Pandemic Planning

1. Pandemic Planning Merilee Choy Corporate Development Manager Roche

2. Pandemic Preparedness Planning - Agenda • H5N1 Update • Pandemic Impact • Preparing for the Next Pandemic • Government Guidance • Corporate Resources • Q & A

4. H1 H3 H2 H1 Pandemics Do Happen! H9* 1998 1999 2003 H5* 1997 2003-2006 H7* 1980 1996 2002 2003 2004 1977 1915 1925 1935 1945 1955 1965 1975 1985 1995 2005 1918 Spanish Influenza H1N1 1957 Asian Influenza H2N2 1968 Hong Kong Influenza H3N2 * Avian Flu

5. General Newspaper Coverage Source: CIDRAP Number of Articles 2005 2006 2007 5

6. Countries Affected with H5N1 Avian Influenza in Animals (Cumulative)1 Confirmed H5N1 Avian Influenza Human Cases (Cumulative)1 Avian Flu Threat The near-term threat of a pandemic remains despite declining media coverage of Avian Flu Death rate22008: 77%2007: 67%2006: 69%2005: 44% 2 2 “The media buzz has died down, but the ‘bird flu’ virus has not…We don’t know if the H5N1 virus will spark the next pandemic, but we know that it’s just a matter of time before something does.” – HHS Secretary Micahel Leavitt 1. “Pandemic Planning Update V”, Health and Human Services, March 2008 2. WHO: www.who.int

7. Current Human Morbidity and Mortality due to H5N1 InfluenzaSept. 10-2008 The total case fatality (CFR) rate is 77%. Source: WHO 4/17/08

8. 11 Countries report H5N1 Avian Flu in Domestic Poultry or Wildlife since 2008 • China • Egypt • Germany • India • Iran • Israel • Thailand • Turkey • Ukraine • United Kingdom • Vietnam 8

9. Nations With Confirmed CasesH5N1 Avian Influenza Pandemicflu.gov 421/08

10. Human Cases as of May 2008

11. Who Has Been Infected? >50% younger than 20 >90% under 40 Men and women equal Lowest death rate? Over age mid 40’s Very young < 5 years CFR 10-19 = 75% 20-29 = 66% 30-39 = 66%

12. Some experts predict a potential spread of a pandemic globally in less than 6 weeks

13. What Does This Mean? No one knows….We’ve never been able to follow virus mutations this closely before! Are we closer to a pandemic? Will H5N1 be the one to cause the next pandemic? Will the next pandemic look like past pandemics? Nobody can tell you the three things you want to know……….when, which virus, how bad So, what do we know?

14. “Everything we do before a pandemic will seem alarmist and everything we do after will seem inadequate” Michael Leavitt Secretary of HHS

15. No Cases in North America…yet No cases in North & South America 15

16. Pandemic Phases & Trigger Definition WHO Phases Pandemic Period Post- Pandemic Period Inter-Pandemic Period Pandemic Alert Period Post Pandemic Period Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 • Low risk of human cases • Higher risk of human cases • Return to inter-pandemic period • No or very limited human to human transmission • Evidence of increased human to human transmission • Evidence of significant human to human transmission • Efficient and sustained human to human transmission Current Phase Source: WHO, Roche’s Pandemic Plan

17. Impact of Recent Health Crises on GDP Expected Severity of Catastrophic Risks1 Potential Pandemic Impact An influenza pandemic is more likely and is expected to be far more severe than other catastrophes and recent health crises % Reduction in GDP $800B A severe pandemic may infect approximately 30% of the U.S. population, resulting in almost 2 million deaths2 Pandemic Severity (U.S. GDP Reduction) Cyclone Earthquake Terrorism Flooding $0B Likelihood Low - 1% High - 10% 3 2 3 3 Represents $5B of expected impact (severity x likelihood) (estimate) 1. “Global Risks Report 2008”, World Economic Forum, Jan 2008 2. “Pandemic Flu and Potential for U.S. Economic Recession”, Trust for America’s Health, March 2007 3. “Actuarial Reflections on Pandemic Risk and Its Consequences”, European Actual Consultative Group, May 2006

18. Expected Business Impact of a Pandemic1 Comments What Experts Are Saying Experts and pandemic planners acknowledge the likelihood of a near-term pandemic and expect it to be highly disruptive to corporations "We can't delude ourselves about the threat of a pandemic influenza – it has not diminished.” -Keiji Fukuda, coordinator for the WHO Global Influenza Program “Scientists fear that the H5N1 strain of bird flu virus could mutate into a form that spreads easily among humans, potentially sparking a pandemic that could kill millions” -Associated Press, May 20082 “The ability of the avian flu virus to acquire efficient human-to-human transmission is likely one amino acid mutation away” -PLoS Pathogens, October 20073 % of Respondents 88% of pandemic planners believe a pandemic would be disruptive on their business “In the event of pandemic influenza, … employers will play a key role in protecting employees' health and safety.... Planning for pandemic influenza is critical.” - CDC 1. Pandemic Planner Research, Trinsum, Feb 2008 2. “Pandemic Flu Threat Remains Substantial, Experts Say”, Associated Press, May 2008 3. “Growth of H5N1 Influenza A Viruses”, PLoS Pathogens, October 2007

19. The Impact of Disaster Planning on a Company’s Shareholder Value1 Business Crises Facts Benefits of Pandemic Planning Preparing for disruptions like an influenza pandemic has significant economic, business resilience, public relations, and regulatory benefits Cumulative Abnormal Returns (%)2 • 73% of businesses that have a prolonged disruption (greater than 10 days) close or suffer long-term impact3 • 43% of businesses suffering a disaster never recover sufficiently to resume business. Of those that do reopen, only 29% are still operating 2 years later4 • Failure to plan adequately could create significant PR, regulatory, insurance, and financial exposures5 • There might be a legal duty to prepare and breach may be actionable5 Effective Crisis Response +7% -15% Ineffective Crisis Response Trading Days After the Event 1. “The Impact of Catastrophes on Shareholder Value”, University of Oxford; 2. Change in market cap adjusted for market movement 250 trading days after event 3. Crisis Management 4. National Archive and Records Administration 5. “Pandemic and Legal Issues: An Unexpected Relationship?”, McGuire Woods LLP, 2008

20. About the Roche Group • Founded in 1896 and Headquartered in Basel, Switzerland • Over 100 years in the U.S. • Roche has operating divisions that span the healthcare gamut • Diagnostics to pharmaceuticals to monitoring devices • Globally employ more than 68,000 people • Operate in more than 60 countries • 2005 sales ~ $ 27.1 billion* • Invest more than $4 billion per year in R&D * Includes Genentech

21. Roche Faces Challenges Similar to Other Critical Companies • Coordination Challenges • Thousands of employees spread out geographically • Supply Chain Risk  • Roche has numerous vendors around the globe • Business Continuity Challenges • Patients rely on the steady supply of life sustaining drugs • Dependent on Infrastructure • We are reliant upon the resilience of organizations that provide essential services such as water, electricity, highways and other critical infrastructure • People Challenges  • Disaster planning can best be measured on how well we take care of our people • Senior Management Support • Champion at executive level is paramount

22. Business Continuity Plan - Key Learnings Business Continuity Plan - Key Learnings NOT ‘Business As Usual’ During A Pandemic • Your company needs to establish what your pandemic operating strategy is, before developing the details of the plan • During a pandemic internal/external stakeholders will most likely have different expectations and needs – try to anticipate these expectations and needs as well as how the organization will respond to them External/Internal Stakeholders Expectations And Needs • Leverage crisis management experts to provide an objective “outside-in” perspective into the pandemic planning process External Crisis Management Experts Points Of Coordination Between Functions • During Katrina, although many functions/agencies had robust plans, breakdowns occurred at the points of coordination between functions/agencies

23. Business Continuity Plan –Key Learnings (cont) Pressure Test The Plan • Roche continually holds simulations to pressure test the plan and making updates based on the learnings from the simulations • Increase confidence and experience in HQs ability to manage the pandemic crisis situation • Practice using the pandemic plan and supporting tools • Generate appreciation for what it means to be in the thick of the crisis • Create awareness for and understand how to manage the emotional / behavioral aspect of a crisis among the leadership team • Surface gaps in pandemic plans Build Redundancy Into Communications Systems • Roche has made investments in private networks and other technologies to build redundancy into our communication systems • Need for robust secure communications during an emergency • During a pandemic we do not know what portion of public or third party communication will be operational Upgrade Our Existing TV Control Room To Provide Simultaneous Data Communications Around The World A Virtual Private Face to Face Videoconference Network A Private Satellite Phone System

24. Roche Employee Protection Program

25. Why Roche Created the Employee Protection Program • Preparing for a disaster means preparing people • No people… no business continuity • Having an employee protection plan can inspire confidence and can reduce absenteeism • “In the absence of fact, people create myth”

26. Employee Protection Strategies What can you do to protect your employees/staff? How can you keep your business going? What are the elements of an effective employee protection program?

27. Prevention and Treatment Strategies Non-Pharmalogical Interventions Administrative Controls Environmental Controls Engineering Controls Personal Protective Equipment Pharmacological Interventions Vaccination Antiviral Prophylaxis and Therapy

28. Prevention and Treatment Strategies Non-Pharmalogical Interventions Administrative Controls Environmental Controls Engineering Controls Personal Protective Equipment Pharmacological Interventions Vaccination Antiviral Prophylaxis and Therapy

29. Vaccinations Are Critical The best method of preventing and reducing the impact of the flu on the population is the timely development, distribution, and administration of influenza vaccine Key target groups for seasonal influenza include persons at increased risk for complications: Health care workers People 50-64 YO Children 6-23 MO Pregnant women Key target groups not identified for pandemic influenza

30. Approved H5N1 Vaccine FDA approved vaccine made by Sanofi Pasteur Intended for 18-64 YO Made from an older viral strain from 2004 Requires two doses one month apart Doesn’t work in 55% of recipients? Purchased by the Federal Government for distribution by public health officials only

31. Limited Availability of Antivirals Government Statements of Support Government Support for Stockpiling Due to extremely limited access to antivirals in a pandemic, the federal government encourages private sector antiviral stockpiling • Government stockpile will cover treatment (no prophylaxis) for only ~25% of the population1 • It is extremely likely that demand [for antivirals] will greatly outstrip supply once WHO Phase 4 is declared2 • “Any community that fails to prepare with the expectation that the federal or state government will rescue them will be tragically mistaken” – HHS Secretary Leavitt • “Antiviral drugs can serve as an important part of an employer’s comprehensive pandemic preparedness plan” – CDC3 • “HHS will continue to encourage states, local governments, and private sector entities to share the responsibility for stockpiling antiviral drugs.” – HHS HHS has challenged the private sector to respond to the need for broader pandemic protection 1. “BARDA Influenza & Emerging Disease Program”, HHS, 2008 3. “Corporate Pandemic Preparedness”, Marsh, Inc and Albright Group, 2007 3. “Proposed Considerations for Antiviral Drug Stockpiling by Employers in Preparation for an Influenza Pandemic”, CDC, November 2007

32. Antiviral Therapy Two antivirals for treatment of H5N1: Tamiflu (Oseltamivir) – Roche Relenza (Zanamivir) – GSK Neurominidase inhibitors prevents virus from spreading in your body Things to consider How is it administered Shelf Life Prophylaxis vs. Treatment

33. Potential Role of Antivirals in an Influenza Pandemic The WHO recommends antivirals for the prevention of the spread of pandemic influenza disease through household contacts The CDC and HHS encourages the private sector to consider stockpiling in advance of a pandemic as part of comprehensive pandemic planning program. June 2008 updated draft guidelines on antivirals released. Mathematical modeling suggests that antivirals could delay the spread of a pandemic influenza virus thus gaining time to augment vaccine supplies

34. The Role of Antivirals in an Influenza Pandemic Delay outbreak peak Decompress peak burdenon hospitals/infrastructure Diminish overall casesand health impacts 1 2 1 3 Pandemic Outbreak: No Intervention 2 Daily Cases Pandemic Outbreak: With Intervention 3 Days Since First Case The early use of antivirals + community mitigation strategies could delay the spread of a pandemic, gaining time to develop a targeted pandemic vaccine Centers for Disease Control and Prevention (CDC); Interim Pre-pandemic Planning Guidance: Community Strategy for Pandemic Influenza Mitigation in the United States; February 2007; Available at: http://www.pandemicflu.gov/plan/community/community_mitigation.pdf; Accessed on: July 24th, 2008

35. The Stockpiling Obstacles Obstacles to Stockpiling • Financial investment • Shelf-life • Storage and distribution • Investment flexibility Reward Risk

36. RAPP OFFERING • RAPP = Roche Antiviral Protection Program • Created in response to customer needs • Provides the option to secure antivirals • Minimizes the existing obstacles • Provide companies flexibility around antiviral purchase

37. Summary of RAPP Features and Benefits Feature Benefit • Storage and maintenanceof corporate stockpile • Low annual fee • Usage fee at then wholesale acquisition cost (WAC) payablewhen product is shipped to customer • Right to terminate at any timefor no additional fee • Storage included for no additional cost • Stock rotated as product nears expiry for no additional fee Accessibility - Ready accessto your designated antivirals Reduced financial risk Flexibility - Able to reassessthe investment decision Logistics support – Limits concerns on how or where to store the product Expiration protection – eliminates concerns about product expiration

38. RAPP Terms • Annual Fee: $6.00 per pack • Offer Period: Now until December 23rd, 2008 • Minimum Order Quantity: 2,500 packs (1 pack = 10 pills) • Annual Renewal Fee: $6.00 for initial 2 renewals • Contract Length: One-year contract with optionto renew • Purchase Price: Wholesale Acquisition Cost (WAC)at time of product acquisition (current WAC = $81.36)

39. Available Resources

40. Thank You Merilee Choy Roche Corporate Development Manager Merilee_g.choy@roche.com