Andreas Barner Minneapolis, July 16, 2007

1. ` Healthcare and Innovation Trans-Atlantic Experts' Roundtable 2007 Opportunities and limitations for health care innovations in Germany Andreas Barner Minneapolis, July 16, 2007

2. Health Care Innovations in Germany The Opportunities: • direct market access and reimbursement immediately after registration • fast registration in the EU

3. Proportion of molecules available to patients at reference dateAll new medicines with marketing authorisation from 1 July 2002 to 30 June 2006 NB – Figure in parenthesis after country name represents the number of molecules with marketing authorisation in each country Source: IMS Management Consulting, May 2007

4. Average time delay between marketing authorisation and market access (hospital and retail delays combined)All new medicines with marketing authorisation from 1 July 2002 to 30 June 2006 NB – Figure in parenthesis after country name represents the number of molecules included in the delay calculation; second number is Phase 6 delay Source: IMS Management Consulting, May 2007

5. Average time difference between US and EMEA marketing authorisation datesUS dates subtracted from EMEA dates n=14 n=16 n=9 n=11 n=6 n=5 Since 2004, the delay between US and EMEA marketing authorisations has increased significantly Source: EFPIA Information Meeting, 30 May 2007

6. Health Care Innovations in Germany The Opportunities: - direct market access and reimbursement immediately after registration • fast registration in the EU • in the early phase after registration innovation being honored

7. Price differentials across the EU are narrowing dramatically 5 core markets all EU 16 * 2003 launches chosen to allow roll-out to be measured across the majority of countries 1997 2000 2001 2002 2003* Source: Cambridge Consultancy Analysis (Analysis covering NMEs launched by the top 14 pharma companies)

8. Health Care Innovations in Germany The Opportunities: - direct market access and reimbursement immediately after registration - fast registration in the EU • in the early phase after registration innovation being honored • good research institutions (universities, Max-Planck-Society, etc.)

9. Top 100 R&D Institutes worldwide Source: Webometrics

10. Health Care Innovations in Germany The Opportunities: - direct market access and reimbursement immediately after registration - fast registration in the EU • in the early phase after registration innovation being honored • good research institutions (universities, Max-Planck-Society, etc.) • biotech companies and pharmaceutical industry active in Germany

11. Biotechnology Companies in Europe for comparison: 1450 Companies in USA number of companies Source: Ernst & Young, 2005

12. Patent Applications on Pharmaceuticals in Germany by Country of Origin Total USA Germany Japan Source: German Patent Office, 2006

13. Patent Applications on Biopharmaceuticals in Germany by Country of Origin 2005: 1.375 Patents Others 22 % USA 43 % France 6 % Great Britain 6 % Germany 11 % Japan 12 % Source: German Patent Office, 2006

14. Health Care Innovations in Germany The Limitations: • acceptance of innovations in Germany

15. Innovative Medicines (NME) compared to other European countriesPercentage share of sales of innovative medicines brought to market in the last 5 years Result: Germany is bottom in Europe in adopting new medicines... As of: 2005 Source: European Pharmaceutical Associations, VFA

16. … but top in prescribing generics Generics in European Pharmaceutical Markets(Percent of Market Sales Value at Ex-Factory Prices) As of: 2005 Source: EFPIA, VFA

17. Health Care Innovations in Germany The Limitations: • acceptance of innovations in Germany • cost containment measures and health care reforms

18. Health Care Reforms in Germany Gesund- heits- struktur- gesetz GKV-Soli- daritäts- stärkungs- gesetz Arznei- mittel- Ausgaben- begrenzungs- gesetz Gesund- heits- moderni sierungs- gesetz GKV-Wett- bewerbs- stärkungs- gesetz Festbetrags- anpassungs- gesetz GKV-Neu- ordnungs- gesetz Haushalts- begleit- gesetz 1983 1989 1992 1997 1999 2000 2001 2002 2003 2004 2006 2007 200? Gesund- heits- reform- gesetz Beitrags- entlastungs- gesetz GKV-Gesund- heitsreform Arznei- mittel- budget- ablöse- gesetz Beitrags- sicherungs- gesetz Arznei- mittel- versorgungs- Wirtschaftlich- keitsgesetz ??? Source: Bayer Health Care

19. Most recently: • April 1st 2007 “Law for the Strengthening of Competition in the Statutory Health Insurance (SHI)” affects: • Private health insurance, • Statutory health insurance, Hospitals, • Physicians, • Patients, • Pharmaceutical industry - patented + generics • The law stipulates: adherence to established international standards in benefit assessments and cost/benefit assessments (IQWiG)

20. Health Care Innovations in Germany The Limitations: • acceptance of innovations in Germany • cost containment measures and healthcare reforms • patented compounds and generics in one reimbursement group • Institute for Quality and Efficiency in the Health Care Sector (IQWiG) – still to be proven to live up to convincing quality standards and internationally accepted scientific standards

21. Introduction of health economic assessment: Structure of the decision making process Ministry of health (MoH) Tasks Supervision Supervision IQWiG G-BA Sawicki guest at G-BA meetings Panels Committees Departments Commissions Project groups Office Recommendations Decisions MoH has to approve G-BA decisions Statutory health insurance (90% of population), manufacturers

22. Institute for Quality and Efficiency in the Health Care Sector (IQWiG) • Carrying out HEA and benefit analysis • Established 2004 as private foundation • Located in Cologne • Bodies: - Foundation Council and Executive Board - Scientific Advisory Council (10 members) - Board of Trustees (30 members) • 8 departments with 72 (50 scientific) staff • 2006 budget: EUR 11 million • Financed with funds from statutory health insurance • Public funding only if MoH commissions directly

23. The new law reflects some of industry’s wishes • IQWiG will have to comply with international standards of both evidence-based medicine and health economics. • IQWiG must guarantee transparency and the participation of experts, industry and patients for ongoing and future assessments. • Participation of industry is required in all steps of the assessment. • Set of definitions of patient benefit is widened and determined by law.

24. Recent IQWiG Reports/Draft Reports are being debated controversially • stem cell transplantation • antihypertensives (draft report)(e. g. in contrast to NICE evaluation) • the atorvastatin case(e. g. in contrast to decisions taken by formularies in the US) • short-acting insulin analogues(in contrast e.g. of International Diabetes Federation, also a Cochrane recommendation)

25. Conclusions • Germany has a history of good access to innovations in health care with immediate access to directly after registration • Germany has a variety of very good research institutions, of pharmaceutical companies and of biotech companies to continue to be attractive for scientists and companies.

26. Conclusions • Germany has in the recent past had many cost containment measures and endorsed legislations which decreased the value of patents and innovation. • The institutions to judge the value of innovations (in particular the IQWiG) still need to demonstrate that they can live up to international standards.

27. Thank you for your attention