pharmaceutics Transports Engineering Metallurgy Chemical ind. Electronics ind. Computer ind. Food ind. Oil industry Glass and mineral Gum and plastic Paper and printing Clothing industry Wood and furniture * Pharmaceutical R&D net of clinical trials Source: processing on Istat data

14 One employee in satellite industry every one employee in pharmaceutical sector Sectors of pharmaceutical satellite industry and employees Employees in Pharmaceutical Industry Employees in Upstream sectors First 3 sectors of pharmaceutical satellite industry Engineering Packaging Chemical Source: Farmindustria, Pharmintec

15 Regional facts & figures of pharmaceutical and satellite industry Lombardia employees in pharmaceutical, 33 R&D centres and more than 90 red biotech employees in satellite industry (chemical, mechanics, paper) Piemonte e Liguria employees in pharmaceutical and in satellite industry (mechanics, chemical, packaging) Toscana employees in pharmaceutical employees in satellite industry (glass, chemical) Lazio employees in pharmaceutical 29% of regional export (74% of hi-tech export) employees in satellite industry (chemical, packaging) Facts & Figures of pharmaceutical and satellite industry 126 thousand employees 36 billion euros of manufacturing 6 billion euros in wages and contributions 3 billion euros of investiment in R&D and manufacturing Veneto employees, in satellite industry (mechanics, chemical, packaging) Emilia Romagna employess in pharmaceutical and in satellite industry (mechanics, chemical, glass). Parma ranks 3 rd for export Campania 700 employees in pharmaceutical and in satellite industry Marche employees in pharmaceutical and satellite industry. Ascoli Piceno exports 41% of manufacturing Abruzzo More than employees in pharmaceutical (100 in R&D) and in satellite industry Puglia Centres of excellence of great international companies (2.800 employees in pharmaceutical and satellite industry). Bari and Brindisi export 28% of total manufacturing Sicilia About employees in pharmaceutical and in satellite industry. Catania exports 23% of total manufacturing Source: Farmindustria, Osservatorio Pharmintech, Istat

16 More highly qualified, productive and gainful jobs Employees by educational (% on total) Pharmaceutics Manufacturing Industry Productivity and Salary (manufacturing industry=100) Pharmaceutics Manufacturing Ind. Degree holders 54,8 8,4 Diploma holders 34,2 47,6 Degree or Diploma holders 89,0 56,0 Labour productivity (surplus value per employee) other 11,0 44,0 Women are the 42% of total (the 24% in other sectors) with better qualified tasks, and they represent the majority (53%) in R&D Wages per employee Investments and quality of Human Resources make pharmaceutics a sector with elevated surplus value and higher salaries than the manufacturing average Source: Istat, Indagine Sistema Confindustria

17 The role of medicines in the NHS

18 Italian healthcare spending compared to Eu countries and the role of pharmaceuticals Healthcare public expenditure as % on GDP % on GDP (2009) Growth rate as % of GDP ( ) France 9,2 1,5 Germany 8,9 0,9 UK 8,2 3,3 Italy 7,2 0,6 Spain 7,0 1,6 Structure of National HC Financing (% on total, year 2012) Other budget items of territorial expenditure (39,5%) Prevention (5,0%) Territorial pharmaceutics(*) (13,1%) Hospital pharmaceutics (2,4%) Big 5 (ave.) 8,1 1,6 Other EU 15 8,1 1,6 UE 15 (ave.) 8,1 1,6 USA 8,3 5,1 * Including a share of private expenditure Other budget items of hospital expenditure (40,0%) In Italy expenditure as % on GDP and per capita is lower by 10% compared with the other big european countries (the difference reaches the 25% compared with pharmaceutical) Source: estimes on Oecd, Ministero Salute, FMI data

19 Medicines and vaccines are tools for reducing NHS expenditure The proper use of medicines can determine savings for the NHS: preventioning reducing the risk of disabling diseases avoiding unnecessary surgeries (eg. gastroduodenal ulcers) slowing down the degeneration or diminishing the symptoms of some diseases associated with aging (eg. Parkinson s and Alzheimer s) shortening the time of hospitalization (eg. in case of chemotherapy) or avoiding hospitalization if unnecessary (eg. in case of chronical diseases) Use of medicines for chronic deseases: a cost/benefit analysis (cardiovascular, respiratory, depression, Alzheimer) Public expenditure in medicines 6,3 Savings for NHS expenditure (less hospitalization, unnecessary surgeries, reducing the degeneration of diseases) Non-NHS savings (avoided leave, less expenditure in social assistance) Savings achievable by vaccines billion /year 6,1 5,6 A day of hospitalization costs 1000, more than 5 times the per capita public expenditure for medicines in pharmacies. 1 euro spent on immunization can amount to 24 euro spent on those who become ill Source: CER-Nib, Aifa

20 The 90% of the market is composed by off-patent medicines, with an high growth of generics Sales of reimbursable medicines by patent coverage (in units, % on total, jan-aug 2012) Sales percentage change (pharmacy) % on total IN PATENT 10% 2012 jan-aug annual average OFF PATENT 90% MARKET TOTAL -5,9% -0,4% Off patentbranded 64% Generics 20% Branded (in and off patent) -7,3% -1,3% Other 6% Generics +9,7% +15,7% The 90% of packaging sold are off-patent medicines, more than what declared by lists of transparency. There are molecules with no patent coverage which, although classifiable as generics, they are only branded (25% of total off-patent) Source: Farmindustria processing on IMS Health data

21 Off-patent market share in Italy is aligned with other European countries Percentage composition of pharmacy market (volumes) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% UE ITALIA SPA FRA GER UK In major European countries the share of off patent market (accessible by generics) is 90% of total pharmaceutical market In Italiy is different the allocation between generics and off patent branded, but it has no effects on public pharmaceutical expenditure (NHS reimbursed the lowest price) it does not penalize the Patient that could choose the generic even before the prescription with the active principle Off patent In patent Source: Farmindustria processing on Assogenerici and IMS Health data

22 Lower medicine prices even in off-patent market Average price per package in 2011 (Big Ue index=100) Source: IMS Health

23 Identify areas of waste and spread the best practices for recovering resources for innovation Incidence of Caesarian birth in OECD Countries (% on total) South Italy Mexico Features of Regional Health Administration Max Min Average Italy Turkey South Corea Portugal North-centre of Italy Swiss Germany OECD Average Spain UK Danmark France Finland The Netherlands Caesarian birth (% on total) Standard rate of hospitalization (every inhabitants) % of dismissed with diagnosis related group % of hospitalization only for medical check 62,2 23,8 38,4 154,9 97,3 124,6 47,8 25,7 35,3 24,9 5,4 16, Source: OECD, Istat, Ministry of Health

24 It is necessary a sustainable management of the expenditure items, without penalizing the pharmaceutical % cumulative change In last 5 years Other goods and services purchased by NHS Total of public healthcare expenditure +10,1% +17,5% public pharmaceutical expenditure has stopped at 1,1% on GDP; other goods and services were increased from 2,6% to 2,9% companies have payd more than 11 billion euros for public finance public pharmaceutical expenditure per capita is downturning (-0,8%) In 2011 NHS Personnel and medical fees +6,5% Total public pharmaceutical expenditure* +2,3% Inflation (+11%) Public pharmaceutical expenditure: -4%, instead of, for expample laundry, canteen, cleaning +4,2%; maintenance and repair costs +2,8%; leasing and renting +4,4%; general costs +6,3% specialistic exhamination NHS reimb. +3,3% In 2012 Public pharma expenditure: -3% 0% 5% 10% 15% 20% * territorial+hospital exp., including vaccines, excl. copayment e payback Source: Farmindustria processing and estimes on Aifa, MEF, Istat data

25 The Global changing scenario of pharmaceutical industry

26 While the global pharmaceutical market slows down, growth moves to Emerging Countries Global pharmaceutical market (% on total) Pharmaceutical market trend (annual average % change, US dollars) BRIC + rest of the world EU JP North America ,1 World 5,3 14,1 Advanced Economies 4,8 1,1 BRIC + rest of the world 13,0 Source: IMS data processing

27 Italy drops in the international ranking of pharmaceutical market 2004 Rank 2009 Rank 2014 Rank 1 United States 1 United States 1 United States 2 Japan 2 Japan 2 Japan 3 France 3 Germany 3 China 4 Germany 4 France 4 Germany 5 Italy 5 China 5 France United Kingdom Canada Spain China Brazil Mexico Australia South Korea India Netherlands Belgium Poland Turkey Greece Russia Italy Canada Spain United Kingdom Brazil Russia Mexico India Australia Turkey South Korea Greece Poland Netherlands Belgium Brazil Italy Canada Spain India Russia United Kingdom Venezuela Turkey South Korea Australia Mexico Argentina Poland Greece Population growth and better conditions are increasing the demand for Health in developing countries. Advanced Economies market slows down due to cost containment Source: IMS Health maneuvers MIDAS, Market Prognosis September 2010; Market size ranking in Constant US$. Source: IMS

28 Investments are raising, but new molecules are annaully decreasing due to complexity and costs of pharmaceutical Research R&D pharmaceutical investments in Europe and USA (index 1990=100) New molecules launched into the international market Specialistic care Primary care Research is heading toward more personalized therapies, which are more effective but also more expensive, because only 1 molecule of is able to pass all test required to become a new medicine Source: processing on Efpia, CERM data

29 R&D costs are increasing and the 50% of medicines is becoming off-patent Global R&D cost dynamics per new medicine (billion dollars) Italy Off-patent molecules: cumulative value compared to in-patent market (index=2009) market launch phase III Retail Market (inc. non retail) market launch phase III phase II pre-clinic phase II phase I pre-clinic discovery discovery today Rising costs and decreasing revenues (related to patent deadlines) are causing a global structural change in pharmaceutical Source: processing on Phrma, CERM

30 The changing geography of global production in pharmaceutical sector 550 Manufacturing value of the global pharmaceutical industry (index 2000=100, US dollars) 100 Share of new investments in the global pharmaceutical industry (% on total) BRICS and other Emerging Countries World Advanced Economies Advanced Economies BRICS and other Emerging Countries Shifting of demand causes the rilocalization of global manufacturing capacity. Growing competition among Advanced Economies to strengthen and attract investments Source: Global Insights

31 A structural changing of pharmaceutical industry all over the world Population ageing in advanced economies Lower prices Growing importance of emerging countries Patent deadline (50% of in patent market) Increasing of R&D costs Growing costs Increasing of business competition Reduction of profit margin Changing scenario New needs of caring (e.g. rare disease) Innovative technologies Interconnections between research and development Consequences on other sectors Necessity of more resources for R&D Customized care (from 500 to molecules in the next years) Increasing number of specializations + Technologic shock Research developed mainly on = network than in laboratories Radical changing of business management by strong shake-out process

32 The competitive benchmarking of pharmaceutical industry in Italy

33 International comparison on pharmaceutical prices in Italy and the Eu countries Prices of medicines with prescription (index Italia=100) Prices of primary hospital products (manufactured in Italy, classe H, measured upon the sale price, Italy=100) Germany France Spain UK Average Big EU 5 Italy -10% (*) medium exchange rate of last 5 years Source: Cergas Bocconi

34 Access to innovation at regional at national level Number of days to include medicines in the guidebook after PFN, per Region (medicines with AIC during the period ) % of retail sales medicines launched on the market in the last 3-5 years (% on 2011 total) max , ,2 8,9 8,3 6 5,3 Italy (average): 305 days AIC : 246 AIC : ,5 3,9 3,3 3,5 3,1 min days is the average time in which medicines become available in hospital structures 0 ITALY Other Big GER FRA SPA Euro Area In-patent medicines launched in the last 3 years In-patent medicines launched in the last 5 years Sourcee: Farmindustria processing on IMS data

35 Payment from the PA delays are increasing Payment terms from PA to pharmaceutical companies (days, quarterly data and moving average) The average payment terms consists in about 250 days, and some Regions registered over 700 days. Companies are creditors for almost 4 billion of euros Investment in production and R&D (billion euros) 7,5 6,0 giu 2008 giu 2009 giu 2010 giu 2011 giu 2012 Payment terms equal to France, UK and Germany could release an amount of resources of 2, 3 and 5 billions respectively. More reinvested resources could strengthen middle/long term competitiveness of pharmaceutical companies in Italy, Prometeia, november ,5 3,0 1,5 0,0 ITA FRA UK GER growing with payment terms: Real level ITA=FRA ITA=UK ITA=GER

36 Per capita pharmaceutical expenditure international comparison across Eu countries Public pharmaceutical expenditure per capita in Italiy and in other Eu countries (territorial+hospital, average other Big Ue=100) Cumulative costs of pharma industry due to restrictive manouvres ( billions) Germany ania France Francia Average Totale Big Ue (excl. Italy) Spagna Spain 96 4 Regno Unito UK 76 Italia Italy 74-26% Followint the provisions adopted in 2012, this amount will increase by more than 4 billions per year in Source: estimes on Aifa, Istat, MEF, Cerm, IMS, Cergas Bocconi data

37 Some evidence on competitive benchmarking Benchmarking for logistics, bureaucracy and energy (Italy=100) Logistics 100 Italy 76 Bureaucracy European Countries 100 Energy Tax burden on pharmaceutical: differences between Italy and EU (percentage points) Competitiveness Index World Economic Forum (overall index and some components) Overall competitiveness Business sophistication Health Infrastructures Institutions 42 Market size Value chain breadth 12 - Local supplier (quality&quantity) Life expectancy Property righs and protection 69 - Efficiency of legal framework Burden of Government regulation EU15 Big EU FRA SPA UK GER REMINDER Italy 42, Germany 6, UK 8, France 21, Spain 36, Swiss 1 Source: World Economic Forum, Prometeia, Other sources processing

38 Pharmacetical employment is deacresing Employees in pharmaceutical industry in Italy (thousands) 75 Pharmaceutical employment in Italy (cumulative % var ) 71-13% (~ dismissals) -13% Total -3% R&D % Manufacturing and Staff 59-28% Field force % -20% -10% 0% In 2012 employment is still decreasing (-2,5%): currently, pharmaceutical sector risks a new strong reorganization in the next years Source: Farmindustria, Istat

39 Internal market is declining 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Italy: pharmaceutical market and its components (% var compared to previous year) retail total non retail +4,3% +1,8% +0,2% Domestic market has reached the lowest rate of the decade, nearly 0% and is still decreasing In the last 3 years only export has sustained manufacturing activity that could be drecreased by 8% A further contraction of domestic market can not support this process: In 2012 industrial manufacturing is decreasing (-4% jan-jul) Estimated downturn in manufacturing Source: Farmindustria, Istat, IMS

40 Slowing down investments and falling of foreign balance: the necessity of contrasting the two trends Investments in pharmaceutical manufacturing and R&D in Italy (average % change) Medicines and vaccines foreign balance (export-import) in Italy (billion euros) 7% 6% 5% 4% 3% 2% 2,0 1,5 1,0 0,5 0,0 Medicines Vaccines 1% -0,5 export medicines =12bln export vaccines=0,4 bln 0% -1, In the last years the investment growth rate has been decreasing, but it is still positive thanks to relevant investment in hi-tech manufacturing that has significant consequences on export (the average value of exported medicines has grown of 7% from 2008 to 2011) Source: Farmindustria, Istat

41 The pharmaceutical industry and upstream sectors: a fundamental contribution to Italy Direct and upstream sectors contribution of pharmaceutical industry and public expenditure for reimbursable medicines in Italy 2011 (billion euros) Pharmaceutical industry Upstream sector 5,9 3,6 12,5 12,2 3,4 15, ,0 4,0 4,3 2 2,4 Investments, Output and R&D Salaries and contributions Direct tax, other tax and VAT Effective contribution of pharmaceutical and upstream sector Export Public expenditure in terms of company revenues (territorial+ hospital excl. payback) Contribution of pharmaceutical industry with only commercial presence Source: processing and estimes on Aifa, Farmindustria, Istat data