Trends in the Global Pharma-Market and its Impact on the Supply Chain

Transcription

1 Trends in the Global Pharma-Market and its Impact on the Supply Chain Dr. Frank Wartenberg President Central Europe October, 20 th, 2016 Copyright 2016 QuintilesIMS. All rights reserved.

2 Sales (Bn LCUS$) Growth Top line growth forecast at 4-7% CAGR to 2020 (in constant US$) Pharmerging growth declines to single digits Global Sales and Market Growth 12% 10% 8% 6% 4% 2% Developed Markets CAGR US 6%-9% Japan (-1)%-2% Germany 3%-6% UK* 4%-7% Italy 2%-5% France (-2)%-1% Spain 2%-5% Canada 3%-6% Developed 4%-7% Pharmerging Markets CAGR LCUS$ China 5%-8% Brazil 7%-10% India 10%-13% Russia 6%-9% Turkey 12%-15% Mexico 2%-5% Pharmerging LCUS$ Pharmerging US$ 6%-9% 4%-7% % At par with region CAGR Global sales Pharmerging growth Developed growth *Subject to clawback Lower than region CAGR Higher than region CAGR Source: IMS Market Prognosis March 2016; at ex-manufacturer price levels, not including rebates and discounts. Contains Audited + Unaudited data; Sept 2015 forecasts used for all countries outside of top 52 1

3 Over time growth in specialty markets out-performed traditional markets in terms of value 2015 value share specialty vs. traditional in TOP 5 EU + focus countries Average specialty share: 34% 5 year CAGR ( 10-15) Specialty Traditional US 35% 65% 15% 2% CA 32% 68% 13% -2% JP 25% 75% 10% 2% RU 21% 79% 11% 11% UK 34% 66% 14% 2% DE 41% 59% 11% 0% IT 39% 61% 11% 1% ES 43% 57% 10% -2% FR 37% 63% 5% -3% Specialty Traditional Source: IMS Health, MIDAS, MAT Q

4 . and are expected to remain the main growth driver in Europe till 2020 Share of Absolute Growth and 2020 Sales by Region Europe LC$ 42Mrd Growth 36% 64% North America LC$ 152Mrd Growth 34% 66% 24% 76% 60% 40% Asia LC$ 88Mrd Growth 21% 18% AFME LC$ 21Mrd Growth 79% 82% LATAM LC$ 20Mrd Growth 7% 7% 7% 6% 93% 93% 93% 94% Specialty Growth Traditional Growth Specialty 2020 Sales Traditional 2020 Sales Source: IMS Health Market Prognosis September 2015; at ex-manufacturer price levels, not including rebates and discounts. Contains Audited + Unaudited data; IHII analysis 3

5 At the same time, wholesalers loosing ground amongst European countries Q4/2015 value share by channel in TOP 5 EU + focus countries PL 78% 19% 3% Delta WHS 2015 vs % DE 76% 13% 12% -4% HU 73% 26% 1% -2% Traditional Full Line Wholesalers Direct sales to hospitals AT BE 62% 59% 33% 36% 6% 5% -1% -4% CZ 57% 36% 7% -5% Direct sales to retail UK 53% 45% 1% FR 50% 33% 17% ES 47% 50% 2% -5% -4% -9% DK 42% 58% -7% IT 35% 58% 7% -11% Traditional FLW Direct Hospital Direct retail Source: IMS Health, total market, shares are based on value, Q4 2015, direct shares from local affiliates 4

6 Specialty products require a special handling leading to a rise in new distribution models Distribution Preparation Administration Many specialty products need refrigeration or freezing Often requires maintaining cold chain distribution during the whole delivery process Specialty products can require compounding of individual ingredients in an exact strength and dosage form tailored to the patient s need Many specialty products are selfadministered injectable Requires patient training to administer Support to achieve adherence needed Rise of Homecare and specialty pharmacies Total service to patient Aseptic services (e.g. oncology) Compliance programs/ patient support Elimination of indirect payer costs Source: ASHP Specialty Pharmacy Resource Guide, available at: 5

7 Typically specialty products are high price products with simultaneously low volumes EU 5 Concentration of product sales in bn US$ EU 5 Concentration of product sales volume in SU bn US$ 100.0% $146.2 Bn $142.4 Bn 100.0% Bn Bn 80.0% 60.0% 73.2% 61.7% 98.0% 8.0% 95.4% 94.7% 40.0% 20.0% 0.0% 7.8% 11.3% 7.7% % 16.8% 11.3% % 4.0% 2.0% 0.0% 2.2% 1.7% 0.7% % 1.9% 0.6% 2015 Top 10 products Products Products All others Source: IMS Health, MIDAS MAT Q4 2015, US$ and SU 7

8 They have a large impact on WHS margins manufacturers try to keep those by direct sales Mark up Price per pack HUMIRA ENBREL GLIVEC WHS mark Price per WHS mark Price per up pack up pack WHS mark up AUSTRIA fixed mark-up , BELGIUM % , FRANCE GERMANY 6.68% for first 450 (with a minimum mark-up of 0.30 ) 0% above 450 Fixed fee of 0.70 plus 3.15% mark-up to a limit of on the percentage mark-up element , , , , SPAIN 7.54 where ex-mnf price excl sales tax is > N/A Why direct sales? Ability to control discounting Ability to receive information about the dispenser Eliminate wholesaler exporting Manage distribution costs Source: IMS Health 8

9 Wholesalers offer pre-wholesaling carrying out warehousing & logistic for manufacturers Classic distribution system for pharmaceuticals with pre-wholesalers Pre-Wholesalers Pharmacies Manufacturers Wholesalers Self-dispensing doctors Hospitals Characteristics Manufacturers outsource the warehousing and logistic to pharmacies, self-dispensing doctors and hospitals to so called pre-wholesalers Wholesalers often offer pre-wholesaling services Patients Source: IMS Health 9

10 PI sales (Bn) Parallel trade is a huge threat for specialty products due to different price levels in the EU Import markets context European annual parallel trade Size Size 5.2bn (EU 8) % - 4% Growth Share - 4% PI + 5% Non-PI growth + 4% Total market growth 9% PI (8 main import markets only) 3% across EU % + 2% + 6% - 7% MAT 06'14 MAT 06'15 MAT 06'16 ~60% Specialist Primary Care Source: IMS MIDAS and internal database, import markets: DEU, GBR, NLD, Nordics and IRL, All sales at ex-mnf level. 10

11 The traditional dispensing and distribution model is changing Classic distribution system for pharmaceuticals Manufacturers Wholesalers Trends: Manufacturers Aim to control the supply chain (reduce distribution costs increase margin, control exports) Pharmacies Discounts driven (mainly generics and PI) Trend towards dispensing fees Pharmacies Self-dispensing doctors Patients Hospitals Wholesalers Parallel Export important in several markets Offer pre-wholesaling to participate in direct sales business New market players Homecare and Specialty pharmacies Source: IMS Health 11

12 to a highly complex environment Manufacturers Pre-Wholesalers Parallel trader Wholesalers Specialized pharmacies Pharmacies Self-dispensing doctors Hospitals Mail-order Patients Pre-wholesaling Direct sales Parallel trade New distribution channels Source: IMS Health 12

13 Counterfeits are a high threat leading to another big challenge for distributing pharmaceuticals Inside the fake Viagra factory Which one is the counterfeit? Source: The Telegraph Inside the fake Viagra factory (23 Aug 2005) 13

14 Politicians take actions and continue efforts to highly control the pharmaceutical supply chain Introduction of Falsified Medicines Directive Objective: Protection of patients from falsified medicines in the legal distribution chain Content: Pan-European system to verify the authenticity of medicinal products Scope: All Rx-bound products); OTC-products cannot be subject to authentication Due date: Implementation in all countries by Q1/2019, Non compliance puts sales at risk!!! Additional tasks and new costs for the pharmaceutical supply chain Source: EU Falsified Medicines, ESM A European Medicines Verification System 14

15 Key Insights to Take Away 1 Growth in the pharmaceutical market mainly comes from specialty care 2 Specialty products are typically high cost products with low volumes and require a specific handling in distribution, preparation and administration 3 Manufacturers seek to fully tap high margins for those products and keep control over the whole distribution process via direct sales 4 Wholesalers react to this development by expanding their business in offering manufactures prewholesaling services 5 Big threat of counterfeits leads to even stricter regulations (Falsified Medicine Directive) of the pharmaceutical supply chain in the next years 15

16 Please contact me for more information Dr. Frank Wartenberg President Central Europe +49 (0) Follow me on 16

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18 2016, IMS HEALTH GmbH & Co. OHG All rights reserved. The information may not be duplicated, stored, further processed, nor be made accessible in whole or in part to any third party without the prior express written consent of IMS HEALTH. In connection with data/figures used terms, such as patient, doctor, medical practice, prescriber or pharmacy, do not designate any personal data but exclusively anonymous information (in accordance with 3 Abs. 6 Bundesdatenschutzgesetz German Federal Data Protection Act) IMS employs high sophisticated technologies and methods which ensure all its Information Services to meet the applicable data-protection requirements, regardless the way data are combined with one another. 18