Global & local pharma trends, an IMS perspective. LINDA REID, Country Manager South Africa IMS Health October 2014

Transcription

1 Global & local pharma trends, an IMS perspective LINDA REID, Country Manager South Africa IMS Health October 2014

2 Contents Global & Africa context SA market dynamics SA market forecast & drivers 2 October 2014

3 Global & Africa dynamics Setting the broader context

4 SALES US$BN Global Global growth forecast at 4-7% CAGR to 2018: US$ 1.25 trillion in 2018 * Stagnancy in many developed markets 1,200 1, Global Sales and Market Growth 16% 14% 12% 10% 8% 6% 4% 2% % GROWTH (CONST US$) Developed Markets CAGR US 2-5% Japan 1-4% Germany 2-5% France (-2)-1% Italy 1-4% Canada 3-6% Spain (-2) 1% UK 2-5% Pharmerging Markets CAGR Tier 1 (China) 11-14% Tier % Brazil 13-16% Russia 7-10% India 10-13% Tier 3 5-8% Pharmerging 9-12% (f) Japan 2015 (f) 2016 (f) 0% (f) (f) Pharmerging Tier 1 (China) Pharmerging Tier 2 Pharmerging Tier 3 US EU5 Developed 2-5% At par with region CAGR Lower than region CAGR Higher than region CAGR Global growth (*) at ex-manufacturer price levels, not including rebates and discounts. Contains Audited + Unaudited data. All CAGR calculations are 5 years Source: IMS Market Prognosis, March October 2014

5 Share of Regional Contribution to Growth (%) Global Pharmerging to account for >50% of global growth in the forecast period Region Contribution to Global Growth 2018 Region Market Share % 7% 12% 12% 14% 16% United States Canada Pharmerging Tier 3 9% Pharmerging Tier 2 8% Rest of World 6% United States 32% 25% 27% 1% 1% 6% 0% 2% 5% 8% 6% 1% 2% 24% 24% EU5 Rest of Europe* Japan S. Korea Pharmerging Tier 1 (China) Pharmerging Tier 2 Pharmerging Tier 3 Rest of World Pharmerging Tier 1 (China) 14% S. Korea 1% Japan 8% Rest of Europe* 5% EU5 14% Canada 2% 5 October 2014 *Rest of Europe excludes Russia, Turkey, Poland, Romania, Ukraine, which are included in Pharmerging Source: IMS Market Prognosis, March 2014, at ex-manufacturer price levels, not including rebates and discounts. Contains Audited+Unaudited data. Growth and 2018 Market share based on LCUS$

6 Forecasted Growth, CAGR ( ) Pharmerging But forecast growth is lower than historical growth China remains the largest pharmerging market : Pharmerging Markets Growth Dynamics Ph. Tier 1 & 2 Countries 20 Ph. Tier 3 Countries Newly defined Ph Countries Yr CAGR % Pakistan Nigeria Brazil Indonesia Algeria Egypt India Saudi Arabia China Vietnam 5 0 Mexico Turkey Thailand Poland Ukraine South Africa Colombia Venezuela Romania Russia Argentina Yr CAGR 12.9% Venezuela and Argentina adapted for their hyperinflation and currency devaluations Historic Growth ( ) Source: IMS Health Market Prognosis, March 2014, at ex-manufacturer price levels, not including rebates and discounts. Contains Audited + Unaudited data. Bubble Size indicates 2013 LC$ Sales. All CAGR calculations are 5 years 6 October 2014

7 SALES US$BN 2014, IMS HEALTH INCORPORATED OR ITS AFFILIATES. ALL RIGHTS RESERVED Pharmerging A two-speed market, but the differences are more fundamental than growth In developed markets primary care costs are contained and value focus is specialty 800 Developed Markets CAGR 1-4% Pharmerging Markets CAGR 10-13% Absolute increase for Specialty 30% $148 $153 $160 $169 $180 $193 $453 $448 $450 $459 $466 $476 Absolute increase for Primary Care 5% Absolute increase for Specialty 90% $43 $38 $34 $29 $26 $23 $199 $218 $244 $273 $302 $336 Absolute increase for Primary Care 69% Primary care Specialist driven Source: IMS Health Thought Leadership, Sept CAGR is 5 years. Source: IMS Health Thought Leadership, Sept CAGR is 5 years. 7 October 2014 Primary care Specialist driven

8 Median price ratios Africa Despite great need for cheaper products, prices of originator brands in SSA are high Price is impacted by lack of data and poor distribution Average, median price ratios for a basket of medicines in the private sector High range Mean Low Range SSA LATAM EMR EE SEA WP SSA LATAM EMR EE SEA WP (n=21) (n= 11) (n=17) (n=10) (n=12) (n=10) (n=22) (n= 11) (n=17) (n=10) (n=12) (n=10) Originator brands Lowest-priced brands Source: Cameron A, Ewen M, Auton M, Abegunde D. The world medicines situation Medicine prices, availability and affordability. Analysis updated in March 2014 by IMS Thought Leadership with data from Health Action Int. 8 October 2014

9 Africa Fragmented, uncompetitive distribution is largely to blame, increasing price to patient, & reducing ability to pay & volumes Looking at cost breakdown rarely is MSP over 50% of the price to patient Public sector anti-rabies vaccine in Lusaka, Zambia (2010) Donor ACTs Nigeria (2013) conservative estimate Private sector high value drug Kenya (2013)* 70% 12% 18% 33% 9% 8% 7% 44% 21% 22% 9% 47% Cost breakdown of a vial of antibiotics in Lusaka, Zambia (2010) Donor ACTs Nigeria (2013) maximum estimate Private sector Kenya (2007) (WHO/HAI study)* 64% 10% 26% Manufacturer s price Import Tariff 50% 23% 7% 9% 12% Local company repackaging Wholesaler gross margin Source: Differential Pricing for Pharmaceuticals; *Hypothetical and not including sub-distribution 9 October % 47% 17% 9% Retail gross margin

10 South Africa Market dynamics

11 SA market South Africa has a two-tier health system with a deep gulf between high quality private healthcare and public health services Private sector Public sector About 16% of the population (7 million people) can afford high quality private healthcare 7 million people 42 million people The over-stretched public healthcare institutions cover the majority of the South African population, around 84% of the population (42 million people) 84% of the total pharma expenditure 16% of the total pharma expenditure 29,926 million ZAR 5,622 million ZAR Provision: Healthcare is delivered by private general practitioners and specialists, and 211 private hospitals The sector is increasingly dominated by corporate forprofit groups Financing: Private healthcare is available through Medical Aid Schemes Schemes are financed by contributions from employees and sometimes employers (who usually pay 50% each) Various plans with varying contributions and consequent levels of coverage Source: IMS South Africa Market Prognosis Report, 2014 Provision: Public healthcare provision is primarily based on tertiary hospital facilities Financing: Public health is financed through the government, primarily through taxes Healthcare expenditure at the local level is subsidised by central government, which refunds anything from 33% to 100% of the costs to the local authorities Subsidies depend on the type of service provided and whether or not the drugs provided are on the Essential Drugs Lists 12 October 2014

12 Millions Millions SA market Total Private market growth has slowed in recent times State hospitals demonstrated significant growth over last year 40,000 Growth of Private Vs Public Market 30% Growth of Private Pharmacy Vs Rest of TPM 35,000 12% 35,000 30,000 25,000 20,000 15,000 10,000 5,000 25% 20% 15% 10% 5% 0% -5% -10% 30,000 25,000 20,000 15,000 10,000 5,000 10% 8% 6% 4% 2% 0 MAT Jun'11 MAT Jun'12 MAT Jun'13 MAT Jun'14-15% 0 MAT Jun'11 MAT Jun'12 MAT Jun'13 MAT Jun'14 0% TPM SH % TPM %SH Private Pharmacy Rest of TPM % PP % Rest TPM The Private market grew with a CAGR of 7.6% from MAT June 2011 to June 2014 whereas Public market showed a CAGR of 5% only Private pharmacies gained 1.4% of TPM market share from MAT June 2011 on account of its growth by 8% CAGR. Rest of the private market grew with a CAGR of 6% Source: DVTPM & DVISA 13 October 2014

13 PPG% Company performance Top multinational pharmaco performance is variable while local corps have produced stronger growth Lupin Labs and Cipla have both achieved at least 15% growth from 2009 to South Africa: Top 15 corporation performance, long vs short term value growth ASPEN NOVO NORDISK BOEHRINGER INGEL LUPIN LABORATORIES SANOFI 10 5 ADCOCK INGRAM NOVARTIS MERCK & CO BAYER ROCHE JOHNSON & JOHNSON CIPLA ASTRAZENECA ABBVIE Local Firms -5 PFIZER Foreign MNCs Bubble size reflects absolute value (USD) Source: IMS Health MIDAS Total Market (TPM + State Hospitals), MAT Dec October CAGR%

14 Company performance This growth is evident in Cipla s rise from 16 th place in 2011 to 6 th in 2013 & Pharmadynamics appearance in 12 th Top 20 Corporation Ranking 2001 Rank 2009 Rank 2013 Rank 1 ASPEN 1 ASPEN 1 ASPEN 2 ADCOCK INGRAM 2 ADCOCK INGRAM 2 ADCOCK INGRAM 3 SANOFI 3 PFIZER 3 SANOFI 4 PFIZER 4 SANOFI 4 PFIZER 5 MERCK & CO 5 NOVARTIS 5 NOVARTIS 6 NOVARTIS 6 ASTRAZENECA 6 CIPLA 7 BAYER 7 MERCK & CO 7 JOHNSON & JOHNSON 8 JOHNSON & JOHNSON 8 CIPLA 8 MERCK & CO 9 ROCHE 9 JOHNSON & JOHNSON 9 ASTRAZENECA 10 ASTRAZENECA 10 ROCHE 10 BAYER 11 BOEHRINGER INGEL 11 BAYER 11 ROCHE 12 ABBOTT 12 LILLY 12 LUPIN LABORATORIES 13 LILLY 13 BOEHRINGER INGEL 13 NOVO NORDISK 14 BRISTOL-MYERS SQB. 14 DAIICHI SANKYO 14 BOEHRINGER INGEL 15 NOVO NORDISK 15 NOVO NORDISK 15 MERCK KGAA 16 CIPLA 16 MERCK KGAA 16 LILLY 17 DAIICHI SANKYO 17 ABBVIE 17 ABBVIE 18 MERCK KGAA 18 SERVIER 18 DAIICHI SANKYO 19 RECKITT BENCKISER 19 ABBOTT 19 PHARMAPLAN 20 TAKEDA 20 BRISTOL-MYERS SQB. 20 RECKITT BENCKISER Source: IMS TPM, MAT Dec October 2014

15 PPG% Therapy classes Several acute & chronic therapy classes demonstrate strong recent & longer term growth 65 Top 10 Therapeutic Classes - Growth Dynamics G3A HORMONAL CONTRACEPT SYST 60 J5C HIV ANTIVIRALS A2B ANTIULCERANTS 10 N2B NON-NARCOTIC ANALGESICS N3A ANTI-EPILEPTICS M1A ANTIRHEUMATIC N-STEROID 5 N6A ANTIDEPRESS.& MOOD STAB. J1C BROAD SPECTR.PENICILLINS A10C HUMAN INSULIN+ANALOGUES R5A COLD PREPARATIONS October CAGR% Bubble size reflects absolute value (USD) Source: : IMS Health MIDAS Total Market (TPM + State Hospitals), MAT Dec 2013

16 Market growth Changes to price was the largest driver of TPM growth in % 7.00% 0.88 Elements of growth within SA TPM 7.18% New products Line Extensions Price changes Volume changes Interactive effect 6.00% 5.00% 4.00% % New Products Line Extensions Residual change New products have not had any major effect on the Market Line extensions (NEW SKU's) are not a key growth driver 3.00% Price Changes Price changes accounts for the highest contributor to growth 2.00% 1.00% 0.00% Volume Changes Interactive effect Volume as a growth driver has declined from 2012 Interactive difference has had no effect on growth during % Residual change Residual difference has no impact on growth during 2013 Source: IMS Monthly Feedback Report, Dec October 2014

17 Top corps The top 20 corporations in the private market are responsible for 79% of market value TOTAL MARKET OTHERS Daiichi Sankyo PharmaPlan Reckitt Lilly Abbvie -5.2% Merck Boehringer Novo Nordisk Lupin Labs Bayer -5.6% AZ Roche MSD J&J -2.1% Cipla Novartis Pfizer Sanofi Adcock Aspen 5.5% 7.8% 2.5% 3.0% 6.1% 4.8% 2.7% 1.3% 8.3% 4.7% 4.9% 2.6% 4.2% 7.2% 4.9% 10.7% 11.4% 11.2% 16.7% Value share of market PPG, MAT 8 14 The top 20 companies are contributing less to market value each year; they grew at 4.2% over the last MAT compared with 5.5% market growth -10% -5% 0% 5% 10% 15% 20% 25% 18 October 2014

18 Top products The top 20 products make up 10.8% of the market value, and have very variable growth dynamics -42.4% TOTAL MARKET Total others Corenza C Herceptin Mircera Crestor Odimune Invanz Accuchek Altosec Lantus Mabthera Augmentin GSK Adco-dol Foxair Novomix 30 Celebrex Centrum Concerta Clexane Tribuss Nexiam -5.3% -7.3% -1.9% 5.5% 5.6% 9.2% 1.6% 3.7% 7.6% 8.0% 3.8% 4.1% 4.4% 9.4% 7.9% 4.9% 7.4% 29.5% 29.4% 19.2% 26.9% TOTAL MARKET Total others Corenza C Herceptin Mircera Crestor Odimune Invanz Accuchek Altosec Lantus Mabthera Augmentin GSK Adco-dol Foxair Novomix 30 Celebrex Centrum Concerta Clexane Tribuss Nexiam Value share of market PPG, MAT % -40% -20% 0% 20% 40% 0.0% 0.5% 1.0% 1.5% 19 October 2014

19 Evolution by Schedule shows rising prices of OTC drugs over the last 5 years Share changes are greater in value than in volume 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Volume share Units 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Value share Rands 0% Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19 OTC Prescription 0% Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19 OTC Prescription 20 October 2014

20 Generics Indonesia Argentina Colombia Pakistan Egypt India Brazil Venezuela Saudi Arabia Thailand Poland China S. Africa Turkey Mexico Russia US Value Market Share (%) South Africa has the highest proportion of OB / non-generic value in a comparator basket of pharmerging countries 100% 2013: Country Value Segmentation Dynamics 90% 80% 70% 60% 70% 69% 66% 65% 58% 57% 53% 52% 51% 45% 42% 35% 34% 34% 32% 28% 19% 50% 40% 30% 20% 10% 0% 16% 14% 22% 28% 37% 41% 32% 21% 28% 24% 7% 8% 9% 20% 19% 12% 11% 8% 45% 10% 43% 15% 26% 39% 49% 17% 49% 17% 46% 22% 46% 26% 72% 10% Generics Original Brands / Non-Generics Others Source: IMS Health, MIDAS, MAT Sept Market Segmentation + LIC countries. LIC Countries are Argentina, Egypt, Indonesia, Pakistan, Thailand, Venezuela, Saudi Arabia and Colombia. Above data represent Total Private Market only 21 October 2014

21 Generics Considering the growth trends, generics will continue to erode the market share of non generics over the next four years Volume growth will outstrip volume growth as people consume more, but cheaper medicines Volume market share of private market segments Value market share of private market segments 100% 90% % 90% % 80% 70% 70% % 50% % 50% 40% 40% 30% 20% 10% % 20% 10% % MAT/12/2009 MAT/12/2010 MAT/12/2011 MAT/12/2012 MAT/12/2013 0% MAT/12/2009 MAT/12/2010 MAT/12/2011 MAT/12/2012 MAT/12/2013 NON GENERIC PRODUCTS GENERIC PRODUCTS NON CATEGORIZED PRODUCTS Volume Source: IMS TPM Market Segmentation, MAT Dec % NON GENERIC PRODUCTS CAGR 4.48% 7.31% GENERIC PRODUCTS CAGR 11.65% 6.50% NON CATEGORIZED PRODUCTS CAGR 12.38% Value 22 October 2014

22 Generics More products will lose patent protection in the future than in the past 4 years (global) A quarter of those will be from 4 companies Number of Products went Off-Patent ( ) N=357 Sanofi 17% Pfizer 45% 7% 5% 5% 5% Roche 3% 3% 4% 3% 3% GlaxoSmithKline Euro-Celtique Merck & Co AstraZeneca Bristol-Myers Squibb IAF Biochem Johnson & Johnson Others Number of Products going Off-Patent ( ) N=999 55% 9% 7% 3% 6% 5% 4% 3% 3% 3% 3% Pfizer GlaxoSmithKline Novartis AstraZeneca Bristol-Myers Squibb Boehringer Ingelheim Johnson & Johnson Lilly Merck & Co Novo Nordisk Others GSK lost the patent of almost 62 products in last 5 years 8 in J7B1 (Comb. With Tetanus Compnt.), 6 in N2C1 (Antimigrain Triptan) and 6 in R3A (B2 Stimulants) Pfizer will be losing almost 92 patents till in L1H (Protein Kinase Inh A-Neo). Erlotinib and Afatiniib will be expiring in near future (2016 and 2018 respectively) Source: IMS Lifecycle Patent Focus 23 October 2014

23 Price R per SU % PP growth In the retail sector the price per Standard Unit has increased by 31% since before SEP was introduced The increase is more striking since 2005, at 47% Average Price per SU Growth October 2014

24 ZAR, millions Market Share % ZAR, millions ZAR, millions Market Share % ZAR, millions Distribution Full line wholesalers continue to be the largest carrier from both a value and volume perspective Despite their small market share Distributors have shown strong growth Wholesaler values Q Q Wholesaler volume Q Q % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% SHORT LINE WHOLESALERS DISTRIBUTORS MANUFACTURER DIRECT SALES Value Source: IMS Trade Channel Analyser, Q % 90.00% 80.00% % % % % % % % % 2012 FULL 2013 LINE WHOLESALERS FULL 2014 LINE WHOLESALERS SHORT LINE WHOLESALERS FULL 2014 LINE WHOLESALERS SHORT LINE WHOLESALERS DISTRIBUTORS FULL LINE WHOLESALERS SHORT LINE WHOLESALERS DISTRIBUTORS MANUFACTURER DIRECT SALES DISTRIBUTORS 6.41% DISTRIBUTORS CAGR ( ) 12.09% MANUFACTURER DIRECT SALES MANUFACTURER DIRECT SALES 7.97% FULL LINE WHOLESALERS CAGR ( ) 3.15% 4.70% MANUFACTURER DIRECT SALES CAGR ( ) -0.12% 6.20% SHORT LINE WHOLESALERS CAGR ( ) 9.95% Volume 25 October 2014

25 Market share % ZAR, millions Market share % Trade channels Independent pharmacies and small groups remain the largest contributing trade channel in South Africa National managed chain pharmacies are the second largest segment. Together they contribute to ~60% of value and ~71% of volume share Trade channel value Q Q Trade channel volume Q Q % % 80.00% % % % 40.00% % % % 0.00% % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% % % INDEPENDENT PHARMACIES & SMALL INDEPENDENT GROUPS MAIL ORDER / COURIER PHARMACIES PRIVATE HOSPITAL & PHARMACY BUYING GROUP INDEPENDENT PRIVATE HOSPITALS SUPERMARKET GROUP PHARMACIES OTHER HEALTHCARE PROFESSIONALS Source: IMS Trade Channel Analyser, Q NATIONAL MANAGED CHAIN PHARMACIES PRIVATE HOSPITAL GROUPS GP's & SPECIALISTS RETAIL BUYING GROUP OUTLETS & SMALL WHOLESALERS ALL OTHER PRIVATE 26 October 2014

26 South Africa Prognosis & drivers

27 ZAR, billion Market Forecast The total pharmaceutical market is expected to grow at a CAGR of 5.8% over the period of Sanctioned SEP price increases, NHI implementation and population growth are some of the market vehicles that will drive growth Total Market Sales ( ) % 12% 10% 8% 6% 4% 2% Retail Hospital Other Annual growth 0% Source: IMS MP SA Q The prognosis incorporates an estimate of the value of the unaudited sector (Other Outlets) and, for the purpose of this forecast, assumes that this will grow in line with the rest of the market and hold a market share of 31% throughout the forecast period 30 October 2014

28 Expected events Event analysis key drivers Event Details Trend NHI / transformation of primary care Increased consumption of medicine Improved regulatory framework Price increases Recent and future product launches Source: Market Prognosis, Q October 2014 A gradual roll out of the NHI scheme in three distinct phases covering a period of 14 years culminating in the introduction of a fully operational NHI scheme for the first time in 2025, providing better access to healthcare & greater volumes though not greater value Government efforts to tackle communicable diseases (namely HIV and tuberculosis (TB)) will continue to push up medicine consumption in the medium term, although the switch to fixed dose combination (FDC) formulations has meant in a reduction of volumes and means that the positive impact on volume will less pronounced than in the past. The South African Health Products Regulatory Agency (SAHPRA) will replace the Medicines Control Council (MCC) as the body responsible for the regulation and approval of pharmaceuticals mostly likely in The creation of this body, and legislation enabling mutual recognition by overseas agencies, will mean that registration approval times will decline and the current backlog of applications for registration will be addressed. Department of Health may sanction an additional one-time SEP increase this year if the rand continues to depreciate. The DOH has also proposed the introduction of a differential calculation mechanism that would help to compensate local manufacturers for increases in the cost of imported raw materials. Launch of innovative drugs will drive growth in the market.

29 Expected events Event analysis noteworthy constraints Event Details Trend International Benchmark Pricing implementation Intellectual property law revisions Economic impact Whilst less aggressive than in previous versions, the current draft proposed methodology will still result in impactful price pressure on original brands, and consequent competitive pressures on other brands and on generics Proposed amendments to the intellectual property law envisage the establishment of explicit compulsory licensing provisions, the creation of a patent search and examination regime, and the introduction of a legal pathway enabling the submission of pre-grant opposition motions to patents requested by originators. A continued weak rand is increasing API costs Generic competition & biosimilars Other regulations / legislation Continued loss of exclusivity & the introduction of biosimilars, will have a suppressive effect on overall value Logistics fee capping, Complementary & Applied Medicines, Commission of Enquiry into Private Healthcare costs, Health Technology Assessments. DoH has signaled intent to regulate bonusing and sampling and also intent to adjust Dispensing Fee to accommodate. Source: Market Prognosis, Q October 2014

30 SALES US$BN Global Global growth forecast at 4-7% CAGR to 2018: US$ 1.25 trillion in 2018 * Stagnancy in many developed markets 1,200 1, Global Sales and Market Growth 16% 14% 12% 10% 8% 6% 4% 2% % GROWTH (CONST US$) Developed Markets CAGR US 2-5% Japan 1-4% Germany 2-5% France (-2)-1% Italy 1-4% Canada 3-6% Spain (-2) 1% UK 2-5% Pharmerging Markets CAGR Tier 1 (China) 11-14% Tier % Brazil 13-16% Russia 7-10% India 10-13% Tier 3 5-8% Pharmerging 9-12% (f) Japan 2015 (f) 2016 (f) 0% (f) (f) Pharmerging Tier 1 (China) Pharmerging Tier 2 Pharmerging Tier 3 US EU5 Developed 2-5% At par with region CAGR Lower than region CAGR Higher than region CAGR Global growth (*) at ex-manufacturer price levels, not including rebates and discounts. Contains Audited + Unaudited data. All CAGR calculations are 5 years Source: IMS Market Prognosis, March October 2014

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