Looking East – the role of generic Pharmaceuticals in

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14 Δεκ 2012 (πριν από 4 χρόνια και 10 μήνες)

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Looking East


the role of generic

Pharmaceuticals in reducing the

cost of healthcare

Dr. Brian W Tempest

Chief Mentor & Executive Vice Chairman of the Board

Ranbaxy Laboratories Limited


Barcelona


21
st

March’06


Except

for

the

historical

information

contained

herein,

statements

in

this

presentation

and

the

subsequent

discussions,

which

include

words

or

phrases

such

as

“will”,

“aim”,

“will

likely

result”,

“would”,

“believe”,

“may”,

“expect”,

“will

continue”,

“anticipate”,

“estimate”,

“intend”,

“plan”,

“contemplate”,

“seek

to”,

“future”,

“objective”,

“goal”,

“likely”,

“project”,

“should”,

“potential”,

“will

pursue”

and

similar

expressions

or

variations

of

such

expressions

may

constitute

"forward
-
looking

statements"
.

These

forward
-
looking

statements

involve

a

number

of

risks,

uncertainties

and

other

factors

that

could

cause

actual

results

to

differ

materially

from

those

suggested

by

the

forward
-
looking

statements
.

These

risks

and

uncertainties

include,

but

are

not

limited

to

our

ability

to

successfully

implement

our

strategy,

our

growth

and

expansion

plans,

obtain

regulatory

approvals,

our

provisioning

policies,

technological

changes,

investment

and

business

income,

cash

flow

projections,

our

exposure

to

market

risks

as

well

as

other

risks
.

Ranbaxy

does

not

undertake

any

obligation

to

update

forward
-
looking

statements

to

reflect

events

or

circumstances

after

the

date

thereof
.

Disclaimer

Asia’s Share of the World GDP (at PPP in %)


Year

1870

1913


1950

1973

2001




China 17% 9% 5% 5% 12%


India 12% 8% 4% 3% 5%


Japan 2% 3% 3% 8% 7%


Rest of Asia

7%

5%

7%

9%

13%




Total Asia

38%

25%

19%

25%

37%



Source


WEF






Davos 2006

Source


FT



The Productivity Advantage


India

a usa pharma view


USA


1 chemist FTE





1 chemist FTE


70 h/week





50 h/week


$ 800 monthly





$ 12,000 monthly

Better education x 1,3

Longer working time x 1,3

Lower cost x 20

Sources: IPHMR Conferences, New Delhi August 2004


Europe
-

retirees grow faster than workers


-

fertility rates lower



Japan
-

expansion of grey segment



USA
-

over 50’s 88m will grow to 118m (2020)


-

obesity



China
-

one child families


-

get older before becoming wealthy


-

labour costs will rise owing to labour shortage


-

rural to urban flow



India
-

will remain very young


-

source of the extra needed global workforce



The Ageing Advantage


The R&D Investment Advantage



Most attractive R&D Investment locations:



1. China


2. USA


3. India


4. Japan


5. UK



Source


UNCTAD 2005






Qualified Scientists & Engineers



Global India players with Alliances




English speaking



TRIPs compliant



IIT, IIM & other scientific institutions



Source


UNCTAD 2005

The R&D Investment Advantage

-
reasons why

Genetic engineering research 165

Transgenic work 55

Therapeutics 25

Basic research 28

Universities > 250



Source


Dept. of Bio
-
technology







The R&D Investment Advantage

-

research institutions in India


4
th

largest reservoir of Scientific Manpower




2
nd

largest in terms of speaking English



3m graduates pa, 115k MSc Chemistry




345k IT, USA 75k




Knowledge super power



Lead by a Scientist as President



Diaspora network (25m across 120 countries)



The world’s largest free nation



US & Europe will not dominate Science, Maths, IT





The Knowledge Advantage

The Knowledge Advantage

The State of European Science Teaching

Source


Royal Society of Chemistry, Policy Bulletin


Winter 2006

“This means that when pupils are in a science laboratory their experience is


unsafe, unsatisfactory or uninspiring for 65% of the time. In addition, 13%


of science classes are not taught in a laboratory at all”




Laboratories in UK state schools:



Excellent



5%


Good




29%


Basic/uninspiring


41%


Unsafe/unsatisfactory


25%


GDP World growth marginally less in 06 than 05 (+4.3%)




USA expansion at a slower growth than 05 (+3.6%)




Eurozone


expected to perform better than USA




Asia :


PRC


slightly slower growth to prevent hard landing


Japan


sustain current growth


India


increasing growth rate


Chindia


40% population, 8% economy



Largest foreign affairs caucus in US Congress (180)



74,000 demonstrations reported in 2005 in China





The Economic Growth Advantage


$b


2001/2 6.1


2002/3 5.0


2003/4 4.7


2004/5 5.5


2005/6 6.5



-

But still only at 10% of PRC levels





The FDI Advantage


$m


2000 110


2001 160


2002 200


2003 250


2004 400


2005 450



Source


Citigroup







Investment by top 15 Indian Domestic
Pharmaceutical Companies

Investment by foreign Pharma companies


Microsoft Global Development Centre (GDCI)



Microsoft Global Services (MGSI)



Microsoft Global Technical Support Centre
(GTSC)



Microsoft Systems Research (MSRI)



Microsoft India Development Centre (MIDC)





Investment by Microsoft in India



Manufacturing growth ‘90’
-

03



-

Chinese manufaturing +12% (90
-
03)


-

India manufacturing +6.5%



Scope for improvement of Government Policies



Revitalisation of agriculture



Further privatisation



Further encouragement of R&D



Prosperous middle class 300m strong



The Potential for Improvement Advantage


34 News TV channels. Oldest 13 years old (NDTV)



5000 newspapers, circulation 17m. 12 with 1m copies each



200m daily readers. 21m new daily readers 2003/2005, +14%



50% rural / 50% urban



Indian are hungry for information





Source: World Business 26.2.2006



The Information Advantage


High quality healthcare



Patients from developed & developing countries



Growing Privatisation



International standards



Low Costs:


Thailand India


-

Open heart $14250 $4400


-

Hysterectomy $ 2012 $ 571


-

Knee surgery $7000 $4500



Better access through airports likely



The Medical Tourism Advantage

0
1000
2000
3000
4000
5000
6000
7000
Teva
Sandoz
Merck
Ratiopharm
Watson
Alpharma
Mylan
Ranbaxy
The Global Generic Pharma companies

Source : Company /Financial reports & presentations

Annual Sales (US$ Millions)


%


1999 13%


2000 17%


2001 20%


2002 30%


2003 35%


2004 40%




Source


Citigroup


*DMF


Drug Master Files







Chindia share of all API* filings

$b
2004

2009


USA 15 27

W Europe 9 14

Japan 3 4

Rest of America 6 9

ROW
25

40



Total
58


94





Source: Frost & Sullivan

The Global Generic Market


The Generic Pharma Landscape

Fundamental drivers of growth


High healthcare costs

Total Healthcare Spending, % of GDP

15.0
11.1
10.1
9.9
8.4
7.9
7.7
7.7
0.0
4.0
8.0
12.0
16.0
United
States
Germany
France
Canada
Italy
Japan
Spain
UK (1)
Source: World Bank, DB Global Pharma Report Aug 2005, OECD Health Data 2005 (1)


2002, UBS European Pharma Report, Sep 2005


The Generic Pharma Landscape

Fundamental drivers of growth


Demographics

Source: World Bank, DB Global Pharma Report Aug 2005, OECD Health Data 2005 (1)


2002, UBS European Pharma Report, Sep 2005

15
20
25
30
Europe
US
2005
2010
2015
2020
2025
Estimated % of regional population over 60

The Generic Pharma Landscape

Fundamental drivers of growth



Patent Expiries

Source : Global Generic Drug Stocks Citigroup Smith Barney, September 2004, IMS Health : MIDAS , MAT June 2005

0
5
10
15
20
2006
2007
2008
2009
2010
Patent expiry, 2006
-

10

$ Bn

Revenues

The Generic Pharma Landscape

Fundamental drivers of growth

Source : Global Generic Drug Stocks Citigroup Smith Barney, September 2004, IMS Health : MIDAS , MAT June 2005

0%
10%
20%
30%
40%
IT
SP
JA
FR
CA
UK
GE
USA
Total
% Growth Constant $

Generics

11%

20%

30%

-
2%

13%

20%

13%

9%

19%

23%

36%


8%


4%

36%


10%

2%

31%

38%

% Share (Volume)

% Share (Value)

8%

5%

8%

2%

20%

20%

16%

7%

2%

Ranbaxy Strategic Direction

US $ 1 Bn

US $ 5 Bn

US $ 2 Bn

2004

2007



Amongst the Top 5


generic Companies



Significant income


from proprietary products

2012



Growth through


-

Organic


-

Inorganic

Competitive Advantages


Aggressive Home Market

Competitive Advantages

Cost of Manufacture

Active Pharmaceuticals Facility, Mohali

Dosage Forms Facility, Paonta Sahib



Highest number of FDA approved plants outside the US

Competitive Advantages

R&D I

R&D III

R&D II

R&D IV

Cost of Innovation

Potential Downsides

Potential downside


Asian Flu

Potential downside


Oil prices

Source


BLS, ELA, The Conference Board

Potential downside
-

Infrastructure

Source


FT









Potential downside


Counterfeit products











































Origin of fake products

seized in EU in 2004



Rank

1.
China

2.
Thailand

3.
Hong Kong

4.
Turkey

5.
USA


Source: FT






Countries where fake

pharma products seized in

2005


Rank

1.
Russia

2.
China

3.
South Korea

4.
Peru

5.
Columbia


Source: PSI









Asia economic strength is returning



Many advantages for India



Some downsides



The feeling in India a turning point has been


reached and passed






Summary

“We have all grown up learning the story of the

unfinished voyage of Christopher Columbus setting

sail to reach India, he discovered America. I now

invite the people of America to complete the voyage


of that great explorer”




Manmohan Singh

Prime Minister of India


July 2005.”

Thank You