The Pharmaceutical Industry in Europe Key data

1. The Pharmaceutical Industry in EuropeKey data

2. Pharmaceutical production in Europe1980-2005 (� million)

3. Pharmaceutical employment in Europe 1985-2005

4. Employment in pharmaceutical R&D in Europe (1985-2005)

6. European total pharmaceutical exports, imports & trade balance 1985-2005 (� million)

7. EU Trade balance � High technology sectors (� million) � 2004

12. Pharmacy Market Growth Rate2005 (%)

13. Breakdown of the world pharmaceutical market 1990 - 2005

15. Total pharmacy market (at ex-factory prices)Average annual growth rate 1994-2004

16. Total pharmacy market (at ex-factory prices)Average real annual growth rate 1994-2004

17. Global corporate performance (worldwide)

18. Leading products (worldwide)

25. BiopharmaceuticalsEurope versus USA (2005)

26. Share of Global Biotechnology Revenues Publicly traded companies (2005)

27. Share of Global Biotechnology R&D Expenses Publicly traded companies (2005)

29. ROUTE OF A NEW SUBSTANCE FROM DISCOVERY TO PATIENT�S ACCESS

31. R&D: Scientific Risk

34. R&D Expenditure as a percentage of GDP (2004)

35. EU / US �Global� Environment USA Basic patent (20 years) Patent Term Restoration � max 5 years, 1984 Biotech Patent, 1983 Orphan Drug Act, 1984 Same levels of IPRs across all States Bayh-Dole Act + National Institutes for Health Economic environment (direct access to a large unified market; competitive market pricing) EUROPE Basic patent (20 years) SPC � max 5 years, 1992 Biotech Patent 2000-yet to be applied in some MS Orphan Drug Reg., 2000 Lower IPRs in some EU MS (+ EU enlargement) European Framework Research Programme Economic environment (no direct market access; price controls; parallel trade) In the early eighties, the US officials identified a series of priority sub-sectors to be the corner-stones of the development of the US economy. The sub-sectors were mainly selected according to their economic contribution and their potential role in further increasing the US dominance at international level. Pharmaceuticals was identified as one of the five priority sectors, the four others being aerospace, automotive industry, information technologies and energy/power generation. Environmental technologies and travel/tourism were later added to the priority list. Therefore the more favourable US climate is not a question of �laissez-faire� market-based economics but the result of a deliberate industrial and innovation policy of the US Government which took a series of key initiatives in various fields such as intellectual property and R&D. The above-listed examples just show that the US are always one step ahead in all legislative and non legislative areas affecting pharmaceutical R&D.In the early eighties, the US officials identified a series of priority sub-sectors to be the corner-stones of the development of the US economy. The sub-sectors were mainly selected according to their economic contribution and their potential role in further increasing the US dominance at international level. Pharmaceuticals was identified as one of the five priority sectors, the four others being aerospace, automotive industry, information technologies and energy/power generation. Environmental technologies and travel/tourism were later added to the priority list. Therefore the more favourable US climate is not a question of �laissez-faire� market-based economics but the result of a deliberate industrial and innovation policy of the US Government which took a series of key initiatives in various fields such as intellectual property and R&D. The above-listed examples just show that the US are always one step ahead in all legislative and non legislative areas affecting pharmaceutical R&D.

36. EU/US �Healthcare� Environment USA A less regulated health system and no monopsony Difference between payer and supplier of health care services Scientific and economic system which is flexible and ready for changes and renewals (universities, small enterprises and high-tech laboratories, integration between schools and enterprises, etc) Financial and fiscal incentives for scientific and technological innovation (access to credits and capital, incentives, flexibility at work, company aids, etc) EUROPE National health services depending on the restrictive requirements of public budgets (welfare, Maastricht, etc) No difference between payer/buyer and regulator of health care services Rigid economic environment marked by fragmented legislation and policies (lack of a single economic European market) Limited incentives to scientific and technological innovation (financial, credit and fiscal incentives)

37. Product life cycle in US and Europe Europe lacks a climate which favours and rewards innovation: Significant market access delays for new medicines; Little (or no) recognition of incremental innovation; Slow diffusion of new medicines. In Europe cost-containment policies tend to focus at the beginning of the product life cycle rather than at the end of the product life cycle like in the US. Europe lacks a climate which favours and rewards innovation: Significant market access delays for new medicines; Little (or no) recognition of incremental innovation; Slow diffusion of new medicines. In Europe cost-containment policies tend to focus at the beginning of the product life cycle rather than at the end of the product life cycle like in the US.

38. Slide Creator: Marsha As a consequence of these differences, overall growth is dominated by the U.S.(+16.3%) ahead of WW growth (+11.4%). New chemical entities launched after 1997 now have a total market share of 62% in the U.S., 21% in Europe, only 7% in Japan and 10% in the rest of the world. The U.S. is by far the most important market for new products. Note: These percentages are based are projected 12 month sales for NCEs The values have not changed significantly in the last 12 months Sept 2000 :USA (62%), Europe(21%), Japan (6%), ROW(10%) Slide Creator: Marsha As a consequence of these differences, overall growth is dominated by the U.S.(+16.3%) ahead of WW growth (+11.4%). New chemical entities launched after 1997 now have a total market share of 62% in the U.S., 21% in Europe, only 7% in Japan and 10% in the rest of the world. The U.S. is by far the most important market for new products. Note: These percentages are based are projected 12 month sales for NCEs The values have not changed significantly in the last 12 months Sept 2000 :USA (62%), Europe(21%), Japan (6%), ROW(10%)

39. Innovation � market penetration According to IMS data, 70% of sales of new medicines (1) marketed since 1999 are generated on the US market, compared with 19% on the European market. Just four years before the share of Europe was 25% against 57% for the US market. (1) New medicines cover all new active ingredients marketed for the first time on the world market during the period 1999-2003.According to IMS data, 70% of sales of new medicines (1) marketed since 1999 are generated on the US market, compared with 19% on the European market. Just four years before the share of Europe was 25% against 57% for the US market. (1) New medicines cover all new active ingredients marketed for the first time on the world market during the period 1999-2003.

40. Impact of Cost Containment Policies on Industry

41. Share of Parallel Imports in Pharmacy Market Sales (%) - 2004

42. Pricing � International referencing

43.

44. Diffusion of Medicines in EuropeCurrent situation Market authorization does not mean access for the patient There are huge differences between a possible optimal treatment and the treatment in reality There are also huge differences in the provision of innovative medicines between European countries

45. Percentage of eligible patientsreceiving statins