future of health & wellbeing- key trends and business opportunities

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Future of Health & Wellbeing Key trends and business opportunities Danilo Mazzara Trento, April 10 2014

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Global trends in the Healthcare and key business opportunity for new ventures

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Page 1: Future of Health & Wellbeing- Key trends and business opportunities

Future of Health & Wellbeing Key trends and business opportunities Danilo Mazzara Trento, April 10 2014

Page 2: Future of Health & Wellbeing- Key trends and business opportunities

2

Key trends and business opportunities

I. Global trends in the Healthcare

II. Digital Health convergence

III. Key opportunities for new venture

IV. Summary

Global Trends in the healthcare industry

Agenda

Page 3: Future of Health & Wellbeing- Key trends and business opportunities

3

Key trends and business opportunities

Innovation in the Healthcare Industry highly impacted our quality of life, over the last 50 years we have gained 12 years more and by 2050 4,3% of total population will have more than 80 years

Life expectancy at birth total years (OECD Countries)

80,0

67,9

1960

17,8%

Today

World

1,4

1,5

3,7

4,8

2,1

6,8

1,6

6,4

7,2

7,4

11,4

4,3

14,5

16,7

2050 2011

Population over 80 years on total population (World and selected Countries in %)

Source: Elaboration on OECD data, 2014

Global trends in the Healthcare

Page 4: Future of Health & Wellbeing- Key trends and business opportunities

4

Key trends and business opportunities

Although we live more, Chronic Diseases prevalence have been rising in all countries (industrialized, middle income, low income), surpassing infections as a disease burden among adults

Chronic disease, refers to disease lasting three months or longer

Can be prevented trough an healthy "life style"

In USA an Europe , from 70% to 80% of total healthcare cost are related to chronic diseases management

Global trends in the Healthcare

11% 10%

9% 6%5%6%

5%

Lung cancers

Ischemic heart Desease

Stroke

Lower Respiratory infections

COPD

Diarrhoea desease

4%

HIV/AIDS

Diabet mellitus

Road Ingiury

Prematury

2011

28

24%

21%

11%

5% 5%

4% 4%

27

2000

21%

20%

13%

4% 4%

The 10 leading causes of death in the world (distribution by causes)

Chronic Diseases

Chronic Disease on the top10 leading death causes

46% 49%

Source: Elaboration on World Health Organization, 2014

Page 5: Future of Health & Wellbeing- Key trends and business opportunities

5

Key trends and business opportunities

4 BLN $ market since the first launch in 1998

Global dysfunction erectile market (%)

Worldwide Aesthetic Market (in billions of dollars)

K

K

Source: Allergan Annual Report, 2013

Source: Elaboration based on Evaluate Pharma and Med Tech

Cataracts is responsible of 50% of global blindness

World cataracts procedures (mln)

Alzheimer's disease or other dementias (mln on people global)

Source: Elaboration on World Health Organization, 2014

Source: The Global Impact of Dementia, Alzheimer Disease International 2013

Live longer also means incurring in new aging related diseases and in addition to that, people expect a better quality of life in their "silver stage"

5,0

3,22,3

+10%

2017 2012 2009

135,0

76,0

44,0

+3%

2050 2030 2010

32,0

20,0

+5%

2020 2010

510

40

45100

Others Levitra Cialis Viagra Total

Global trends in the Healthcare

Page 6: Future of Health & Wellbeing- Key trends and business opportunities

6

Key trends and business opportunities

Illustrated trends, generate a dramatic increase of the global healthcare expense with deep pressures on public budget which absorbs around 60% of the whole cost

+17,9%

2011

9,2%

1995

7,8%

7,8%

13,6%

6,8%

9,1%

17,9%

9,3%

42%26%

54%

20%

Pubblic

Private

Jap

100

80%

USA

100

46%

EU

100

74%

World

100

58%

Total expenditure on health on GDP (World and selected region)

Healthcare per Payors (Government vs Private expenditure)

Global trends in the Healthcare

Source: Elaboration on World Health Organization, 2014

Page 7: Future of Health & Wellbeing- Key trends and business opportunities

7

Key trends and business opportunities

50

55

60

65

70

75

80

85

9.000 4.500 4.000 3.500 3.000 1.000 500 0

USA UK

Turkey

Russia

Nigeria

Mexico

Japan Italy

Indonesia

India

Germany France

China

Canada

Brazil

In addition to overall healthcare cost increase is necessary to balance difference needs across the world, affordability in mature markets and the accessibility in the emerging ones

1.100

70

Health per capita cost (ppp in $)

Life

exp

ect

ancy

at

bir

th t

ota

l ye

ars

Affordable in mature market

Access the emerging markets

Frugal innovation

Country Population – 80 mln€

Global trends in the Healthcare

Source: Elaboration on World Health Organization, 2014

Life expectancy and Health per capita expenses per Country

Page 8: Future of Health & Wellbeing- Key trends and business opportunities

8

Key trends and business opportunities

To deal with current challenges, leading Life Sciences players have been redefined their strategic priorities, focusing on new growth opportunities and increasing operating model efficiency

1. Shifting global

markets

New Markets - BRIC

New price points

New Supply chain models

2. Changing

Product Portfolios

3. Customer

Engagement

Revolution

4. Changing

cost base

Replace LOE Products

Rise of Ultra-specialty products based on biotech (e.g. orphan drugs

Rise of generics/ biosimilars

New services (e.g. Care Management)

New Customers

New Technologies

Multichannel engagement

SG&A challenges

Investment timelines

R&D Productivity

Strategic Priorities Selected Example

Global trends in the Healthcare

NON EXHAUSTIVE

Page 9: Future of Health & Wellbeing- Key trends and business opportunities

9

Key trends and business opportunities

I. Global trends in the Healthcare

II. Digital Health convergence

III. Key opportunities for new venture

IV. Summary

Agenda

Agenda

Page 10: Future of Health & Wellbeing- Key trends and business opportunities

10

Key trends and business opportunities

Every business is a technology business, "SMAC" technologies are driving the change and they are available to everyone anytime and everywhere

Share of digital companies on….

Note 1. Source: Inter-Brands Source: Accenture Elaborations on market data, 2013

88% 84%77%

… Most Valuable Brands

100

23%

… Market Capitalization

100

16%

… Fortune 100

100

12%

Technology Example (selected)

Digital Health convergence

1

The rising of Digital Economy

Page 11: Future of Health & Wellbeing- Key trends and business opportunities

11

Key trends and business opportunities

New technology waves are coming with significant grow in the mid-term

85,3

23,7

+29%

2018 2013

European App Economy1 (bln$)

3-D printing market2

(Printer sales, materials and associated services, bln$)

Source: Gigaom Research, Sizing the EU app economy 2014 Nota 2. CNBC on Canalys data, April 2014

16,2

2,5

2013 2018

+45%

Digital Health convergence

SELECETD EXAMPLE The rising of Digital Economy-new waves

Source: CNBC on Canalys data, April 2014

Page 12: Future of Health & Wellbeing- Key trends and business opportunities

12

Key trends and business opportunities

Sequenced human genome cost

Digital Health is the next wave of industry convergence as shown by a number of initiatives both from Tech and Life Sciences players

Today

1.000 $

2000

3 Bln$

Time for sequencing

10 Years 3 days

Life Sciences Players' Initiatives

Tech Players' Initiatives Google reportedly investing hundreds of millions into its new life extension company, Calico

Apple iWatch will be mainly about health monitoring

The Breakthrough Prize in Life Sciences is founded by A. Levinson, S. Brin, A. Wojcicki, M. Zuckerberg and P. Chan, and Y. Milner to recognize excellence in research aimed at curing intractable diseases and extending human life

Merck Emerges As Top Funder Of Digital Health Start-Ups

GE Healthcare … $2 billion investment over 5 years …. in software and analytics to better help our customers manage the operational complexity of the healthcare systems

Johnson & Johnson (J&J) has launched the Digital Health Masterclass (DHM) programme to help drive growth in the next generation of digital health businesses

SELECTED EXAMPLE

Digital Health convergence

ource: Accenture Elaborations on market data, 2013

Page 13: Future of Health & Wellbeing- Key trends and business opportunities

13

Key trends and business opportunities

Connected Health is the end state vision enabling the whole healthcare ecosystem to collaborate to improve efficiency and effectiveness

Information and data sharing across several healthcare players

Access trough multiple channels (e.g. Electronic Health Records, Mobile Health,…)

Boost compliance to the treatment to reduce related costs

Increase efficiency and effectiveness of the healthcare outcomes

Connected Health Model

Key priorities

Digital Health convergence

Connected Health vision and key priorities

Page 14: Future of Health & Wellbeing- Key trends and business opportunities

14

Key trends and business opportunities

Google Glass in the operating room

Brain control

There are several examples of new technologies both in consumer and specialized healthcare

Wearable devise

Digital Health convergence

Groupon

25% coupon related to health and well being

SELECTION

Page 15: Future of Health & Wellbeing- Key trends and business opportunities

15

Key trends and business opportunities

Customers have moved online

…are more connected & interactive…

…are in control of more information…

…and are increasingly mobile…

Customers (People, Patients and Physicians) are ready for the digital revolution

Health is the #1 Search topic

60% say it influenced a treatment

decision

76bn Searches a month

>50% say online information impacts

their prescription

Physicians spend 8hrs/wk online (<

2.5 hrs with reps)

96% of Physicians use the web for

health, medical and prescription information

…Of which > 300 mln in China

alone (inc by 33% year on year)

68% of US physicians join

physician-only social networks

>1bn Social Media users

worldwide…

>80% of doctors have smart phones

800m mobile Internet users

Mobile web to exceed fixed access

by 2014

>20.000 health-related iPhone apps

>60% of doctors actively use apps

Digital Health convergence

Source: Accenture Elaborations on market data

Page 16: Future of Health & Wellbeing- Key trends and business opportunities

16

Key trends and business opportunities

Digital Healthcare is reshaping the whole "Patient Experience", they can share their experiences and access to more than 20K apps trough mobile

Digital Health convergence

Prevention

Information

Diagnosis

Treatment

Recovery (Relapse)

Patient journey Key Functionalities

Focus on factors associated with overall wellness: Healthy eating, Weight management Fitness,…

Locate physician or healthcare facility

Rate and review physicians Appointment reminders

Reference for common symptoms Diagnosis based on data

inputted/question answered Communication with Professionals

Order medications from the phone

Medication reminder supporting compliance

Emergency and first aid information

Condition management information

Selected Leading Example

Source: IMS Institute, Patient Apps for Improved Healthcare, October 2013

Page 17: Future of Health & Wellbeing- Key trends and business opportunities

17

Key trends and business opportunities

I. Global trends in the Healthcare

II. Digital Health convergence

III. Key opportunities for new venture

IV. Summary

Agenda

Agenda

Page 18: Future of Health & Wellbeing- Key trends and business opportunities

18

Key trends and business opportunities

Innovation is a key priority in the Healthcare, Start Up can have a key roles in driving the change as shown by the huge investment by VC

"I have a dream" attitude

Patient first but then Payers

From "Product" to "Services"

Think global but act local

Be credible and take your time

9,2%

X 2,7

VC Invesment**

25,0%

Global Market Cap*

10,6%

GDP

Share of Healthcare sector on …. Key success factors for a Start-Up

1

2

3

5

4

Key opportunities for new venture

Source: Accenture Elaborations on market data * Based on Global Standard and Poor's ** Based on USA and Europe (NVCA, EVCA)

Page 19: Future of Health & Wellbeing- Key trends and business opportunities

19

Key trends and business opportunities

Leading breakthrough innovation in the Healthcare comes from true life experiences, people had the passion to solve "unmet needs"

Global Orphan drugs market (mln $)

127,0

83,0

28,0

2012 2004

2018

+11%

From 6,6% to 15.9% of total prescription business

"I have a dream" attitude 1

Leverage your network to find the stimulations and good idea

Partner with Healthcare Professionals to add technology on top of clinics

Build a true story around your solution

Invatec (leading Italian med tech)

Acquired by Medtronic for 350 mln $ in 2010

"Recognized for developing novel devices …. in collaboration with physicians"

Key opportunities for new venture

Source: Elaboration based on Evaluate Pharma and Med Tech and Company Press Release

Page 20: Future of Health & Wellbeing- Key trends and business opportunities

20

Key trends and business opportunities

Healthcare affordability is the top priority, new treatment need to show both clinical and economic benefits

Provide strong fact to show incremental benefit compare to existing treatment

Consider the whole indirect cost related to disease management (eg. care gIver)

Be able to deal with multiple stakeholders (Clinical and Buyers)

Innovative pricing scheme based on value sharing

Patient first then Payers 2

Key opportunities for new venture

Between 2008 and 2011, 17 out of the EU’s 28 member states have slashed their public spending on healthcare due to austerity policies

Hospital Solutions, a new business focused on developing novel partnerships with hospitals to provide services directly related to hospital operational efficiency. September 2, 2013

Same trends can be observed in USA and Emerging Markets (eg. India recent cuts by 10% the 2014–15 the government)

EU Member with public healthcare budget cut (100=28)

61%

29%

Source: Company Press Release

Page 21: Future of Health & Wellbeing- Key trends and business opportunities

21

Key trends and business opportunities

Customer ask for services, market niches where flexible and fast companies can easily differentiates from established players

Don't replace Healthcare Professionals but partner with them to provide a better patient experience

Find with new concept to address emerging issues: • Pharmacy of the Future • Patient Mobility • Gender • Migrants • Compliance

From "Product" to "Services" 3

Key opportunities for new venture

-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0

5

Adherence support

Lifestyle coaching and training Nurse support via phone

Access to clinical trials

Physician referrals

Access to patient support forums

Measurement tracking and alert Financial assistance

Product information

Rewards program

0

20

15

10

65

60

55

35

30

25

In-home nurse support

Patient received (%, Reversed Axis)

Pat

ien

ts w

ants

Patient demand for services vs. Services already delivered by Pharma Co.1

Note1. Accenture and Coleman Parkes Research, online survey of 2.000 respondents in the US between September and October, 2013

Launch of a New Business Focused on Comprehensive, Evidence-Based Weight Management Interventions in the U.S. December 20, 2013

Page 22: Future of Health & Wellbeing- Key trends and business opportunities

22

Key trends and business opportunities

Healthcare is a global market but strictly regulated at Country and Regional levels, key partnerships are needed to accelerate route to market

Market Authorization Regulation Authority Price control Pharmacy Chain Advertising for RX Payer

AIFA AIFA Yes No No Public

BFARM IQWIG No No No Statutory Health Funds

NICE NICE No Yes No Public

FDA FDA No Yes Yes Ins./ Public

Regulatory specifics across Country in Prescription drugs (Selection)

EMA Licensing and strategic alliances with global players to reach more complex market

Multichannel distribution which includes Direct sales and Distributor

Communication and promotion mix to deal with multiple stakeholders

4 Think global but act local

Key opportunities for new venture

Source: Accenture Elaborations on market data

Page 23: Future of Health & Wellbeing- Key trends and business opportunities

23

Key trends and business opportunities

Long time and big investment are needed to be in the market, plan your efforts consistently, find the right skills mix and look for sustainable partners

Time for approval Medical Device (USA vs EU in months)

Cost new drugs (median RD cost/new drugs in bln $)

5,3

1,8

0,4

1 2-3 > 3

7,0

31,0

11,0

54,0

EU USA EU USA

510K/CE Mark PMA/CE Mark

5 Be credible and take your time

Key opportunities for new venture

4) Launch 3) Pre

Launch

12

Elapsed (months)

24 -30 6-12 3-6

Key milestones

• Therapies effectiveness in the animal • Prototype

• Therapies effectiveness in human • Supply chain

validation

• CE Registration • FDA approval

•Operating model released

2) Clinical Trial and supply chain in

planning

1) Pre-clinical

5 mln € investment needed before launch

Real example on med tech start up

# drugs per company Source: Elaboration based on Forbes, 2013

Source: USA National venture capital Association (NVCA)

Page 24: Future of Health & Wellbeing- Key trends and business opportunities

24

Key trends and business opportunities

I. Global trends in the Healthcare

II. Digital Health convergence

III. Key opportunities for new venture

IV. Summary

Agenda

Page 25: Future of Health & Wellbeing- Key trends and business opportunities

25

Key trends and business opportunities

Summary

Summary

1. Big and growing Market

2. Needs and for improvement

3. Technology as key enable to succeed

VC Invesment**

X 2,7

25,0%

Global Market Cap*

10,6%

GDP

9,2%

Share of Healthcare sector on ….

Source: Accenture Elaborations on market data * Based on Global Standard and Poor's ** Based on USA and Europe Venture Association

Page 26: Future of Health & Wellbeing- Key trends and business opportunities

Thank you ! [email protected] Danilo Mazzara