Facts and Figures 2012

Pharmaceutical HealthcareFacts and Figures

For a PowerPoint version of Pharmaceutical Healthcare Facts and Figures 2012please visit www.ipha.ie.

All facts and figures were correct at time of going to print in April 2012.

The Irish PharmaceuticalHealthcare Association (IPHA)represents the internationalresearch-based pharmaceuticalindustry in Ireland. Its membercompanies include bothmanufacturers of prescriptionmedicines and non-prescription orconsumer health care medicines.

IPHA

Pharmaceutical Healthcare Facts and Figures 2012

1

2

The Irish economy has undoubtedly been experiencing one of

its most challenging periods over the last four years. As a small

open economy, we are more exposed than most to the global

downturn, which has in turn been exacerbated by domestic

problems in banking and the property market.

Real hardship has been experienced, especially by those who have lost

their jobs. However, there are signs that better times are ahead as

Ireland has implemented strong measures to deal with the banking

issue and the national debt. Much uncertainty remains and more

austerity measures must be implemented. However, the public

finances remain on track for recovery and we are moving in the right

direction for a return to economic growth.

A key driver in this process of recovery is Ireland’s exports with the

international research-based pharmaceutical industry in Ireland

leading from the front. Along with chemicals and medical products,

the industry already accounts for 50% of our exports, generating a

record €55 billion in 2011, consolidating Ireland’s position as the

largest net exporter of medicines in the world.

For a country of our size, Ireland punches well above its weight in

supporting the international research based pharmaceutical industry.

Underpinning the industry are more than 120 companies, who as well

as playing a key role in meeting the healthcare needs of Irish people

Introduction

3


through the provision of innovative and effective medicines, provide

employment both directly and indirectly, to almost 50,000 people in

this country.

Numbered amongst the companies with a manufacturing presence

here are 13 of the top 15 global players, producing 5 of the top 12

medicines in the world.

In order for our industry to optimise its leading role in driving

economic recovery, it is essential that conditions prevail that will

continue to allow innovation and excellence to thrive. A strong

pharmaceutical industry and a domestic economy returning to

growth go hand in hand.

This 2012 edition of Pharmaceutical Healthcare Facts and Figures

compiles the most up to date information on the industry in Ireland,

its place in a global context and invaluable data on healthcare trends

and innovation.

It is an important resource for those seeking an overview of our most

dynamic and innovative industrial sector.

David Gallagher

IPHA President

4

Healthcare Today 6

Public Expenditure on Health 2002-2012

Health Expenditure as a % of GDP 2009

Annual Growth Rate of Public Expenditure on Health Per Capita 2009

Number of Day Cases Treated in Ireland 2002-2010

Self-Perceived Health Status by Age Group in Ireland 2009

Prevalence and Burden of Chronic Disease

Self-Care Today 14

Self Medication Market in Ireland 2010

OTC Medicines as a % of the Total Pharmaceutical Market 2010

Demographic Trends 18

Population Projections 2011-2041

Life Expectancy 2010

Impact of Ageing on Public Expenditure

Main Causes of Death in Ireland 2010

Healthcare Tomorrow 24

Evolution of Innovative Medicines

Life Cycle of an Innovative Medicine

Cost of Developing an Innovative Medicine

Number of New Chemical or Biological Entities (1991-2010)

Benefits of Innovative Medicines

Need for Continued Medicines Innovation

Contents

5

Medicines in the Community 32

Irish Pharmaceutical Market Decline 2002 – 2011

Community Medicines Schemes Expenditure 2010

Most Commonly Prescribed Products 2010

GMS Expenditure: Overall Cost of Medicines 2002 – 2010

GMS: Decreasing Euro Cost of Medicines Per Person 2005-2011

The Evolution of the GMS 1994 – 2011

Drugs Payment Scheme Expenditure 2002 – 2010

Long Term Illness Scheme Expenditure 2002 – 2010

Making Headroom for Innovation

The Medicines Industry 44

Leading Companies by Sales Globally 2010

Distribution of Global Pharmaceutical Sales by Region 2010

European Trade in Pharmaceuticals 2009

Top Ten EU Countries by Pharmaceutical Employment 2009

Pharmaceutical Production in Europe, Japan and the US

5 of the World’s Top 12 Medicines are Produced in Ireland

Pharmaceutical R&D Expenditure – Annual Growth Rate (%)

Medicines and Global Health 54

Industry Supported Programmes in the Developing World

Number of Positive Health Interventions Made in the Developing World

Map of Pharmaceutical Locations in Ireland 58


6

• Following a period of cutbacks and stagnation in the early 1980’sand 1990’s, Ireland experienced an unprecedented increase inhealth expenditure between 1999 and 2009. Public expenditureon health almost quadrupled during this period. However, giventhe economic downturn and its impact on the public finances, asignificant decline was seen in 2010 and 2011, with a furtherprojected reduction of €750 million in 2012.

• Healthcare expenditure in Ireland equals the OECD average.However, in comparison to its close neighbours such as France andGermany, it is coming from a low base. Irish health expenditure asa percentage of GDP was 9.5% versus 11.8% in France in 2009.

• Relative to the rest of Europe, Ireland continues to have thehighest positive perception of health amongst its population. 84%of the population reported either very good or good health in2009.

• The Irish healthcare system remains a mix between public andprivate expenditure. Just under 50% of the population continueto have some form of private health insurance, although thisnumber appears to be decreasing due to the economic recession.

• The numbers employed in the public health services increased byover 22% between 2001 (90,302) and 2008 (111,025). However,due to the difficult economic situation, the numbers employed inthe health services have decreased with a total of 104,287employed in 2011.

Healthcare Today

• Health expenditure in Ireland accounts for approximately 20% oftotal current public expenditure. In 2010, approximately 13% ofhealthcare expenditure was spent on medicines and non-drugitems supplied to patients under the Community Drug Schemes –this represents a small but vital component.

• The research-based pharmaceutical industry has recognised thatthe State continuously faces a challenge in funding healthcare. Inan effort to assist with these challenges, the industry has agreedrobust, cost effective arrangements for the supply of medicines tothe health services. In the period 2006 to 2010 the industrydelivered savings in the region of €300 million to ensure the Statehad the monies to fund new therapies. In 2010, understandingthe difficult state of the public finances as a result of thedownturn in the economy and following a request from theMinister for Health and Children for immediate savings, theindustry put in place arrangements to yield savings to the State ofapproximately €94 million in a full year. This saving is in additionto the savings of over €105 million generated, from the 2006arrangements, in 2010. The industry further agreed to provideadditional savings of €200 million for the State in 2011.

7


8

Public Expenditure onHealth 2002 – 2012

€ (M

illio

ns)

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Source: Department of Health, Health in Ireland: Key Trends 2011* Projected figure in HSE National Service Plan 2012

2002 2003 2004 2005 2006 2007 2008 2009

8,440

9,367

10,162

11,676

12,709

14,321

15,18615,520

2010

14,818

2011

14,078

*2012

13,317


9

Health Expenditure as a % of GDP 2009

0 2 4 6%

8 10 12

Source: OECD Health Data 2011

7.8

9.2

9.5

9.5

9.5

9.5

9.8

10

10.9

11

11.4

Luxembourg

Finland

Ireland

Spain

Italy

OECD

UK

Sweden

Belgium

Austria

Switzerland

Denmark

Germany

France

The Netherlands

11.5

11.6

11.8

12

10

Annual Growth Rate of PublicExpenditure on Health Per Capita 2009

-8 -6 -4 -2 0 2 4 6 8 10% Growth

Source: OECD Health Data 2011* 2008 Data

6.5

1.8

-3.2

2.8

3.1

-0.6

4.5

-7.0

-0.4

2.9

3.1

8.1

0.4

7.5

Denmark

Ireland

Sweden

UK

Finland

Norway

Austria

Switzerland

Portugal*

Luxembourg*

Germany

Italy

Spain

France


11

Number of Day Cases Treated in Ireland2002 – 2010The number of day cases treated in Ireland has increased by 143% since 2002

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

Source: Department of Health, Health in Ireland: Key Trends 2011

2002

353,179

2003

389,244

2004

425,205

2005

442,692

2006

661,589

2007

718,238

2008

770,546

2009

818,884

2010

857,596

12

Self-Perceived Health Status by AgeGroup in Ireland 2009

0

10

20

30

40

50%

60

70

80

90

100

Source : Eurostat, Self-perceived health by sex, age and activity status 2011

16-24 25-34 35-44 45-54 55-64 65-74 75-84 Total85+

Bad/Very Bad Fair Good Very Good


13

Prevalence and Burden of Chronic Disease

• Chronic diseases such as diabetes, hypertension, heart disease and stroke are alarge and growing burden on the health of Irish people and the Irish healthcaresystem.

• The rising prevalence of chronic disease is partly the result of a population thatis ageing and increasingly obese. It is estimated that about 60% of adults andabout 20% of children and teens in Ireland are either overweight or obese.These percentages are expected to continue to rise.

• Today, approximately 25% of the Irish population have a chronic diseaseaccounting for 78% of the country’s healthcare spending.

• Approximately 80% of GP consultations and 60% of hospital days are related tochronic disease and their complications making those people the most frequentusers of healthcare in Ireland.

• 2 out of 3 patients admitted as medical emergencies have exacerbations ofchronic disease and 60% of deaths are as a result of a chronic disease.

• Chronic diseases can be disabling and reduce a person’s quality of life,especially if left undiagnosed or untreated.

• There is a significant increase predicted in chronic disease due to the estimateddoubling of the elderly population over the next 30 years. If the current trendscontinue there will be significant implications for the healthcare system e.g. it isestimated that bed requirements in hospitals will increase by 50-60% over thenext 15 years.

• Approximately 60% of the disease burden in Europe is accounted for by 7preventable risk factors including high blood pressure, tobacco, alcohol, highcholesterol, overweight and obesity, poor diet and physical inactivity. Many ofthe consequences and costs of chronic disease are avoidable through screening,early intervention, behaviour change and the elimination of key risk factorssuch as poor diet, inactivity and smoking.

Self-Care Today

14

• Consumers want to actively manage their own health and are takinggreater individual responsibility for their healthcare and healthchoices.

• The health, social and economic benefits of responsible self-medication are well known and have been extensively reported1.

– Patients and consumers benefit due to wellness, enhancedproductivity and improved health in terms of prevention andincreased patient satisfaction as a result of being able to obtainthe correct medication directly.

– Employers gain by having employees attend work when theymight otherwise have stayed at home.

– General Practitioners save time which enables them to better usethat time for those patients with complicated or serious illnesses.It is estimated that 51.4 million GP consultations in the UK aresolely for minor ailments. Over half these consultations aregenerated by people aged between 16 and 59. It is estimatedthat this represents 18% of a GP’s workload. Furthermore, it isestimated that the total cost to the NHS of these consultations is€2 billion2. It also presents more of an opportunity for doctorsto educate patients about common ailments and diminishespatient expectations of a prescription for every visit.

– Pharmacists play a more active advisory role using their skilledknowledge of medicines and expertise in advising on symptoms.

– Consumers pay less visits to accident and emergencydepartments and doctor surgeries. This in turn reduces thenumber of prescriptions, most of which are paid for, directly orindirectly, by the State.

1 The Story of Self-Care and Self-Medication. 40 years of progress 1970-2010 (WSMI 2010)

2 Royal College of General Practitioners conference on self care (report in GP, 18 November 2010)Report in “The Independent” (16 March 2010)


15

• The Association of the European Self-Medication Industry (AESGP)has estimated that savings of over €75 million annually could beachieved in Ireland if self-medication was practised more widely.These savings could be put to better use elsewhere in thehealthcare system.

• Self-medication is an important element of the total Irish marketfor pharmaceutical products and was valued at €273 million in2010 accounting for 11.9% of the total pharmaceutical market.The leading areas of the market include analgesics (€79.9m),cough and cold treatments (€49.7m) and skin treatments (€46.9m).

16

Self Medication Market in Ireland 2010

Source: AESGP, Economic and Legal Framework for Non-Prescription Medicines 2011*At consumer price level

Analgesics 28%

Cough & Cold 18%

Skin Treatment 17%

Digestives & Intestinal Remedies 12%

Vitamins & Minerals 13%

Others 12%

Total Market: €273m*


17

OTC Medicines as a % of the TotalPharmaceutical Market 2010

0 2 6%108 12 14 16 18 204

Source: AESGP Economic and Legal Framework for Non-Prescription Medicines 2011

8.3

8.0

8.3

11.4

11.5

11.5

11.9

12.6

13.9

14.4

14.5

17.8

18.1

Portugal

Spain

Austria

Italy

Sweden

Finland

Ireland

The Netherlands

Belgium

Germany

Denmark

France

UK

Demographic Tre

18

• The population of the Republic of Ireland increased by over 340,000in the five year period between April 2006 and April 2011. It is set toexceed 5 million within the next 5 years and projected to rise to over7 million by 2041.

• In 2010, foreign citizens accounted for 8.6% of Ireland’s population.80% of these citizens were citizens of another EU27 Member State.

• With an average age of 35.6 years Ireland has a relatively youthfulage structure; however this is set to change. Those aged 65 and overwill account for 20% of the population (1.43 million) by 2041 asagainst just 11% of the population (430,000) in 2001 and the numberof those aged 80 and over is set to increase from a 2001 level of98,000 to 465,000 in 2041. These changes will have significantimplications for public spending and in particular healthcareexpenditure as the elderly typically require 2 - 5 times as manyresources as those under 65.

• The life expectancy of those over the age of 65 has improvedsignificantly in recent years. Life expectancy at birth for malesincreased from 64.5 years in 1950 to 78.7 years in 2010, representinga gain of 14.2 years over the fifty nine year period. Thecorresponding female rates were 67.1 and 83.2 years, respectively,which represents a gain of 16.1 years.

• Although mortality from circulatory diseases has fallen by almost40% between 2000 and 2010, these diseases still account for 33% ofdeaths in the Republic of Ireland.

• Approximately one in five deaths in Ireland is of a person aged lessthan 65 years old.

Source: Central Statistics OfficeDepartment of Health, Health in Ireland : Key Trends 2011


19

nds

20

Population Projections 2011 – 2041

0

1

2

3

4

5

6

7

8

Mill

ions

Year

Source: Central Statistics Office

Total population Population over 65

4,581,269

5,233,300

5,687,500

6,068,200

6,417,200

6,747,900

7,072,200

536,700 648,600 774,800 918,2001,075,700

1,243,0001,434,300

2011 2016 2021 2026 2031 2036 2041


21

Life Expectancy 2010

70 72 74 76 78 80 82 84 86

Source: Eurostat 2011

8579�Italy

Spain

France

Finland

Ireland

Portugal

Austria

The Netherlands

Luxembourg

Germany

Belgium

EU27

United Kingdom

Denmark

8578

8477

8379

8377

8378

8478

8478

8378

8377

8276

8278

8177

8579

Men Women

Impact of Ageing on Public Expenditure

22

Years

Source: The impact of ageing on public expenditure: projections for the EU25 Member States on pensions, health care, long term care, education and unemployment transfers (2004-2050), European Commission 2006

Ireland

Female

Male

0

2000

4000

6000

7000

60-64 yrs

25181939

70-74 yrs

3854

2914

80-84 yrs

5392

4052

90-94 yrs

6110

4604

0

2000

4000

6000

7000

1000

3000

5000

1000

3000

5000

euro

euro

60-64 yrs

28002117

70-74 yrs

4514

3365

80-84 yrs

6034

4472

90-94 yrs

6567

4964

EU 15


Main Causes of Death in Ireland 2010

23Source: Central Statistics Office: Vital Statistics Fourth Quarter and Yearly Summary 2010

Cancer 29%

Respiratory Diseases 12%

Injury and Poisoning 6%

Other causes 20%

Circulatory Diseases 33%

Other Circulatory Diseases 8%

Stroke 7%

Heart Disease 18%

Healthcare Tomor

24

• Research and development of new medicines offers an ageingpopulation hope of a longer healthy life, well beyond that ofprevious generations. For example, there are currently nearly 900medicines in development to combat cancer, 300 for two of theleading causes of death in Ireland; heart disease and stroke, and 235for diabetes and related conditions1.

• Research based pharmaceutical companies are the engines ofmedicines innovation. They have discovered and developed over 90%of all new medicines made available to patients worldwide over thelast twenty years.

• The discovery, development, testing and gaining of regulatoryapproval for new medicines has become an even more highlycomplex, lengthy, risky and expensive process. Each success is built onmany, many prior failures. On average only one or two of every10,000 promising molecules will successfully pass extensive tests andstringent regulatory requirements and go on to be approved asmedicines, which are suitable for use in patients. The cost ofresearching and developing a new medicine has gone from €149million in 1975 to almost €1.4 billion today2.

• It takes an average of 12 to 15 years to develop a new medicine fromthe time it is discovered to when it passes the regulatory standardsof safety, quality and efficacy and is available to patients. Once onthe market the average medicine has only 8 to 10 years of effectivepatent protection remaining before facing generic competition. Onlythree out of ten marketed medicines produce revenues that match orexceed their R&D costs before they lose patent protection.

• The European pharmaceutical industry employs over 115,000 peoplein R&D at a total cost of over €27.4 billion3.

1 PhRMA, Medicines in Development (2011)2 Association of the British Pharmaceutical Industry data (2012)3 EFPIA, The Pharmaceutical Industry in Figures (2011 update)


25

rrow

• Innovation is central to the creation of the knowledge basedeconomy of the 21st century. In Ireland pharmaceutical industryR&D is responsible for 20% of all business R&D.

• The pharmaceutical industry in Ireland invests considerablefunding in clinical trials in this country ranging from under€100,000 by smaller companies to over €1.5 million for largercompanies. This money is ploughed into equipment, theemployment of research nurses, etc. In addition, there areindirect savings associated with industry-sponsored trials in thatpatients taking part in a trial are provided with the newest mostadvanced treatments at no cost to the hospital where they arebeing treated.

• Additionally, companies provide research grants (rangingfrom €5,000 to over €100,000 per annum per company) andbursaries and grants for projects conducted by research studentsand post-doctorate fellows in Irish universities. As well as thefunding that industry provides through its investment in clinicaltrials, companies have considerable expertise in Good ClinicalPractice (GCP) and the general regulatory requirements applicableto clinical trials.

• If innovation is to flourish then it must be rewarded. In addition toescalating R&D costs and regulatory issues, the austerity measuresintroduced by EU countries including Ireland is impacting on thesector.

• Emerging economies such as Brazil, China and India areexperiencing rapid growth in both the market and researchenvironments, which is leading to an increasing number ofpharmaceutical companies, including European ones, deciding tolocate new R&D facilities outside Europe.

26

Evolution of Innovative Medicines Co

mpl

exity

1890 1900 1910 1920 1930 1940 1950Accumulated Knowledge of Human, Cell and Molecular Biology

1960 1970 1980 1990 2000 2010

Source: Boston Consulting Group

SerendipitousObservation

Aspirin

Sulfonamides

Antibiotics

Antihypertensives

Tranquilizers

Anti-arthritis

Beta-blockers

Cancer therapies

CNS drugs

Treatment forautoimmune disease

Focus onTissue Biochemistry

Focus onCell Biochemistry

Focus onMolecular Structure

Evolution of Innovative Medicines

27

The Life Cycle of an Innovative Medicine

Researchphase

10,000 molecules screened

From concept to product:steps in the genesis of a medicine

100 molecules tested

10 candidate molecules1 medicine

Testphase

5 years0 15 years 20 years

Patent filing Patent expiry

10 years R&D 2 to 3 years

Developmentphase

AdministrativeProcedures Commercialisation phase

10 years

Source: LEEM


Life Cycle of an Innovative Medicine

28

0

200

400

800

600

1000

1200

1300

1400

€ (M

illio

ns)

1975 1987 2001

149

344

868

2006

1,059

2010

1,375

Source: J.A DiMasi and H.G. Grabowski, ‘The Cost of Biopharmaceutical R&D: Is Biotech Different?, Price of Innovation: New Estimates of Drug Development Costs’, Managerial and Decision Economics 28 (2007) Association of British Pharmaceutical Industry data (March 2012)

Evolution of Innovative Medicines Cost of Developing an InnovativeMedicine

29

100

90

80

70

60

50

40

30

20

10

0

Source: EFPIA, The Pharmaceutical Industry in Figures (2011 update)

1990-1995 1996-2000 2001-2005 2006-2010

Europe USA Japan Others



Number of New Chemical or BiologicalEntities (1991-2010)

30

Beta Blockers

Source: Adapted from an ABPI Report (2004) The Human and Economic Value of Pharmaceutical Innovation and Opportunities for the NHS: Blood Pressure Lowering Treatment Trialists’ Collaboration (2000) The Lancet. See also IFPMA: The Value of Innovation (2008).

23% reduction in long term risk of death

Improved bypass operation survival rates

22% reduction in risk of death from heart attack and stroke

30% reduction in stroke events

29% reduction in coronary heart disease events

CalciumAntagonists

39% reduction in stroke events

28% reduction in major cardiovascular events

CombinationTherapy

72-80% reduction in risk of death when using acombination of anti-platelets, beta blockers, ACE inhibitorsand statins

AceInhibitors

60% reduction in risk of heart attack

30% reduction in risk of death

17-30% reduction in stroke events

Statins

Evolution of Innovative Medicines Benefits of Innovative Medicines

31

HIV/AIDSPrevention

Medicines exist (R&D to improve their utility for patients)

Medicines exist (R&D to overcome emerging challenges e.g. drug resistance)

No medicines (R&D to bridge the gap)

Treatment Cure

Tuberculosis

Malaria

Childhood Diseases

Respiratory Infections

Cancers

Neuropsychiatric Disorders

Cardiovascular Diseases

Diabetes

Respiratory Diseases

Source: IFPMA, The Value of Innovation (2008)



Need for Continued Medicines Innovation

Medicines in the

32

Expenditure on the community medicines schemes has risen steadily inrecent years. The factors behind that growth include:

• Ireland’s increasing population: the country has experienced asignificant increase in its population as outlined in the section ondemographic trends. This increase in population directly impacts on thenumbers eligible for the community drugs schemes which in turnincreases the consumption of medicines.

• Ireland’s ageing population: Ireland has an ageing population withpeople living longer, and as they do so, they make a greater call on allhealth services, including medicines. For example, in June 2011, anestimated 11.6% of the population were over the age of 65 years. Thisis expected to double over the next twenty years.

• The development of new treatments becoming available and morepatients availing of them: for example in the areas of preventativemedicine and the long-term treatment of chronic illness. This hasresulted in improved life expectancy and quality of life, less time beingspent in hospital, less time off work and less sick pay. However, theavailability of these treatments on the community medicines schemespresents increasing costs to the State.

• The introduction of Government initiatives to improve public health:Irish people currently have one of the lowest levels of life expectancy inWestern Europe. Initiatives such as the cardiovascular strategy and thecancer strategy were launched with a view to improving these poorhealth outcomes. They have resulted in more people being treated andan increase in the utilisation of medicines.

• Epidemiological evolution: Chronic diseases such as diabetes,hypertension, heart disease and stroke are a large and growing burdenon the health of Irish people and the Irish healthcare system. The risingprevalence of such diseases is partly the result of a population that isageing and increasingly obese. Today, approximately 25% of the Irish


33

Community

population have a chronic disease accounting for 78% of the country’shealthcare spending. The increased incidence of chronic and non-communicable diseases is generally quite costly to treat. Ireland has thefourth highest incidence of asthma in the world, and increasing levels ofdiseases like diabetes and obesity.

• State decisions on eligibility and administration of the communitymedicines schemes: The decisions to grant medical cards to everyone over70, between 2001 and 2008, and to introduce the Drugs Payment Scheme(DPS) have had a significant impact on the State bill for medicines. In2002, the first full year of everyone over 70 being provided with medicalcards, the cost of the GMS Scheme grew by 28%.

• Rising unemployment: Rising unemployment means that the proportionof the population eligible for a medical card is rising continuously. Therehas been a 20% increase in the number of medical cards since 2008, withalmost 140,000 cards issued to applicants in 2010 alone. Currently thereare approximately 1.7 million people in Ireland who have a medical card.

• Increasing research and development costs: The development of a newmedicine is an extremely expensive, high risk and lengthy process with,on average, only one or two of every 10,000 promising substancessuccessfully passing extensive testing to be approved as a marketableproduct. This must be factored into the pricing of new medicines so thatfuture innovationn and R&D can continue. Figures show that R&D costshave risen from €149m in 1975 to almost €1.4 billion today.

The growth in medicines expenditure should also be seen in the contextthat Ireland historically had one of the lowest levels of consumption ofmedicines per head of population. It is only to be expected that spendingon medicines will increase as the healthcare system endeavours toimprove life expectancy and quality of life. It also has to be seen in thecontext of the large scale increases in Irish health spending that occurredin the boom years, a momentum which has been reversed since 2010 andis set to continue in 2012 with cuts of €750 million being targeted.

34

%

25

20

15

10

5

0

-5

-102002 2003 2004 2005 2007 2008 2009 2010 20112006

17

19

15

11

14

109

4

-2

-5.4

5

7

4 43 3

2 2

12*

Irish Market GrowthTop 5 European Markets

Source: IMS IRLP (Retail Only, Prescription Bound, GMS Reimbursable) *EFPIA estimate

Evolution of Innovative Medicines Irish Pharmaceutical Market Decline 2002 – 2011

35

1,800,000

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

€ 0

00s

Long Term Illness

Source: HSE Primary Care Reimbursement Service Financial and Statistical Analyses 2010 HSE Supplementary Report December 2010

126,922

High Tech

358,019

Drugs Payment

173,435

GMS

1,693,600



Community Medicines SchemesExpenditure 2010

36

Evolution of Innovative Medicines Most Commonly Prescribed Products2010

General Medical Services (GMS) Scheme

1 Acetylsalicylic Acid-Aspirin (Antithrombotic)

2 Atorvastatin

3 Levothyroxine Sodium

4 Bisoprolol

5 Paracetamol

6 Calcium, Combinations

7 Salbutamol (Inhaled)

8 Amlodipine

9 Ramipril

10 Esomeprazole

11 Amoxicillin and Enzyme Inhibitor

12 Warfarin

13 Lansoprazole

14 Omeprazole

15 Furosemide

16 Clinical Nutritional Products

17 Rosuvastatin

18 Diclofenac (Systemic)

19 Metformin

20 Zopiclone

Drugs Payment Scheme


2 Atorvastatin

3 Levothyroxine Sodium

4 Rosuvastatin

5 Esomeprazole

6 Salbutamol (Inhaled)

7 Bisoprolol

8 Calcium, Combinations

9 Diclofenac (Systemic)

10 Amlodipine

11 Salmeterol and other drugs for obstructive airway diseases

12 Omeprazole

13 Lansoprazole

14 Ramipril

15 Amoxicillin and Enzyme Inhibitor

16 Codeine Combs. Excl.Psycholeptics

17 Prednisolone (Systemic)

18 Escitalopram


20 Perindopril

Source: HSE Primary Care Reimbursement Service Financial and Statistical Analyses 2010

37



Most Commonly Prescribed Products2010

High Tech Scheme

1 Adalimumab

2 Etanercept

3 Tacrolimus

4 Mycophenolic Acid

5 Bicalutamide

6 Ciclosporin

7 Darbepoetin alfa

8 Triptorelin

9 Interferon beta-1a

10 Pegfilgrastim

11 Teriparatide

12 Erythropoietin

13 Leuprorelin

14 Somatropin

15 Interferon beta-1b

16 Capecitabine

17 Methoxy Polyethylene Glycol – Epoetin beta

18 Cinacalcet

19 Glatiramer Acetate

20 Goserelin

Long Term Illness Scheme

1 Diagnostic Products

2 Metformin


4 Atorvastatin

5 Needles/Syringes/Lancets

6 Gliclazide

7 Ramipril

8 Insulin Aspart, Fast Acting

9 Perindopril

10 Rosuvastatin

11 Amlodipine

12 Insulin Glargine, Long Acting

13 Sodium Valproate

14 Lamotrigine

15 Bisoprolol

16 Carbamazepine


18 Insulin Detemir, Long Acting

19 Levetiracetam

20 Pravastatin

Source: HSE Primary Care Reimbursement Service Financial and Statistical Analyses 2010

38

Source : HSE Primary Care Reimbursement Service Financial and Statistical Analyses 2005 - 2010 Figures including VAT

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

30

25

20

15

10

5

0

-5

€ 0

00s

2002 2003 2004

550,892

650,662

763,318

2010

1,233,2662

2009

1,260,244

2008

1,145,292

2007

1,048,409

2006

940,225

2005

831,443

27%

18%17%

9% 9%

-2%

13%

12%

10%

Euro (000s)

% Growth Rate

% G

rowt

h

Evolution of Innovative Medicines GMS Expenditure Overall Cost of Medicines 2002 - 2010

The GMS Scheme provides free medical services to persons who wouldnot otherwise be able, without undue hardship, to afford such services.

39

900

800

700

600

500

400

300

200

100

0

€

Source: GMS/PCRS Annual Reports, HSE Supplementary Reports IPHA estimated figures for 2011

2005

719

2006

770

2007

822

2008

847

2009

852

2010

763

2011

697



GMS: Decreasing Euro Cost of Medicines Per Person 2005-2011

The number of persons eligible for a medical card has increased byalmost 550,000 since 2005. However, following the implementation ofthe IPHA/HSE 2006 Agreement and the subsequent savings provided byIPHA Members in 2010 and 2011, figures show that the € cost ofmedicines per person has decreased significantly.

40

Evolution of Innovative Medicines The Evolution of the GMS 1994 - 2011

The number of cardholders aged 65 and over has increased byapproximately 44% since 1994 (a trend significantly accentuated by thegranting of medical cards to everyone over 70 years old in 2001).

Year Total No. of As a % of the Total No. 65+ as a % of Eligible Persons Population Aged 65 years+ Eligible Persons

1994 1,287,000 36.0% 297,000 23.1%2000 1,148,000 30.3% 323,000 28.1%2004 1,149,000 29.3% 383,000 33.3%2008 1,352,000 31.9% 423,000 31.3%2009 1,478,560 33.2% 413,585 27.8%2011 1,701,951 37.2% 428,272 25.2%

Source: GMS (Payment) Board Annual Reports 1994-2005HSE Primary Care Reimbursement Service Financial and Statistical Analyses 2005 - 2010HSE Supplementary Report October 2011

41



Drugs Payment Scheme Expenditure 2002-2010

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

20%

10%

0%

-10%

-20%

-30%

-40%

Source: HSE Primary Care Reimbursement Service Financial and Statistical Analyses 2005 - 2010

192,366204,422

2002

223,959

2003

244,486

2004

283,108

2005

307,334

2006

311,898

2007

259,928

2008 2009 2010

173,435

Euro (000s)

% Growth

€ 0

00s

8%6%

10% 9% 9%

1%

-17%

-33%

16%

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

25%

20%

15%

10%

5%

0%

-5%

-10%

-15%


61,636

73,348

2002

85,551

2003

100,547

2004 2005

124,458

2006

137,899

2007

139,759

2008 2009 2010

126,922

Cost

% Growth

€ 0

00s

18%19%

17%18%

8%

11%

1%

-9%

15%

115,461

42

Evolution of Innovative Medicines Long Term Illness Scheme Expenditure2002 - 2010

The Long Term Illness Scheme is for persons who suffer from one or moredefined long term illnesses. It gives such persons the right to obtain,irrespective of income, relevant medication free of charge.

60

50

40

30

20

10

02002 2003 2004 2005 2007 2008 2009 20102006

48.15

31.72

18.24

50.11

33.92

19.74

51.08

35.35

21.35

52.12

36.67

21.81

53.32

37.31

22.8

52.9

36.57

23.27

52.17

36.44

23.43

48.95

45.2

33.78

30.35

24.56

22.47

Longterm Illness SchemeDrugs Payment SchemeGeneral Medical Services


€

43



Making Headroom for Innovation Per Item Cost on the GMS, DPS and LTI is reducing

Savings made by the industry continue to provide the essentialresources for innovation.

The Medicines In

44

• The international research-based pharmaceutical industry in Ireland isa crucial hub of economic activity and plays a vital role in the healthof Irish people.

• More than 120 pharmaceutical companies have a presence in Ireland,of which 13 of the world’s top 15 companies have substantialoperations and manufacture 5 of the top 12 medicines in the worldhere. As well as being a major source of revenue to the State, withover €3 billion paid in taxes annually, almost 25,000 people areemployed directly by these companies, half of whom hold a thirdlevel qualification, while a further 25,000 depend on the provision ofservices to the sector for their livelihoods1.

• Pharmaceutical production in Ireland currently generates nearly 50%of our exports, which along with chemicals and medical devices, wasworth a record €55 billion in 20112.

• For such a small country, Ireland punches well above its weight whenit comes to pharmaceuticals and such a performance is sustaining ourposition as the largest net exporter of medicines in the world.

• Nearly €7 billion has been invested by the pharmaceutical sector inIreland over the last decade. According to IDA Ireland, thereplacement value of the investment by the pharmaceutical sector inthe Irish economy is over €40 billion.

1 PharmaChemical Ireland: Ireland - the Location of Choice for Scientific Investment (2011)2 Central Statistics Office (March 2012)


45

dustry

46

Evolution of Innovative Medicines Leading Companies by SalesGlobally 2010

Pharmaceutical

1 Pfizer

2 Novartis

3 Merck&Co

4 Sanofi-Aventis

5 AstraZeneca

6 GlaxoSmithKline

7 Roche

8 Johnson&Johnson

9 Abbott

10 Eli Lilly

Biotechnology

1 Roche

2 Amgen

3 Gilead Sciences

4 Biogen Idec

5 UCB

6 Genzyme

7 CSL

8 Celgene

9 Cephalon

10 Actelion

Source: IMS Health Midas, (December 2010)Pharmalive, (August 2011)

47



Distribution of Global Pharmaceutical Sales by Region 2010

Source: IMS Health Midas, (data relates to 2010 audited market at ex-factory prices)

Europe 29%

North America 42%

Africa/Asia/Australia 13%

Japan 11%

Latin America 5%

2010 Global Sales €597 billion

48

Evolution of Innovative Medicines European Trade in Pharmaceuticals 2009

Country Exports € million Imports € million Balance € millionSwitzerland 38,534 15,545 22,989Ireland 20,663 2,848 17,815Germany 47,550 34,303 13,247Belgium 37,407 31,294 6,113UK 22,912 15,099 7,813France 24,761 19,647 5,114Sweden 6,380 2,925 3,455Netherlands 9,908 10,125 -217Italy 11,523 15,356 -3,833Spain 7,902 12,208 -4,306Luxembourg 109 347 -238Denmark 5,714 2,377 3,337

Source: Eurostat (COMEXT database - February 2011)

49



Top Ten EU Countries byPharmaceutical Employment 2009

0 20,000 40,000 60,000 80,000 100,000 120,000Total numbers employed in the pharmaceutical industry

Source: EFPIA member associations

72,000

39,155

25,000

26,620

25,000

67,500

16,900

104,605

100,355

31,966

UK

Spain

Romania

Poland

Ireland

Italy

The Netherlands

Germany

France

Belgium

Total employment in Europe 640,000 (including non EU members)

50

Evolution of Innovative Medicines Pharmaceutical Production inEurope, Japan and the US

USA 32%

Japan 23%

Germany 9%

France 9%

Italy 8%

UK 7%

Switzerland 4%

Other 8%

1990: €136 Billion

USA 34%

Japan 11%

France 10%

Germany 8%

UK 6%

Italy 6%

Switzerland 6%

Ireland 5%

Other 14%

2008: €358 Billion

Source: OECD EFPIA member associations

51

Rank Medicines Company

1 Lipitor Pfizer

7 Enbrel Pfizer

8 Remicade Centocor (J&J)

10 Zyprexa Eli Lilly

12 Singulair Merck Sharp and Dohme

Source: IMS Health Midas 2010Product names shown are IMS International Product names.Products marketed around the world with different names or marketing companies are grouped together. The names generally reflect the name in the country where the product was launched first. A match on two of three criteria (local brand name, marketing corporation and active ingredient) will be grouped together.



5 of the World’s Top 12 Medicinesare Produced in Ireland

14

12

10

8

6

4

2

0

%

Source: EFPIA PhRMA 2010

Europe USA

9.3

4.24.4

12.5

7.7

3.9

1996-2000 2001-2005 2006-2010

52

Pharmaceutical R&D Expenditure –Annual Growth Rate (%)

53



Medicines andGl

54

• Of the 340 medicines on the World Health Organisation (WHO)essential drugs lists, 95% of them have no patent. This means thatthere is no patent obstacle preventing cheap generic copies of thevast majority of essential medicines being produced locally for poorpeople in developing countries. But those people are not gettingthem.

• Patents do not prevent access to medicines. The real barrier hinderingaccess to treatments is in fact a lack of the basic healthcareinfrastructure required to get existing medicines to people. Otherfactors such as a lack of access to essentials such as food, adequatehousing and clean water, simple prevention measures like condomsand mosquito nets coupled with continuing armed conflict,corruption and bureaucracy unfortunately mean that poor health isendemic for the world's poorest people.

• Pharmaceutical companies globally were involved in 213 healthprogrammes in the developing world in 2010, up from 202 in 2009.These programmes have expanded beyond infectious diseases andinclude child and maternal health and chronic diseases. They alsosupport primary healthcare programmes and capacity building,including the training of doctors and nurses.

Source: IFPMA, Developing World Health Partnerships Directory, 2010


55

obal Health

• In the period 2000 to 2008, the industry provided enough healthinterventions – medicines, vaccines, equipment, health education andtraining – to help nearly 1.75 billion people in developing countries.

• The industry has made available medicines, vaccines, equipment,training and health education worth $9.2 billion to the developingworld since the United Nations announced the MillenniumDevelopment Goals.

• Pharmaceutical companies also contribute greatly to R&Dprogrammes to combat diseases in developing countries and wereinvolved in 75 separate programmes in 2009, up from 67 in 2008. Theindustry is now the largest source of funding for R&D in thedeveloping world after the US Government and the Bill and MelindaGates Foundation.

250

200

150

100

50

0

Partn

ersh

ip p

rogr

amm

es

2007

Source: IFPMA, Developing World Health Partnerships Directory 2010

135

2008

155

2009

202

2010

213

56

Evolution of Innovative Medicines Industry Supported Programmes inthe Developing World

0

50

100

150

200

250

300

Milli

ons o

f peo

ple p

oten

taill

y rea

ched

350

400

2000 2001 2002 2003 2004 2005 2006 2007

Other health interventions + education + trainingMedicines, Vaccines & Diagnostics - no profitMedicines, Vaccines & Diagnostics - donated

57



Number of Positive Health InterventionsMade in the Developing World

A positive intervention is: (a) the delivery of sufficient medicine to cure oneperson of one disease (b) the provision of a course of therapy sufficient tomanage one disorder in one person for one year, (c) provision of sufficientvaccine to immunise one person against one disease for at least one year or(d) delivery of a proven programme of health education or training for oneperson. These metrics were used because while companies know the numberof doses they make available, they have a less precise view of the number orpatients actually treated.

Source: IFPMA www.ifpma.org/healthpartnerships

1

1

11

45

1

1

4

3

2

2

18

4

4

11

2

1

1

1

1

DUBLIN

MEATH

KILDARE

WESTMEATH

WICKLOW

CARLOW

WATERFORD

TIPPERARY

MAYO

CLARE

CORK

KERRY

SLIGO

DONEGAL

LIMERICK

CAVAN

LONGFORD

58

Map of Pharmaceutical Locations in Ireland

DublinShared Services SitesAbbott Laboratories ActelionA Menarini Pharmaceuticals Alliance PharmaceuticalsAmgenAstellas PharmaAstraZenecaPharmaceuticalsBayer Consumer CareBayer Schering PharmaBiogen IdecBoehringer IngelheimBristol Myers SquibbCelgeneChugai PharmaDaiichi Sankyo IrelandEisaiEli Lilly & CompanyGiuliani InternationalGlaxoSmithKlineGlaxoSmithKline ConsumerHealthcareGrünenthal PharmaIpsen PharmaceuticalsJanssen-Cilag (J&J)Jazz PharmaceuticalsLabopharm EuropeLEO PharmaLundbeck McNeil Healthcare (J&J)Merck SeronoMSDMundipharmaNovartisNovartis Consumer HealthNovo NordiskPfizer Healthcare IrelandPfizer TreasuryReckitt BenckiserRoche ProductsSanofi-aventisSanofi Pasteur MSDServier LaboratoriesShire Pharmaceuticals TakedaTillotts PharmaUCB Pharma

Manufacturing SitesAmgenBristol Myers SquibbCovidien (J&J)Helsinn BirexIpsenMerrion PharmaceuticalsPfizerRottapharmMSDSwords Laboratories (BMS)Takeda

MeathShared Services SitesMEDA

Manufacturing SitesBASF Ireland

WestmeathManufacturing SitesElan

KildareManufacturing SitesPfizer

WicklowManufacturing SitesMSDSigma Aldrich Ireland LtdServier LaboratoriesTakeda

CarlowManufacturing SitesMSD

WaterfordManufacturing SitesGenzymeGlaxoSmithKlineTEVA

TipperaryManufacturing SitesAbbott Alza Ireland (J&J)Clonmel HealthcareMSD

Mayo Manufacturing SitesAllerganCharles River Laboratories

SligoManufacturing SitesStiefel LaboratoriesAbbott Laboratories (3 Sites)

ClareManufacturing SitesRoche Schwarz Pharma Ltd

CorkShared Services SitesGlaxoSmithKline

Manufacturing SitesCara PartnersCentocor BiologicsEli Lilly & CompanyFMC InternationalFournier PharmaGE HealthcareGilead ServicesGlaxoSmithKlineHovioneIpsenJanssen-Pharmaceuticals (J&J)NovartisRecordati Ireland LtdPfizer (3 Sites)MSD Leo Pharma Wexport

Kerry Manufacturing SitesAstellas IrelandTemmler

LimerickManufacturing SitesPfizer

CavanManufacturing SitesAbbott

LongfordManufacturing SitesAbbott

DonegalManufacturing SitesAbbott

45 11

1

1

1

1

3

4

18

2

2

1

1

1

1

2

4

4

1

1

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Facts and Figures 2012