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Transcript of The Value of Innovative Drugs – Benefits to Patients and Society AARP Conference Washington, June...
The Value of Innovative Drugs – Benefits to Patients
and SocietyAARP Conference
Washington, June 10, 2003
Daniel Vasella, MDChairman and CEO
2 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Key Questions
Are Americans spending too much on healthcare and drugs?
What are we getting in return?
What are the choices and tradeoffs?
Why do we invest in research and develop of innovative drugs?
How can we best help patients in need?
4 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Source: Efpia 1999 - 2002
-80%
-75%
-68%
-67%
-61%
-41%
-31%
Early infancy diseases
Rheumatic fever and rheumatic heart disease
Atherosclerosis
Hypertensive heart disease
Ulcer of stomach and duodenum
Ischemic heart disease
Emphysema
Drop in death rate for diseases treated with pharmaceuticals 1965 - 1999
Major Achievements of Innovative Drug Therapy
5 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Prescription Drugs Only Account for 10% of US Healthcare Expenditures
39%
22%
10%
6%
24%
Hospital /Long-Term Care
PhysicianServices
Other1
Administration
US national health care expenditure 2001: USD 1.4 bn
Prescription Drugs
1 Dentist and other professional services, Home health care, durable medical products, OTC drug and sundries,
public health, research and construction
Source: Centers for Meidcare & Medicaid Services 2003
6 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
US Spending on Drugs in Comparison withOther OECD Countries
1.91.8
1.6
1.4 1.4
1.11.0
0.0
0.5
1.0
1.5
2.0
France Italy UnitedStates
Canada Germany Switzer-land
Nether-lands
2000 Expenditure on Pharmaceuticals and other non-durable healthcare products in % of GDP
Source: OECD Health Data 2002.
7 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Expenses For Prescription Drugs Are Increasing, but no More Than for Other Daily Expenses
Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2003
Consumption expenditures in the US, USD bn (1996)
0
50
100
150
200
250
300
1995 1996 1997 1998 1999 2000 2001 2002
Video and audio
Auto Repair
Prescription Drugs
Telephone
8 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Increased Spending on Prescription Drugs is Mainly Due to Higher Utilization
47
24
26
Source: Kaiser Family Foundation
Price increases
Increase in prescription volume
Changes in prescription mix
Factors Contributing to Increase in US Prescription Drug Expenditures 1997-2001
9 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
US Prescription Drug Expenditures Are Low Compared with other Every-day Expenses
3.10
1.77
1.58
1.48
1.28
1.27
0.78
HousingFood + Beverages1 Clothing
Auto repair
Prescription drugs
Telephone
Tobacco
Consumption expenditures per day, 2002 in USD
10.39
8.73
Gasoline and oil
Alcoholic beverages
1 excluding alcoholic beveragesSource: US Department of Commerce, Bureau of Economic Analysis, 2003
11 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
-3
-2
-1
0
1
2
+1.00 –3.65 +1.54 -1.11
Positive economic Effect of Innovative Drug Treatment
Source: American Economic Review, 1996
Medication Hospital charges
Outpatient care
Total Savin
gs
Total cost evaluation of innovative drug treatmentUSD
12 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Higher Pharma Spending Offset by Lower Hospital Utilization
10
100
1 000
1960 1970 1980 1990 2000
0
1
2
3
Source: OECD Health Survey, 2002
US Pharma spending per capitain 1995 USD
Hospital daysper capita and year
13 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
435
44
Without Medicatio
n
WithMedicatio
n
Migraine medication significantly reduces employers’ cost
Total costs per employee & month USD 85
55
Without Medicatio
n
WithMedicatio
n
Growth factor (G-CSF) reduces hospital costs of cancer patients
Cost per patientUSD
Source: Legg et al “Cost Benefits of Sumatripton to an Employer” JOEM, Peters “Comparative effects of G-CSF and PBSC therapy” Blood
Innovative Medicines Reduce Total Costs to Society
14 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Inhaled Steroids for Asthma Improved Outcomes and Reduced Costs for Medicaid
-50%
-26% -24%
-60%
-40%
-20%
0%
Hospitalizations Outpatient visitsTotal health-care
costs
Balkrishnan R, Norwood GJ, Anderson A. Outcomes and cost benefits associated with the introduction of inhaled corticosteroid therapy in a Medicaid population of asthmatic patients. Clin Ther. 1998 May-Jun;20(3):567-80.
15 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Innovative Anti-hypertensive Therapies Achieve Superior Compliance
67.4
60.7
54.1
45.6
20.8Thiazide diuretics
Beta-Blockers
Calcium ChannelBlockers
ACE-Inhibitors
AngiotensinReceptor Blockers
Persistence on drug after one year in % of patients
Source: Conlin et al. Clin Ther. 2001 Dec;23(12):1999
16 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
The Average Health of the Elderly Population is Improving
26.2%
19.7%
1982 1999
Manton KG, Gu X. Changes in the prevalence of chronic disability in the United States black and nonblack population above age 65 from 1982 to 1999. Proc Natl Acad Sci U S A. 2001 May 22;98(11):6354-9.
Prevalence of disability in US seniors
25% decrease between 1982 and
1999:
We are not only living
longer but also healthier!
In addition to better outcomes, what does the US get in return
for its high utilization of innovative drugs?
18 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
European Firms Are Moving Research and Operations to the US
GlaxoSmithKline moved its operational headquarters to the US in 2000
Novartis moved its research headquarters to Cambridge, Massachusetts
Schering AG moved its therapeutics division to the US
Organon relocated from the Netherlands to New Jersey
19 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
European Brain Drain to the US
50
60
70
80
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Share of EU born PhD candidates who plan to stay in the USin %
Source: Third European Report on S&T Indicators, 2003
20 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Pharmaceutical Industry is of National Interest
Strategic value of the pharmaceutical industry
High investment in research and development
Export surplus
Valuable jobs and attraction of talent (brain gain)
Technology spill-over to other industries
22 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Source: Novartis research
Earlier Access to Innovative Drugs for US Patients
51
47
3333
20
+29
New Drugs First Marketed in the United States% of all new drugs approved in the US
1987 - 89 1990 - 92 1993 - 95 1996 - 98 2001
Simultaneously launched
23 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Delayed and Limited Access to Important Medical Innovation in Europe
0
10
20
30
40
50
60
1 2 3 4 5
USA
UK
Italy
France
Germany
Market share development of Zyprexa after first launch% of its category
Time since first launch in years
Source: IMS Health
24 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Delayed Access to Glivec/Gleevec for Patients in Europe
Approval time in days
Source: Data from FDA and EMEA: European approval time includes 119 days CPMP assessment and
109 days decision making by the Commission
247
73US
Europe
Effect: Patients in Europe received Glivec 6
months later
25 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Evidence from Research Reveals that….
Diffusion of Medicines in Europe Prof. Dr. Oliver Schöffski, MPH
Universität Erlangen-Nürnberg, Lehrstuhl für Gesundheitsmanagement
In Germany one million people unnecessarily suffer from migraine
In France, 9 in 10 patients with acute asthma do not receive adequate care
Only 5% of UK patients with a prostate cancer are treated by an oncologist
26 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Percentage of eligible patients receiving Statins
More Patients In Europe Are Not Receiving Adequate Treatment
26
23
17
56
36
29
Diffusion of Medicines in Europe Prof. Dr. Oliver Schöffski, MPH
Universität Erlangen-Nürnberg, Lehrstuhl für Gesundheitsmanagement
United States
United Kingdom
Germany
Netherlands
Italy
Switzerland
27 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
There Are Clear Tradeoffs for Patients
Free pricing and fast approval secure rapid access to innovation without rationing
Market-driven generic substitution lowers cost and frees up resources for innovation
Innovative drugs lower overall healthcare expenditure as most are cost-effective
More choice, independence and modern therapies for US patients
30 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
GSK Pfizer Merck AstraZeneca
Aventis BMS J&J Pharmacia Novartis Lilly
2000 2001 2002
Novartis Launched Most New Molecular Entity Approvals Across Industry in Past Three Years
Number of NMEsZelnorm,
Elidel,Foradil,Gleevec,Zometa,Trileptal,Visudyne,
Exelon,Rescula,Starlix
23
2 21 1
2
4
10
1
US approvals (NMEs) for Top 10 pharma companies 2000 – 2002
Source: FDA website, company websites, other public domain information
32 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Novartis Leads in Providing Discounts to Seniors: CareCard, CarePlan and Together Rx Card
33 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Impressive Savings for US Seniors Through TogetherRx Card and Novartis CarePlan Up to 11 million Medicare enrollees are eligible
Seniors with low income1 and no prescription drug coverage receive Novartis drugs at significant discount
Currently there are 772 000 Together-Rx and 53 000 Novartis CareCard enrollees
Total savings for patients amount to over USD 90 million
Novartis has provided almost USD 24 million in savings1 Medicare enrollees without prescription drug coverage and annual income under USD 18,000 (couples under USD 24,000) receive Novartis prescriptions for USD 12.00. Individuals with annual incomes between USD 18,000 and USD 28,000 (couples between USD 24,000 and USD 38,000) receive a discount of 25% of Wholesale Acquisition Cost which translates into 25 - 40%
34 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Novartis Patient Assistance Program Provides Drugs to Patients not Covered by Third Parties
The number of uninsured Americans increased to over 40 m
Key facts about the Novartis Patient Assistance Program
Easy access through toll-free phone, internet and physician offices
More than 30 Novartis products provided
Eligible are patients with low income, not covered by third parties
Currently there are over 200 000 enrollees
High customer satisfaction
Since 2001, products worth more than USD 200 m supplied
35 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Novartis’ Patient Assistance Program for Gleevec
Facts about Gleevec/Glivec Revolutionary therapy for Chronic
Myeloid Leukemia and GIST High price but cost-effective
therapy based on unprecedented response rates
Relatively small patient population
Novartis Patient Assistance Program
Liberal patient assistance program: more than 10% of all patients receive drug for free or at significant discount1
Similar provisions for patients in other countries
1 Annual household income less than 500% of federal poverty level, assets not to exceed USD 250,000
36 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Novartis Commitment to Patients
Patient Assistance ~ 1 m CHF per day contributed to those in need 12% of all Gleevec/Glivec patients receive assistance
worldwide Free medicine donation until leprosy is eliminated
worldwide Malaria drug, Coartem, provided at cost for the
developing world 100 000 treatments for tuberculosis per year for 5 years
in Africa
Innovative Medicines 10 new drugs brought to patients in key markets in
2000–2002 5 new molecular entities to launch in 2003-2004 Research and development grow overproportional to
sales 122 m USD funding with Singapore government for
Novartis Institute for Tropical Diseases for research in neglected diseases of the developing world
37 AARP Conference / Dr. Daniel Vasella, Chairman and CEO / June 10, 2003
Shared Healthcare Imperative
1. Get Medicare drug benefit bill passed in the US during the 108th Congress bringing coverage, access and choice for senior patients
2. Accelerate drug development and improve regulatory communications to get medicines to patients faster
3. Respect IP, so industry continues to invest into R&D and provides a continuous flow of innovative drugs
4. After patent expiries generics free up funds to be redeployed in innovative medicines
5. Form genuine partnerships at the state level to manage healthcare cost pressures
6. Fund access to medicine initiatives with focus on distribution and infrastructure