Healthcare Disrupted From Selling Pills to sell Value The changing Paradigm

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1 Healthcare Disrupted From Selling Pills to sell Value The changing Paradigm Hans-Peter Frank PhD, MBA; Global Head Integrated Solution Vifor Fresenius Medical Care Renal Pharma, a partnership of Vifor Pharma and Fresenius Medical Care Vifor Fresenius Medical Care Renal Pharma, a company of the Galenica Group

2 Business Model Transformation From products to outcomes Drivers of change R&D productivity Globalization Demographics Pricing, Access & reimbursement changes Health Data Deals e.g. Big Data Disruptive Technologies Consumerism Value mining Business Models Value proposition Blockbuster Drugs Diversified Drugs Portfolio Health Outcomes Customer Physician Budget Holder Patient

3 Vifor Fresenius Medical Renal Care Pharma (VFMCRP) is a joint venture between Galenica and Fresenius Medical Care Service- and Distribution Agreements 45% 55% Service- and Distribution Agreements Global leader in dialysis products, dialysis care and renal pharmaceuticals 500,000 patients treated worldwide in 3418 clinics ~17 BUsd in sales Vifor Pharma, part of the Galenica group is the main shareholder supporting VFMCRP with products and medical sales force in Europe Flagship products include Venofer and Ferinject VFMCRP s mission is to become the customer s partner of choice for renal pharmaceuticals and in delivering patient centric solutions

4 VFMCRP is further building mid & long term growth opportunities: Integrated, outcomes based patient centric and customer services Competitive Position TRANSFORM Integrated Services / Outcomes Based Solutions/ Customer and Patient Centric Services ESTABLISH GROW 33% by 2025 Revenue

5 Delivered Features Follow the Value Curve What do Healthcare Systems demand Around the Patient Value Innovators Living Service Simple Product Drug/treatment Provided to cure specific patients conditions Enhanced Product Extend product, with the coupling of digital services(e.g. web pages, apps etc.) capturing data and providing added value and information Integrated Service Integrated services is an ecosystem capturing data from different sources (remote sensor, wearables, EMR etc.) and allowing and sharing feedback to improve patients outcome and health provider effectiveness Services are aware of the context and dynamic in response to individual patient s need Offered as a part of a service business and revenue model Payment is on the basis of population or patient outcome Time

6 How is performance based prizing realized in other industries? 47% 54% Operational hours of jet engine

7 VFMCRP moving from strong brands to therapeutic area focus by putting the patient into the center Anaemia Management Mineral & Bone Management Cardio-Renal Management Kidney Protection Transplantation Diabetic Nephropathy Transplant Preparation Rayaldee Rayaldee Polycystic Kidney Disease ChemoCentryx CCX168 Organ Rejection GROW Licensing & Acquisition Targets TRANSFORM Integrated Solutions to OUTCOMES

8 VFMCRP building a leading renal portfolio is a cornerstone of the company 1 PRESERVE RENAL FUNCTION CKD PROGRESSION Diabetic Nephropathy Polycystic Kidney Disease 2 MANAGE IMPACT OF LOSS IN RENAL FUNCTION ANAEMIA Oral and i.v. Iron Current Ferinject ESA Venofer HIF-PH MBD Phosphate Binder Velphoro Vitamin D Calcimimetic Other Anti-coagulation Potassium binder 3 MANAGE TX* / POST TX* Immune suppressiva Prevention of delayed graft function ND CKD Dialysis * Transplantation

9 VFMCRP building leading outcomes solutions for the whole life cycle of nephrology patients 1 PRESERVE RENAL FUNCTION CKD PROGRESSION DIABEX performance based diabetes management for nephrology patients BPEX performance based blood preasure management for nephrology patients NEPHDATEX big data driven risk monitor for CKD 3-5 patients 2 MANAGE IMPACT OF LOSS IN RENAL FUNCTION ANAEMIA ANEMEX performance Ferinject Venofer based anemia management MBD BONEMEX performance based Velphoro MBD Other CARDIMAX performance based CR management 3 MANAGE TX* / POST TX* TRENSMAX performance based kidney rejection management ND CKD Dialysis * Transplantation

10 MISSION Milestones towards our VISION are moving ESTABLISH GROW TRANSFORM Preparation ANEMEX Study BONEMEX Dev. & Verification ANEMEX Commercial BONEMEX Commercial DIABEX Dev. & Verification BPEX Dev. & Verification *non-dialysis chronic kidney disease NEPHDATEX Dev. & Verific.

11 New Challengers gaining ground Partnering with non traditional partners Physicians Providers Pharmacies IT Information companies Pharma Academia Biotech Food CROs Med device Retailers Patients Consumer goods Insurers Telecom Governments Social media Health records Medical technology Drugs Diversified drug portfolios Outcomes

12 Competition is out there. Newsflash April 2016 NHS signed more than 1500 contracts with 3rd party providers leveraging national health data.

13 Market Overview Top European 5 Countries Represent 70% of EMEA Dialysis Business Bundled Part Non Bundled Strong Presence of HD Chains Strong Public Presence of HD Centers *Size of bubble represents number of relevant HD patients

14 Pilot Country Preparation First commercial Pilots: United Kingdom Italy - France First Wave Commercial Pilot Countries Second Wave Commercial Countries Third Wave Commercial Countries

15 Pathways to become a Value Innovator 1. Choose Projects close to your core business 2. Realistic Business Cases Take Risk 3. Act proactively to get missing skills established 4. Develop outcomes based business models 5. Focus on regulatory registration pathways 6. Prepare the market Prepare the organization 7. Deliver Deliver Deliver - Deliver

16 Skills needed to achieve value leadership Healthcare Delivery Requested Skills Drug Device Reg Know How Service Know How Innovative Partnerships Business Model Development Co-Creation Legal flexibility Technological Leadership Behavioral Economics Gamification Real World Data Analytics Continuous Communication Available Skillset 08/12/2016 Needed Skillset

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