The Pharmaceutical Industry
Challenges and Opportunities
Dr Ajit Shetty
Corporate Vice President Enterprise Supply Chain Johnson & Johnson (retired)
Chairman Emeritus of the Board of Directors Janssen Pharmaceutica
Indian Business Chamber of Luxembourg
Luxembourg
June 18, 2012
1
CONTENTS
•
J&J
•
Janssen
•
Health Care
•
The Pharma Market
•
Challenges
•
Opportunities
•
M&A
•
Indian Pharma
•
Conclusions
2
Johnson & Johnson: Global Presence
Global Leader in
Health Care
More than 250
Operating Companies
In 60 Countries
Selling Products in More
Than 175 Countries
116,000 Employees
Worldwide
3
Johnson & Johnson Family of Companies
• Sixth-largest consumer
health care company
• The world’s largest and most
diverse medical devices and
diagnostics company
• The world’s fifth-largest
biologics company
• The world’s eighth-largest
pharmaceuticals company
Jesica Harrington
Diagnostic test fueled hope in her fight against cancer
4
4
2011 Sales by Segment
$ U.S. Billions
Consumer
23%
MD&D
40%
$14.9B
(0.7%*)
$25.8B
1.7%*
$24.4B
6.2%*
Pharmaceuticals
37%
*Operational YOY change
2011 Sales: $65.1 Billion
5
Our Consumer Business Segment




2011 sales of $14.9 billion
Broad portfolio of iconic CPG and OTC brands
Based on sound science and technology
Touching a billion lives every day
Our Pharmaceuticals Business Segment
 2011 sales of $24.4 billion
 Now unified under the Janssen name
 A well-positioned pipeline
– Growing demand
– Emerging markets
– Unmet needs around the world
 Recent product approvals
Our Medical Devices & Diagnostics
Business Segment
 2011 sales of $25.8 billion
 The world’s largest medical technology business
 Focused on emerging markets and an aging
population
 Our most recent acquisition
A premier manufacturer of orthopedic devices
Dr Paul Janssen (1926-2003)
• Founder of Janssen Pharmaceutica
• One of the most prolific researchers into new
therapeutics for use in anesthesia, pain
management, psychiatry, gastroenterology,
mycology and many other therapeutic areas
• Received 22 Honorary Doctorates and 5
Honorary Professorships
• Holder of more than 100 patents
• Over 850 scientific publications
• In the survey Belgian of Belgians (Jan. 2004)
Dr. Paul Janssen has reached the third place
9
Janssen Pharmaceutica Campus
Olen
Geel
Beerse II
Beerse I
Portfolio of Leading Pharmaceutical Brands
Pain Management
•
Fentanyl® / TTS
•
Rapifen®
•
Sufenta®
Psychiatry
• Haldol ®
• Risperdal ®
Neurology
• Topamax®
• Reminyl®
Fungal Infections
•
Daktarin®
•
Nizoral® Shampoo
•
Sporanox®
HIV
•
Intellence®
•
..........
•
...........
Gastroenterology
• Imodium ®
• Motilium ®
•
..........
•
..........
Health Care at $5.7 trillion
is 7-8% of Global GDP
12
Total Healthcare Expenditure
as a percentage of GNP at market prices
US
14
12
Germany
France
Belgium
Italy
Japan
UK
10
8
6
4
2
0
1960
1970
1980
1990
2002
13
Ratio Healthcare Expenditure - Drug Expenditure
Health Care as % of GNP
USA
14
Healthcare expenditure as % of GNP
12
DEU
CHE
10
FRA
CAN
NEDSUE
AUS
AUT ISL
DEN
BELGIUM
NOOR
FINNLZ SP
JAP
IRL LUX
GBR
8
POR
CZE
GBC
6
0
5
10
15
Share of drugs in healthcare
Correlation coeff.:- 0.44
20
25
30
Gradient: 0.13
Constant: 9.99
14
Global Pharmaceutical Market
15
Growth Projections for the Pharmaceutical Industry
16
The Pharmaceutical
Research & Development Process
Timeline / NPD Process
10 - 15 YEARS ~$1B to $1.5B Investment
IND APPLICATION
SUBMITTED
Early
Exploration
Discovery/
Concept
Early
Development
(PC, Ph1, Ph2a)
NDA/BLA
Late
SUBMITTED
Development
Regulatory
(Ph 2b, Ph 3)
Review
PostLaunch
Molecule
Preclinical
First in
Human
Ph2
Ph3
Clinical Trials
FDA Approved Drugs
Pharma R&D spend and new drug approval
18
Global pharmaceutical market generics challenge
19
J&J Counterfeit Products Position
• Our Credo responsibility
• Patients should receive
genuine products
• Taking tangible steps
• Monitor markets
• Work with regulators to
strengthen laws
http://www.jnj.com/connect/about-jnj/views-positions/product-safety/
The global pharmaceutical market growth remains
under pressure
The near term future belongs to the payers
Changing sources
of growth
PHARMA
INDUSTRY
Intensifying
competition
• Increasing generic penetration
in large therapy areas
• Declining R&D productivity
• Mature vs. emerging markets
• Primary Care vs. Specialist
driven
Shifting
stakeholder power
•
•
•
•
Increasing payer power over treatment decisions
HTA controlling access
Increasing patient power
Changes in distribution patterns
Positive Trends
• Global expansion/emerging markets
• Demographics/aging population
• Unmet needs
• Advancing science and technology
22
Drug Usage by Age Band
60% of drugs
are used by
people over 60
And this group
is growing
23
Unprecedented Potential
Waiting for a
more effective
option for
hepatitis C…
Waiting for a solution
for prostate cancer…
ZYTIGA®
Abiraterone Acetate
First-in-class, novel
orally administered
for treatment
of prostate cancer
Telaprevir (VX-950)
Potential first-in-class
protease inhibitor
Waiting for
a better
anticoagulant…
Waiting for a more
convenient way
to treat HIV…
Rivaroxaban
First-in-class,
once-daily
oral anticoagulant
TMC-278
Oral once-daily
single agent/
fixed dose
combination
24
Innovative delivery technology
with therapeutic added value
OROS ® : Osmotic - Controlled
Release Oral - Delivery System
Laser- drilled
delivery orifice
Rate- controlling
semi- permeable
membrane
Drug
compartment 1
Outer coat
Drug
compartment 2
• Oral controlled release
Water
Push compartment
Water
• Once-monthly injection
Cross Sector Synergies
Convergent Technologies
CYPHER
EVRA
Our Vision:
Comprehensive Healthcare
• Prevention
• Diagnosis
• Treatment
27
Survival of the fittest: Takeovers, Mergers and JVs
Smithkline RIT - Beecham
Rhône-Poulenc - Rorer
Pharmacia - Upjohn
Marion Merrell Dow - Hoechst Roussel
Rhône-Poulenc Rorer - Fisons
Kabivitrum - Pharmacia
Nicholas - Roche
Vickx Blendax - Procter & Gamble
Ciba - Sandoz
Sankyo - Luitpold Pharma
Bristol-Myers - Squibb
Roche - Boehringer Mannheim
Sanofi - Synthelabo
Synthélabo - Delagrange & Delalande
Sanofi - Winthrop
Kabi Pharmacia - Farmitalia
Brocades - Yamanouchi
Warner - Wellcome (OTC products)
Cyanamid - AHP
Roche - Syntex
Roussel - Hoechst
Glaxo - Wellcome
Boots - Knoll
Astra - Zeneca
Hoechst-Marrion-Roussel - RhonePoulenc-Rorer (= Aventis)
Warner-Lambert - Pfizer
Monsanto - PharmaciaUpjohn
GlaxoWellcome – Smithkline
Novartis acquires 20% in Roche
Intense M&A activity in biotech
Alza – J&J
Dupont- BMS
28
Survival of the fittest: Takeovers, Mergers and JVs
Chugai Pharm- Hoffmann-La Roche
Hoffmann-La Roche – Novartis
(Novartis owns 33% of Roche)
Pharmacia- Pfizer
Schering – Bayer becomes
Bayer Schering
Wyeth - Pfizer
Searle – Pfizer
Roche Consumer Health – Bayer
Aventis – Sanofi.Synthelabo: become Sanofi-Aventis
APS/ Berk becomes TEVA
Celltech – UCB
Genentech – Hoffmann-La Roche
(Roche becomes majority owner Genentech)
Aventis Pasteur MSD becomes
Sanofi Aventis MSD
Boots – Alliance Unichem becomes Alliance Boots
Altana – Nycomed
IVAX – Teva
Lifescan – becomes J&J subsidiary
29
The Indian Pharmaceutical Industry
An Awakening Giant?
Positive
Improvement Areas
• Excellent, highly skilled people
• Lack of patent protection
• Language is no barrier
• Cost effective
• I/P Protection ?
• Counterfeit
• Low prices
India’s Potential Role as a Pharma Player
From
To
• A low priced generic market
• A market that rewards innovation
• An exporter of generic products
• A major factor in an integrated
R&D / production global effort
(partnership)
• Large presence of counterfeit
products
• A safe and effective supply chain
The future we can influence
32
Conclusion
Global Competition in the
Pharmaceutical Industry
= Competition through Innovation
33