Global Contract Manufacturing Trends

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Global Contract Manufacturing Trends

Rhenu BhullerGVP, Pharmaceuticals & Biotechnology

Frost & Sullivan

Pharma Contract Manufacturing, Singapore25-26th October 2010

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Agenda

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Global Pharmaceutical Market TrendsGlobal Pharmaceutical Market Trends

The Global CMO MarketThe Global CMO Market

Drivers and ChallengesDrivers and Challenges

Future Trends and OpportunitiesFuture Trends and Opportunities

The Healthcare World is ChangingThe Healthcare World is Changing

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The Healthcare World is Changing

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• Cost Containment

• Reimbursement changes

• “Pay for Performance”

• Comparative effectiveness

The Healthcare World is Changing

U.S. Reform China build-out U.K.

Cost Challenge

• National HC spend more than $100B

• Expanding medical coverage – 500M rural population

• $1B direct hospital investment by 2012

Access Challenge

• Quality & service-related press focus

• Patient “right to choose” in draft NHS charter

• NHS quality charter

• Quality accounts need to be published

Quality Challenge

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Demographics Drive Access Concerns Globally...

China• 1,300 Million population• 3 Million hospital beds• 2.2 beds/1000 people• 1.4 doctors/1000 people• 60,396 hospitals

Japan• 127 Million population• 1.8 Million hospital beds• 9.9 beds/1000 people• 2.7 doctors/1000 people• 7,785 hospitals

India• 1,100 Million population• 0.8 Million hospital beds• 0.7 hospital beds/1000 people• 0.6 doctors/1000 people• 13,896 hospital

Australia •27 million population•0.213 Million hospital beds•7.9 hospital beds / 1000 people•2.5 doctors/1000 people•1,317 hospitals

Korea•48 Million population•0.283 Million hospital beds •5.5 hospitals beds/1000

people•1.7 doctors/1000 people•997 Hospital

Taiwan •23 Million population•0.136 Million hospital beds•5.9 beds per 1000 of the

population •1.6 doctors /1000 people•556 hospitals

Source: Frost & Sullivan

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The Balance Between Young and Old Is Shifting

In 2000, 10% (606 million) of the global population was aged 60+

By 2050, this will be more than 21% (2 billion)

75% of those aged 60+ have one chronic condition - 50% have two or more chronic conditions

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Global Pharmaceutical Market Trends

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Global Pharmaceutical Market . . . A USD880 billion market in 2011 driven by emerging markets

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However . . . pharmaceutical R&D productivity declines

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The Global CMO Market

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Outsourcing across the industry value chain

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Pharmaceutical Contract Manufacturing Market Segmentation

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Global Pharmaceutical Contract Manufacturing Markets expected to be a USD 40 billion market by 2014

US – stable, but reducing global share to 35%US – stable, but reducing global share to 35%

India – among fastest growing markets, exceeding 10% of global volumes by 2012

India – among fastest growing markets, exceeding 10% of global volumes by 2012

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Global comparisons

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Drivers and Challenges in CMO

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Market drivers

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Recessionary Environment

Restraints CMO Expansion Plans to Meet Demand

Risks Associated

with Safety

Issues Threaten

Manufacturers

Consolidation in Biopharmaceutical

Industry Could Result in Cutbacks

on Number of Service providers

Increasing Competition from

Emerging Regions

Threatens US Share of CMOs

Technology Developments

Require Continuous Capital Expenditure

from CMOs

Market challenges

Source: Frost & Sullivan.Source: Frost & Sullivan.

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CMO = cost, competency are key drivers

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Future Trends & Opportunities

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Emerging Trends

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Emerging Opportunity Areas

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Existing CMO business model

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Emerging CMO Business Model

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Partner of choice: The 3 C’s drive choice

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Industry Best Practices

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Conversion of brand awareness to brand preferenceConversion of brand awareness to brand preference

Customer focused alignment of servicesCustomer focused alignment of services

Growth built on the strength of long standing relationships

Growth built on the strength of long standing relationships

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Key Collaborations: India

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Key M & A’s: India

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Indian Contract Manufacturing Services Market: Drivers, Restraints and Challenges

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[email protected]

Thank you