pharma industry italy

The Pharmaceutical Industry in ItalyFacts & Figures

October 2014

For further information: [email protected]; tel.: +39.06.67580345

Research & Development

Production

Market Access

HEALTH ANDQUALITY OF LIFE

INDUSTRIALGROWTH

ROLE IN HEALTHCARE,

VALUE FOR PATIENTS

More Productivity

More Resources

Acc

ess

toC

are

and Innovat

ion

Direct output + Upstream sectors

The pharmaceutical industry’s activities create health and wealth for the nation

Research & Development

Production

MarketAccess

Summary

CompetitiveBenchmarking

Every 4 months life expectancy increases by 1 month thanks to pharmaceutical innovation

The sector ranks 1st in Italy for R&D investments

Warning signs: decline in R&D employment and clinical trials

The pharmaceutical industry is the leading hi-tech employer in Italy

Highly qualified, more productive and better-paid jobs

Pharmaceuticals: at the top of European ranking for productivity and competitiveness

Public healthcare expenditure in Italy and the EU

Pharmaceuticals boost overall National Health System efficiency

It is necessary to optimize HC spending without penalizing medicine

WorldPharmaceutical

Trends

Slowing global pharmaceutical markets; growth moves to Emerging Economies

Increased complexity and costs of pharmaceutical research

The changing geography of global pharmaceutical production

Italy’s population is older than the EU average, but pharmaceutical expenditure is lowerLower prices and difficult access to innovation

Pharmaceutical industry in Italy: an asset the Nation must not lose

Research is life

Life expectancy increases 1 month every 4 months, 40% of the rise is due to pharmaceutical R&D

Italy: life expectancy at birth(years, male and female average)

All causes

Cardiovascular

Cancer

Respiratory

Digestive tract

Other causes

Italy: cumulative decrease in standard mortality rates (% change, deaths per 100 thousand inhabitants)

Since 1994

Since 1978

Research is life.More than 90% of Pharmaceutical Reasearch in Italy is funded by pharmaceutical companies

Source: Istat, OECD

40

50

60

70

80

90

1881 1911 1931 1951 1971 1991 2013

82

77

72

65

55

47

35

30

-30,0

-42,5

-21,1

-28,3

-44,1

-13,7

-47,5

-63,9

-18,2

-56,0

-62,6

-41,3

Living better and longer thanks to the pharmaceutical industry’s innovation

Source: CERM, Istat, OECD

Italy: population over 65 reporting their health to be good (mln)

Pharmaceutical R&D brings both breakthroughs and incremental innovationthat allows continuous improvements in quality of life and steady progress

in treatment efficacy, adverse effect reduction and ease of use

5-year survival rate and availability of new antineoplastic medicines

5-year survival rate

degree of pharmacological innovationhigherlower

average

Otherneoplasias

Stomach and lung cancer, leukemia

0

50

40

30

20

10

60

80

70

100

90

today20031994

0,0

2,0

4,0

1,0

3,0

3,3

2,4

1,8

+90%, 1,5 mln more

The Pharmaceutical sector leads Italy in Research and Development investments

Source: elaboration of Istat data

Intensity* of R&D activity in Italy (index, pharmaceutical industry=100)

Data on R&D investments in Italy (% on total)

Pharmaceuticals

Telecommunication

Precision and electromedical

equipment

Transport

Computer industry

High-mediumtechnology sectors

Machinery

Electronic devices

Chemicals and oil

Industry overall

* average of ratios (R&D expenditure/turnover) and (R&D employees/total employees)

Pharmaceuticaland health-oriented biotech

Internal R&D in other sectors

(46%)

Public R&D(43%)

Non profit (3%)

0 25 50 75 100

Enterprises overall

7%

403 biotech products developed in collaboration between pharmaceutical companies and SMEs

Source: elaboration of Istat, Aifa, Ernst&Young-Assobiotec data

The biotech sector in Italy is growing, with 176 companies investing on average 18% of revenues in R&D, far more than that for overall manufacturing (1%)

The pharmaceutical and biotech industries together employ about 7,100 researchersand invest €1,385 million in R&D

More than two thirds of Italian biotech activities are generated by pharmaceutical companies

Biotech SME research concentrates on early stages and feeds the innovationof pharmaceutical companies, which play a leading role in clinical development

The biotech pipeline in Italy, by phase and company type

Pre-clinicaland phase 1

Phase 2

Phase 3

Total

BiotechSMEs

Pharmaceuticalcompanies TOTAL

With additional 67 discovery projects

112

37

8

42

89

115

157 246

154

126

123

403

Warning signs: loss of R&D employment, decline in clinical trials

R&D employees in the pharmaceuticalindustry in Italy

Number of clinical trials in Italy

Source: elaboration of Istat, Aifa data

Clinical trials are also an important source of funding for regional and private healthcare organizations and an opportunity for patients to benefit

from advanced therapies

4,000

4,500

5,000

5,500

6,000

6,500

0

100

200

700

800

900

20062002 2004 2008 2010

300

400

500

600

Phase I and II

Other

5,950

2012

-21%

20092003 2005 2007 2011 2013

6,250

2001

The pharmaceutical R&D ecosystem

Patentprotection

BrandQuality, reputation,

Patients’ trust, industrial committment

Necessary tomaintain investments

InnovationResearch is Life.

Pharmaceutical R&Dis 90% supported by

companies

that must not be interrupted

continuous processa

From innovation to brand:

Pharmaceutical companies: Italy’s hi-tech engine

Source: elaboration of Istat, Eurostat data

The pharmaceutical industry in Italy:an asset that the nation must not lose

€ 28 billion of manufacturing value, of which 71% for export (€19.6 billions)

€ 2.3 billion in investments, of which €1.2 in R&Dand €1.1 in hi-tech plants and machinery

+64% export growth in the last 5 yearscompared to +7% in overall manufacturing

5,950 R&D employees

174 manufacturing plants

62,300 employees(90% graduates)

and other 64,000 in upstream sectors

Pharmaceutical industryand upstream sectors

Source: elaboration of Istat, Eurostat, Efpia, BCG data

Pharmaceuticals in Italy rank top in European manufacturing

Pharmaceutical manufacturing overall value (€ billion)

Per capita pharmaceuticalmanufacturing value (euro)

With reference to the value of pharmaceutical manufacturing, Italy ranks 2nd in big EUcountries after Germany, but ranks 1st for per capita manufacturing value

0

5

10

15

20

25

30

0

100

200

300

400

500

Source: elaboration on Istat

1991 1993 1998 2003 2008 2013 Q1 2014

Export: Medicinal products’ ranking out of 119 sectors in Italy

The growing importance of pharmaceuticalsfor Italian overall export

Pharmaceutical growth on international markets

Export as a % of pharmaceutical manufacturing in Italy


The export growth is rooted in the high competitiveness of manufacturing in Italy, which reflects investments by enterprises and the quality of its Human Resources

Increase in pharmaceutical exports in 2008-2013 (% change, Eu15)

+29%

+64%

500 10 20 30 40

+29%

+64%

60 70 20131993 1998 2003 2008

40

80

70

60

50

30

20

10

0

71%

The pharmaceutical industry has become a highly specialized sector in Italy’s manufacturing industry

Source: elaboration of ICE-Istat data

Export-manufacturing specialization index(ratio between Italy’s exports as a % of world exports in pharmaceuticals and other manufactured goods;values greater than 1 indicate international specialization)

sectors 2008 sectors 2013

glass/ceramics/other materials 1,9 engineering 1,8

textile/clothing 1,9 textile/clothing 1,8engineering 1,7 glass/ceramics/other materials 1,8

other manufacturing products* 1,4 pharmaceuticals 1,3rubber and plastic 1,3 other manufacturing products* 1,3electric equipment 1,2 rubber and plastic 1,2metals 1,1 paper 1,1food/beverages/tobacco 1,0 metals 1,1paper 0,9 food/beverages/tobacco 1,1

pharmaceuticals 0,9 electric equipment 1,0

transport 0,8 transport 0,8oil and gas 0,7 chemical 0,7chemical 0,6 oil and gas 0,7wood (excl. furniture) 0,5 wood (excl. furniture) 0,5computers and electronics 0,2 computers and electronics 0,2

sectors 2008-2013

pharmaceuticals +0,4paper +0,2food/beverages/tobacco +0,1

engineering +0,1

chemical +0,1metals 0,0computers and electronics 0,0wood (excl. furniture) 0,0transport -0,1

oil and gas -0,1

textile/clothing -0,1glass/ceramics/other materials -0,1rubber and plastic -0,1other manufacturing products* -0,1electric equipment -0,2

*including furniture, jewelry and other products

In 2014 pharma export is still growing


Average value of pharma export (index other Big Eu 2008=100)

Export 2014: Italy vs. Big Eu(% var. over previous year)

70

110

100

90

80

60

502008 2009 2010 2011 2012 2013 I sem.

2014

2013 2014*Italy

Industry total

Pharmaceutical

PharmaOther Big Eu -1,7

+13,8

-0,1

-1,6

+1,2

+3,1

As well as in 2013, pharmaceutical export achieves good results in 2014recording a growth higher than the overall industry

and the other Big european countries

* data for Italy are referred to January-August, data for other Big Eu to January-June

Other Big Eu

Italy

Key data for the pharmaceutical industry:a leading hi-tech sector in Italy


% of pharma industry compared to overall hi-tech (*) in Italy

Employees Investmentsin production

and R&D

Value ofproduction

Export

(*) Pharmaceuticals, computer, electronic and optical equipment, aeronautics

0

20

30

40

50

10

30%

42% 44%

53%

Pharmaceuticals, Italy’s most competitive manufacturing sectorCompetitiveness indexfor manufacturing sectors in Italy (index Total manufacturing=100)

Source: elaboration of Istat, Banca d’Italia data

Other manufacturing

PharmaceuticalsBeverages

Chemical

Transport

Machinery

Rubber and plastic

Computers and electronics

Electronic equipment

Food

Coke and oil products

Total manufacturing

Textile and clothing

Metallurgy

Paper

Glass and minerals

Print

Wood and furniture

Metal products

Maintenance, repairand installation of machinery

and electronic equip.

180100 1400 20 40 60 80 120 160

Export and productivity in overalleconomy of Italy (% ch., 2008-2013)

Product

ivit

ygro

wth

5%

10%

15%

20%

25%

0%

-5%

-10%

-15%

Export growth

40%20%0%-20%-40% 60% 80%

Pharmaceutical industry

Overall economy

The pharmaceutical industry is the mostproductive industrial sector in Italy

Source: Istat, Eurostat

Trend of productivity in Italy(index total economy in 1993=100)

Productivity: international comparison(overall % change since 2000)

Total Economy

PharmaceuticalIndustry

Italy

EU Countries

Germany

-10%

0%

10%

20%

30%

90

100

110

120

130

140

150

160

170

180

1993 1998 2003 2008 2013

PharmaceuticalIndustry

Overall economy

Maintaining and supporting the industrial value of the Italian pharmaceutical industry

Overall industry

Other hi-tech industrial

sectors


72

61

100

0 20 40 60 80 100

47

38

100

0 20 40 60 80 100 0

100

44

17

20 40 60 80 100

Competitiveness Productivity R&D intensity

Innovation, competitiveness, productivity, R&D are necessary to growth: they are the key to the success of the pharmaceutical industry


In its 2012 Annual Report, the Bank of Italy shows that the pharmaceutical industry recorded the highest increase in productivity over the last five years, compared to

other manufacturing sectors

Compared to the EU’s Big 5, Italy’s share in manufacturing is higher than its sales share


Italy is a big pharmaceutical manufacturer even outstripping its own big market

Characteristics of pharmaindustry in Italy: index per employee(Overall manufacturing=100)

Italy’s role among the EU Big5 (% on total)

Pharmaceuticalmanufacturing

Pharmaceuticalmarket

(retail+non retail, ex factory values)

150 5 10 20 25Pharmaceuticalindustry

All sectors

Export

Investmentsin manufacturing

and R&D

Investmentsin environmental

protection

24%

18%

0 100 200 300

291

303

291

35025015050

Pharmaceutical companies’ leading rolein R&D and internationalization

Source: elaboration of Istat data, Farmindustria

Italian-owned companies internationalsales, % on turnover

R&D and manufacturing investmentsin Italy of foreign-owned companies(€ billion)

Pharmaceuticalindustry

Total manufacturing

industry

International sales Domestic sales

0%

20%

40%

60%

80%

100%

Data on pharmaceuticals is refered only to R&D intra-muros, net to clinical research

Pharmaceuticals

Transport

Machinery

Paper and printing

Chemical

Electronics

Metal products

Food

Petroleum

Glass and minerals

Rubber and plastic

Wood and furniture

Textile and clothing

Informatics

6000 200 400 800 1.000

Pharmaceutical and upstream sectors by Regions

Source: Farmindustria, Osservatorio Pharmintech, Istat

28,000 employees in pharmaceuticals, Lombardia ranks 1st for pharmaceutical and

biotech firms; 14,000 employees in upstream industries (chemicals, machinery, paper)

Lombardy

14,000 employees in pharmaceuticals42% of regional export (82% of hi-tech export)

6,600 employees in upstream industries(chemicals, packaging)

Lazio

Tuscany

2,700 employees, 6,000 in upstream industries (machinery, chemicals, packaging)

Veneto

3,300 employees in pharmaceuticals and 6,000 in upstream suppliers (machinery, chemicals, glass). Parma: pharma ranks third for export

Emilia Romagna

Centres of excellence of major international companies (3,000 employees in pharmaceuticals and related industries). Bari and Brindisipharma accounts for 31% of total export

Puglia

Campania

SicilyAbout 1,000 employees in pharmaceuticals and 4,000 in related industries. Catania: pharma accounts for 26% of total export

More than 1,000 employees in pharmaceuticals (100 in R&D) and 1,200 in allied industry

Abruzzo

900 employees in pharmaceuticals and

4,000 in upstream industries

2,800 employees in pharmaceuticals and upstream suppliers. Ascoli Piceno: pharma accounts for 62% of total export

Marche

6,000 employees in pharmaceuticals

Piemont and Liguria2,200 employees in pharmaceuticals

and 7,000 in upstream industries (machinery, chemicals, packaging)

4,000 employees in upstream industries (glass, chemicals)

Highly-skilled, productive and well-paid jobs

Source: Istat, Indagine Sistema Confindustria

Pharmaceuticalindustry

Overallmanufacturing

1) MS and Ph.D 55.6 19.6

2) High school 33.7 42.1

Other 10.7 38.3

Employees by educational level(% on total)

Thanks to investments and the quality of Human Resources, the pharmaceutical industry adds more value with higher salaries

when compared to the average of other industrial sectors.

(1 + 2) 89.3 61.7

Productivity and salaries, per employee(manufacturing industry=100)

Total 100.0 100.0Productivity (added value per employee)

Gro

ssw

ages

per

em

plo

yee

pharmaceuticalindustry

The role of pharmaceuticalswithin the National Healthcare Service

Italian healthcare spending compared to EU countries and the incidence of pharmaceuticals

Territorial pharmaceutical

spending* (11.35%) Hospital

pharmaceutical spending (3.5%)

Other hospital

expenditure (40.65%)

Italian Health System (NHS) Expenditure (% of total NHF, 2013)

Source: estimates on Oecd, Health Ministry, FMI

Public healthcare expenditure as % of GDPShare % of GDP(2012)

In Italy healthcare expenditure as a percentage of GDP and as per capita value is roughly 20% lower than in other large European countries

(for pharma spending, the gap is about 30%)

France

Germany

UK

ItalySpain

Big 5 (average)Other EU 15

EU 15 (average)USA

Other territorial

expenditure (39.5%)

Prevention (5.0%)

* Including mandatory patient copayment

9.0

8.6

7.8

7.17.1

7.97.5

7.68.0

In the future public healthcare expenditurewill grow less than in other European countries

Source: estimates on OECD, FMI data

Public HC spending, 2013-2030 increase(% on GDP, forecasts)

In the coming years, growing public HC spending in Italy will be due mainlyto population ageing, as opposed to other countries where growth will be related to

an excessive cost increase

0

1

2

3

4

5

0

1

2

3

4

5

Medicines and vaccines are tools for makingtotal healthcare expenditure cost-effective

avoidance of unnecessary surgery(eg. gastroduodenal ulcers)

prevention

slowing the degeneration or easing the symptoms of age-related diseases(eg. Parkinson’s and Alzheimer’s)

shortening hospitalization (eg. in case ofchemotherapy) or avoiding unnecessaryhospitalization (eg. in case of chronicdiseases)

reduced risks of disabling diseases

The appropriate use of medicines bringssavings for the NHS through:

Use of medicines for chronic diseases: a cost/benefit analysis(cardiovascular, respiratory, depression, Alzheimer’s)

Savings for NHS expenditure(less hospitalization,lessunnecessary surgery, slowing ofdegenerative deseases)

Non-NHS savings(less working days lost, higher productivity, lower welfare costs)

6.1

5.6

Expenditure in medicines 6.3

€ billions/year

Source: CER-Nib, Aifa

Savings achievable with vaccines

1 euro spent on vaccination is worth24 euro in patients therapy

One-day hospitalization costs €1,000

90% of the market consists of off-patent medicines, on account of the high growth of generics

TOTAL MARKET -1.2%

UnbrandedGenerics

Branded(in and off-patent)

-2.3%

+11.9%

2008 – 2013 annual average

Sales trends by percentage(public and private, pharmacy chain)

Source: Farmindustria elaboration of IMS Health data

Sales of reimbursable medicinesby patent coverage(% of total, in units, retail chain, Jan.-Aug. 2014)

IN-PATENT 6.7%

Off-patent branded

93.3%

62.8%

% of total

Unbranded generics 23.5%

Other 6.9%

OFF-PATENT

-2.8%

-3.6%

+5.2%

2014Jan.-Aug.

Off-patentIn-patent

Retail consumption by type of medicine (% on total)

Germania Francia Regno Italia SpagnaITA SPAFRAGER UK

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% In all major European countries the off-patent market share (accessible by generics) is about 90% of the total pharmaceutical market

In Italy the difference is in the proportion between generics and branded off-patents, but this:

has no effect on public expenditure as Italy’s NHS only reimburses the lowest price

does not penalize patients who can choose to use generics after being mandatorily informed by their physician and pharmacists about this alternative

Off-patent market share in Italy is in line with other European countries

Source: elaboration Farmindustria of Assogenerici and IMS Health data

-27% the gap between Italy and other Big Euin terms of per capita public HC expenditure

Source: elaboration of Aifa, IMS, Eurostat data

Total exp. (net of interests)

HC public spending: cumulative % change 2009-2014

Public exp. (net of HC exp)

HC expenditure

Pharmaceuticalexpenditure*

Per capita pharmaceuticalexpenditure*

2%-6% -4% -2% 0% 4%

(*) terrritorial+hospital, excl. payback

Per capita public pharma expenditure in Italy and other big EU countries (territorial+hospital, €, market prices and net of VAT)

net of VAT

370

440

424

308

268

270

343

370

415

296

268

245

4000 100 200 300 500

Source: Farmindustria

National Healthcare Service with regionaldifferences that must be reduced

Regional Positive Listsfor access to new medicines

Prescription objectives for physicians

Two examples. Coloured Regions have specific healthcare systems in addition to the national systemand they differ one from another

The changing global scenario for the

pharmaceutical industry

North America

JP and South Korea

EU

BRICS + rest of the

World

Global pharmaceutical market (% on total)

Pharmaceutical market trends(CAGR %, USD)

Source: elaboration IMS

World AdvancedEconomies

BRICS + restof the World

Growth moves to the emerging economies, while the global market is slowing down

0

2

4

6

8

10

12

14

2007-2012 2012-20172007 2012 2017

2129

39

2523

181113 10

4235 33

7,9

4,5

11,3

4,5

0,8

12,5

Source: elaboration of IMS, Global Insights data

Advanced economies BRICS and rest of the World

0

20

40

60

80

100

20172006 2010 20142002

The shifting in global Healthcare demand fosters competition between advanced economies to maintain investments inside national borders and attract further investment

Total sales growth 2007-2017 (USD billion, CAGR)

Share of new investments in the global pharmaceutical industry (% on total)

Double-digit growth in emerging marketswhile advanced economies are stagnating

705

+11.3%

+4.5%

+12.5%

+0.8%149

288462

723552

2017201220070

1200

1000

800

600

400

200

The economic context in Asia and Oceania is luring R&D investment overseas

R&D spending(% on total, public and private)

R&D spending % var. 2007-2012(USD)

Source: elaboration on data extracted from The New England Journal of Medicine

0 5-5 10 152007 20122008 2009 2010 2011

North America and Canada

Europe Asia and Pacific (excl. Japan)

Japan

-1.9

-0.2

+5.7

+14.0

52.4

31.9

10.8

4.9 9.2

46.4

30.5

13.9

Rank 2005 Rank 2013 Rank 20171 United States 1 United States 1 United States2 Japan 2 Japan 2 China3 Germany 3 China 3 Japan4 France 4 Germany 4 Brasil5 Italy 5 France 5 Germany6 UK 6 Italy 6 France7 Spain 7 Brasil 7 Italy8 Canada 8 UK 8 Russia9 China 9 Canada 9 UK

10 Mexico 10 Spain 10 Canada11 South Korea 11 Australia 11 India12 Brasil 12 India 12 Spain13 Turkey 13 Russia 13 Mexico14 Australia 14 Turkey 14 South Korea15 India 15 Mexico 15 Australia

Population and economic growth are boosting demand for healthcarein emerging countries. In advanced economies cost containment measures

are squeezing markets.

Italy in the international ranking of pharmaceutical markets

Source: IMS

R&D costs are increasing while patentsare expiring within 50% of the branded market

Source: elaboration of Phrma and CERM data

20

30

40

50

60

70

100

80

90

10

02010 2011 2012 2013 2014

Italy: expiring-patent molecules, cumulative value compared to in-patentmarket (base year=2009)

Retail Total market (inc. non retail)

Rising costs and decreasing revenues (related to patent expiries) are a source of global structural change in the pharmaceutical sector

Global R&D costsfor innovative pharmaceuticals(estimate in billions of dollar)

today20010

200

400

600

800

1000

1200

1400

discovery

pre-clinical

phase IIImarket launch

discovery

pre-clinicalphase I

phase II

market launch

phase II

phase III

phase I

A structural change for the pharmaceuticalindustry around the World

Growing role of Emergingcountries

Ageing population in Advanced Economies

New medical needs(e.g. rare disease)

Increasing R&D costs

Patent deadline(50% of in-patent market)

Innovative technologies

Lower prices

Increasing business competition

Necessity of more resourcesfor R&D

Growing costs

Falling profit margin

Interdisciplinarity of research and development

Consequences on other sectors

Increasing number ofspecializations

Customized care (from 500 to 10,000 moleculartargets in next years)

Changingscenario

+Technological

“shock”

Radical changing in business organizationthrough major restructuring

=Research developed more on network than in laboratories

Thecompetitive benchmarking

of the Italian pharmaceutical industry

Source: elaboration of IMS data

Innovation: improving access to new products

Actual usein hospitals

Europeanauthorization

National authorization

RegionalPositive List

12-15 months

12 months

2 years

More than 2 yearsthe overall time

for access to new medicines

-40%

Even after market access, new products are penalized

by several restrictions

difference betweenItaly and big EU in per capita sales for new medicineslaunched between2008 and 2013

Source: BCG

Access conditions

Before Launch

National Guidelines

Risk Sharing Agreement

P&R setting (HTA)

Regional Guidelines

Authorization/PTOs(*)

Web-monitoring

Product Spend ceiling

Category Spend ceiling

Product Registries

National Spend Ceiling

After Launch

Hospital budget

Physicians prescription

Me-too drugs quotas

Me-too drugs quotas

Regi

onal

Nat

iona

lN

atio

nal

Regi

onal

Condition generally/widely applied Condition applied only in selected/specific cases

Market access conditions in Italy are hampered when compared to other big EU countries

(*) Prontuario Terapeutico Ospedaliero

0

50

100

150

200

250

300

350

400

450

0%

20%

40%

60%

80%

100%

Conditions at market launch for new medicinesin Italy and other big European countries


Time of access to new products (time elapsing between EMA’s MAs and availability)

Share of new medicines compared to MAs released by EMA from 2011 to 2013(% on total)

80109

330364

427

221

69% 52%66%

39% 35% 35%

Qualitative index on access to new medicines authorized by EMA from 2008 to 2013


Country ranking by specific indexes

Per capita consumption(standard units)

% of new medicines compared to MAs released by EMA from 2011 to 2013

Average price of new medicines available on each market

Time of access to new medicines compared to EMA MAs

1 23 45

1 43 52

1 32 45

1 43 52

TOTAL (average between 5 criteria)

1 42 53

1

2

3

4

N°molecules launched to local market from 2001 1 34 525


Acces to Innovation: the gap in consumptionof new medicines between Italy and other Big Eu

-80

-70

-60

-50

-40

-30

-20

-10

0

2013 per capita consumption of new medicines with MAsreleased by EMA 2008-2013: comparisons between Italy and Big Eu(% gap)

CentralNervousSystem

Blood and hematopoietic

organs

Gastrointestinaland metabolic

Antimicrobial Anti-neoplastic and immunomodulators

Lower in-patent and off-patent prices in comparison to EU countries in pharmacies and hospitals

Source: Cergas Bocconi on IMS data

-15% Ita vs big EU

Total market

-19%

Pharmacy channel Total in-patent off-patent

-19% -17%

Hospital

-8%

Ex-factory prices of prescription medicines(bilateral comparisons, total market, index Italy=100)

Italy Spabig EU UK GerFra80

130

120

110

100

90

140

100

115

104107

111

132

Over 10 years of decreasing prices, much more pronounced in Italy than in the rest of Europe

Difference between medicine prices and inflation (percentage points)

Source: elaboration of Istat, Efpia data

-40

-30

-50

-10

-20

0

Italy big EU

-31% -14%

+29% +24%

Medicines prices (reimbursable and non-reimbursable)

inflation

Cumulative change 2001-2013

-60% -39%difference

In 2013 in Italy

• medicine prices (-0,7%)• inflation (+1,2%)

medicine prices -14%, inflation +12%2001-2006: difference -26%

medicine prices -19%, inflation +15%2006-2013: difference -34%

-60

-70

2003 2005 2007 2009 2011 2013

Italy Europe

Source: Farmindustria survey

Pro

1. Inefficient bureaucracy

2. Tax pressure

3. Complexity of labour legislation

4. Variability of regulatory framework

5. Complexity of tax legislation

1. Quality of Human Resources

2. Upstream quality

3. Quality of life/environment

4. Market size

5. Quality of clinical structures/access to expertise and skills

Cons

Main favourable and unfavourable factors for pharma company investments in Italy

Source: elaboration and estimates on Aifa, Farmindustria, Istat data

The pharmaceutical industry in Italy

Investments, Production and R&D

Direct tax, other taxes

and VAT

Wages and social security contributions

Public expenditure for medicines and vaccines (ex factory,

territorial+hospitalexcl. clawbacks)

Effective contribution of pharmaceutical

and related upstream sectors

Contribution of pharmaceutical industry with a

solely commercial presence

Direct economic contribution of the pharmaceutical industry and upstream activities, compared to public expenditure for reimbursed medicines – 2013 (€ bln)


Upstream activities

12.113.7

3.83.3

6.3

4.1

2.3

4.1

3.9

0

8

10

12

2

4

6

14

16

pharma industry italy

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