The Biosimilar Market Leader’s Perspective

Carol Lynch, Global Head of Sandoz Biopharmaceuticals

April 28, 2016

2 | Medicines for Europe Biosimilars Conference | April 2016

10 years on, biosimilars have had a strong impact on global healthcare

20+ Products approved by the

European Medicines Agency over 10 years1

Product Approvals

551M€ Estimated cumulative

savings from biosimilars epoetins in Germany 2007-20114

Healthcare system savings

104% Increase in standard units of

filgrastim in the UK from 2008-2014 (post biosimilar launch)5

Increased patient access

+50% Market share for biosimilar

G-CSF2

Market Acceptance

+250m Patient days of safe clinical

experience with Sandoz biosimilars alone3

Patient Experience

1. European Medicines Agency Website2. IMS MIDAS3. Sandoz Product Safety Update Report (accessed October 2015)4. IMS Institute for Healthcare Informatics: Assessing biosimilar uptake and competition in European markets. Date of Report: Oct 2014.5. IMS Institute for Healthcare Informatics: Delivering on the Potential of Biosimilar Medicines. Date of Report: Mar 2016.

3 | Medicines for Europe Biosimilars Conference | April 2016

However, the status quo must change for biosimilars to deliver on its promise

Strategic ImperativesCritical Challenges

Build Trust & Confidence

Ensure Sustainable Market Policies

Clarify Legal and Regulatory Uncertainties

1. Stakeholder understanding and acceptance

2. Disproportionate focus on acquisition costs

3. Continued legal and regulatory uncertainties (mainly in US)

4 | Medicines for Europe Biosimilars Conference | April 2016

Recent US and EU biosimilar launches indicate progress in building stakeholder acceptance.....

Physicians accept biosimilar concept –in acute care settings

Economic value recognized by payors & healthcare providers

Pre-launch educational efforts across stakeholders helped address key concerns

Source: IMS Pharmascope1 Community medical center: MVZ in Germany, therefore, possible multiple specialties are included

0

5

10

15

20

25

21%

17%

Jan-15

5%

1%

6%

4%

15%

3%

Jun-15

1%

12%

1%0%

11%

12%

2%

Apr-15

9%

Feb-15 MAR/15

6%

12%

4%

MAY/15

6%

0%1%

0%

17%

4%

Others

Derma

GPs/community medical centers

Rheuma

Total Biosimilar penetration

Gastro

Filgrastim US Infliximab EU5

Pre

scrip

tions

(in

%)

5 | Medicines for Europe Biosimilars Conference | April 2016

....However, all stakeholders must contribute to improving trust and confidence in biosimilars

Payors: Support biosimilar education amongst HCPs

Patient Groups: Develop and share educational

content for patients

HCPs: Deepen understanding of biosimilars and help reassure patients

Manufacturers: Ensure availability of science-based

information on biosimilars

Govt: Continue to highlight societal value of biosimilars across stakeholders

Regulators: Engage with HCPs on robustness of regulations/extrapolation

Increasing adoption of biosimilars

Collectively address the scourge of misinformation

6 | Medicines for Europe Biosimilars Conference | April 2016

Considerable variation across the EU exists in terms of payer policy approaches to biosimilars

Many patients available for

manufacturers to compete for

Most patients out of reach for manufacturers

National management passive (i.e. fixed biosimilar price reduction)

No prescribing incentives

No prescription quota

Increased active management nationally

Education of physicians by payers

Biosimilar prescribing stimulated (quotas)

Competition averse Foster competition

Source: Adapted from IMS Health, IMS Consulting Group, March 2016

7 | Medicines for Europe Biosimilars Conference | April 2016

Healthcare systems must advance policies that ensure sustainability

Sustainable Procurement

No “winner takes all tenders”

Acknowledge that biosimilars are not generics: no mandatory price cuts

Promote fair competition and level-playing field

Prescribing Incentives

“Gain-sharing” that helps hospitals to benefit from savings

Quotas to create competition while retaining prescriber choice

Support acquisition of most cost-effective medication by hospitals

8 | Medicines for Europe Biosimilars Conference | April 2016

Legal and regulatory clarity essential for further development of the biosimilars industry

Maintain established regulatory framework

BPCIA Ambiguities

INN & Labeling

Interchangeability

9 | Medicines for Europe Biosimilars Conference | April 2016

Collectively, we can ensure biosimilars play an even more transformational role in global healthcare

49-98B€ Expected cumulative savings from

biosimilars 2016-2020 in US+EU51

Generate savings for healthcare systems

~5% Patients with moderate-to-severe

psoriasis receiving biologic medicines2

Improve patient access

1. IMS Institute for Healthcare Informatics: Delivering on the Potential of Biosimilar Medicines. Date of Report: Mar 2016.2. Ref: Nast A, et al. Arch Dermatol Res 2013;305(10):899–907